This is not a bailout. This is about economic warfare with other economies.

They all do it. They all subsidize. They all coddle their own industries. They love our naïveté. They are eating us for breakfast, lunch, and dinner, and also for in-between-meal snacks.

We don’t do that. We don’t like it. It goes against our economic genetic makeup. Our freedom-loving ways make it natural to give people a chance to succeed and to do that, we naturally have to give them the chance to fail. The one cannot occur without the other. Otherwise the resources to let people start up new ventures would always be used to support dying industries.

So why not let the Detroit 3 fail in this case, at this juncture?

First of all, even WE in the West subsidize the transplants, begging them to locate in our state or province. Do you see anything inconsistent in that? When did we last give Ford a 10-year freeze on taxes for opening a plant in Mississippi?

If I were an “old car sector” autoworker in the parts or fabrication industry I would initially just be having an angry fit. That would be followed by great sadness on my part as to why everyone seems to be abandoning this very critical sector. And as to why everyone is so myopic. Time will tell how painfully the repercussions will flow through the economy.

Sure, we cannot save every activity, every initiative, and every person’s job. Not too many people make buggy whips anymore. And sure we need new ideas, new solutions.

There is a lot of ignorance in the world. And I am personally ignorant about a lot of things. And maybe I am in this too, but I hope not.

But to me it seems that there is an awful lot of ignorance to be shared. For example, I have to laugh at the Climate Change crowd. Wake up. That global warming multi-decade charade is over. You have to finally admit, that like communism, the Global Warming ideology is dead, in the wastebasket of history, utterly discredited, useless, and furthermore grievously harmful to our economy.

Al Gore in his famous film, his sticky words oozing sarcasm, claims that there cannot possibly be a relationship between carbon dioxide and warming. He naturally wants you to laugh at the people who might claim this. This is because He, the Goracle, does this standing in front of a chart showing hundreds of thousands of years of time which confirms that there is an almost pure 1-to-1 relationship between those 2 factors. It is pretty hard to argue with that. I guess Big Al MUST be right — those stupid people who cannot understand this are like dodos. What utter simpletons they must all be.

But then that is because Gore has the relationship BACKWARDS. It is not the carbon dioxide that is driving the changes in the average planetary temperatures; it is the temperatures that are driving the concentrations of atmospheric carbon dioxide.

This is the kind of pseudo-intellectual and pseudo-scientific babble the average person has to contend with every day. And it goes for the economy as well. We until recently had another person we anointed with god-like skills, another Oracle Big Al, a Maestro, a Guru, a “genius”, our own Alan Greenspan at the Federal Reserve. In a fascinating exchange with Representative Henry A. Waxman, Greenspan admits that maybe his ideology had slight ‘flaws’
http://economix.blogs.nytimes.com/2008/10/23/greenspans-mea-culpa/?apage=10

[I begin quote:]

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”
Mr. Waxman pressed the former Fed chair to clarify his words. “In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.
“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”
[I end quote.]

But this is what we do; we cling not to our guns and religion, but to those outdated ideological straightjackets that keep us from taking practical and useful positions given differing circumstances and new information. We need to remain flexible. It is not easy.

Why do say this? Because there is a harmful parallel between the Climate Change proponents and the straight-jacketed way we run our money system. We do it backwards. Foremost we base all our growth on Debt — ever heard of Savings-based Consumption? C’mon, that’s crazy-talk!

The auto worker, and company executive, must both wonder why all the changes they have made have not brought more improvements to them and to their indigenous industry.

IMO it is because they are up against the most powerful entrenched institution the world has ever known. If it were properly run, that would not matter. But IMHO, it is not properly run, because it clings to a harmful view of how the economy operates. And it therefore makes bad mistakes in trying to “fix” perceived problems.

The institution I am referring to is the Federal Reserve Bank of the United States. Well, to the FED, to be fair, I should add all its brethren in those countries we compete with.

There is collusion, not premeditated, but collusion nevertheless. These institutions and the way they run our money system allow for great hidden subsidization of industries around the globe. There is no level playing field. Our automakers don’t stand a chance.

Don’t get me wrong. There are other wounds. There are other mistakes and mismanagement. But against such otherwise notable maladroitness, the FED does not take second place. It is first.

There is a lot of evidence that the FED was instrumental in the creation and nourishment of the Housing Boom. A similar effect was observed in the auto industry. We could not build and buy enough cars. It was not the big SUV versus the small car, it was that anything went. And now we have the subsequent painful bust. We have pre-bought maybe 7 years worth of surplus cars. That is, because we were so out of whack, it might be 7 years before we return to some normal trend line of sales.

There are many places to read about the FED’s involvement with the Housing Boom — one recent one is at http://mises.org/story/3252

The way that the FED and the other countries can hurt domestic manufacturing, especially automobile manufacturing, can be showcased with a simple example.

Let’s use Japan as our example. After the war, Japan was coddled by America. (America did the same with Europe and later with China, for various strategic, geopolitical reasons. These were not poorly thought out. To get any semblance of stability in your former enemies, you need to allow them to rebuild their economies.)

Japan learned to use import duties and import restrictions to help itself. In her position we would have done the same. But the game was learned too well. Japan was never able to wean herself away from this way of doing business. After a while Japan was forced to make some concessions. But it retained (among other ‘underground’ methods) a dangerous, hidden way of stimulating its own industry and economy. This was the printing of Japanese money. If the manufacturing of new money had been kept to only the growth in the indigenous economy’s real output, then no bad effects should have ensued.

But money was manufactured far beyond any semblance of normality. Japan paid for it with the boom of the 1980-s and the subsequent bust. But did China learn from this? Well it learned you could have a boom. Now China is trying to avoid the bust.

