As this blog correctly predicted last November (http://www.shoutbits.com/2008/11/gm-cant-be-saved.html), General Motors’s failure has become a political circus. As with the Chrysler looting (http://www.shoutbits.com/2009/05/obama-commander-in-thief-or-you-cant.html), the Obama Administration’s main goal is to bolster the UAW, which helped elect the Democrat supermajority. The law has been turned inside out, and the US looks more like a thuggish banana republic every day.

GM will become the new Amtrak, a permanently subsidized quasi-government entity that serves as a conduit for government influence throughout its industry. GM may never again earn a profit, but that hardly matters. Politicians will use GM to push their environmental and labor agenda for the entire nation, making a perpetual subsidy well worth the taxpayer expense. Once GM becomes a ward of the government, any suggestion of reducing its annual subsidy will be met with cries of turning hard working Americans out of their homes. The US industrial policy will look very European indeed.

Worse still, history suggests that the government will mandate similar cost structures for the Southern US auto makers, such as Toyota, BMW, Mercedes, and Honda. The government will recognize Detroit’s comparative disadvantage with the South, but rather than clean up Detroit, the sure response will be to legislate the same cost structure into the competition. The government has a long history of mandating compensation and benefits for all employees in order to equalize costs with union contracts. The cynic would say the government’s motive was to protect union shops from competition more than aid employees who clearly didn’t want a union.

Surely a part of Obama’s GM strategy is to force ‘green’ cars on Americans. However, another important element is to ally with unions to expand their reach where they have never been welcome. GM will receive a perpetual subsidy to allow it to sell cars few Americans want at well below their cost to produce. Apparently Obama has not heard of the UK’s debilitating industrial policy before Thatcher cleaned house.

So, GM is a nation-threatening disaster on many levels. What to do? Boycott GM. This blog calls on anyone who cares about the rule of law, prosperity, or the US system of capitalism to avoid GM. Do not buy the government cars sold by GM. Do not patronize GM dealers for maintenance of existing GM cars.

Won’t boycotting GM just make the government bailout costs higher? Won’t boycotting GM put more workers out of business? Perhaps, but these arguments rely on the socialist-family conceit that values stability over freedom.

If GM is boycotted now by enough people, the cost of keeping it afloat will be too high for even the trillion dollar man, Obama, to bear. Rather than pump billions upon billions into GM in perpetuity, a boycott would force the government to accept its sunk costs as a loss and move on. A boycott will save taxpayers in the long run.

Likewise, boycotting GM will create jobs, not destroy them. The UAW kills jobs by enforcing inefficiencies and imposing higher costs on consumers. The US will need the same number of new cars with or without GM, so manufacturing and jobs will simply transfer to more efficient competitors. While those new jobs might pay closer to their real worth, the savings to consumers, who will receive better value, will create more prosperity.

The GM of American legend is now gone forever. No matter what, GM will never again sell fun or extravagant vehicles that fit the American notion of car. The new GM will be a wing of big labor, big government, and activist environmentalists. The best resolution for GM is to kill it off entirely before it becomes entrenched with powerful special interests. Freedom loving consumers should stay away from the new GM.