It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.As MaxedOutMama says, "It's all being done on the basis of theorized social costs, rather than with a view to eventually creating a viable domestic auto company." In other words, disregarding the lessons learned in college economics courses except those in Marxist econ. And see Megan McArdle:
But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.
But now, according to those who joined him in the middle of his crash course about the automakers’ downward spiral, he has emerged as one of the most influential voices in what may become President Obama’s biggest experiment yet in federal economic intervention.
GM's main problems are:Which sets up Jonah Goldberg's modest suggestion:1) A terrible, bloated cost structureWhich of these is the government going to solve? That terrible, bloated cost structure supports a bloated union whose jobs are the entire rationale for the government intervention. Leaning on the parts suppliers just risks UAW jobs further down the supply chain. Maybe we can take it out of the budget for copy paper and pencils.
2) A terrible, bloated bureaucracy
3) A bunch of meh car lines
Forgive me if I am skeptical that the government is going to show GM how to streamline its bureaucracy.
We're ponying up $50 billion, but the total costs might be closer to $100 billion in the long run. And all we get is the same car company we always had.
So, I'm wondering: How much would it cost to just build a car company from scratch? I'm sure the start-up costs would be high. But the new company wouldn't have to bow and scrape to the UAW and could probably just buy GM's best plants at fire-sale prices.