The Obama administration has it figured out.
What the country really needs, apparently, is an automobile industry that is rolling out highly fuel-efficient cars, from the cleanest, safest, unionized factories in the world, made by highly paid workers with excellent health and retirement benefits. Of course, the production process needs to be inexpensive and efficient, too, so that the cars are competitively priced and can attract consumers who might otherwise gravitate toward bigger and heavier vehicles.
Gee, why didn’t Rick Wagoner think of that?
The president and his team are suffering from the same conceit which has afflicted many other activist governments in many other settings. They believe a central government can find a way to induce reluctant consumers to buy products they don’t want from inefficient suppliers without asking anyone, anywhere — save for corporate hot-shots — to make an economic sacrifice. Certainly, the unions aren’t to blame. Therefore, the problem must be poor “leadership.” And if the companies can’t manage themselves well, then by golly, the government will help them do it.
This kind of story tends to run a fairly predictable course. Political control gradually supplants private management. Private investment dries up. For a time, taxpayers are willing to subsidize both the demand and the production process to give the government-approved “plan” a chance to work. But, soon enough, it becomes clear enough that the government never had a silver bullet for profitability either, and, in fact, made matters worse by introducing wasteful political manipulation into operational decisions.
Fortunately, in time, it gets easier and easier for politicians to walk away from the whole mess. Consumers continue to spend their money on products they actually want, for the prices they are willing to pay. Successful and profitable companies hire up workers who have left unsuccessful and unprofitable ones. The marketplace adjusts. End of story.