We head down the old road of single industry when we should be diversifying…

June 2, 2009

While I have not agreed with President Obama’s auto company bailouts, with GM going into bankruptcy but propped up by billions of taxpayer dollars and a 72 percent government ownership stake (60 percent U.S. and 12 percent Canadian), and Chrysler coming out of a relative quick bankruptcy – propped up by the government bailout program as well, I sure hope it all works out.

The government has loaned GM nearly $21 billion, but to no avail so the company filed for bankruptcy on Monday and the taxpayers are left with a majority ownership of a failing business.

(And I have to ask why American taxpayers have to fund this whole thing when Chrysler is merging with the Italian car maker Fiat. Also I heard the president say that the government was the only entity that could come up with enough money to bail out GM. And that is probably true since only the government can essentially print its own money – how much that phony stuff will be worth in the long run is hard to know. We are looking at heavy inflation down the road, I’m quite confident.)

I know in times way past I often heard something to the effect that our economy is driven by car production, but it always kind of whizzed by me like so much freeway traffic.

Seems like a lot of us were thunderstruck a year or so ago when we realized that the U.S. economy was virtually totally dependent upon car and light truck production and a super-inflated real-estate market that suddenly deflated.

Going forward it sure seems we need to diversify – never a good idea to put all your eggs in one basket as the old adage goes. Surely we can produce a lot more than cars. We used to.

Rather than go down that wrong road again by bailing out the failing automakers, it seems government efforts would be better spent promoting highly diversified industry for this country, everything from tennis shoe making to highly technical so-called green energy projects. We need to produce things and get people working. How are we going to support the unemployed when too few are employed?

We have come to this pass via the evolving global economy. So many saw the global economy as a panacea, that is as long as the U.S. controlled it, selling Coca-Cola, cigarettes, and cars around the world.

But somehow we lost control of the whole thing. Through inflated real estate values and maybe to some extent inflated wages (and I wish I could have gotten in on more of that) we became a nation of consumers more than a nation of producers.

One of the reasons for all of this no doubt is that capital by itself is not patriotic. Those who have it may or may not be in their own right, but the rules they play by have nothing to do with the interest of their own nation. You invest capital to make more capital. And generalizing here, those with the money found it more profitable is so many cases to invest outside of our borders because labor in less developed nations was cheap. I knew we were in trouble when we no longer made our own Levis here and not even cowboy boots. If memory serves me correctly, Levi Strauss, a company with a proud uniquely American heritage, closed down its last plant in El Paso, Texas and moved south of the border. Justin Boots also moved its production outside the country, as well.

The car production things seems to have gone something like this: American car manufacturers over the years seemed to have decided that the reality of the market and of production costs meant that they would be better off pushing essentially bigger muscle cars and trucks to satisfy a large demand here in the USA and in order to be able to make more money on each unit. They ceded most of the small car market to primarily Asian producers.

And I just heard an auto company CEO concede something we already knew, the Japanese beat us on car quality a long time ago. He claimed, though, that now American manufacturers are catching up (a few decades too late perhaps). To me it is not that we could not produce quality, it is that the automakers did not want to. Planned obsolescence and making money on repairs was long the game plan out of Detroit and its environs and at the old dealership, so many of which have now been closed down.

And I’ve read that investors, such as these so-called hedge funds, look to quick and big profits rolling in each quarter – they’re not big on long-term planning or research and development. As I stated earlier, capital does not think in terms of what is good for the country.

And then there is the consumer. People want what they want. In the case of the United States with the high standard of living it was enjoying, large numbers of consumers went for comfort and did not consider things like gas mileage too much except when fuel prices would spike. The spike last summer really did it. Gasoline approaching or at or more than $5 per gallon, combined with increasing unemployment or fear of unemployment or reduced wages gave the consumer a dose of reality of now and future.

But now I read that although the Obama administration aims to force car producers by way of policy and law ( not to mention ownership – even if Obama vows not to run the companies) to produce smaller and more fuel efficient vehicles, if gas prices don’t go up too much, it might be hard to get folks to buy vehicles smaller than they are used to. And notice, I automatically combined SMALLER and FUEL EFFICIENT. That’s because the assumption always seems to be that in order to get to fuel efficient we have to go smaller.

Well we probably need to go smaller than a main battle tank in the U.S. Army or one of those civilian Hummers you see on the road or those oversized or supersized pickups and SUVs.

