The $25 Billion Question

Holman W. Jenkins Jr. has an excellent Op Ed piece in today’s Wall Street Journal. Mr. Jenkins ask the one question that no one Congress dares ask… Why is it Ford and GM can build viable auto businesses all over the world but not in North America?

A Car Wreck Made in Washington

Can Democrats afford to let Detroit succeed?

By Holman W. Jenkins Jr., Wall Street Journal, November 26, 2008

The wrong folks were in the witness chairs in last week’s congressional hearings on auto doom. A fantastic moment was Massachusetts Rep. Stephen Lynch assailing Rick Wagoner about whether GM was asking China for a bailout too. The implication seemed to be that GM can’t afford its inflated UAW pay packages because it’s squandering money to build cars in China.

Mr. Wagoner mildly answered that GM’s China operations are profitable. They actually help to underwrite the massive losses in the U.S.

Mr. Lynch showed no sign he was actually listening, having illustrated his disapproval of foreigners. He didn’t ask the obvious question: If GM can make cars profitably in China, why doesn’t GM import them to the U.S.?

For that matter, any of the brainpans on the Hill might have asked why Ford and GM managed to build viable auto businesses all over the world but not in North America.

You don’t need the Hubble telescope to tell the answer: The UAW is present only in the U.S., not all over the world. Read the rest…

It’s high time we faced the reality: Washington is the problem. Ronald Reagan summed it up pretty well when he said “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it.  If it keeps moving, regulate it.  And if it stops moving, subsidize it.”