When are we going to talk about government's role in destroying the industry?

For instance — what about the restrictive state franchise laws that require GM to maintain obsolete brands and keep nonviable dealerships functioning? When they opted to close Oldsmobile, they paid out $7 billion and are STILL paying! Imagine how much money closing Pontiac, Buick, GMC and other brands would be under those laws.

Let's not forget mandatory unionization laws. If GM, Ford or Chrysler were to open non-union plants, the anti-union-busting laws would kick in.

How about legacy costs? Toyota, Honda and Nissan have operated in the USA for less than 20 years. GM, Ford and Chrysler have all operated here for about 100 years — and have HUGE legacy pension and health care costs… many of which were imposed by the government's regulation of the industry.

How about laws that force automakers to violate the laws of physics by requiring heavier cars, loaded up with "safety equipment," that must somehow get dramatically better fuel economy at the same time?

What about the fact that the Japanese government provides direct transfer payments to Toyota, Honda and Nissan — and that the German automakers are all heavily state owned?

What about the fact that imported cars from Japan, Korea and Europe pay a 2% tariff, but exported cars from the USA to Korea pay a 140% tariff, to Japan pay a 100% tariff, and to much of the EU end up doubling or tripling in price?

It's easy and simplistic to bash the Detroiters with 20-year-out-of-date cliches about "crappy cars" (they're not — nobody sells crappy cars anymore) and "bad management" (some of the management has been bad, but many of them have had their hands tied by government).

The real problem is that American government has viewed Detroit as a giant source of cash and a "public good" to be simultaneously taxed, regulated, burdened AND mocked, and now the results of all of that government activity are coming home to roost.

And none of the phony Republican "free marketeers" decrying bailout money are rushing to respond to the crisis by eliminating stupid "safety" regulations that require a car to be able to be driven into a concrete barrier at 80 MPH and the driver to walk away, or eliminating the government regulations that require no-deductible health care for auto workers, or eliminating the cash transfer requirements, or even going to the Japanese, Koreans and Germans and negotiating an end to their government subsidies and import tariffs.

And sorry Kip, but domestic facilities of foreign-operated auto-makers are no more the "US auto industry" than domestic facilities of foreign-owned electronics companies are the "US electronics industry."

At some point, it needs to be conceded that these companies are important, and that they've largely been destroyed by government.

[Kip replies: While I generally try to avoid the intra-libertarian debate of "capitalism versus corporatism" (except to occasionally expose blatant cases of shameless rent-seeking), I think it's a bit naive to summarily dismiss the Big Three's woes as nothing more than a case of overregulation. There has been a long history of complicity by the Big Three toward all the supposed slings and arrows you cite, and it's far too late for them to suddenly start saying, "Ow, that hurts!"]