But something I would like to look into is just what kind of gas mileage did your average, say, 1956 Chevy get? The reason I ask that is that to me the 1950s really seems the golden age of American cars. I was only a little kid in the 50s, and my folks had a ‘53 Studebaker – kinda small, but more or less a regular sized family car. But seems to me those Chevies and Fords of that era were plenty big for a family and were comfortable to ride – I just am at a loss of what the gas mileage was (see end of blog).

Of course I know they were heavy. They were actually all steel – you had something solid – instead of so much fiberglass.

I do recall that through unfortunate circumstances, an accident with the Studebaker (it survived), we wound up with a second car, a Plymouth station wagon, that began as a temporary replacement car and stayed on as a second car. It was comfortable, had more room, but not so good on gas mileage, I’m sure.

But it seems to me that the consumer ought to be in the driver’s seat when it comes to deciding what the car market should be. Individual car buyers will and should be able to decide what they want and what they need and what they can afford. As for fuel mileage and other environmental concerns, let’s take that on one at a time. We know from last summer’s big fuel spike what it takes for Americans to go for more fuel efficient vehicles and/or cut down on unnecessary driving. – of course we have an indication they will tend to turn the other way when fuel prices go the other way. But on fuel mileage, letting the market dictate seems to have a pretty powerful effect. As for other environmental concerns, such as the amount of pollutants cars put out, the market will not control that, the government does have to set some standards. But those standards have to be realistic and based on hard science and should not be based on some congressman’s idea of, say, pushing corn based ethanol (which really does no good for the environment) because he’s from Iowa.

And standards should be set by the federal government, not states, so that they are uniform across the nation. Once the automakers, to include foreign makers, know what the standards are, they will produce cars that meet those standards – they have no choice.

Something tells me that private enterprise in competition will likely do a better job of meeting consumer demand and meeting pollution standards, that is making cars people will and can buy and use to their best advantage, rather than a government one-size-fits all approach.

I think competition from foreign car makers, to include ones who assemble right here in the U.S., can be healthy for our own homegrown industry. But as long as the government is there to prop up industry, the corporate powers that be will not learn how to compete.

The government set a bad precedent back in 1979 when it propped up Chrysler with loan guarantees. “We’ll do better”, they promised at the time — what happened?

I can only hope we haven’t fallen for that same line again.

P.s.

As to what the gas mileage was on your average 1950s model family car, my oldest brother said his resident expert suggests about 15 to 22 mpg. I’ll bet we could produce cars just as roomy with slightly better or even far better mileage (partly because we use lighter weight materials nowadays) even using the existing internal combustion engine model, with just some slight tweaking. I’m sure we will evolve into another technology, but we need to consider does it really save energy and what unforseen effects might there be on the environment when all things are considered and what it will take to provide the infrastructure (you know, things like electrical outlets to plug your car into and how to make it all affordable).

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If “local” news gathering can be outsourced to India and U.S. taxpayers must fund GM to produce cars in China — just what is OUR function???

May 29, 2009

I just read on the Editor and Publisher site that the Hartford Advocate newspaper (out of Connecticut), along with two other alternative newspapers connected with it, in what was first proposed as a joke and then became serious, has published at least one edition in which all or virtually all of its local news was done by outsourced writers – from INDIA!

On my first read of this item I did not get whether this was a one-time thing or a new way of doing things. This is not the first time something like this has been done. And in the case of the Advocate, it seems some of these writers are quite highly qualified, having written for the Guardian (out of England), the BBC, and the Times of India. Interestingly, the Advocate personnel said the whole thing was “not cheap”.  But at least one other U.S. newspaper tried (still is?) outsourcing local news because they could get the job done for a lot less money (really kind of like just accepting the news release written by city hall instead of doing your own reporting – but really the story for the local newspaper is not so much about what happened at the council meeting, but what led up to it and what is the result and so on – good reporting is not transcription). My own local newspaper is starting to use more submitted articles. Back in the old days, local newspapers often used so-called “stringers” who worked on a kind of low piece rate (or maybe for free for their own vanity – kind of like I’m doing here). Back to the oursourced writers from India. Of course they do all of this by phone, calling to the U.S. for interviews from the Indian subcontinent. It’s bad enough they’ve taken over medicine (at least where I live), but our local news reporting too!?

