Obama & GM

President-elect Obama is reported to be urging the present administration to provide more assistance to the US auto industry. After promising change, the incoming leader has either succumbed to politics as usual by throwing a bone to some who got him elected, or to status quo bias: the cognitive behaviour which refers to the human condition of wanting to keep things as they have always
been. At least one major bank has rated GM’s stock price at zero, warning ‘equity shareholders are unlikely to get anything’ even if the automaker averts formal bankruptcy proceedings. Granted, allowing the carmaker to fail risks being called unpatriotic or something presumably far worse, especially if some solvent foreign automaker should come in and snap up the good bits as Barclays did with Lehman. But should the US government really be supporting the infrastructure which led to the crisis at GM? The world would keep spinning even if it didn’t, and room would be made for  innovation which has been riding behind the curve as long as we have been riding in squishy SUVs.

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