John Stossel's Take
Commentary from Co-Anchor of ABC News' "20/20"

John Stossel is ABC News' Co-Anchor of "20/20" and New York Times best-selling author of Give Me A Break & Myths, Lies and Downright Stupidity. His "Give Me a Break" commentaries take a skeptical look at a wide array of issues, such as education, the economy, parenting, and more.

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The "New GM": Giving the People What They Don't Want

08/14/2009 10:53 AM

Nm_chevy_camero_090814_main In a new ad, General Motors calls itself a "leaner, greener, faster, smarter" company and says, "we're witnessing the rebirth of the American car."

The cars featured are "the kind of cars the Obama administration has been pushing: small cars with high fuel economy, hybrid technology, “alternative fuel” capability, etc." says Alex Epstein of the Ayn Rand Center, who doesn't see this as the exciting turnaround GM does.

GM has already gone down a less extreme version of this road — and it proved to be the road to bankruptcy. Induced by irrational government fuel economy laws and union laws to make myriad small, fuel-efficient cars with overpaid union workers, GM lost enormous amounts of money. By contrast, GM and other American automakers made money on larger, safer, more luxurious cars (which could more easily absorb the higher labor costs) including SUVs and Muscle Cars — cars the administration decries.

And we can see this trend continuing today with the one new GM car that is generating genuine excitement among consumers, a car developed pre-Obama-era. Is it a hybrid or other car that gets 30+ MPG? No — the new hit car is a Muscle Car, the revamped Chevy Camaro, which gets a whopping 22 miles per gallon. And it’s only that high if you buy the lower-powered V-6 model.

GM is not ridiculed as "Government Motors" for nothing. Look for the "New GM" to develop more cars like the Volt and fewer like the Camaro.  If customers don’t like them, taxpayers will cover the loss.

August 14, 2009 in Regulation | Permalink | Share | User Comments (18)

User Comments

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Government tries to twist economics into a human behavior modification tool.

Of course, that is the tail wagging the dog.

Economics is the express of human action. Yes, government force can attempt to distort that, but like a rock in a river, eventually the water wins; eventually economics and human action overcomes all the designs of the Elite.

Posted by: Black Flag | Aug 14, 2009 11:02:00 AM

As usual, Stossel and Epstein are absolutely right! The government needs to get out of the car business, and every business less the job of protecting our rights!

Posted by: Kelly | Aug 14, 2009 11:09:09 AM

@Black Flag - Human action doesn't always overcome the Elite - especially since the elite slowly but surely disarm the unwashed. The Cuban & Venzuelan governments always get there way...

Same with Iran, North Korea, etc...

Posted by: John | Aug 14, 2009 11:09:45 AM

Parroting the right wing again without any regard for reality I see:
"GM and other American automakers made money on larger, safer,"

Safer? Really? Ask the insurance industry for the number of single-vehicle fatalities for large SUVs versus smaller (lower center of gravity) vehicles. I guess the (incredibly biased) Ayn Rand center was thinking "safer if you're driving drunk and cross over the yellow line," rather the more common "less likely to cause your death while driving" definition.

And it's amazing how they claim GM went under because of small cars and not the well-documented plummeting of SUV and inefficient luxury car sales to nothing when gas prices spiked (how popular are Hummers now?). If GM didn't have any more efficient cars, they would exist today.

Posted by: jhw539 | Aug 14, 2009 11:16:12 AM

John- I agree with you. "Black Flag" don't forget water always takes the easiest path. Rocks may not be able to control the river but they can guide it. Plus even if the rock is destroyed there are always other to take it's place.

Posted by: Brandon | Aug 14, 2009 11:18:09 AM

jhw539- If you bothered to watch the news you would know that Hummers are still extremly popular. The government "briallant" idea Cash for Clunkers uses the popularity of this type of vehicle to up the "success" of the plan by offering subsidies on them.

Try to verify your facts before posting.

Posted by: Average Joe | Aug 14, 2009 11:21:21 AM

GM will be the new Amtrak. Except the government will be writing the rules by which the competitors will play - which will force us all to buy what we don't want. Incandescent bulb restrictions was just the first of forcing us to be "leaner and greener."

BTW: Since the Volt's battery only lasts for 10 years - I wonder what the environmental and economic impact is to dispose and replace? I would imagine one would have to get a lot more than the (fictitious) 230 mpg to cover the costs.

Posted by: Demetrios | Aug 14, 2009 11:31:20 AM

GM will be the new Amtrak. Except the government will be writing the rules by which the competitors will play - which will force us all to buy what we don't want. Incandescent bulb restrictions was just the first of forcing us to be "leaner and greener."

BTW: Since the Volt's battery only lasts for 10 years - I wonder what the environmental and economic impact is to dispose and replace? I would imagine one would have to get a lot more than the (fictitious) 230 mpg to cover the costs.