What does this have to do with Big Al (Greenspan) and our current FED Head Ben Bernanke?

What Japan and China do, along with many other countries, is that they exchange the Mad Money they have created into American dollars. This is done using those surpluses that their own exporters have earned on world markets. After all, the exporter living in Japan has to pay local wages and taxes using local currency. This entire process penalizes their own workers and consumers, because it keeps their own currencies artificially depressed. Local wages are lower than they should be. And foreign products, to Japanese consumers, are far more expensive than they would otherwise be.

But it is a boon to the economy overall (for a while). The car maker in Japan is subsidized every day this continues. And consequently the American car worker is penalized every day it continues.

His American products cannot compete.

Not only that, but America’s debts to other countries continue to grow. There are no “checks and balances”, no feedback within the overall system that should force self-correction. We sell our children’s inheritance to others. We have made them debt-slaves to foreigners. They will never forgive us. Well I guess we can claim we did not know any better. That we thought we were doing good.

So how does the FED facilitate our housing and auto bubbles through a mechanism that is already causing terrible harm to our auto sector? Why it calmly observes that there is no inflation (as measured by a CPI of a limited number of goods and services) and proceeds to also inflate our domestic money supply. This leads to a boom here also.

This is a boom that is most definitely not indefinitely sustainable, as the current times seem to portend. The earlier example of Al Gore and his graph come to mind. Why it seems perfectly sensible to any non-dodo that we can inflate our money supply to “stimulate” the economy, so long as I, the FED chairman, cannot see any inflation. Not only that, but I can inflate to “save” the economy from that “evil” known as Deflation. Whoa, Deflation —- now that’s scareeeee, boys and girls. Please see Helicopter Ben and his ideology on display at the FED’s own site
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm

So, Ben Bernanke, following the ideology of his predecessors, will continue to pump up the money supply, as if that will be our Savior, and not the Deb-Devil it really is — the devil which has only just started to torment us.

There is no free lunch. I don’t think the autoworkers are asking for one, given the circumstances I have outlined above. Such ‘collusion’ and artificiality are killing our money system’s ability to do the job it was intended for.

How soon we forget just how important these companies were to the establishment of the American Way. Ford and GM helped build this country to what it is. Let’s not forget that these companies have sacrificed for us too. IN times of war, they have stopped production to build miltary vehicles, tanks and planes for our country. Did they ever say NO to helping out when it was needed.

Well now they need us to help them. They wouldn’t be in this problem if more people bought American. Stop trying to impress everyone out there with your Lexus or Mercedes and have a little faith in the American product.

A few weeks ago, my brother-in-law and I had a heated discussion over American cars and his point was that no American car would last as long or as well as his Porsche, and the only one he’d consider would be a Corvette Z06. I said “really” let’s discuss it. If you took care of the Vette and well as the Porsche, it would last just as long. If you go out there and wipe it with a diaper (soft cloth), change the oil every 1,000 miles and tuck it in at night, just like you do with your Porsche, I guarantee it’ll last just as long. The problem is that you wouldn’t do that becasue it’s n American car, you expect it to be tougher and stand up to more punishment and only change the oil every 5,000 – 7,500 miles.

America car products are every bit as good as the foreign cars, we are simply much harder on them and expect them to do more with less care and maintenence. It’s an unfair comparison and an completely false statement to say that foreign cars are better. It’s simply not true.

Ask yourself this, especially if you are an owner of a foreign car, when’s the last time you sat behind the wheel of an American car, I bet it’s been a long, long time. Remember, the best things the foreign car companies have done is not build a better car, but sold people on the idea that they build a better car. Best sales job in world history.

Support GM and Ford in this time of need. They certainly have been there for the past, oh, 100 years for America.

Be American, Buy American, Support the American product.

Time to let captialism work the way it is suppose to.

UAW work rules and excessively high wages are a significant part of the reason the US auto industry has a very hard time being competative on a consistant basis.

The only unions I know of that are MORE of a parasite are the Postal Worker’s Union and the Teamsters – all 3 of these unions are notorious for making it almost impossible to fire incompetant workers even WITH cause, among other issues.

And no, I am not anti-union. I’ve helped unionise one place I worked because it needed a union – but far too many unions last far beyond the point they are needed and turn into parasites.

Chrysler, mabey. They almost went backrupt once before, got a big loan from the government, and eventually paid it off.

Ford, yes IF needed. They’ve lost by far the least market share of the 3 big US auto makers over the last 40 years, because they are more responsive to the market most of the time. Doesn’t mean they’re perfect, but they do the best job of the Big 3 overall – and that is reflected by their far better current financial position compared to GM or Chrysler.

Personally, I think far too many morgage holders are getting a free ride the last few months, when those of us that do deal with credit RESPONSIBLY are getting the shaft on these bailouts. Where’s *MY* free money?

Giving the money to the American people would devalue our dollar so bad, we would be in worse shape.

I have never owned a foreign car and probably never will, I will always buy from an American car company. As with every thing I do I try and balance what is good for my family with what is good for my country.

Our manufacturing sector is being destroyed by foreign competition and the sending of jobs over seas. This is the same manufacturing capacity that was called “the arsenal of democracy”. The government should loan the money to the auto companies, but they should also restrict the so called free trade agreements.

As much as they don’t deserve a bail out, it is absolutely necessary. A failure of one or all of the companies would leave millions more out of work, and throw us into a massive depression. There has to be oversight of the funds, to ensure that the money does not go for any bonuses of any kind, except perhaps to employees who can find ways to ease costs, labor, production times, and so on. No CEO or corporate bonuses should be used with taxpayer money and there has to be a way for the taxpayers to get a return on our investment.