Democrats Move To Bail Out Big Auto... And Determine What Gets Built In The Process

The Democrats want to bail out the big three... they just want the deal to include dictating what vehicles get made. Get the feeling we are headed for a Soviet-style America, where the government picks which cars are made each year?

http://www.foxnews.com/story/0,2933,450298,00.html

"Before adjourning for last Tuesday's elections, Congress passed legislation providing for $25 billion in government-backed loans to the automakers to prod them to retool their factories to make more efficient vehicles."

I'm not a fan of a no strings attached approach, but history has shown that a public/private venture can work... so as long as the government lets business do what it does best: make money using basic economic principles such as meeting the needs of the market.

Take CONRAIL for example. This was a company formed from the remains of the Pennsylvania, New York Central, Delaware and Hudson, Reading, and other northeast railroads in the early seventies. Much like big auto today, the railroads were driven to bankruptcy through terrible labor contracts, a declining demand in the industry, and a host of excesses such as enormous physical plant and aging fleets. Sounds eerily familiar.

http://en.wikipedia.org/wiki/Conrail

With Conrail's increasing success, two eastern rail competitors of Conrail engaged in a takeover battle to control the railroad and expand their systems. In 1997, however, the two railroads, CSX Transportation and the Norfolk Southern Railway, struck a compromise agreement to jointly acquire Conrail and split most of its assets between them, with Norfolk Southern acquiring a larger portion of the Conrail network via a larger stock buyout. Under the final agreement approved by the Surface Transportation Board, Norfolk Southern acquired 58 percent of Conrail's assets, including roughly 6,000 Conrail route miles, and CSX received 42 percent of Conrail's assets, including about 3,600 route miles.

Conrail was cut into two and sold to CSX and Norfolk and Southern, as a victim of its success! Congress NEVER told Conrail how to run their business. They just told them to get profitable!

Pelosi and the Democrats are looking at this as a golden opportunity to sink environmentalist legislation into the deal. They want Detroit to produce cars that support their agenda.

It incenses me to see that government wants to take on the role of decision maker for product development. These types of policies written into "help" will result in the failure of the free market.

At least President Bush doesn't want to go along with this...