Thursday, July 16, 2009

Oh What a Tangled Web We've Woven

There are some basic facts that you simply can't get around. You ignore them at your peril. Of course, if you are the Messiah, you can rewrite the rules for yourself, but you will still run afoul of the basic facts at some point.

  1. Government is a non-profit enterprise.
  2. Governments produce no product.
  3. Governments have no money except that which they take from citizens.
  4. Governments are not immune from market forces.
  5. Governments are going to be responsive to the greatest number of people.

Now consider this item with those facts in mind:

Afoul of the Facts

The first problem we see there is that government shouldn't be taking over a free enterprise, publicly held corporation. At the best it gives that entity an unfair market advantage against non-government competitors. At the worst it becomes management from a distant committee with no experience in the business. The unintended consequences are not unforeseen and they will be significant.

Next we note that the mandate to reduce dealerships does several negative things. It reduces market footprint. You lose presence in regions of the country. It also reduces availability of service after the sale for potential customers. Finally, in a period of unemployment, you are dispossesing thousands of workers. None of that is desireable either for the nation or the effected corporation.

Finally you have the political process in action as dispossessed workers and condemned dealership owners appeal to their congress-members who will be seeking campaign support in a few short months. The congress-critters will naturally respond to the voters without concern for the economic realities of the business.

So, you stick government's nose in where it doesn't belong. You damage the situation beyond what was already wrong. You impose politics into the free market. And you eventually wind up worsening the situation as you do what politicians do best, pander for votes.

This presidenting business is a bitch!

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