Bloomberg has a news article about banks with some blunt quotes from money managers who think government ownership is a negative in a business. It quotes Philip Orlando of Federated Investors as saying, "You never want to have the government involved in your business...They're not businessmen; they're bureaucrats. They don't understand capitalism, they don't understand the profit motive and they don't understand the financial industry." Kevin Starke, an analyst at CRT Capital Group LLC in Stamford, Connecticut, is quoted as saying, "Every time I try to pitch an idea to investors that has some government involvement, the automatic reaction is, 'I don't want to get involved.'"
Meanwhile, in the context of the GM bankruptcy, the Wall Street Journal editorial writers are worrying that the government, with its big ownership stake in GM, will favor that company over its competitors: "The larger corruption will be when government tries to vindicate its ownership by favoring GM over Ford and the other auto makers that aren't wards of the state."
These are two lines of reasoning that both come out against government ownership, but for different reasons. To go back to the analogy in the earlier FutureOfCapitalism post on Government Motors:
if you are an owner of a competing car company — for example, a shareholder in Ford or Toyota or Honda — do you really want to be competing with an auto-maker whose owner, Uncle Sam, has the power to set rules for auto emissions and fuel economy and is also a major purchaser of cars for the federal fleet?
Or could government ownership wind up running GM into the ground, and end up being good for its competitors and bad for its taxpayer-owners? Federal Express and UPS, after all, have done pretty well competing with the United States Postal Service.
The Wall Street Journal, in the sentence about "larger corruption," is making the point that government ownership of GM might be bad for GM's competitors. The sources in the Bloomberg story are making the point that government ownership of a bank is bad for the bank and good for that bank's competitors.
Of course, it's possible (some might even say likely) that the government could try its best to use its power to help a company it owns and still be inefficient or clumsy enough to fail at the attempt. But logically, it's hard for both these arguments against government ownership to be true at the same time. If it were, the government would have to both be such a formidable competitor that you don't want to compete with it, and at the same time be such a bad owner that you don't want to be a partner with it. What's the alternative? In the case of the auto industry, if you think the government is both going to foul up GM and throw its weight around enough to adversely effect Toyota and Ford, maybe the upside lies with alternatives to automobiles, such as trains, planes, bicycles, and videoconferencing.