Car czar

Here’s the broad outline of what we believe will essentially be an in-place nationalization of a major American industry:

• The government will name a “car czar” to rule over the industry with “veto power” over any Big Three expenditure over $25 million.

• The government will get stock warrants equal to 20% of the bailout — today equal to about half the market value of the Big Three. Basically, the government will own the auto industry.

• Government will control the pay of Big Three executives, limit dividends to shareholders and give government debt priority over private bondholders.

This would be the death knell of American-style capitalism, where Joseph Schumpeter’s notion of “creative destruction” has helped forge the most productive, wealthiest economy ever.

Worse, none of this addresses the Big Three’s basic problem, which is that their costs are completely out of whack with the rest of U.S. industry. The bill asks nothing at all of auto unions, even though they’re a major cause of the industry’s dire condition.

As we and others have noted, U.S. automakers pay their average worker just over $70 an hour in total compensation, compared with about $45 an hour for Toyota, Nissan, Hyundai and other transplants. Same work force. Same country. Nearly a $30-an-hour difference. A “car czar” won’t be able to address this difference.