Reading this on top of learning by way of the web and some on cable news that General Motors plans to use taxpayer bailout dollars to make cars in China (and even import some of them back into the U.S.) leaves me to ask the question: just what is OUR function on this planet?

(Maybe we’re all supposed to join the Army. Then again, that could be outsourced — like the French Foreign Legion — not a bad idea.)

Going back and reading the E&P item again I saw that the Advocate is a weekly and the whole thing was done as a kind of spoof to prove a point (or not). They (the paper) explain it themselves and if I can get this link correct you can get that explanation at: http://www.hartfordadvocate.com/article.cfm?aid=13171

And if that didn’t work, just Google Hartford Advocate.

They also mentioned that they got the idea from news some time ago that a newspaper in Pasadena, Ca. decided to outsource some local coverage by doing such things as linking up their Indian correspondents via webcam to local city council meetings. Having attended far too many council meetings when I was a reporter (I actually liked them at first), I’d say that’s one job I’d almost not mind giving up.

Seriously. Besides all the obvious logistical, practical, ethical, even cost, considerations associated with outsourcing news coverage, doesn’t one have to ask at what point do we lose our personal identity?


Expand Medicare, stop bailouts, reinstate draft, support science, admit that to be gay is genetic…

May 18, 2009

Some more public policy suggestions from Tony Walther’s Weblog:

HEALTH CARE:

Expend a lot fewer resources and energy on the subject. Simply expand Medicare by extending it to those who cannot afford or are not eligible for private insurance, regardless of age. There of course would have to be a strict means test for this. And I don’t mean to suggest that it would be inexpensive to do this, but it might be no more or even less expensive and more practical than what we are doing now or what is being proposed (which is not clear at all). And it could be all done so much quicker (how long has congress faced the health care issue? Decades now).

It occurs to me that health care could be seen as a personal right in our modern society, but it might also be seen as a personal responsibility at the same time. I don’t think those two conditions are mutually exclusive. While it is a personal responsibility, if you cannot afford that responsibility, you need help.

And I realize we read that both the Medicare and Social Security trust funds are fast running out. But something will have to be done about that. I doubt that either program will be cancelled, so our elected representatives will have to, dare I say it, make some decisions and the electorate itself has to accept certain priorities. But it would seem that a secure and stable retirement system and some form of universal health care (I refer to a system in which no one is denied health care simply on the basis of cost) would be at least near the top of those priorities. 

ECONOMIC STIMULUS:

Give business back to business for the most part. Stop all bailouts. Let failing enterprises, banks included, go bankrupt. But at the same time offer incentives, such as tax breaks, to businesses that create American jobs (and these need to be jobs that don’t require further government subsidy to workers – such as the old Walmart approach of handing out how-to-get-government-assistance flyers to employees). At the same time apply penalties to businesses that ship jobs overseas, such as high tariffs on products being imported back in. And I was going to write simply, enact penalties for outsourcing (maybe a penalty tax on outsourcing). But I don’t know how practical or practicable that would be. But if there is enough incentive for hiring American, then maybe that would not be necessary.

Our government should encourage a return to the production of manufactured goods and consumer products, again through incentives such as tax breaks.

Also, renegotiate our so-called “free trade” agreements with other nations so that we are all playing on a fairly level field. Other nations subsidize industries and/or have labor forces that work at extremely low wages. We need “fair trade”, not so much “free trade”.

Instead of bailing out failing businesses, divert some of that funding to help displaced workers, but do not make this commitment open ended. The ultimate goal for able-bodied people should be new jobs.

DEFENSE:

Make our policy one of defense rather than offense. While I don’t think the United States, even under George W. Bush, has been an imperialist nation, we have long held the belief that we have to exert our influence all over the world. I think we should promote our form of democratic government by example more than by force. We should be supportive to the extent we can of nations who would model themselves after us, but leave it at that.

I do, though, realize that in some situations we may find that the best defense is a good offense. This would be in cases of true emergency when it comes to our attention that, say, a rogue nation or rogue regime in a nation might come within grasp of having the means along with the aim of destroying us. Strangely, that last sentence sounds like Bush 2’s rationale for going into Iraq. So, if he and Cheney had been honest about such, that is if Iraq would have really been in the position to attack us or supply weapons of mass destruction to our enemies, I might have seen the Iraq invasion as the necessary choice (although a more surgical choice might have been wiser). But the information that has come out points the other way (and some of this info was at least hinted at even before we went into Iraq). I believe Bush and Co. have even admitted they were wrong (if not that they knew they were wrong at the time). They had a predilection, that is they were predisposed to go into Iraq and then they manufactured an excuse.

