Chrysler — VOICES for REASON

One way in which the central planners of the Obama administration easily acquire and exercise the power to dictate how a 300-million-person economy should run is by portraying entire industries as stupid, short-sighted, and in need of “adult supervision.”

Recall how the administration overrode bankruptcy law to hose Chrysler creditors, denying them their rightful say in the company’s fate — and instead handed the company, and billions in government money, not just to the UAW but to Italian company Fiat for a price of zero dollars. They portrayed Chrysler and other automakers as having stupidly neglected small, fuel-efficient cars in favor of larger ones (in fact, government-mandated small cars had killed the profits of UAW-hamstrung automakers, while larger, consumer-friendly cars were genuinely profitable). By contrast, it was treated as self-evident that if they would only be acquired by a sensible, small-car dynamo like Fiat, they could become the car company of the future.

This narrative should have raised the question: If Fiat is such an amazing car company, and a slam-dunk merger prospect for US struggling automakers, why didn’t these automakers pursue such a profitable opportunity?

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Yesterday, I discussed how Chrysler’s attempt to avoid bankruptcy was not a just, free-market process, but a giveaway to the administration’s beloved UAW. The UAW, of course, loudly sheds tears over “concessions” of its own.

But let’s take a look at the UAW’s “concessions” in Chrysler’s final, pre-bankruptcy restructuring-proposal/bailout-plea. From the Wall Street Journal: Read the rest of this entry »

My colleague Tom Bowden just wrote a very helpful blog explaining the details and injustices of Chrysler’s phony bankruptcy. I want to look at Chrysler from a slightly different aspect: How should the Chrysler case have been handled by the government since last December — when the Bush administration propped it up with billions in bailout money? Answering this can help us advocate for the right policies today and understand just how wrong the government’s actions are.

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