Posted by: Demetrios | Aug 14, 2009 11:31:20 AM

Putting the UAW on the public payroll is an ingenious way to purchase a voting block.

Seems the 'Obama administration' (remember the 'Bush Administration' as a derogatory term..), is already working on the 2012 reelection campaign ('Hope for the 'future'').

Especially advantageous if they're successful at pulling the anonymous provision from Union voting..

We'll all be buying into the 'Chicago Way'; unwittingly in most cases.

Wow, nothing like an angry mob to put the minority in control of the majority. The only thing more powerful is an angry mob that reflects majority opinion, (ie. healthcare I think).

Posted by: stephen | Aug 14, 2009 11:41:30 AM

Average Joe:"If you bothered to watch the news you would know that Hummers are still extremly popular. "

Back in reality, Hummer sales in 2008 were down 50% versus 2007. Overall auto sales overall were down only 18% in 2008 versus 2007 - it is clear the Hummer's popularity is crashing.

Not sure what news you are watching, but they are either lying to you or you don't understand it if you think Hummers are still extremely popular.

Posted by: jhw539 | Aug 14, 2009 11:55:36 AM

@jhw539: Like it or not, SUVs are safer. You don't need to be an engineer to figure out that a bigger vehicle offers more protection. And since you're apparently not a scientist at all, here's another link: http://www.exponent.com/Are-SUVs-Safer-than-Passenger-Cars/

Posted by: Angela | Aug 14, 2009 12:58:08 PM

Black Flag @ #1,

Very well said.

Thanks

Posted by: Susana | Aug 14, 2009 1:02:17 PM

Yes, forcing upon us that which we don't want, or need, is myopic and wishful thinking.

Re: restrictions on the light bulbs:
The other day I had on three light sources on for one room, and I still didn't have enough light for reading.

Posted by: Susana | Aug 14, 2009 1:06:26 PM

Angela:"Like it or not, SUVs are safer. You don't need to be an engineer to figure out that a bigger vehicle offers more protection."

I am an engineer, and apparently you do have to be one to understand the basics of what a high center of gravity does to vehicle handling and the liklihood of an accident. The best outcome is usually to not have any type of accident at all, rather than having a reasonable chance of surviving the roll over. There is also a blind assumption that the replacement for SUVs will be current econoboxes.

One of several more thorough investigations of the issue can be found at http://eetd.lbl.gov/EAP/teepa/pdf/Are_SUVs_Safer.pdf

Posted by: jhw539 | Aug 14, 2009 1:39:07 PM

Here are two pieces of political humor on this subject: GM Unveils More Aggressive Post-Bailout Commercial http://optoons.blogspot.com/2009/06/exclusive-gm-unveils-more-aggressive.html
Some Hail Obama’s Requiring More Costly Low-Emission Autos; Others Concerned Cars Designed to “Burn Through So Much Money” May Increase Global Warming http://optoons.blogspot.com/2009/05/some-hail-obamas-requiring-more-costly.html

Posted by: Lou Perry | Aug 14, 2009 5:42:45 PM

The funny thing that the one guy isn't addressing as far as SUV safety is that when you are in a wreck, you're better off in an SUV. Statistics saying that more people in SUV's are in wrecks doesn't mean that the SUV's are to blame for them. It simply means that we have a lot of stupid teenage girls driving SUV's that mommy and daddy got them for their birthdays when they don't even have a driver's license. They start out driving (recklessly) in the SUV, don't change, and bam they're in a wreck. It has nothing to do with the "center of gravity" if you're texting while you're driving.

Posted by: David McEldowney | Aug 31, 2009 11:06:45 AM

The funny thing that the one guy isn't addressing as far as SUV safety is that when you are in a wreck, you're better off in an SUV. Statistics saying that more people in SUV's are in wrecks doesn't mean that the SUV's are to blame for them. It simply means that we have a lot of stupid teenage girls driving SUV's that mommy and daddy got them for their birthdays when they don't even have a driver's license. They start out driving (recklessly) in the SUV, don't change, and bam they're in a wreck. It has nothing to do with the "center of gravity" if you're texting while you're driving.

Posted by: David McEldowney | Aug 31, 2009 11:06:46 AM

Let us not forget, before fuel prices maxed out last summer, and also during the flawed C4C program, some of the more popular vehicles were full-sized pickup trucks. Yet, those short sighted people who have repeatedly cited trucks and SUVs as the reason for GM's financial problems; as they claim they were producing vehicles people didn't want; they have also failed to understand that these were the vehicles that were keeping GM afloat.
Simply put, if GM made more money on truck based vehicles since they're more profitable, and customer demand remained higher for these vehicles versus smaller more efficient vehicles with lower profitability; anyone with a thread of business sense would then conclude you'll be more likely to profit producing those vehicles people actually want, i.e. trucks, SUVs, and now muscle cars.

Posted by: FearTheVoices | Sep 24, 2009 7:34:06 PM

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