Tuesday, June 2, 2009
How does it feel to own a car company (or two)? GM is ours (at least nominally) as is Chrysler, at least for a little while. The good news is we only paid 50 - 60 billion for them. And what gets better from there is, we are now "selling" the only valuable parts of Chrysler to Fiat. Then the plan is to give (for a nominal investment in operating capital) most of the value of GM to Magna (a large parts supplier from Canada) and a Russian banking/investment firm. The auto workers union gets another large chunk; and the US and Canadian government get most of the rest. If, and that is a BIG IF, GM (and the new owners) gets what is left turned around and makes money, we (the US government part) gets a return. Whoopee! After the money we paid in "bailouts' prior to the bankruptcy, and the unseen fallout that will occur after the bankruptcy (layoffs and closures from suppliers, dealers, etc) it would have been cheaper to buy the three million cars that sales were off and give them to those that need them (although I would not want to be in charge of deciding who was to get one!) Your government at work! Speaking of which, I commented in an earlier blog about the digital transition. This is where all existing full-power TV stations are required to go to a digital transmission system. This was to originally occur in mid-February of this year and was moved to June 12th to allow for more consumers to get the proper equipment to allow their old analog TVs to receive the new digital signals. One of the big components of this program was a $40 government coupon that would be issued to any household that requested one (or two). This coupon could be used to buy a digital tuner converter box that would allow an analog TV on an antenna to pickup the digital signals. After two years of promotions and ads about the program and the issuance of the maximum number of coupons much earlier (due to there being no limit or requirements on getting the coupons other than the ability to apply), someone noticed that most of the consumers that the program was intended to help had NOT gotten a coupon, a digital converter box, nor the information they needed to do so. That was when the decision was made to delay the conversion until June 12th. A massive advertising and awareness plan was launched - read massive SPENDING plan - to inform these folks that come June 13th they would have no TV. Now, any politician worth anything knows there are a few things that are sacred to most voters. Access to TV is one of them. That is why the MASSIVE spending was authorized. I read the other day that with the money spent on the coupons, and all the advertising and promotional events that have been run; when this is over, we will have spent about $1,000 a household to tell people with TVs on antennas (it affects NO ONE else - not cable households, not satellite TV households) that they need a box that costs $49 - $59 to watch TV. Your government at work. Why do I mention this? I have deviated from my original intent, but I wanted to make the point with the above two (or three if you count GM and Chrysler separately) examples of how inefficient our government is. Think of the DMV, military and government purchasing, medicare & medicaid, the government bureaucracy, welfare programs, etc. All a model of efficiency, right? Why the heck would anyone want the government to take over healthcare? Or any other part of our lives? Cradle to grave - the cradle will be in the grave!