Iran’s (reported) continued development of nuclear weapons capability might someday require an offensive, pre-emptive reaction, and perhaps more urgenty, the possibility of Islamic militants getting hold of Pakistan’s nuclear arsenal. But let’s hope none of that becomes necessary. But let’s also hope no potential adversary doubts our resolve to defend ourselves.

MILITARY SERVICE:

I think the all-volunteer professional military has big advantages and that we should maintain a large and highly-trained and motivated professional cadre, or really a permanent professional force that would be larger than the word cadre connotes. But along with that professional force I would be supportive of a mandatory military service of youth, beginning at age 18. Two years of active duty would seem appropriate, if a little bit arbitrary. There of course would probably be provision for conscientious objectors with some type of compulsory public service. I think with a new military draft or compulsory service you would find that we would be a lot more thoughtful and careful about using military force. We might also have more resolve once we did commit force. And why is it not everyone’s duty to defend the nation?

My reading of recent history is that the so-called neo conservative movement was disappointed with the nation’s lack of resolve in Vietnam and thought it endangered us by making us look weak. The liberals who had pushed for ending the draft got caught in their own trap. The neocons decided that the all-volunteer force would leave so many off the hook that it would be easier to commit forces where they desired. And I think it did make it easier.

But it seems to me we are all in this or should be all in this together. Not everyone serves on the local police force and that is understandable. But too many have come to view the military as a police force that they can simply expect to “handle it”. When only a minority is left with the responsibility to protect a nation I think we lose our sense of nation and one day might be in jeopardy of losing the nation itself.

 ENVIRONMENT:

We need strong public investment in science more than anything else. And it is the government’s job to protect the environment and to enact laws that support that. Environmental regulation needs to be based on science and not politics. We cannot afford to cut off our nose to spite our face by enacting unreasonable and over-reactive environmental regulations that stifle commerce, but at the same time we do not want to destroy our planet or our quality of life.

THE MORAL QUESTIONS:

Societies have rules, often called “morals”. The United States has been unique in that we are a blended society whose members may have similar, but not necessarily the same moral code. We are not all of the same religion and we are indeed not all religious, although for the most part our laws regulating social behavior are I suppose based on Judeo-Christian principles.

For the most part there is not a problem. We virtually all agree, for example, that it should be illegal to murder someone. We don’t all agree on the proper punishment, though. There has been a continuing debate over capital punishment. I think I am correct in saying that the anti-capital punishment forces seem to be holding the edge on this one. I have my own opinion, but I think this has to be left to voters and legislatures, and to some extent the courts (who seem to be frequently confronted as to the question of the constitutional prohibition of cruel and unusual punishment – you can execute someone as long as it is not cruel? Unusual?).

Abortion and gay (or homosexual) marriage seem to be the hot moral topics now.

As to these two subjects, I have to ask whether there is a rightful governmental interest.

Abortion is a far more complicated topic than those on both sides of the argument make it out to be. But under current law, based on the Roe Vs. Wade decision, the Supreme Court has held that the intent of the constitution was to in the name of individual liberty leave such a personal decision up to the individual. The justices at the time had to reach for that decision by finding it based in part on what was not explicit but what they felt nonetheless was implicit in the constitution. But that is really often the case with decisions in courts. If literal meaning was always evident we probably would not need justices to render decisions (think about it).

As to gay marriage, the only government interest is that marriage is a contract and the government has oversight of contract law. As to the religious aspects, the government has no rightful role. It’s all more a problem of terminology and context and tradition. We have simply called these government-sanctioned contracts between, yes, what have been traditionally men and women, “marriage”. We might have been better off to call all of them “civil unions” from the beginning. Some religious people object to gays forming unions with each other and calling them “marriage”. They have been willing to compromise by accepting “civil unions” for gays. But civil unions are not always equal to marriage and not equally recognized within the 50 states. And if you legislate that only heterosexuals can have “marriages” and homosexuals must have “civil unions”, even if those civil unions were supposedly made equal to marriage, I think you would have something equivalent to the “separate, but equal” doctrine that was used to justify Jim Crow laws that forced black people to be discriminated against. Separate but equal was originally recognized by the Supreme Court, but decades later was struck down by the high court.

