United Liberty
Thursday evening I posted on my Facebook profile the speech that Congressman Ron Paul gave on the House floor, opposing the auto industry bailout (the so-called “bridge loan”), along with the following comment:
“This speech on the auto bailout speaks for itself. Congressman Paul really puts it all into perspective. Were that there were more in Congress like him.”
It was not long before I received a response from one of my friends who lives in southeast Michigan, where I myself had lived for a long time until moving to Alabama in early 2007. She reminded me of the consequences facing many people in southeast Michigan, including herself and her co-workers, possibly losing their jobs and foreclosing on their homes, in addition to the already near-certainty of expecting a decrease in compensation for 2009. What does one say to this? I did my best to reply to as thoroughly and sensitively as possible, with the idea of helping her see things beyond all the emotional arguments that hold so much sway right now in that part of the country. It was also my hope to provide some perspective, so that she would see that this is much bigger than just southeast Michigan. Here is most of what I said in my response (note: occasional bracketed words are my improvements here upon what I wrote):
“While I understand the feeling you and many others have who are living right in the heartland of the auto industry in southeast Michigan (where, as you know, I lived for over 14 years until a couple of years ago), it’s important to see the big picture in all this. For one thing, there is an assumption that has been repeated over and over, that bankruptcy automatically means “the end” for GM and Chrysler, and that all the jobs will be lost and that’s the end of it. This is an emotional argument that does not take into account what bankruptcy actually is and how it works. Bankruptcy is an important regulatory tool that allows for necessary reorganization to take place so that companies can become solvent and profitable again. It involves the transferring of assets and resources to new or reorganized corporate entities that can better utilize them. The process of such reorganization can be painful, as there will always be the unavoidable layoff of some workers.
“But it does well to keep in mind that these periods of correction, especially when they are allowed to happen without the propping up or bailing out by government, are only temporary, as workers are [eventually] able to find new jobs and be retrained for new jobs if necessary. It is clear that the U.S. auto industry has been and is traveling down a path that is unsustainable. Many, many changes will have to be made in order to ensure a viable future for the U.S. auto industry. The Big Three have been so utterly resistant for years to making changes and responding to the changing needs of U.S. consumers, and this is all catching up now. All the bailouts or “bridge loans” are likely to do is keep putting off the inevitable, and propping up something that isn’t viable or sustainable. The same goes for the whole financial system, with the big banks and insurance companies.
“As one who believes in freedom and the creativity that flows from it as vastly preferable , the Big Three reorganized under the leadership of very creative, innovative individuals who develop things in new directions consumers are looking for, without the promptings of an “auto czar”. Nationalization of the Big Three is not the answer, for ultimately it would lead to a precipitous decline in the quality of vehicles on the market. Think, for example, of cars made in the Soviet Union back in the day: who would want them? They were reputedly worse than mediocre.
“We are a “can-do” people, as the late Senator Barry Goldwater said in his 1979 memoirs, With No Apologies. Some of the most creative minds started from virtually nothing to become the greatest inventors and industrialists of their time, among them people like Thomas Edison and Henry Ford, without any help from the government.That’s what I’m talking about when I speak of the spirit of freedom that made our country great. We can achieve this again as long as we have the determination [and as long as we can keep the government out of the way]. I believe the best way we can do it is to rekindle the spirit of liberty, and not give into feelings of despair in the difficulties of the current economic downturn. It shall soon pass, as long as we allow it to do so [emphasis added].
“Certainly my thoughts and prayers will be with all of my friends in Michigan in the months ahead. But I would remind all of us that we are in this together, for this crisis is much bigger than just one industry… [I]t’s important to bear in mind that what’s happening in Michigan is part of something that is so huge and effects the whole country, which is that the entire monetary system is near collapse. The auto bailout as such bothers me far less than the trillions of dollars poured into the hole in futile attempts to rescue all these huge banks and financial institutions (which includes what the Federal Reserve has been doing, not just the $850 billion bailout measure passed by Congress in October). All that money is being created out of thin air, backed by nothing at all (only by debt), and once in the economy long enough, it causes the devaluation of the dollar. We are really headed for some rough times, and everything Congress and the Federal Reserve are doing will only make it worse, because it’s more of the very thing that got us into this mess in the first place.
“My big concern about the approach that Congress and the powers-that-be are taking is that I think they are only going to make it last longer, rather like the Great Depression. I don’t think it will be quite the same as that, but I see the parallels. I am very concerned for our future, but I think it is so important that we not do the wrong thing, which requires decision making guided by logic rather than all the emotions being stirred up in the halls of Washington.”
