"Why would US taxpayers want to own today’s GM? Surely not because the shares promise a high return when the economy turns up. GM has been on a downward slide for years.""Many younger Americans have never bought a GM car and would not think of doing so. Given this record, it seems doubtful that taxpayers will even be repaid our $60 billion. But getting repaid cannot be the main goal of the bail-out. Presumably, the reason is to serve some larger public purpose. But the goal is not obvious.""It cannot be to preserve GM jobs, because the US Treasury has signaled GM must slim to get the cash. The company has only slightly more than 60,000 Americans today (83,000 around the world), and plans to shut half-a-dozen factories and sack at least 20,000 more U.S. workers this year.""The purpose cannot be to create a new, lean, debt-free company that might one day turn a profit. That is what the private sector is supposed to achieve on its own and what a reorganization under bankruptcy would do."
"Nor is the purpose of the bail-out to create a new generation of fuel-efficient cars. Congress has already given auto makers money to do this. Besides, the Treasury has said it has no interest in being an active investor or telling the industry what cars to make."
"So the Obama administration is, in effect, paying $60 billion to buy off both constituencies. It is telling the first group that jobs and communities dependent on GM will be better preserved because of the bail-out, and the second that taxpayers and creditors will be rewarded by it. But it is not telling anyone the complete truth: GM will disappear, eventually. The bail-out is designed to give the economy time to reduce the social costs of the blow."
"Such circumstances might arise, if democracy's progress was accompanied by demands for a leveling of social conditions. The danger was that an obsession with equality was very compatible with increasingly centralized state-power.""Tocqueville's vision of “soft-despotism” is thus one of arrangements that mutually corrupt citizens and the democratic state. Citizens vote for those politicians who promise to use the state to give them whatever they want. The political-class delivers, so long as citizens do whatever it says is necessary to provide for everyone's desires. The “softness” of this despotism consists of people's voluntary surrender of their liberty and their tendency to look habitually to the state for their needs."