Those who oppose gay marriage argue that homosexuality is anti-social behavior. Most everyone else has come to realize by simple observation that homosexuality is apparently genetic and has come to accept it even if they are not always comfortable with it.

One solution would be to take the government out of the marriage business and have it issue civil union contracts to all, straight and gay. The churches could handle marriages as a religious and symbolic ceremony. That seems an equitable approach to me, but might be socially confusing (how would we refer to a couple now joined? they’re married, no they’re “civil unioned”, and how would you refer to already married people under the old rule, and it’s a whole can of worms).

As to the implications on our society moving forward if we fully accept the gay lifestyle under the law by granting gay marriage or unions, I actually think there is a question, but I do not think it is one government can resolve.

One of the problems is that government itself may have lost some of its moral authority.

Just some ideas.


Right and left seem to have conspired, perhaps unwittingly, in economic collapse…

May 9, 2009

By this time I’ve forgotten what the big bank bailouts were all about or at least how they were supposed to operate.

I know I did hear along the way the canard that banks were forced to take government money and the strings that went along with it. Maybe I have it wrong, but I don’t think anyone was actually forced to do so. In mid October, when Bush Jr. was still president, then U.S. Treasury Secretary Henry Paulson and other government officials sat down with some high level bankers and told them this is the way we are going to do this, and they were ASKED to sign on the dotted line. They all did.

(My source: http://online.wsj.com/article/SB122402486344034247.html )

But had any of the participants not wanted to play that game, certainly they could have just said, thanks, but no thanks, we’re good.

They were not good, though, and they knew it. The bankers were facing bankruptcy, and had men still worn hats, they would have been literally hat in hand, but they were figuratively hat in hand. So they signed.

My own opinion is that it should have never come to that. The big banks should have been allowed (forced) to go insolvent. Bankruptcy and/or the federal banking rules (as you can tell, I am not versed in these subjects, but who is?) would then take over. Probably not a pretty picture, but is it a pretty picture now? And have we not been forced to throw billions of public dollars at these institutions? And has not the government had to borrow billions from China? And will not the taxpayers who fund all of this simply have to end up paying interest to borrow their own money back?

And yet, the banks are still calling the shots. The Wall Street Journal reports (I get this indirectly off of a journal report carried on Yahoo online) that in the recent so-called stress tests for the big banks the government bent to the demands of the bankers and toned down their capital requirements, even though the bankers still think they are being unfairly treated. And now I forgot what the penalty is for not having enough capital. The big banks are “too big to fail” the government has already told us, so I guess we would just have to borrow more money to give them so that they can eventually loan us the money back at interest.

People that really understand banking probably won’t be reading this blog, and by chance if any readers who do understand it all read it they might laugh at my naivete. But I challenge them to think hard and then answer that if in reality I have not pretty well summed it up, albeit in oversimplified terms.

Where were the conservatives we hear so much about when they should have been railing against all of this? Well, yes, I know that many of them complained, but their complaints were too full of talk on side issues such as gay marriage, co called “pro-life” (anti-abortion), family values, when their message should have been a well thought out and reasonable and sober assessment of every-day economics and the basics of capitalism and free enterprise.

I think many of the conservative voices were spooked by the idea that the whole economic system could have indeed come crashing down and that all of the king’s horses and all the king’s men would not have been able to put Humpty Dumpty (the economy) back together again.

The Republican presidential candidate tried in vain to appease the conservative element of his party, but perhaps as a campaign ploy to show he was “presidential” in a crisis, or perhaps out of real concern, remember? he temporarily “suspended” his campaign and rushed back to Washington to take part in the bailout – so much for conservatism.

And since the conservatives had no coherent alternative, except to vote no (a good start, but there still has to be a well articulated alternative to catch the public interest), they ceded the job of economic repair to the left-of-center crowd, which strangely enough at first was led by a faux conservative, none other than George W. Bush (to the extent that carrying water for billionaires is conservative, Bush was conservative, but that is all).

If you’ve read this far you might likely come to the conclusion this blogger thinks of himself as conservative. Not really. I stick to middle of the road. But while I support government involvement for the well being of its citizens, I am not so supportive of a government-run economy that seems too socialist in nature or of a too cozy relationship between government and business that seems almost national socialist (NAZI) in nature.

