Nationalizing
entire industries worked very poorly under dictatorships and communist
centralized economies. In fact, they were so dysfunctional, despite grandiose
economic five-year plans designed by the communist party apparatchiks who had
no idea how to run a lemonade stand, they have all collapsed since 1989, with
the exception of Cuba and North Korea, and we know how “well-off” their
citizens are and how much individual freedom they have. Communist China had to
modify its centralized economic control and adopt successful capitalist models.
Managed economies are not the solution, capitalism and entrepreneurship are.
President
Obama’s auto bailout cost taxpayers $60,000 per job saved. GM and Chrysler Fiat’s
roaring sales are due to subsidized sales, indirect funding by the government,
“sub-prime auto loans to inflate their car sales, selling automobiles to people
who cannot afford them.” (Michael Savage, Savage Nation, August 9, 2012)
Taxpayers
lost $20 to $23 billion in the auto bailout. The Obama Administration
redistributed $26.5 more to the union than UAW would have received legally in
the bankruptcy proceedings had the rule of law and contract been followed. “Thus
the entire loss to the taxpayers from the auto bailout comes from the funds
diverted to the UAW.” (Amy Payne, Heritage Foundation, June 13, 2012)
Mismanagement
and high union labor costs, $70.51per hour in wages and benefits for GM and
$75.86 per hour for Chrysler, contributed heavily to the bankruptcies that
necessitated the bailout in the first place.
Secured
creditors and investors should have had prior claim, in accordance with the
law. Unsecured creditors should have received proportional payouts from the
bankruptcy. A special trust fund protected UAW, while other creditors received
fractions of what they were owed. UAW received billions and partial ownership,
and Fiat, a foreign corporation, received part-ownership of Chrysler. UAW
workers continued to receive huge compensations when compared to the much lower
compensation of $47 per hour for Nissan and Toyota workers. Stephen Rattner,
President Obama’s car czar said, “We should have asked UAW to do a bit more. We
did not ask any UAW member to take a cut in their pay.”
According
to Amy Payne, the auto bailout was not a bailout of GM and Chrysler but a
bailout of the auto union by American taxpayers who make on the average $30 per
hour in wages and benefits. (Auto Bailout Was Really Just a UAW Bailout, Heritage
Foundation, June 13, 2012)
The
issue is more complex. GM did not just become Government Motors, it became
China Motors. After $80 billion of taxpayers’ dollars “saved” GM and Chrysler,
GM opened a plant in Wuling, China. Research and development for car design was
moved to China. Dan Akerson, CEO of GM said in Shanghai, China, in February
2011:
“Seven out
of ten automobiles were made outside of the United States. We have 11 joint
ventures in China with SAIC and FAW. We operate 11 assembly plants in China,
four power train plants in eight cities across the country. We have more than
2,700 dealerships and sales outlets nationwide. We regard our eleven joint
ventures as 11 keys to success. Not just in China but globally. Our commitment
to working in China, with China, for China remains strong and focused in the
future. We are now building out the advanced technology center which will bring
our research and development that is centered largely in the U.S.; we are going
to diversify that more into China because we think this market is so critically
important to the success of our company. GM is a company well established for
the future in China.” (May 4, 2012, video clip narrated by Vince Wade,
http://www.youtube.com/watch?v=Lvl5Gan69Wo&feature=youtu.be)
I
wonder how millions of unemployed Americans feel about their bailout money that
is now invested in China with SAIC, the Shanghai Automotive Industry
Corporation which is run by the communist government of China who owns and
controls most of the manufacturing and with the FAW, another Chinese government
owned manufacturer. If Americans truly own GM, should the cars, jobs, and
investments not be made in the United States? Why build China from the ground
up while our American economy and infrastructure crumbles and turns to “has
been” and dust?
Cadillac,
a division of GM, sponsored “Birth of a Party,” a propaganda film about the
Chinese Communist Party. Chinese leaders love to drive Cadillacs, the ultimate
status symbol car. The banner advertising the movie had the hammer and sickle
next to the famous Cadillac logo.
(http://www.youtube.com/watch?v=Lvl5Gan69Wo&feature=youtu.be)
There
is no democracy or free trade in China. The Chinese have demanded American
technology with every deal signed since 1990, in exchange for promises of big
profits from China’s 1.3 billion people. According to the U.S. Chamber of
Commerce, GM’s one billion dollar bid from China was won in exchange for “GM’s
willingness to transfer a good deal of state-of-the-art technology.” (Vince
Wade)
State-owned
corporations of the communist government of China are buying key segments of
the U.S economy as well, energy resources, and key industrial plants. The Wall
Street Journal reported the purchase of Nexteer Automotive of Saginaw,
Michigan, the largest employer in the area, by Pacific Century Motors and an
industrial authority for the city of Beijing. Ownership was transferred six
months later to AVIC, the Aviation Industry Corporation of China. (Vince Wade)
We
now have 257 Chinese Free Trade Zones, presumably to produce goods that will be
sold in the U.S. Do we not have enough unemployed Americans and newly-minted
college graduates without job prospects who could produce goods and services here
in the U.S.? Do we need to insource jobs to imported Chinese workers into the
Free Trade Zones, and outsource every manufacturing job and many service
industries to China and India?
President
Obama’s $3 billion centralized “cash for clunkers” program artificially and
temporarily stimulated new car sales while destroying 690,000 good used cars that
could have been sold on used car lots to people who were not willing, or able
to buy a new car.
To
make matters worse, the Obama Administration is planning to increase the new
car mileage standards from 35.5 miles per gallon to 54.5 miles per gallon which
will cause further pain for Americans. According to the National Highway
Traffic Safety Administration (NHTSA) the new mileage requirement will add
$3,000 to $4,800 to the average price of new vehicles until 2025. The National Auto Dealers Association (NADA)
said that 6-11 million low-income drivers will not be able to afford new cars
through 2025. Because of the new “corporate average fleet economy” (CAFÉ)
standards, cars will have to be made smaller, less safe, resulting in more potential
fatalities with each crash. The Smart Car may be smart in theory.
The
idea behind the new standards was driven by the “green” environmentalist agenda
who proposed to eliminate the use of fossil fuels and replace them with renewables
because fossil fuel burning destroys the planet, and we are running out of oil
and gas reserves. That is of course, not the case, the Obama Administration
tried to purposefully increase our dependence on foreign oil by imposing
moratoriums on drilling in the gulf, refusing the approval of the Keystone XL
pipeline, and denying permits for the exploration of domestic shale oil on
federal lands. Furthermore, he promised to bankrupt the coal industry and make
electricity prices skyrocket.
The
President is right that GM is number one again – in China. Nationalizing the
auto industry was not necessary. Extending the same business model to all American
industries is not a good idea in capitalism, it WILL “drive jobs away, taking
root in China” and elsewhere.
No comments:
Post a Comment