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Auto Industry Highlights American Double Standard
By James West
MidasLetter.com
Tuesday, March 31, 2009
The hypocrisy governing American economic policy is not lost on the world outside of the United States, even though it appears to be invisible to the administration of Barack Obama and his team of financial elves.
The basis of American enterprise and globalization has been the idea that market forces should be allowed to regulate business, not governments. Yet in the case of General Motors and Chrysler, market forces would dictate that both these bloated and inefficient companies be allowed to go bankrupt. But instead, the United States government insists on throwing good money (arguably) after bad, as the $17 billion doled out to these 2 ailing companies now seeks to become another $23 billion.
The pressure from the hopelessly disconnected auto workers union centers around the idea that if the auto industry isn't bailed out, it will cease to exist, and it will take down a big chunk of the American heartland with it.
The auto industry wouldn't disappear if allowed to go bankrupt. It would merely fall under new ownership and become efficient and profitable again.
The reality is that if the government would adopt a more appropriate "hands off" approach to industries which it has no business meddling in, and instead focus on convicting the perennial swindlers leading America's banking and financial services sector, our economy could easily withstand what would simply be a re-allocation of the resources that comprise the auto industry, which is exactly the influence free markets are intended to have in such circumstances.
There appears to be a collective misapprehension about the difference between regulating financial institutions, who increasingly add nothing to real GDP, and who have demonstrated collectively an inclination to exploit any and every opportunity to compound capital regardless of the cost in real economic terms, and interfering with the normal business of industry.
In this crisis environment, government has lost track of the capitalist doctrine that demands free markets, and has embroiled itself in central planning so overbearing as to resemble that of the Soviet Union pre-Gorbachev.
Two themes recurring in the general media should provide some direction to Team Obama.
The first is that the biggest emerging metaphor for the American financial industry is a giant out-of-control casino, where the public is the gambling addicted victim of the house that always wins. The second theme concerns the idea that America is a nation that privatizes profit while socializing losses. That is worse than communism - that's fascism.
The bottom line is when it comes to the banking industry, we've got wolves guarding the sheep and foxes guarding the chickens. The wolves wear wool and the foxes feathers.
Obama's incessant populist pea-cocking on any TV show that will have him belies a dangerous belief in his own press that threatens to neutralize his effectiveness as a president, and his credibility as a leader.
There are some great opportunities for this administration to effect positive change where it is needed most - at the top of the food chain.
Although social unrest has not reached a level where it is a major concern in America yet, Obama would do well to head off such an eventuality by going after those who profited most from the ransacking of America during the last ten years, and taking the wealth back off of those people who contributed nothing and took everything, leaving a shambles in their wake.
If we're going to conduct ourselves like Communists, then a little persecution of tycoons who thwart the public interest would go a long way towards generating support for a president who now appears to be more of a tool of capitalism than a leader of the people.
Increasingly, the perpetrators of the most heinous and profitable predatory corporate programs are publicly vilified by investigative reporters around the globe, yet no steps are taken to convict them, commandeer their spoils, or close the loopholes that facilitate their schemes.
If Obama wants to avoid getting painted with the casino brush as the duplicitous head of the gaming commission, he'd better consider less preening and more real action.
Here's a short 20 minute video that will teach you everything you need to know about the hedge funds that caused the collapse of both Bear Stearns and Lehman Brothers: http://vimeo.com/3722293?pg=embed&sec=.
And here's a link to a story by Rolling Stones columnist Matt Taibbi that demonstrates the scam perpetrated by Joseph Cassano, who should be in prison but instead has ridden off into the sunset with upwards of US$280 million stuffed into his boots: http://www.midasletter.com/news/09032301_AIG-and-the-Long-Con.php.
Throughout history, the harbinger of impending doom for all the great civilizations has been the condition in which the government, through corruption, wantonly victimizes the population over which is supposed to rule.
There is absolutely no doubt that the United States is in precisely that predicament. The chance to wrest the nation from the fate of every predecessor is in the hands of one man: Barack Obama.
SOURCE: http://www.midasletter.com/news/09033102_Auto-industry-highlights-american-double-standard.php
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