First the banks, now the automakers

The typical American automobile in the early 1920s was easy to describe. It was boxy and black, offered a manual transmission only, and sported a straight-up four-cylinder engine. Creature comforts were few.

On the bright side, if your car tipped over on a sharp turn -- as the top-heavy contraptions were wont to do -- two strong men could usually set the thing upright, little the worse for wear.

On the front were four letters: "Ford."

A decade later, despite hard economic times, America's streets teemed with cars in every color of the rainbow. They were far more streamlined. Six- and even eight-cylinder engines in more efficient and powerful configurations succeeded one another rapidly. Manufacturers vied with one another to advertise new and better features, both mechanical and aesthetic.

What had happened? History has two names for what had happened, both of which (at one time) meant the same thing:

1) Free-market competition.

2) Chevrolet.

Henry Ford had famously said Americans could have any color car they wanted, as long as it was black. What it took to change his mind were competitors with better ideas. Innovative, vibrant American auto manufacturing raced to a world leadership position which was not seriously threatened for half a century.

So why has American free-market auto manufacturing failed, today?

It's not at all clear it has. Along with facing quality foreign competitors, auto manufacturing in America has been subject to an ever-tightening noose of government regulation over the past 30 years, the most onerous being "fleet fuel efficiency standards," which require U.S. manufacturers to make a certain percentage of light, less safe, high-gas-mileage vehicles to which buyers give the cold shoulder (and which can't be sold for enough to cover inflated union "legacy" labor costs, anyway).

The industry tried to hang on by making up profits abroad and domestically on the bigger, heavier vehicles that U.S. consumers love and our masters in Washington love to hate. Then came $4 a gallon gasoline and a recession, which helped trigger a worldwide slump in auto sales and led Detroit executives crawling -- or jetting -- to Washington in search of taxpayer funds.

Might they be having second thoughts?

President Obama over the weekend forced out long-time General Motors CEO Rick Wagoner (yes, as in "Chevrolet"); gave Chrysler just 30 days to merge with Fiat or some other foreign entity; declared he will accept no dawdling on his demand that Detroit must "build the next generation of clean cars;" and announced creation of a new "Director of Recovery for Auto Communities and Workers" -- a post to be filled by former Deputy Secretary of Labor Edward Montgomery.

It should take the breath away. An elected politician who never even finished a term in the Senate, who has never so much as run a local car dealership or worked the counter in a brake and muffler shop, has just removed the head of a major American corporation -- the kind that's supposedly owned and controlled by private stockholders.

Have Mr. Obama and Mr. Montgomery invested $10,000, $50,000, $100,000 of their own cash in auto stocks -- money they stand to lose if their scheme for "cleaner cars" goes down as the next Edsel?

No. Not a penny. They want to play with the toy trains, but if they break them, they'll just "move on."

Then, in a move that sounds like something out of Ayn Rand's great parody of the New Deal, "Atlas Shrugged," the president declares he will decide which firms will merge and which will survive, and winds up the day by appointing a desperately pro-union bureaucrat and functionary to "fix things" in autoland -- clearly implying what's needed is not freedom from regulatory and union-contract shackles, but instead some kind of institutionalized hand-holding and lifetime welfare for their workers.

It appears the president and his men have entirely lost track of -- if they ever really grasped -- the fact that in America, major industries are not run by the government, and for good reason.

This "new" system -- in which private capitalists technically maintain title to their enterprises, but really operate under close, monopoly government supervision -- was tried in Italy starting in the 1920s (where Mussolini's system was called "fascism"), and in Germany starting in the 1930s (where they called the plan "national socialism.")

This is not name-calling. These terms describe a certain type of state-run economic system, to which the Obama administration -- in office a mere 60 days -- is now embarked with a vengeance on converting this nation.

It's a version of central planning, and it won't work.