Tag: Nationalism

GM’s Nationalization and China’s Capitalists

GM’s restructuring under Chapter 11 includes plans to sell off the Hummer, Saab, and Saturn brands. Well, just one day after GM’s bankruptcy filing, a Chinese firm has come forward with a $500 million offer to purchase Hummer. The prospective buyer is Sichuan Tengzhong Heavy Industrial Machinery Co Ltd, a manufacturing company in western China, which hopes to become an automaker.

Not only is the Hummer offer the first bid for a GM asset in bankruptcy, but the bidder is foreign. Not only is the bidder foreign, but Chinese. And not only is the bidder Chinese, but the Hummer was first developed by the U.S. military. Thus, this is certain to be characterized as a national security matter, and the Committee on Foreign Investment in the United States (CFIUS) will have to review the proposal. There should be little doubt that the economic nationalists will be out in full force, warning CFIUS against transferring sensitive technologies to Red China.

Let me offer two quick points, as the bulging veins in my temples pulsate with disdain for official Washington.

First, if this deal is rejected (even if the bidder is scared away by detractors), any remaining credibility to the proposition that the United States will once again become that beacon on a hill, exemplifying for the world the virtues of free markets and limited government, will vanish into the ether. There has been too much U.S. hypocrisy on free trade and cross-border investment and too much double talk about the impropriety of government subsidizing national champions, that another indiscretion in a high profile case will blow open the already-bowing flood gates to economic nationalism worldwide. Considering that U.S. companies sell five times as much stuff to foreigners through their foreign subsidiaries than by exporting from the United States, investment protectionism is as advisable as nationalizing car companies.

Second, the willingness of this Chinese company to purchase Hummer serves as a stark reminder of what could have been. Had George W. Bush not allocated TARP money to GM last December, in circumvention of Congress’s rejection of a bailout, then GM likely would have filed for bankruptcy on January 1. At that point, there would likely have been plenty of offers from foreign and domestic concerns for individual assets to spin off or for equity stakes in the New GM. There would have been plant closures, dealership terminations, and jobs losses, as there is under the nationalization plan anyway. But taxpayers wouldn’t be on the hook for $50+ billion, a sum that is much more likely to grow larger than it is to be repaid. It is also a sum that will serve as the rationalization for further government interventions on GM’s behalf.

Your Apropos-of-Nothing Observation of the Day

Fun with juxtaposed quotes:

Durkheim taught that in religious worship, society adores its own camouflaged image. In a nationalist age, societies worship themselves brazenly and openly, spurning the camouflage.

-Ernest Gellner, Nations and Nationalism (Ithaca, NY: Cornell University Press, 1983), p. 56.

and

Addressing Congress [in 2003], Bush declared that “the course of this war is not known, yet its outcome is certain. Freedom and fear, justice and cruelty, have always been at war, and we know that God is not neutral between them.” A form of religious nationalism permeated the whole address. Bush took words from a hymn, “There’s Power in the Blood,” to refer to the “power, wonder-working power,” of “the goodness and idealism and faith of the American people” — words which in the hymn are used of the lamb, Jesus Christ.

-Anatol Lieven, America Right or Wrong: An Anatomy of American Nationalism (Oxford: Oxford University Press, 2004), p. 128.

Crazy as I thought those days were at the time, the more you think about it, the crazier they seem. You’d think American Christians would have found this sort of thing mindblowingly offensive. Yet, they sort of seem to have dug it.

Nationalism. Powerful stuff.