Ford says does it not need short-term loans from bailout
Now that's what I call a car company. I drive a Ford Freestyle that was manufactured in Chicago.
So Bush emerged from his self-imposed stupor long enough to shovel $14 billion down the gaping maws of GM and Chrysler. I wish he would pay a little more attention to his actual job, which is protecting the nation, instead of fumbling around with an economy that he and his advisers have proven they do not understand. Have the Navy sink some Somali pirate boats or bring us the head of Osama Bin Laden. Anything but this doomed corporatism.
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There is much more to the industrial problems than their financial difficulties. The straw — no, the ton of straws — that broke the camel's back was caused by the colossal failure of government on the credit crises.
The number of institutions that failed to come forward with information concerning the effects of the bubble breaking in real estate is overwhelming: Federal Reserve, Federal Reserve Chairman, Investment rating companies, bank regulators, insurance regulators, Fannie Mae, Freddie Mac, the investment bankers, the Secretary of Treasury who was a former wall street banker, ... . But let's not leave out Senator Dodd (chair of senate banking committee) and Rep. Barney Frank who claims to be the smartest man in Washington on banking (chair of the house banking committee) who did not hold any hearings.
But regardless, the industrial companies are supposed to know of the risk according to the Monday morning quarterbacks, none of whom wrote anything about the looming crises. For capital intensive industries such as the auto industry, the plunge in sales is greater than occurred during the great depression. Now there are willing and qualified buyers who cannot get credit.
Certainly, most people understood that the real estate market was not sustainable since prices were rising faster that increases in household income. But what wasn't generally known were the questionable financial transactions to package mortgages that the bank examiners should have not allowed in the first place into mortgage backed securities.
That, combined with the explosion of unregulated credit default swaps, should have made the crisis obvious to the experts.
While staff members in various organizations correctly identified the risks and consequences, they were ignored by the powers to be. There was no oversight in Congress.
We all needed the federal government to be involved in a responsible way. Instead, government was part of the problem.
The above doesn't even consider the many laws, taxes, trade policies, regulations, practices, ... that are favorable to foreign companies. State governments are subsidizing foreign companies to build new plants in their states. There are no equivalent subsidies to established American companies to continue operations in their states. Manufacturing is moving to China and done in plants that pollute the atmosphere powered by power plants that highly pollute the atmosphere. We think we are importing lower cost manufactured products, but we are really getting their pollution and other negative factors.
How can we sustain a middle class if the country doesn't produce any manufactured goods? It is obvious we can't. We are exporting our wealth with the unfavorable balance of payments and deficit spending (borrowed from foreign investors).
We have already lost most of the steel industry and most of the consumer electronics industry. Certainly the auto companies should have done better, but all companies operate within the environment established by government. Laissez faire went out with steam-powered cars. Rereading Wealth of Nations by Adam Smith in its entirety might open a few eyes.
Pardon me, but the United States has clearly lost its way. That means that the large companies with large investments in the U.S. suffer the greatest consequences. Very few people have looked in the mirror. The problem is us.
In just 45 years, the entitlement mentality has turned President Kennedy's famous statement on its head. This was predicted by Alexander Fraser Tytler in the Scottish Enlightenment era. Pogo was right.
Don Nordeen
Governance of Property Owners Associations
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