Do you know how many American auto manufacturers went out of business in the 20th century? Do names like Packard and Studebaker ring any bells with you? But somehow, we prospered anyway, didn’t we?

We could live without a pharmaceutical industry. In the 19th century, Germany, not the U.S., was the world leader in chemistry and medicine. But that didn’t stop the U.S. from economic growth, did it?

We could live without a construction industry–if there’s nothing worth constructing. But that’s never the case.

We’ve become so accustomed to the idea that America has to be first in EVERYTHING that we’ve forgotten that in a global capitalist world, that’s unnecessary.

There are NO industries that are “essential” to ANY country–as long as peaceful free trade between nations exists. What we don’t have inside America, we can buy outside America. The result of this will be the decline of the U.S. dollar to the point that it will be profitable to build industries in America again. And then we’ll build them again.

That’s how comparative advantage works.
That’s how global capitalism works.

What industry would you like next to regard as inessential. Pharmaceuticals, construction equipment? For a $14 trillion a year economy, with an average 14 million a year car market, in one of the most technologically advanced societies in the world to be unable to sustain a domestic car manufacturing industry is ludicrous. Do you really think the Japanese, Germans or French would allow their domestic champions to fail. I wonder whether you read Eakins piece where as far as I can tell, it’s all a bit vague on details, he’s suggesting allowing Chrysler to go into liquidation.

What immediate effect does this have on Chrysler’s workers? None whatsoever.

Cars are being produced on Chrysler’s assembly lines right now. Chrysler showrooms are open for business across the country, and you can buy a car there now if you want. The Obama Administration has even put the full faith and credit of the Federal Government behind Chrysler’s auto warranties.

So what was everybody so afraid of?

Chapter 11 is not the same thing as Chapter 7 (which is actual liquidation). Under Chapter 11, the factories continue to work as before; but terms of contracts and debts can be negated and renegotiated. This gives Chrysler needed leverage in renegotiating contracts with their suppliers and the unions.

The reason the Dems hate Chapter 11 is that it means that their beloved UAW union can’t hold Chrysler to the terms of their previously negotiated contract. But that’s as it should be. If American car companies are to be competitive with Japanese non-union car companies, the American unions are going to have to start being much less greedy.

“Mr Eakins, what’s your alternative?”

Bankruptcy. His alternative – and mine – is and was and always has been BANKRUPTCY.

Ott old boy… are you familiar with the term “legal” vs. “extralegal?”

(*SIGH*)

“GM and Chrysler’s debts to the union trust funds are legal obligations…”

(*SNORT*) Yeah… remember when they used to say that about… oh… MORTGAGE CONTRACTS?

(*HUMORLESS CHUCKLE*)

“…obligations on which millions of car industry retirees depend for their livelihoods.”

And non-car-industry-retirees “depend” upon THEIR own incomes and savings which are being diverted and squandered out of partisan political expediency.

This is nothing more than wealth transfer. “Theft” if you want to put it in ethical terms. (*SHRUG*)

BILL

P.S. – On a possible bright note… perhaps soon leftover G-8’s will be on the market at bargain basement prices! If so… I may very well buy one to go with my “new” Charger RT that I bought back in March!

(*WINK*)

http://www.edmunds.com/pontiac/g8/2009/review.html

Yep.

This is a power grab, pure and simple.

BILL

And btw… “who” exactly is the “voice” of the government “owner?’”

I own stock. I decide how to vote.

I invest in a pension fund, hedge fund, mutual fund, whatever. Someone – perhaps responsible to the head of the Fund, perhaps responsible to a committee of the Fund – decides how to vote on issues like Board Member elections and policies… whether to accept a takeover bid or support a “poison pill defense.”

Does OBAMA hold “the government’s” vote? What about Congress? I thought they were a co-equal branch… the “money branch” in fact? What if Obama decides “our” shares should be voted one way but Pelosi and Reid disagree? Or… what if Pelosi and Reid – with the backing of an actual vote of both Houses – decide to vote “our” stock one way but Obama disagrees. Does Obama get a veto?

Heck… do the nine Members of the Supreme Court get a say…?!?! (*CHUCKLE*) After all… again… isn’t the Judiciary a “co-equal” branch of government?

Let’s say the power is given to an “Auto Czar.” Who does he or she report to… Congress or Obama? Who does he or she actually work for – take orders from?

You folks see where I’m going… right… what I’m asking. Any factual answers…???

BILL

130 years ago, the telegraph industry was more “essential” than the auto industry today. Virtually all high-speed national and international communication was by telegraph; it was the Internet of its time. It’s virtually gone now. Yet America prospered without it.