GM's main problems are
1) A terrible, bloated cost structure
2) A terrible, bloated bureaucracy
3) A bunch of meh car lines.
Hire an MBA to be a journalist and this is what you get. There's no excuse for the poor writing, however; she does have an English degree. All her posts come down to the same libertarian fantasy world nonsense: Eliminate government, let business do whatever they want, and the world will be a Utopian fantasyland.
I wonder if McArdle's usefulness is almost at an end. It will be fun to watch her be wrong in public about Alt-A mortgages, but otherwise she will be just another little voice bleating in the wilderness, defending the indefensible long after everyone else has given up in shame.
More on the Alt-A situation later; a retrospective of McArdle wisdom on ARMs is next.
In some corner of her mind she must realize that she's not actually saying anything worth saying. The evasions are just too obvious. She has to work so hard to not mention that (1)most of the cost disadvantages that killed GM have to do with legacy costs from being a bigger company in the past, much of which became federal obligations with ERISA over 30 years ago & (2) most of the damage from liquidation would be in suppliers, dealers, & related communities that it can't be an accident.
Even her commenters get this stuff. Of course, its about contradictions to her philosophy that are so root basic that she has to be blind to them, or the whole glibertarian appletini train stops & she has to start working.
Yes, she absolutely must ignore a multitude of factors and facts for her ideology to be anything but wishful thinking.
One of the things I try to do with this blog is point out how and why people are able to delude themselves so thoroughly. Megan McArdle needs to think of herself as elite and superior, and part of a superior society, to fight her insecurities and feed her vanities. But people can't admit they feel bad about themselves or are looking for love and approval. They find more acceptable reasons to do what they want to do anyway, and claim they are backed up by institutions of authority.
So (for instance) a man who is uncertain about his masculinity because his parents told him that his love of art means he's not a real male might become very involved in his church, which will tell him exactly what a woman or man should be, and that women are in a place in the universe's hierarchy which is lower than his. He will vote Republican because they will tell him that men are mistreated by women and picked upon, which will trigger his feelings of persecution by his parents. He will dislike gays, since their status is seen as a rejection of the God-and-state-given status quo and they remind him of his own doubts about his masculinity. And the entire time he thinks that he's just a good, moral, God-fearing, America-loving Republican, when he's really just an insecure guy whose parents made him feel bad about who he was when he was growing up.
"...defending the indefensible long after everyone else has given up in shame."
Dream on. These people have no shame, as you know better than most. She'll always have a peer group to validate and reinforce her fantasies.
Yes, you're right, of course. Fortunately it suits my own needs to challenge authority and mock pretension so I'll be there too, annoying them.
Hey, speaking for MBAs with an English Lit undergrad, I think we've just been insulted, being tarred with McCardledumb.
Since the ERISA chimera has been brought up, let's just mention that the reason GM was able to pay all those bonuses to Roger Smith for all those years is that it took monies that were supposed to be allocated to the pension fund and worked out a sweetheart deal with the Government to "fund" those obligations over 20 years. (Can you say 'regulatory capture'? I knew you could. Strangely, McMegan doesn't seem to have the phrase in her vocabulary.)
What was conspicuously avoided over the past decade or so is how badly the Dealer Model screwed the carmakers—and how no one in GM Upper Management tried to do anything about it. (Instead, they spun of GMAC and doubled-down, knowing the risk was effectively socialised.)
Now, when I was in MBA school (2000-2002), we were taught that firms are unwise to do that, and that it is the job of boards and management to make certain they don't get into that position. Haven't heard a peep about that from McMegan either.
Are you certain she has an MBA? (I would question the English degree as well, but that's just because she can't write well; maybe she knows everything there is to know about the Romantic Poets or something.)
My apologies, Ken. I was a little too sweeping in my swiping at McArdle. She must have graduated, but with as little effort as possible, which she has admitted. I guess that explains why her writing is so poor--she doesn't try to make it better.
Susan, I am looking forward to your upcoming Alt-A / ARM posts.
Nor do governments historically have a good record as cutting-edge auto designers.
I watched the whole press conference and one schmuck stood up to ask a "government meddling in car design" question, which was very obviously odd.
Their brains just work differently I suppose, and in a more boring way.
Heck, in my conspiracy theories people's lives are on the line.
RB--what can be worse than having the government impose fuel standards? It's like a jackboot on our gas tanks, forever.
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