Government Motors

Been away so long I hardly knew the place
Gee it's good to be back home
Leave it till tomorrow to unpack my case
Honey disconnect the phone
--The Beatles

President Obama provided a taste of what it's like under a socialist economic system when he spoke of stepped up measures to keep US auto makers afloat. Recall once more that the definition of socialism is state control of economic resources, production, and distribution. At the other end of the scale lies capitalism, where economic decisions are in private hands.

The new plan includes many provisions, including the mandated firing of GM CEO Rick Waggoner and some board members. But two lines in particular grabbed my attention. One was the president's statement that, to maintain confidence in domestic autos, that "the United States government will stand behind your warranty."

President Obama also highlighted his obligation to auto industry workers, promising that "I will fight for you. You are the reason I am here today."

Feel free to ponder those statements on your own...Meanwhile, this intervention is shaping into a textbook example of resource misallocation under the hand of the state. When economic resources are misallocated, standard of living declines.

As such, we're picking up the pace towards a destination of squalor.

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