Almost A Good Idea

Although it does not happen often, a member of the political class sometimes has a good idea and it should be recognized. It has come to my attention recently that Tennessee Senator Lamar Alexander recently proposed a bill that demonstrated some real outside of the box thinking and would have done a little good in restoring some freedom to this country's citizens. As you all know, the Federal government took over $60 billion of our taxpayer money and used it to bailout GM and Chrysler. In a previous blog we discussed this insanity in detail and how it was a total waste of our hard earned dollars. The result of this bailout and the accompanying bankruptcy proceedings has left the Federal government with about 60% ownership of GM.

Senator Alexander's idea is very simple: given that the American taxpayers paid for this bailout, the American taxpayer should own the 60% via a GM company stock distribution process, i.e. all of us who paid for the bailout would own stock in the new GM. Seems only fair, we paid for it, we should own it. Unfortunately, his proposal was defeated in the Senate. Apparently, the political class wants to hold onto the power of ownership even though they had nothing to do with financing the bailout.

Distributing shares to Americans would have a number of advantages:

1. First, it is only fair since we paid for it (the government did not pay for it, it just took our tax dollars and bought the companies). Our dollars, it should be our reward if the stock actually is worth anything in the future.
2. Second, being owned by many, many Americans would force GM management to be solely focused on running the company efficiently and profitably for the shareholders and not have to worry about the political class interfering in that drive for profitability by having the executives of GM and Chrysler scurrying off to Washington every time some vain politician wants to get his or her name in the paper. The company executives would be accountable to the shareholders, all Americans, and not the whims of the political class.
3. Third, do not think for a minute that the political class will not interfere with company activities. Consider two quotes from Obama in the SAME press conference regarding government ownership of GM as reported on Earthlink's news page on June 1, 2009:

• " What I am not saying, what I have no interest in doing, is running GM." He want on to say that auto executives "will call and make the decisions about turning the company around."
• Later in the press conference he said, "looking ahead, GM will be prodded at every juncture by the administration's top officials"."

HUH? In the same breathe he says he does not want to run GM and the executives will make the decisions and that GM will be prodded at every juncture. Makes no sense. You can bet that this administration will meddle in the ongoing efforts of GM, advocating and pressing its position for GM to make small, fuel efficient cars. Unfortunately, a whole lot of America does not want small, fuel efficient cars. Thus, in short order GM will fail again because it did not listen to the needs of the market (first time because of its own shortsightedness and second time because of political class dictates that were not consistent with market needs ands desires) and our billions of tax dollars spent on the bailouts will be wasted.

Nice try Senator Alexander, you gave it a shot for freedom, fairness, and sanity, too bad the rest of your cohorts did not see it that way.