“Not Running GM”

In his press conference yesterday, President Obama went out of his way to reassure us that the government has “no interest” in running General Motors; all the while the feds were finalizing a plan that would give them a nearly 60% ownership in the company. Obama was also reportedly busy reassuring Detroit Mayor Dave Bing that GM would remain in Detroit. It seems to most that this bankruptcy would mark a perfect time to change locations and avoid the crushing tax-burden of Detroit, but clearly turning a profit isn’t the top motive here. In any case, as the Wall Street Journal cleverly points out:

“We don’t know whether GM should stay in Detroit. But we do know that the location of a company’s headquarters is one of those decisions typically not made by people who are busy not running the company.”


3 thoughts on ““Not Running GM”

  1. In economics, purchasing decisions indicate a “revealed preference”. I have no “interest” in filling up my car with gasoline every week or so, but I prefer to get from place to place quickly. The vocalization of my interest is irrelevant to my actions.

    By taking an majority ownership stake in GM, the government is expressing an interest in running the company. Lets hope that the president reveals the preference he vocalizes soon. The government’s actions are much more important than a politician’s words.

  2. Every action taken to this point indicates that the Obama Administration is actively seeking to control GM and Chrysler. I only wonder how quickly it will be before most people understand this.

  3. Pingback: Still Not Running GM « Trying Liberty

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