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Ralph Nader and Public Citizen:
Together Again
A recent letter to President Obama was most notable because it was signed by both Public Citizen and Ralph Nader who started PC in 1971. Mr. Nader has not had much to do with the organization since he left it thirty years ago and there may have been a few hard feelings by PC toward their founder over his 2000 presidential campaign.

Also of note was the topic of the letter, Mr. Nader?s favorite target, General Motors. The letter asks the President to call off GM?s planned IPO in order to preserve the government?s majority ownership stake in the company. Mr. Nader and Ms. Claybrook want the federal government to use its ownership ?to direct or influence the company?s investment decisions? while prohibiting GM from providing policy recommendations to the government.

Nader, Claybrook, et al. assert that GM is acting ?outrageously? by participating in the democratic processes by which public policy is made on issues such as trade and taxes. A reasonable point can be made that a federally-controlled company should not be trying to influence federal decisions but that is a reason to speed the IPO not suspend it.

The letter also cites protection of the taxpayers? investment as a reason to call off the IPO. The letter states, that ?analysts have offered the view that GM's financial prospects are very positive? even though implementation of the Nader/Public Citizen recommendations would change that positive outlook very quickly.

Among the letter?s recommendations is that ?the government can and should direct GM to increase dramatically its investments in electric cars....? In short, the letter asks that the government require GM to spend enormous sums to produce heavily subsidized vehicles primarily for some status-conscious upper income consumers. As a Washington Post editorial writer noted, the Administration's existing commitment of $5 billion for electric cars is a ?taxpayer rip-off? that ?benefits no one but a few well-to-do car buyers and politically connected companies.?

If the letter writers got their way, GM would go from being a promising IPO to a bottomless waste pit of federal subsidies. Who would have thought that the day would come when suing GM would not be Ralph Nader?s most economically harmful idea?

  • See Nader/Public Citizen Letter
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