Alright, we’ve got to wake up.

GM’s latest plan is for the federal government to take a majority stake in the company, in exchange for $11.6 billion in new “loans”. That’s in addition to the $15.4 billion the company has already skimmed from taxpayers. That’s over $25 billion government dollars being misappropriated to prop up a doomed private entity. Doesn’t that alarm anyone?

This is nuts.

The government has no business being in the car business, no experience running a major multinational corporation, and lacks even the proper incentives to operate profitably. GM is going to fail one way or another, and the only question is how many of our kids’ dollars they’re going to take with them. It may be fair to say that the government, GM management and the UAW are trying to prevent people from getting hurt, but we’re past that now–people are going to get hurt. The company has been mismanaged for decades, and the executive suite, the UAW and the government are all complicit. GM shareholders assumed this risk when they invested in the company, and their investment has now gone belly up. Too bad.

There will be a flurry of analysis over the next few days about this deal, and the pointy-headed pundits will evaluate it down to the last detail. But the end result is obvious to anyone with common sense: it will flop, and it will take billions and billions of taxpayer dollars with it. The government and the UAW as majority partners in running a giant private enterprise? Does anybody really believe this has a chance of working? Let the market work, let the investors lose their stakes, let the company try to reorganize in bankruptcy court, and let’s get on with it.

In When Growth Stalls I talk about the problems of a loss of focus, a loss of nerve, and a loss of management consensus, all issues with which GM has struggled. But this one tops them all–loss of sanity.