Capitalism is Failing, but is Government Ownership the Answer?

So driving home from a hiking vacation today, yet another big government bailout is the main story on NPR. This time it is GM and of course, NPR does not give much diversity of opinion. So, I understand the logic, that GM is so large, that its failure would cost the taxpayer more than the bailout, so in that way they do not have a choice. However, is this yet another government involvement with no exit strategy (like Iraq, AIG or Afghanistan)? Are they actually going to look at the policies that created this situation? Capitalism, which is based on the principle of greed, can only survive with continual government interventions to prevent ever growing differences between the rich and poor (which would result in revolution) or to prevent massive failures of mega-corporations (that natural outcome of unregulated capitalism due to benefits of economies of scale). Of course they have come up with all sorts of tricks to make people feel that they are part of the economy, such as getting the general public bought into stocks through pension funds, 401Ks and other investment plans, but I diverge!

Of course the GM bailout will fuel claims that we are moving to socialism, but in my opinion we are just funneling tax dollars into the capitalist system. Nothing is changing structurally, other than investment sources. The result, as we can see, is that good capitalists will follow their instincts, and find ways to make money off of these bailouts. The stock market has apparently seen the benefit of more government cheese on the way and rose accordingly today. However, from my observation, so called public/private partnerships disproportionately benefit those that have the capital, and the rest of the world is supposed to be thankful for what trickles down. Will this administration’s plan work any different? Has Obama stumbled on the magic formula that will allow a mismanaged company to miraculously turn itself around? He talks about stake holders, but who does he mean? I don’t know the details, but is he considering allowing worker control? Will the community where the factories are located (or relocate) have a say in how GM is run? If we are really talking about change, is this going to be something different than a government bailout? What will the structural changes be? NPR was sorely lacking in any real analysis, other than to repeat the administrations line.

Despite what I thought was a nice title, this is not much of a post, I’m tired and had a long ride (after a nice vacation). I had originally planned to get to the idea of worker and community ownership as an alternative business plan (though GM would have to be broken up into smaller components for this to realistically work). This would also require the reversal of so many government regulations and policies that currently favor the mega-corporations over smaller businesses.

So does anybody have any insight into what is so different about the GM bailout and how it is supposed to work? While I certainly am not a Republican, I think their question about what the exit strategy will be is important (and also needs to be addressed for our current foreign occupations (Iraq, Afghanistan) as well as government ownership of AIG and Banks (started by Bush admin).