The salvation of General Motors by the Obama administration was nothing but a despicable political act to gain advantage in the 2012 presidential election — and it worked (“Government recalls GM stock,” Comment & Analysis, Thursday).
The justification for bailing out auto manufacturers was based on the outrageous claim that the industry would be devastated from the disruption of parts suppliers resulting from a formal General Motors bankruptcy. The story went on to exaggerate the effects on the whole U.S. economy as well as the other U.S. auto plants run by competitors.
It is a historical fact that the entire U.S. economy converted from a peacetime economy to a wartime economy in the span of approximately two years prior to Franklin D. Roosevelt’s declaration of war in December 1941. Before this industrial transformation, the U.S. military had little capacity to fight. The buildup created a military second to none and a merchant marine force manning liberty ships being launched at the rate of one per day. It is ironic that one of the key figures in this buildup was the CEO of General Motors, William S. Knudsen.
The implication that the U.S. economy could not work through an auto parts disruption in a relatively short period of time is historically laughable. However, the joke is on the American public, which supplied the $25 billion, apparently the going rate for a U.S. presidential election.