This is the Cato Daily Podcast for Tuesday, June 2nd, 2009.

I'm Caleb Brown.

It could be years before the stock of General Motors is back in private hands now that the federal government is the majority shareholder.

But there are myriad decisions that corporations and governments must make in consideration of the other.

Will lawmakers seek to stick their thumb into the GM pie during this period of government

ownership, and $50 billion later are taxpayers really through paying to prop up GM?

Cato Institute Senior Fellow Jeffrey Myron comments.

I think what happened with respect to the GM bailout in bankruptcy is that various interest

groups in Washington,

especially organized labor and the Green Lobby,

saw an opportunity to take over major car manufacturer

and force it to do things that it wasn't going to do if left to market

forces.

To give the United Auto Workers a more generous contract, then they sort of merit based on the

fundamentals of how profitable GM is and how many people to employ and to push it to make a lot more green cars than American consumers are willing to buy if those are priced at market prices.

Is there any more substantive argument President Obama has said we are avoiding a fate

much worse than this by taking GM through a special kind of bankruptcy, has there been any deeper argument about

why this special kind of coddled bankruptcy rather than the standard bankruptcy?

Well, I think they could have made a case that having the government come in and

engage in a somewhat specialized bankruptcy like proceeding, but that was nevertheless

more orderly or faster than a standard chapter 11 might have been,

there's an argument for that. I don't like the argument overall because I think it subverts the rule of law,

...