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Should we nationalize the Big Three?

As lawmakers debate a bailout package for the troubled Big Three automakers this week, we're seeing a word rarely spotted north of Venezuela or west of Scandinavia: nationalization.

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Others aren't so sure. Robert Weissman, who edits the Multinational Monitor, a bimonthy founded by Ralph Nader in 1980, argues that nationalization of GM should be seriously considered, but that getting government into the automaking business would involve making hard choices:

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[N]ationalizing the companies would entail many complications and difficulties, including managing relations with workers and plants around the world, fair dealing with suppliers and workers at suppliers, and the inherent complexity of running multinational auto companies.
Is a true nationalization the best option? Maybe, maybe not.

A public utility

Michael Moore, who first became famous for his 1989 film, "Roger & Me," which described what happened in his home town after the GM plant closed there, sees an opportunity to use the Big Three's manufacturing might to build a new transportation infrastructure. On his blog, the filmmaker writes:

Transporting Americans is and should be one of the most important functions our government must address. And because we are facing a massive economic, energy and environmental crisis, the new president and Congress must do what Franklin Roosevelt did when he was faced with a crisis (and ordered the auto industry to stop building cars and instead build tanks and planes): The Big 3 are, from this point forward, to build only cars that are not primarily dependent on oil and, more importantly to build trains, buses, subways and light rail (a corresponding public works project across the country will build the rail lines and tracks). This will not only save jobs, but create millions of new ones.

Mr. Moore says that a government buyout of the Big Three makes sense because, if the government loans them money and they default on those loans, the government will end up owning them anyway.

A Red scare?

Some see the prospect of government takeovers as sinister. Libertarian commentator Lew Rockwell, the president of the Ludwig von Mises Institute sees shades of Soviet-style economics in Dan Neil's proposal.

Only a complete economic ignoramus would believe that Americans would for some reason be better at socialism than Russians (or anyone else).

Nationalizing one or more of the Big Three is probably not politically palatable for most Americans: A recent CNN poll showed that 6 in 10 Americans oppose using taxpayer money to help the automakers. But many Americans are not opposed to nationalization in principle. In June a Rasmussen poll found a slim minority of Americans oppose nationalizing the US oil industry.

In Sweden, the public is far less ambivalent about state intervention.  A late-November poll found that 68 percent of Swedes favor temporary nationalization of Volvo, which is currently owned by Ford.

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