In the election that just ended, Barack Obama was called a socialist by his opponents. To anyone who understands the true definition of socialism, Obama could not be considered a socialist (maybe a collectivist, but definitely not a socialist). Socialism by definition is a system in which the government owns and controls the factors of production in the name of the common good.
Well, in the past 24 hours, Obama has announced his plan to help the Big 3 American automakers. His plan includes a $50 billion loan to the automakers. But, the plan doesn’t end there. In a similar manner to the bank bailout plan recently passed against the wishes of the American people, this plan also requires the federal government to take ownership stakes in Ford, Chrysler, and General Motors. Additionally, Obama wants to appoint an “Oversight Czar” to “oversee the companies” thereby giving the federal government both ownership and control of three massive American corporations. Of course all of this is being done in the name of the “common good.”
The $50 billion price tag is most likely a large underestimate of the amount of money it will take to save these automakers. The government doesn’t exactly have the best history of predicting the total costs necessary in an intervention. Some recent examples: the $152 billion stimulus package passed earlier this year which was supposed to save us from a recession, the $250 billion bailout plan which quickly ballooned into a $700 billion bailout package, and of course the $85 bailout for AIG in September which has already cost $143.7 and could cost much more. When $50 billion turns out not be enough for the automakers, the government will surely throw more money at the problem to “protect” its investment as it did with AIG. And, the automakers will need more money too. In 2010, several state-owned Chinese car companies intend to start marketing very inexpensive Chinese cars in America.
This will not stop with the automakers either. If there is one industry in this country worse off than the automakers, it is the airline industry. The airlines have been hemorrhaging money for years and now that the economy is bad, companies are laying off workers and cutting corporate travel, while regular Americans are also cutting back on flying. The airline industry will be the next to go and its lobbyists will swarm on Congress and demand the same favors that were given to the financial industry and the automakers. Then, the government will also own our airlines in addition to our banks and our automakers.
To me, that is a definite. The only maybe is how far this will go. When no new airplanes are being built due to the collapse of the airline industry, what will become of Boeing? Their bottom line will be hurt, and considering that they are a major defense contractor, would the government deem them to be too important to fail? If the automakers and airlines are suffering then of course the steel industry suffers. Will the government then take control of our steel giants like US Steel and Nucor in order to “protect” them from domestic problems and foreign competition?
Now, I am not opposed to helping the automakers. If a loan is absolutely needed, and if the government believes that there is a reasonable chance that it can get its money back, then the government definitely should help the automakers, but under no circumstances should it buy the automakers and take control of them.
This isn’t all about business either. The Democratic Congress is considering passing laws to reinstate the “Fairness Doctrine” to the radio. The Fairness Rule was established in the late 1940’s to guarantee that time would be given to both sides of an issue on the radio. The courts gradually struck down more and more of this doctrine until 1986 when it was completely abolished. Democrats, lead by New Mexico Senator Jeff Bingaman want to reinstate the rule which would effectively force conservative radio stations to place just as many hours of liberal talk radio on their stations as conservative talk radio (to me this is like requiring Christian radio stations to broadcast Jewish or Muslim programming). Of course, there are no Democratic Senators currently pushing legislation that would require CNN, MSNBC, NBC, and CBS time to conservatives or to require FOX News to give time to liberals.
We as a People voted for change last week. Change can be good, yet this is not the change that we need. We must not abandon the free market and free thinking ideals which brought us from a small, weak country of 13 states into a great Nation. If we are to continue to be a great Nation and a leader among other nations, we must not walk down this road.