By John Tamny RealClearMarkets
With England’s economy gasping in the mid 1970s due to a combination of nosebleed rates of taxation and a currency in freefall, the fortunes of many of its flagship companies similarly reflected the ailing health of a country in decline. High tax rates and inflation bat 1.000 when it comes to the disappearance of investors, and with Coventry-based carmaker Jaguar in major financial trouble, its executives went to the government for help.
Jaguar was effectively nationalized by the British government in 1975 thanks to skeptical credit markets, and it remained that way until Prime Minister Margaret Thatcher’s privatization program freed it from government control nine years later. Jaguar’s story as a ward of the state looms large as a cautionary tale for future GM and Chrysler buyers, two formerly great U.S. automakers who’ve recently asked for and received government help.