Protectionism and GM

Now that the tax payers own 60% of GM we have to ask the question. Is the Obama's bail out and now take over of GM a form of protectionism? Stephen Spruiell thinks so, and he may have a point.

The greater concern is the, as the Journal put it, "raw trade protectionism" at the heart of the GM restructuring. The Treasury has made the sale of GM's German Opel unit conditional on the buyer's agreement not to export small cars to the U.S. Our tariffs on imported trucks and SUVs remain a sticking point in the stalled negotiations over a trade deal with South Korea (which is going nowhere under this administration). And the government rescue of GM and Chrysler is itself a form of protectionism — the foreign transplants that employ thousands of Americans at factories in the Midwest and the South did not ask for or receive a bailout. When the government picks winners in the market, the loser is almost always the consumer, who ends up paying higher prices to subsidize inefficient producers. And if the consumer is a taxpayer, he usually ends up paying twice.