Monday, June 01, 2009

I Wish You Would Stop Saying That

In an AP article describing “a defining moment for American capitalism”, in other words the nationalization of GM, they claim that “the nation's severest economic crisis since the Great Depression” is at fault for no one wanting to sink any more money into GM.

First, this isn’t any worse than recessions that occurred in the 80s and 70s for certain – stop saying that this is such a catastrophe.  The only thing that is catastrophic is the government intervention into the market.

Second, companies that are well run are having no trouble getting capital.  GM can’t because they are poorly run and have no honest hope of turning around without shedding some liabilities.

Finally, the auto czar Steve Rattner says that the government will give up control of GM when it ‘succeeds’ - "The outcomes are driven heavily by things that are outside our control, particularly market conditions, car sales, overall economy and obviously the performance of this company"

Anyone want to give an over/under on when this is going to occur?  I’m willing to put on over on just about any number.

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