Not What Socialism Looks Like
So it’s the first of June, time’s up for General Motors, and the Gubmint has got a plan. You’ve already heard most of the details — the wrangling among the White House, UAW and bondholder negotiators, the 60% share the US government will take in ownership, the fuzzy math Republicans use to claim political bias against car dealers — and you have probably heard this described as some sorta socialism.
Here is why this is not socialism:
Officials say the president will insist that once the government sets up new management and a board, it will remove itself from G.M.’s day-to-day operations. But even his aides anticipate intense pressure as the company’s managers are called to testify in Congress and face questions like why they decided to build new cars in Mexico and South Korea, rather than in Michigan or the South.
“Congress and many Americans are going to say, if we own it, why can’t we make these decisions?” one of Mr. Obama’s top economic aides said, “and it’s going to be a challenge to answer that.”
Okay, follow that? After forking over billions of public money — about $30 billion will be added on top of about $20 billion spent so far — to keep the company afloat and then to salvage it during bankruptcy proceedings, the White House will still refrain from dictating how that money should be spent, even allowing further exportation of manufacturing jobs to other countries where labor standards are lower. Technically, Obama is outsourcing the bankruptcy process to U.S. Bankruptcy Judge Robert E. Gerber; that may be wise both managerially (Obama has a couple of wars on his hands) and politically, as he has had to fend off the “socialist” charge from the moment he announced his candidacy for President. Nonetheless, from a labor standpoint, the restructuring of GM looks dicey.