The government of the United States will take over a majority share of General Motors in an effort to "reorganize" the firm under bankruptcy protection. The announcement is colossal and deeply troubling for a number of reasons:
- Bankruptcy is a manner of announcing that past debts are void, which erodes the necessary trust between parties in a free market.
- The government's decision to lend the company about $30,000,000,000 ($30 billion) is a way of saying that future citizens will have to pay for the mistakes of this generation and prior generations. It's a gigantic burden to place on future generations, including many people who aren't even allowed to vote today.
- The President's announced policy of government protection for the company and preferences for the company's products in government acquisitions tells other countries that we don't play fair when it comes to trade. Protectionism has always been a hazard to be avoided, but when a government owns a majority stake in a very large firm, protectionist habits are almost impossible to avoid.