Wicker auto stock bill worth debating

Published 5:00 am Monday, June 29, 2009

Would you be interested in owning a part of one of the nation’smajor automakers?

Legislation being proposed by U.S. Sen. Roger Wicker, R-Miss.,could see that happen in the wake of the federal government’sbailouts of General Motors and Chrysler. After those companiesemerge from bankruptcy, the U.S. Treasury will have a 60 percentstake in GM and an 8 percent share in Chrysler.

As its name implies, the senator’s plan would see “Auto Stockfor Every Taxpayer” by equally dividing stock certificates amongthe 154 million citizens who paid income taxes in 2008. The stockswould be in the citizens’ names and effectively get the governmentout of automaker ownership.

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Citizens would be free to sell their stocks or hold onto them inhopes of an automaker rebound to prosperity. Such a move wouldincrease the stock’s value and the potential windfall for itsowner.

Wicker’s plan presents some intriguing possibilities as it againwould leave automakers’ fates up to the economic winds of a freemarket system.

Opponents could argue those same winds helped create theeconomic storm that required the automakers’ current rescue by thegovernment.

And then – if stocks are to be given to taxpayers for them toreap the financial benefits – there is also the matter of how thegovernment “bank” will get back the money it lent to provide therescue in the first place.

If it can’t, then the government could look to increase taxes orcreate some new ones in order to recoup its money. In that case, atleast part of the financial benefit of stock ownership would stillbe claimed by the government.

The bottom line comes down to who is in a better position tooperate a giant automaker – a board of directors under a freemarket system with its potential rewards and risks, or governmentofficials who may have little expertise or knowledge of autoindustry workings.

Wicker’s proposal may not be a panacea for auto industry ills.But it is one that is worthy of consideration and debate aslawmakers work to fix the current mess.