How Did We Get Here?

Today GM filed for bankruptcy, and President Obama announced that the government will take 60 percent ownership of stock in the company while it is being overhauled. This situation is certainly less than ideal. I personally don’t like the idea that anyone’s hard earned tax dollars being used to rescue GM. There is a part of me that wishes we could just consider it a casualty of the economic collapse and let it disappear like Bear Stearns or Circuit City. However, it appears now that we don’t really have any other alternative than the partial nationalization of GM. If the company were allowed to liquidate, it could result in tens of thousands of job losses that we clearly cannot afford.

The demise of GM and that of Chrysler, for that matter, is incredibly disturbing but not because the partial government takeover will suddenly spell out the end of capitalism and plunge the country into socialist regime. That is not likely to happen. I do not find the concept of democratic socialism all that frightening anyway. What really bothers me about the failure of the American auto industry is the whole question of how it happened.

How did these companies get into the mindset of producing such gas guzzling poorly made automobiles? Why did people continue buy these products? If you are my age (40) or older, you probably remember the oil crises of the 1970’s that resulted in the gasoline shortage, high prices, rationing, and huge lines at the pump. Why did this not result in a huge wake up call to our auto companies and to consumers back then that we needed to move away from our dependency on oil? Why did attempts to produce alternative technologies stall? Why did we not learn from the lessons of the past and start buying mini vans, hummers, and SUV’s? Was it greed, ignorance, apathy, deregulation policies, politics, or all of these factors that caused us to lose are way?

I haven’t found a good answer to these questions. Historians and economists will probably be debating this for years to come, and politicians will go on pointing fingers. Only one thing is clear. We absolutely have to become a culture that starts to think heavily about long-term ramifications even if it is painful or inconvenient for the time being. Otherwise we will have a great deal more to worry about than the “threat” of socialism.

The Obama administration has been criticized for spreading himself thin and trying to tackle too many problems at one time. While I am not supportive of every decision that our new President has made, I certainly don’t take issue with his initiative. So many things have been ignored for so long that we have no alternatives but to confront them now in the same way that there are no other real alternatives to saving GM.