Tuesday, March 31, 2009

Arrogance in Spades

It's my guess that John's exasperation came from listening to the Obama auto bailout speech yesterday - I know I had the same reaction.
It's pretty evident humility is not Obama's strong suit (it is unlikely to be in anyone who becomes POTUS, even if he needs TOTUS) but heavens to Betsy, he and his whole team think they know how to build and sell cars? Even if GM and Chrysler do not, it seems pretty unlikely to me that his team is going to be better at it.
Perhaps I could understand a concern about debt structures, but telling Chrysler it has to use Fiat technology to deliver fuel-efficient cars? What a bizarre incarnation of Chrysler that will be! Obama would not have to mandate this if he imposed a European style tax regime on gasoline - why does he not do that? So long as he does not do that, who does he think will buy the cars? He has an answer - government departments will be forced to buy them for their fleets!
This is going to end in farce, with these companies finally surely mostly nationalized, or gone, and about as efficient as Lada.
Hey! And those warranties! What about my existing warranty from GM that has two years going? Will some government stand behind it?
And how about poor Ford, who have not asked for 'help'? Their warranty offers now have to compete against offers Obama has proudly announced are backed by the full force of the US government?
The potential here for unintended consequences has climbed so high that it is hard to see how this could hope to go well. I look forward to auto marketing in the next couple of months.
And the deepest irony is this is not even close to any sort of resolution.

UPDATE: Here is a more informed discussion of the same points.

UPDATE: Paul Kedrosky is terse but impressively to the point.

UPDATE: Russell Roberts adds on with a great and appropriate quotation from Adam Smith.


Post a Comment

<< Home