Not only can we learn from the Russians, the Russians can learn from themselves. This comes from Marginal Revolution:
One headline reads: Detroit Bailout is to Bring on U.S. Oversight
The other reads: In Hard Times, Russia Moves to Reclaim Private Industries
The Russian automobile sector, however, appears to be booming and it is not mentioned as a candidate for nationalization.”
In Russia, the commercial automobile market is expected to jump 14% during 2008-2012.Meanwhile, in the draft text of the auto bailout here in the United States:
It is the sense of the Congress that, should an eligible automobile manufacturer be unable to reach agreement with all interested parties on a negotiated plan that can be approved by the President’s designee within the time frames provided by this Act, the Congress should act expeditiously on the recommendations of the President’s designee on actions necessary to achieve a viable long-term plan through negotiated or legislated restructuring.”
So let me get this straight. Russia wants more nationalization even though their auto industry, which is privately owned, is booming. And now Congress has said that if auto manufacturers can’t reach agreement on restructuring with all interested parties, then Congress should legislate a plan for them. Am I missing something?
Congress hasn’t had the best track record of becoming ‘all-of-the-sudden’ business owners and it appears to be a lose-lose situation. On one hand, we’re handing out taxpayer money to subsidize the status quo. On the other hand, we’re allowing Congress to write private companies’ business plan and have tight control over the auto industry. There’s a way both of these concerns can be resolved and that’s to take the bailout money off the table.