Just like left and right resemble each other at the extremes (totalitarian government), I think our current economic crisis can be to a large extent blamed on the extreme left and right who perhaps unwittingly conspired together to use government for their own ends. An example, the extreme left wanted to put every citizen in his or her own home, regardless of income. The extreme right wanted to sell them that home (with the backing of the government).


We pay to ship our jobs out of country; libertarianism might help Republicans (just a thought)…

May 8, 2009

Well isn’t this just great? Taxpayers are soaked for billions of dollars to prop up domestic automakers and now we are told (I read in the Washington Post website) that they plan to ship jobs overseas where labor costs are cheaper.

Again, as I stated in a previous post, I think that an American company that assembles its products outiside the USA ought to have to pay a stiff tariff for bringing them back into the country.

The whole idea, albeit wrong-headed idea, behind the automakers’ bailout was to save and stimulate the U.S. economy and to save American jobs.

The Obama administration has erred, I think, in bailouts for automakers and bankers.

The Soviets and the communist Chinese and the old Soviet Eastern Block countries, and don’t forget Cuba, were never successful with state-run economies. Why does the administration think it is a good idea for the U.S.?

I know. I sound like a Republican. I’m not. The Republicans don’t know what they are all about at this time. They had their chance for eight long years to protect and preserve the free-enterprise system and failed miserably.

I think the Democrats would do well to not mess so much with the free enterprise system and pay more attention to social needs, something they have done better at over the years.

Maybe George Wallace, bigot and demagogue that he was, was at least correct when he said there is not a dime’s worth of difference between Republicans and Democrats.

While government should not run private enterprise, it does need to oversee it to make sure that there is a workable framework with rules that enable all a chance to prosper.

Both the Democrats and Republicans may have run out of ideas and may have found themselves beholding to their own special interest groups and therefore hamstrung in moving forward.

A new political party could – probably won’t though – emerge from all of this.

Right now the Republicans are the most vulnerable. I see something like a libertarian kind of party emerging. True libertarians are kind of too far out there in that if they hold to their beliefs are against public police and fire departments and public parks (they prefer selling you a ticket to enjoy a private park) and any kind of social programs. On the other hand, they do believe in self-reliance and personal freedom (right to smoke pot, gay rights, as examples) and they do not believe in getting involved in wars all over the world. Seems to me if the Republican Party could move more toward a libertarian type philosophy (without supporting anarchy) it might have a chance.

And actually, I don’t see the demise of the Republican Party no matter what they do. During my lifetime I have seen the obituaries posted for both parties. The pendulum swings back and forth, tweedle dee or tweedle dum.

Except for the bailouts, so far President Obama seems to have a steady hand on things. It’s still early in his administration, though.


Re-industrialization could save America; time can save Republicans…

May 2, 2009

While I am not a Republican and doubt I ever could be, I am thinking the GOP might find its salvation if it can just have some patience and it probably wouldn’t hurt if a few of its leaders didn’t feel they had to kowtow or at least walk on egg shells around the talk show blowhards that give it such a bad name. They already have accepted Bush Jr. as a bad memory, that’s a good first step on the road to salvation. And maybe they ought to talk Dick Cheney into going peacefully into retirement.

While I along with most folks hope the nation’s economic ills will improve soon, I think reality is that while there will likely be improvements in some areas there will also be much discontentment – cue the Republicans.

And maybe we don’t really want to use our tax dollars to guarantee warranties for domestic autos but at the same time cut aid to the needy (trouble is the Republicans probably don’t want to use tax money for warranties, but don’t mind cutting the aid).

While President Obama seems like he can’t lose right now, over time some of his program will wear thin – again cue the Republicans.

I didn’t jump on the bandwagon and try to assess President Obama’s first 100 days, but, belatedly now I’d say he certainly has faced the most pressure at one time of any president of the United States in my lifetime: the worst economic disaster since the Great Depression, ongoing wars in the Middle East and terrorists close to grabbing nuclear weapons in Pakistan, health care that is becoming costlier and less available to the populous, global warming (or at least some type of extreme environmental change), and a possible pandemic.

But for the most part he has come through with flying colors. He is calm, cool, and collected. He gives press conferences and to my ears his answers seem well thought ought and reasonable whether I agree with all of his points or not. He is able to use clear English sentences and is not given to goofy looks, malapropisms, or deer-caught-in-the-headlights moments. He did make an unfortunate reference to the mentally challenged a while back on the Jay Leno show while perhaps acting a little too glib and cool (maybe presidents don’t need to be on late night TV).

