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TEXT OF COMMENTARY
Kai Ryssdal: In his remarks at the White House today, President Obama reminded us exactly how much skin we’ve got in General Motors right now. Taxpayers own 60 percent of the company in return for $50 billion in government aid. Commentator Robert Reich asks what we’re getting for our money?
ROBERT REICH: You and I and other taxpayers now own what was once the largest company on earth. But it’s difficult to find a public purpose behind this biggest industrial bailout in history.
The goal can’t be to preserve jobs because the Treasury has been telling GM to slim down; and the company plans to shut 11 factories and lay off 21,000 workers.
If the goal is a much smaller and leaner GM that might be profitable one day, that’s something the private sector is better able to do than government — through workouts or bankruptcies — and there’s no reason for public involvement.
If the goal is to create a prototype for a fuel-efficient car of the future, Congress has already appropriated money for that, and the Treasury says it doesn’t want to tell the new GM what to produce anyway.
If the goal is to repay the public, there’s no point in putting up the public’s money to begin with.
So why exactly are we doing this? Maybe because the sudden dissolution of an American icon like GM would be a blow to the American psyche, further eroding confidence during this deep recession. Yet under normal bankruptcy the GM brand would likely live on, and GM’s other valuable pieces would be bought up.
Over the next decade or so, GM as we’ve known it will likely disappear in any event. The government’s huge stake in it merely slows down this process. Which, I think, is the point. The government is investing some $60 billion in GM in order to slow its demise, and thereby give its workers, suppliers, dealers, and the communities that depend on it more time to adjust.
But if the purpose is to help the Midwest adapt to industrial decline, investing that much money in GM seems an inefficient way to accomplish it. Wouldn’t it be better to use the money to convert GM and other declining manufacturing companies into producing what America needs — such as light rail systems and new energy-efficient materials. And training laid-off autoworkers for the technician jobs of the future?
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