The government is rarely held accountable for anything they do. Sure sometimes a politician is voted out of office for poor performance, but as a whole, government chugs along chewing through as many tax dollars as it can with very little to slow it down let alone stop it. Once government and its bloated bureaucracies get their evil hands on anything accountability dies.

President Obama and his henchmen have seized control of a portion of the American automobile industry through government loans to GM and Chrysler. When a company borrows money from a bank there are rules called covenants. The covenants lay out a set of guidelines that must be adhered to by the borrower. If the borrower doesn’t comply, the loan can be considered in default and the lender can order the loan to be paid back in full. I don’t know the details of the loans made to GM and Chrysler but they obviously have some very intrusive covenants attached to them. I use as evidence, the firing of GM CEO Rick Wagoner by the Obama Administration. There was apparently something in the loan covenants that allowed for the government to dictate who would sit in the CEO chair at GM. Why? Because it is the Board of Directors job, not the US Presidents, to fire the CEO. Yet, Obama was able to force Wagoner out without any objection from the Board. I think it’s safe to conclude that this was one of the conditions spelled out in the loan. As for Chrysler, they are required to meet certain goals by April 30th, including a deal with Fiat, in order to receive addition government aid. If these goals are not met, Chrysler will be forced to file for bankruptcy. Because of these loans the government now controls the inner workings of GM and Chrysler and they’ve shown they aren’t afraid to exercise their power.

One American automobile manufacturer, Ford Motor Company, refused the loan offer from the government. Ford has been on a cost cutting campaign for years and even though they continue to lose money it looks like they are headed in the right direction. Their losses are decreasing even though the market continues to produce dismal sales figures. This bodes well for Ford because when the market does turn around they will be in a much stronger position financially then either GM or Chrysler. Refusing the government loans may be Fords biggest advantage, as they will not be taking orders from Washington D.C., like GM and Chrysler.

The free market holds companies responsible for their decisions on a daily basis. If a company puts out a bad product that people don’t buy, they lose money and market share. The customer holds the company accountable for putting out a bad product and punishes it by purchasing a competitors product. When the company loses money and market share, the stock market holds the company accountable and punishes it by selling off the stock; thus causing its price to drop. These are a couple of examples of how companies are held accountable for their actions by the free market. Obviously there are many others.

Unfortunately the government operates outside of the free market. Therefore it is not subject to its rules, which is the main reason it is so inefficient. Now the government is meddling in two companies that operate in the free market with little or no understanding of what they are doing. President Obama, the community agitator, has never run a for- profit business, successful or not. And for those of you that point to his campaign that does not count. Campaigns are based on fundraising and bamboozling people into donating money. Obama used his community agitator skills, along with David Axelrod’s marketing savvy to raise the funds and ultimately win the election. So you have a United States President with no private sector experience getting involved in the complex business of designing and manufacturing vehicles. The government is selling this to the American public as a good thing. What does Obama know that the insiders at these two companies don’t?  How to make a profit? I doubt it. How to style a vehicle people will buy? Many trained stylists haven’t done that. How to negotiate a better price for a supplier part? We’ve seen how Obama negotiates; he gives away the farm! Obama will treat GM and Chrysler as if they were part of the government and play by the same rules ignoring free market forces.

The downfall of GM and Chrysler will be delayed thanks to the government loans but I predict, if the government gets too much say in the products they put out for too long, both companies will ultimately fail. Ford on the other hand is to some extent controlling its own destiny. The market downturn and government regulation aside, Ford controls what products they put out, at what price and when. This is a big advantage considering Obama and his crew are likely too use GM and Chrysler to further their “green” agenda and help out their union cronies; two things that really have nothing to do with producing a desirable car. Unfortunately, the government can dictate fuel efficiency standards having an effect on some decisions made at Ford. Despite the potential adversities, I see Ford coming out the winner while GM and Chrysler become shadows of their former selves, if they survive at all.

Elections are held every two or four years depending on what office you are voting to fill. This is the only time we the people can change our representatives. The public votes daily, with its wallets, for the companies that offer them the best value, and against the ones that don’t. The government doesn’t deal well with this kind of competition because it doesn’t have to. If it did, it would usually lose. I predict we are going to witness first hand why government involvement in private industry is a bad idea. In this election it’s the US government vs. Ford Motor Company. People will be casting their votes when they decide what brand of car to buy. Will they vote for Uncle Sam or Henry Ford? Only time will tell. My bet is on Ford coming out on top.