I do sympathize the pain that my friend and probably many others of my friends in Michigan are feeling with all the uncertainties, and I hope that my comments, which were written not just to her, but to my many other Michigan friends who are likely to read them, will in some way be helpful. One thing that I think we, who believe in liberty, self-government and free markets, need to do is try to show people what the long-term consequences are of decisions that always seem to be made in the interests of the short-term. It’s that perspective that is especially so missing, and that is one reason I so greatly appreciate it every time Ron Paul appears on television or radio or makes a speech on the floor of the House. Central planning doesn’t work in the long run, whatever it might seem to do in the short run (think bubbles). Freedom does work in the long run, even though sometimes the rewards seem slow in coming. But I do wonder, did I say the right things to my friend? I am always open to suggestions on how to better deliver the message of freedom, opportunity, and self-government, and I welcome comments from my readers.
Good article. Good sentiment. But I think at the end of the day the thing that 99% of the people in the United States of America outside of Michigan miss is this! Making automobilies in the United States of America is very profitable! All you have to do is the math. I will not give you all the numbers but just a few. Less than 1000 people make over 500 cars or trucks per shift that cost less than 6k in total parts yet sell for an average of over 20k. SUV’s make more and economy cars make much less. That is why the big 3 built SUV’s. The profit was over 10 million dollars per shift!!! Offshore builders could not build the Large SUV’s and then ship them over here because they did not have the infastructure.
What happened is this. We created the perfect storm by driving gas prices sky high and then bringing them down for no reason and then taking all ability to finance new cars,new production tooling or new anything totally away.
So this story has nothing to do with sentiment even though I actually have a lot of sentiment. The story has to do with this.
Is the United States of America going to have the vision to loan money to an American Industry which makes lots of money and is profitable when people can borrow money. Or is the United States of America going to be short sighted and continue to idle manufacturing that creates more cars with less manpower and less material and less environmental impact than any nation on the face of this earth.
Does it make more sense to spend over 700 billion to put people to work building roads and bridges or in most cases making work that does not need to be done or? Does it make more sense to loan 15 billion to a business that is 100 years old and is the most efficient business on the face of this planet.
This is not a sentimental question! This is a question of economics. Economic Expansion comes only from creating more with less manpower, less material and less environmental impact.
Economic depression comes from idling all of that manufacturing power in favor of off shoring all the manufacturing to countries such as India and China were manpower is cheap, material is wasted and the environment is something to dump into.
Americans need to wake up and look at this in the correct manner. It is not a sentimental question. It is not a jealousy question. It is an economic question with a clear cut answer. People do not sweep all days in these factories and make $70 per hour. People maintain 1000’s of robots and very little assembly work and every day another robot is made to do an assembly workers job. In less that 10 years at the current level of advancement 50% of the assembly workers will be gone. The Chinese and Indians realize this and know that now is the only time to kill the industry before it is too late. Again follow the money. That is were all the donations are coming from for all of the politcal campaigning.
So it is a money question. Are we going to loan money to an industry that makes money and is more efficent than any other industry on the face of this earth and has made more efficency gains than any other industry on the face of this earth in the last 10 years and will make more in the next 10 years.
Or are we going to be lied to by people who have never set foot in an American Assembly plant and are paid by Chinese and Indian business fronts to kill all manufacturing in the United States of America!
So if America does not wake up and demand that there legislators protect economically viable jobs then we will all be competing for our freedoms with countries who have none.
And yes, no matter what we Americans will survive but to kill an industry which has 1000’s upon 1000’s of robots and the most efficent in the world in favor or letting it be done in countries by hand again will take 20 years to build back up. And about 10 billion dollars per assembly plant to do again from the ground up. So a 15 billion dollar loan is a no brainer when we are talking about 700 billion for
infastructure which does no good without manufacturing plants.
Gm is currently idling 20 assembly plants or about 300 billion dollars worth of infastructure. Yes plants are infastructure. So does it make sense to lose all this infastructure. NO!!! Does it make sense to idle Chrysler and maybe Ford too. NO!!! It is a money issue. How about all the taxes lost. How about the states paying for unemployment with what, the states are out of money. Is everyone in America crazy. The sad fact is that this is an economic question and it is a no brainer. Bankruptcy is crazy and economically a crazy decision.
Do not be fooled by those who do not understand the numbers, do not understand how profitable the industry is, or they are paid off by chinese and indian manufacturers.
Sorry about my spelling I did not take the time to copy to word and spell check.
The Auto Industry is really to blame for years of arrogance and self serving management. Now they want more money to fill their pockets while the workers who really need support and are the backbone of the industry do not seem matter to the bosses. Any business should have been managed to self sustain.
Its very simple… but for those who don’t like reason, they complicate things with emotion. Think of Greek rhetoric. It was full of emotion. The point was to be as compelling as possible. No matter if you were right or wrong. You just had to be compelling. So, what’s so compelling.
