More money to be wasted on U.S. auto industry
It's the day
before we are supposed to be told whether or not the Federal
government will continue to shovel money into the hands of the
moribund American automakers, GM and Chrysler. In spite of
protestations from the White House that “bankruptcy is an option”
there is, and I don't think I'm going out on much of a limb here, no
chance that the companies will be allowed to enter Chapter 11
proceedings. This situation can no longer be viewed as strictly an
economic question: what's best for the economy overall?, but from a
political viewpoint: what's best for the Obama regime? Looked at
from that standpoint the answer is obvious as to the course the
Federal government will take – more money will be wasted in an
attempt to keep ineffective corporations afloat, the only question
will be – how much more of the taxpayers' money will be wasted to
gain political favor for the new President?
The Obama
regime (yes, I'm aware of the connotations of the word, but “group
of sycophantic toadies” is too long for general use), and its allies,
will mount a large propaganda campaign in order to justify the waste
of still more money that the country doesn't have, in order to prop up
corporations that have shown themselves incapable of making good use
of their resources. Nothing has really changed since the last time
the Federal government made “bridge loans” to the automakers.
The unemployment situation is worse than it was in late November, so
we'll be told that the country can't take the chance of losing the
supposed three million jobs that directly or indirectly depend on the
U.S. automakers continuing in business. On top of that, since the
State now has a financial interest in the companies, we'll be told
that further “investment” is needed in order to “protect the
investment taxpayers have already made” - the State's excuse for
throwing good money after all. And, I suspect, we'll hear about how
our “national security” depends on the continued existence of a
“viable” American automotive industry.
This last is
totally specious as automotive factories are not suitable for
manufacturing tanks, APCs, or most of the rest of the panoply of
modern war. The only vehicles the auto companies produce, on a
routine basis, for the armed forces are Hummers and trucks – which
could be purchased elsewhere if needed. The idea that automobile
plants could be converted to the production of heavy equipment, as
was done during WWII, is no longer viable. Given the pace of any
large conventional war the conflict would be over long before the
needed conversion could take place. Even in WWII it took the better
part of eighteen months before significant military production was
rolling off Detroit's assembly lines and the process was sped up to
some degree because large amounts of manufacturing capacity was still
idle from the effects of the Great Depression and didn't need to be
shut down prior to being converted to military use. In the long run
our nation's security interests would be far better served by
strengthening the economy over the long run by ending State
interference in the marketplace – the very sort of interference
that is being pushed as the solution to our economic ills.
We will be
told that the recent report of General Motors' auditors, which
expressed grave doubt as to the company's ability to continue as a
“going concern”, is overly pessimistic. The State's propaganda
mill will push the idea that all that is needed is to make sure that
GM continues to operate during the current economic crisis. The
company will announce that its coming products, such as the Chevy
“Volt”, a high-priced (recent estimates put the price at
~$35,000) “green” vehicle, will allow the organization to regain
profitability as soon as the economy recovers from the current
downturn. We will be asked to suspend disbelief, in much the same
manner as when we go see a science fiction movie, and accept the idea
that the automakers will be competitive when things improve, in spite
of all the historic evidence to the contrary. All that will need to
be done is to shovel more billions of dollars of “loans” to GM,
loans which are supposed to be repaid, in order to assure that this
rosy view of the future comes true. No mention will be made of the
fact that GM's indebtedness to the Federal government will approach
the amount it owes its UAW-approved healthcare trust fund. It is
costs associated with on-going healthcare expenses (an estimated $47
billion) that are a large part of GM's financial problems; yet,
somehow repaying government loans will not have the same effect on
the corporation's balance sheet. This type of thinking can only come
from government employees who have access to unlimited funds thanks
to their ability to reach directly into the pockets of every
American.
Finally, the
Obama regime cannot afford to alienate the country's labor union
movement, which would surely happen if the UAW was not to be given a
huge chunk of the public's money. The simple fact is that the UAW,
in spite of all the damage it has done to the automakers over the
last fifty years, is to be rewarded by being granted the opportunity
to feed at the public trough. Ordinary Americans, most of whom make
considerably less than the average UAW worker, will be required to
subsidize the lifestyles of those workers. Labor inefficiency will
be rewarded at the expense of the overall economy. The majority of
Americans will be required to accept a lower standard of living so
that a few politically connected workers may be spared the “economic
turmoil” that the rest of us will be subjected to.
So, come
midweek, don't be surprised to hear that the Federal government, after
having carefully examined “all options”, will “invest” more
money in the dying American automotive industry. It will make no
sense economically. Indeed, it will be counterproductive in the long
term. However, politics is more important, in Washington, D.C., than
anything else, including the long term health of the overall American
economy.