Ronald Reagan And General Motors

I find it genuinely interesting that Republicans are able to describe Obama's General Motors bankruptcy plan into the most unAmerican thing since France. The idea of the government owning a large car manufacturer is not extremely appetizing, but it's hardly the first time the government has intervened in the automotive industry. And the last time, as far as I can tell, was under Ronald Reagan.

It doesn't get mentioned much, but in 1981 the Reagan Administration asked Japanese automakers to impose a "voluntary export restraint" (VER), which capped at 1.68 million the number of cars Japan could send to the United States each year. Reportedly, this was under threat of an outright tariff, but the VER accomplished just about the same thing. Prices of Japanese cars went up, which allowed American manufacturers to raise their prices too. (This was great for the protected industry -- in the short run -- and bad for the American consumer.)

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

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