The Tangled Political Economy of Government Motors
Like Cato's Dan Mitchell, quoted in this LAT article on what the government should do with its auto company stock, my first instinct is to say, "Divest immediately." But I'm not so sure that's right. Owning a big chunk of the auto companies--and (this is important) hoping to profit from that ownership--could check some of the worst excesses of the Obama administration's lust for industrial control, starting with the belief, against all evidence, that U.S. automakers would be more successful if they abandoned SUVs and concentrated on competing with the Prius and Civic. Trying to maximize shareholder return might persuade policy makers to keep out of management decisions. On the other hand, it's a great incentive for further subsidies and favoritism. (Even the NYT, bellwether of liberal conventional wisdom, notes, for instance, that cap-and-trade "is almost perfectly designed for the buying and selling of political support through the granting of valuable emissions permits to favor specific industries and even specific Congressional districts.") All in all, a no-win situation.