I agree with Arianna Huffington, for someone who has done such a good job so far on so many things it is dismaying that he is bungling in his bailouts, that is to say he should not be bailing out banks or big business.

I mean billions to Chrysler and what do we get? Bankruptcy. We could have had that without billions in taxpayer dollars. We want to preserve our domestic auto industry but to do it Chrysler has to make a deal with Fiat of Italy.

At least saving the auto industry has something to do with preserving jobs.

The big bank bailouts? All they seem to have to do with is throwing money down a rathole. I still say let the big banks fail. Something will take their place. Why doesn’t the government just cut out the middle man and loan money to businesses and individuals? (not forever – just in the short term.)

As we all know, there are thousands of relatively small banks around the U.S. that acted like traditional bankers, extremely cautious with their money and did not get into trouble. Why can’t there be newer large banks, if they are needed, to replace the thieves and greedy devils who got us into this mess in the first place?

President Obama says he does not want to keep running the car companies and that he does not have the power to get the banks to do what he wants, at least not right away.

I say quit trying to run the car companies Mr. President; you have way too much else to do. And you do have power over the big banks because they would not be in business were it not for the generous giveaway bailouts of taxpayer money begun by George W. Bush and continued by you. Tell them either do what you want or you cut off the money and demand what you have given them back (although the latter is problematic).

From now on out let’s stop this hideous bailout program for private enterprise. While the bailouts may seem by some a means to save private enterprise they are in fact the seeds of destruction for private enterprise.

And this may be the answer the Republicans are looking for. I think they need to calm down and stick to their supposed free market principles and let the cards fall where they may. Hyper inflation along with a continued stagnant economy seems likely to be in the offing (although I certainly hope not). Get your act together Republicans and come up with coherent and acceptable programs to counteract this disaster. Just saying no and calling the Democrats “socialists” will not suffice.

Make your program or proposed program known and when things get bad enough, the electorate will turn back toward you, realizing they didn’t want so much socialism after all.

And lest anyone get the wrong impression about what I personally think, I will say right here and now that both parties have accepted forms of socialism for decades and so do I. But eventually there is a limit, just like there is a limit to free-wheeling capitalism (we reached that limit round about last September).

The independence and flexibility true private enterprise presents is eroded by the artificial element bailouts present in what should be a natural market of supply and demand and success or failure dependent upon business expertise rather than the generous hand of Uncle Sam, who will not be able to be generous once the money is gone (China will not be able nor willing to support us forever).

Rather than fund Wall Street-type big bankers and auto makers and others who have failed to make good business decisions, the government should be rescuing, lending a helping hand, to those citizens in need – not necessarily on a lifetime permanent basis, but on an emergency basis. But the government coffers to enable government to come to the aid of the citizenry are being depleted by the profligate and shortsighted ways of the business elite who use their lobbying powers to extract as much out of Uncle Sam as they can before the well runs dry.

Of course the political power of the United Auto Workers has played a big part in getting President Obama to work so hard to salvage as much as he can of its memberships’ jobs too. Now the UAW is taking a 55 percent ownership stake in Chrysler. Hopefully at least that will give its members incentive to help operate a lean and mean machine that can survive tough competition without more government aid.

Saving jobs is a good thing, but how far can the government go? Will it step in to save your job?

What we need is something that probably cannot be done via politics, at least not directly. We need a new attitude among those in business that says that their mission, aside from the obvious one of making a profit, is to produce products and services for a sustainable economy that will keep our nation strong for our generation and the next generation and for all to come.

We’ve gone too long on the notion that quick profits and making money solely through speculative bubbles is the way to go. We need capitalism, but regulated capitalism. We do not want to smother ourselves in total socialism, which stifles the very soul of a nation and each human being.

Yes, we do need to energize the economy through new green energy sources, but we also need to re-introduce ourselves to the industrial sector as a whole. 

While researching for a separate transportation blog I do, I was dismayed to read that a big truck manufacturing executive predicted that partly due to the current recession and the lower returns his industry is seeing it will likely move all production to Mexico or elsewhere where labor is cheaper.

Personally I think that is an unpatriotic attitude on the part of industry. Any industry that moves out of the country and then tries to import its products back in, all the while enjoying the benefits of the American taxpayer, to include legal protections and free-world defense, should face a strong tariff for those goods.

