What Was the Point of Bailing out GM? | Daniel J. Ikenson | Cato Institute: Commentary

What Was the Point of Bailing out GM? | Daniel J. Ikenson | Cato Institute: Commentary: "If GM emerges from bankruptcy organized and governed by the plan created by the Obama administration, it is impossible to see how free markets will have anything to do with the U.S. auto industry henceforth. With taxpayers on the hook for $50 billion (at a minimum), the administration will do whatever it has to — including tilting the playing field with policies that induce consumers to buy GM, hamstring GM's competition or subsidize its costs — for GM to succeed. Thus, $50 billion is a sum that is more likely to grow larger than it is to be repaid. It is also a sum that will serve as the rationalization for further government interventions on GM's behalf.

Thus, what's going to happen to Ford? With the government backing GM, will Ford's access to capital be compromised? Can it compete against an entity backed by an unrestrained national treasury?"