Thursday, November 20, 2008

When They Write The History...

When they, the economic historians, write the economic history of this period, it will be interesting to read where they will place the blame for all the unnecessary pain and suffering that millions of Americans went through. Some where in their analysis of the period they will discuss the lack of responsible leadership in both the White House and the Congress to meet the challenges that eventually drove first the American economy and later the rest of the world’s economies into the depression that consumed us all.

Unfortunately, the debate as to whether the federal government should loan the auto makers $25 billion is merely an ego trip for some to demonstrate their knowledge of a few economic numbers, while for others it is covering themselves and protecting their job in Congress. Few seem to be able to see beyond their little area of expertise or self interest.

Inaction on this loan will cause problems that even the smartest economists have not considered. To argue the three American auto makers’ cost per vehicle at this point in our economic recovery and stabilization is absurd. Such an argument misses the trauma that awaits us.

Perhaps there are people in the world, or governments, that are wise enough to realize what the American government is dancing with, and will enter the debate. The Japanese, who are forever being thrown up in our face as an example of a country and people that do it right, would not hesitate for a second to save their auto makers if the situation was reversed. They are of a different culture. The safety of the group, their society takes importance over the ego of the individual. When Japan’s steel industry was in trouble they came to its aid out of necessity and national pride. Perhaps it is time for them to explain to our leaders what real national pride means.

I repeat, this short sighted decision to not loan the three American auto makers the $25 billion will be felt around the world. More than just Americans will suffer from this stupid decision not to act and act now.

Stay tuned.


LceeL said...

Nobody said these people were the sharpest knives in the drawer.

winslow said...

Perhaps we need to revisit our individualistic, free-enterprise, capitalistic mantra. I think we are seeing "it only works when it works". I remember when individual investors were the main driver of the stock market (many, many moons ago). When mutual funds and then hedge funds became the dominant players, I had a queasy feeling. I remember when Japan was becoming increasing stronger and then the US wanted to change the rules (no help from goverments). Back then the US had the power to change the playing rules. Even though all politicians are to blame, I just feel that Bush over the last 8 years is the main cause. There was instance after instance where unethical behavior was commonplace, but was being made!

My dad, who was a very hard worker, always used to say the laws seem to be made for the criminals. This is all so true today as companies have been demolished over the years and nobody is responsible. Some collect their millions and walk away. Most of us are like the auto worker, we are the ones to suffer from misdeeds of others.

Butch said...

Watch this. I am for the loan to the auto industries and yes there are huge cultural differences between us and many of our competitors. In Asia it is first of all the lack of unions. In all honesty, our unions need to take a step back and look at what "their" demands have helped do to their jobs and futures. However, management is as much to blame since they had to agree on the terms. Currently, you cannot bring an outsider into a UAW plant without some sort of consequences, matching an employee of like trade from within to the outsider but with overtime pay. Take a look at this video of a Ford plant. They have bettered the Japanese in their supplier ways, problem, it isn't in the USA and the contract keeps it that way. Congress cannot make it go away. Only the UAW can rewrite this part of history. Copy and paste to your browser, it's clean.

moneythoughts said...

Butch, great comments and a great video. I watched it and I'm impressed. This is something that needs to be worked on for building cars in the USA. No doubt Ford has the skills to do it, they just need the UAW to make it happen. Hopefully, bankruptcy is not the only way this plant gets built in the USA. Thanks again for the link and your coments.