I am not so sure that free trade is what it was cracked up to be. It seems kind of a lopsided deal to me. We are cutting our own throats in the process.

The socks, the work shoes, the jeans, the shirt, and the cap a truck driver wears and the rig that he drives could all be made in the United States. More people would have jobs and there would be more freight to haul. Right now fewer people have jobs and there is less freight to haul – although granted a large portion of what freight there is comes from overseas.

Our elites thought they were clever when they said we could be a service economy, shut down the smoke stacks and live clean and not get our hands dirty. We shipped our jobs overseas and now have a lot less to do here. And we will not be able to continue to pay ourselves to stand around and do nothing, even if we do go to more socialism.

World trade of course must continue to be part of the equation. But what we call “free trade” ought to be replaced by “fair trade”. Other nations heavily subsidize their industry and many do little to nothing for their citizens who must endure terrible working and living conditions. As for competing with modern industrial nations, that should not be a problem.

Re-industrializing alone will not solve the problem I realize. Germany, for instance, is a major industrialized nation and it is suffering from the worldwide recession and is facing major unemployment and for the first time in decades its industries and skilled workers are facing doubts about the future.

Unfortunately, boom and bust seem inherent in capitalism. We need to be ready for the boom.


Over supply, under demand for cars; let businesses and banks go bankrupt…

April 2, 2009

As I take my daily walk down the street I often see cars and trucks with for sale signs on them parked along the curb or in vacant lots.

I wonder why our government has seen fit to get into the business of selling new cars (the auto bailouts and the Treasury Department guarateeing warranties off all things) when so many are shedding the ones they have, but can no longer afford.

I am not at all sure there is much of a market for new cars. We may well have an over supply already. Of course a lot of people would likely prefer to have a new car but cannot afford one now with the recession (or depression).

It seems like the market place should determine the fate of the auto business.

As to all the new incentives, such as offers by the auto companies to make your payments should you lose your job, extended warranties, and equity protection, well that is maybe a good deal, but the buyer surely pays a hefty price at the other end of the contract. It is a big insurance policy. I would say that if you expect you might be losing your job, now is not the time to be purchasing a new car. As to the warranties and equity protection, if the American manufacturers had been making superior products, they would not be necessary. Maybe the era of planned obsolescence and making the big money in parts and repairs is coming to an end, hopefully.

And don’t get me started on the repair con jobs. I went to my foreign car dealer to get my door fixed and found out the guy wanted me to sign on the dotted line to just look at the problem (minimum half hour labor) and at the same time he is telling me that they likely would not be able to fix it. I refused to sign, so he looked at it for free and told me he could not fix it. I took it to a body shop and they fixed it in five minutes for free (I had done business with them previously). I’m no mechanic, to say the least, but I was a truck driver and knew from experience that adjusting a door that won’t open and close properly is usually about a five-minute job (unless there has been major damage). What I am trying to say here is that most of us go into auto repair places and get ripped off because we have little idea of what they are doing (to us).

But even though I have a negative attitude toward the car business – oh and one more story: many years ago I haggled with a car salesman who claimed he was going to give me a super deal on my trade in that no one else was willing to give. But when I suggested that he was simply tacking more dollars on to the other end of my contract he sheepishly admitted to it.

However, back to the auto business itself: it is important and I have no doubt it will survive. I think it could have done so without government help. It might mean different people running it, but where there is a demand for a product, certainly there is a viable business opportunity. As I have written previously, one of the big mistakes of the domestic manufacturers was to not be flexible enough to meet changing demands in the market place.

….Just read a blog by a respected economist – Pulitzer Prize winning one – who said what I and so many others have suggested. The bank bailouts are not working because the bankers have been just taking the money and paying themselves. I am referring to the big banks that took the bailouts. Okay, you want a source for that. I’ll break here and look it back up. Here it is: American economist Joseph Stiglitz, interviewed by the German magazine Der Spiegel. Just Google Der Spiegel and you can get the English language version.

Treasury secretary Timothy Geithner and many others contend that simply letting the major institutions go bankrupt would have been a disaster. On the other hand, many, many economists differ, saying that bankruptcy would be the answer.

My contention would be that governments should stay out of directly funding and/or running businesses, although providing some incentives might be wise. Where governments must act is in protecting the welfare of the population on an emergency basis, and businesses should support that. To do otherwise will risk chaos, in which everyone loses.