GM's Price Hike Confirms Need to Abolish Car Import Quotas

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GM's Price Hike Confirms Need To Abolish Can Import Quotas

EVEN GENERAL MOTORS IS NOT powerful enough to overrule the laws of supply and demand. Its recent announcement of a 2.9% price increase -- following last fall's 3% increase and in the face of declining sales -- simply confirms that the U.S. car market remains fundamentally uncompetitive. What GM has done is to provide a reason for eliminating the basic cause of the problem: quotas on Japanese imports.

It's madness. GM raises prices while shutting factories to reduce excess inventories. The action can only be a desperate attempt to increase profits. But sales have been so slow that the auto companies may be forced to adopt new "incentives" -- possibly low-interest loans -- to revive them. GM apparently hopes that this calculated confusion, raising prices with the left hand and lowering them with the right, will create higher …