GM/Chrysler bailout dead; now government can govern

by philg

If we believe what we read in the newspaper, for the past few weeks we have had all of our top legislators and executive officials occupied with the challenge of saving GM and Chrysler from the indignity of a Chapter 11 reorganization.

Stepping back from this waste of time and effort there are a few question worth asking…

Question 1: Given that our government can’t run its own core functions efficiently, why did we think that a government-appointed “Car Czar” was going to be able to solve GM and Chrysler’s problems? The federal government is going to spend $400 million for each new presidential helicopter that it buys. Under a cost-plus contract, the $30 million Augusta/Westland EH101 morphed into the Lockheed Martin VH-71, a machine with nearly identical specifications and appearance that costs more than a Boeing 747. Are we paying for speedy delivery? The first EH101 flew in 1987. Lockheed Martin is currently scheduled to start delivering the VH-71 presidential helicopter in 2017. The folks who worked who worked on that project are supposed to show GM how to compete with Honda?

Question 2: Could our politicians be working on things that are likely to yield better results for the overall economy? While we dither about GM and Chrysler, our schools continue to be the most expensive in the world while producing mediocre results. Per-capita, our goverment spends nearly as much on health care as any other country in the world… while covering less than half of the population.

Question 3: Does preserving GM and Chrysler in their present forms address our most serious transportation issues? As discussed in my economic recovery plan, unclogging America’s streets and highways with smarter networks and congestion pricing would be a lot more valuable to business than getting everyone out of a Toyota and into a Dodge. To encourage development and sale of electric cars we will need to install power outlets in a lot of Burger King parking lots (more). Who is thinking about that?

As of 2:30 pm, Wall Street has greeted the probable Chapter 11 filings of GM and Chrysler with a yawn. The S&P 500 is down less than one percent. It seems that GM and Chrysler reorganizing do not constitute a national emergency.

Could we possibly generate the same kind of excitement that we’ve seen around GM and Chrysler about bringing our public schools up to internationally competitive standards? Children graduating today are educated to only a fraction of their potential, which would have been a serious waste 100 years ago. Now that our least able citizens are in direct competition with the most able workers in Mexico, China, and India, the situation would seem to merit some urgency.

3 thoughts on “GM/Chrysler bailout dead; now government can govern”

  1. I think it is less that the market is yawning at a potential filing as it is the market things that the White House will ride to the rescue with TARP funds (as they signaled when the market was cratering during the open). If that doesn’t happen…

  2. Regarding road congestion, maybe we also ought to be looking at what trains can do for capacity. California figures their high speed trains, at up to 1300 feet long, can carry up to 1600 people (though a somewhat smaller number may be more realistic if you want truly comfortable seating). 20-25 passenger trains per hour on a single track is probably realistic. So a single track probably has the potential to carry at least 20 trains per hour with 1000 people each, or at least 20,000 people per hour.

    Contrast that with a highway lane, of roughly the same width as the space required for a single track. If the cars are perfectly evenly spaced at one every two seconds, and most carry only a single person, that lane is probably going to carry fewer than 2,000 people per hour.

    The other issue you run into with track capacity in a commuter environment is how frequently you want service on each branch of the system and how many branches can share a common track through the downtown core. You can get better ridership if you can make service frequent enough that people don’t have to bother to consult a schedule and adapt their schedule to the train’s schedule. If you want a train to come every 10-15 minutes on every branch, you can probably only have about 4-6 branches sharing a pair of tracks through the downtown core.

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