Well… 3 million jobless… a completely broken economy and the end of the world as we know it, if we let the big 3 fall. That’s pretty compelling. What else is compelling. I’ve heard a “Terrible Christmas!” Dear god, now that right there got me. Ok sign them a check for the money. Who in their right mind wants to force these people to have a terrible Christmas!
Whats the reality of things? Honda (and Acura), Toyota (Lexus and Scion), Nissan (and Infinity), Hyundai, Subaru, Mitsubishi (sorta), and all the other European car manufacturers do not need a bailout! Why? Well you know the answer, but you don’t want to admit it. If you did, you would have to admit your compelling argument is just that, a compelling argument. What else is the reality of things… Suburban, Excursion, F150, F250 and F350… vs… Civic, Corolla, Versa and of course my favorites, WRX and Evolution. More reality of things…. The big 3 union workers make an average of $28 per hour. I’m a college graduate and work in the high tech industry and I make just barely under that. Ouch!
Sympathy… sure! Bailout… no way!!! It was a monumental mistake to bailout the financial industry… and an equally big mistake to bailout anyone else.
This is America people… Get off your asses and compete! Build better cars!
And Collins… nothing is more efficient then a Japanese manufacturing floor. Nothing!! They are kicking our ass, doing a better, more efficient job and we just sit and vent on blog posts instead of fighting back!!! I guess this isn’t America as it was, but America as it is… laaaaaaaaaazzzzzzzzzzzzyyyyyyyyyyyy!!!!
We deserve to get out ass kicked!!!
THE GOOD DOCTOR SHOULD BE REMINDED HIS HERO BARRY GOLDWATER GOT ONE OF THE WORST ASS KICKINGS OF MODERN TIMES IN THE ‘64 ELECTION WHEN HE TRIED TO PEDDLE THIS 1901 NOSTALIGA PIFFLE POSING AS A POLITICAL POSITION. HOPE AFTER AMERICA’S MANUFACTURING BASE IS TOTALLY DESTROYED WE DON’T HAVE TO FIGHT ANY MAJOR WARS. MAYBE DR. KENNEDY’S GREAT “SPRIT OF FREEDOM” WILL SUBSTAIN THE OUE TROOPS ARMED WITH SHARPENED STICKS…
By your line of reckoning, the worthiness of a political idea or philosophy would be determined by how well it fares in an election. Goldwater lost the 1964 not because of his political philosophy, but because: 1. Johnson was bound and determined to use any means at his disposal to win by the largest margin in history, giving way to a horrible smear campaign against Goldwater; 2. The establishment wing of the Republican party felt so threatened by the power of Goldwater’s ideas that its proponents likewise joined in the smear attacks; 3. The Goldwater campaign ran an ineffective, defensive campaign in response to the attacks; 4. Barely a year after the assassination of Kennedy, the American electorate was not in the mood for yet another change of Presidents.
Goldwater’s ideas were not “1901 nostalgia piffle posing as a political position.” His ideas were presented at a time the electorate was not yet ready to receive them. Ronald Reagan was successful as a candidate running on these ideas in 1980 (even though his presidency fell well short of hopes and expectations of those wishing for more freedom and less government).
America’s manufacturing base is in fact being destroyed by the existing policies that have placed us on an unsustainable course of endless debt and the feverish printing of more worthless paper currency. As for wars to fight, we shouldn’t be looking to start any wars, major or minor. The wars we are currently fighting to maintain an empire overseas will be forced to come to an end eventually if we are brought to our knees by the collapse of the dollar.
Give the caps lock a break. It needs a day off.
“Timid men prefer the calm of despotism to the tempestuous sea of liberty.” - Thomas Jefferson
I think what’s going to happen is that Bush is going to approve the 15billion, congress won’t get to vote on it. That’s the reality. The big three may well go under but not under the blade of a guillotine (sp?), by one vote of the Senate. Relative to the 750 billion dollar bailout approved by congress, the public is going to feel that $15bill is a drop in the bucket. This may, if the majority of the middle class is lucky, help buoy the financial markets and whether you own stocks or not, one has to realize that this is important.
It turns out you are correct, as the Bush administration is planning to do just that, as Ron Paul predicted. Regardless of how many bailouts are used to rescue the auto industry, there will be layoffs of thousands of jobs, as the course they are on and will be allowed to continue on (by the bailouts) is unsustainable. They will eventually come crashing down, indeed much harder, the longer they are propped up.
Any financial assistance for the Detroit’s Big Three are necessary. But hopefully, we’ve been expecting a larger number of positive results.. These car companies should try to make some alternatives to address our economical problems. Why not make any modifications on their car parts too? (ex: a more developed mufflers parts and interiors).
Is the auto industry worth a bailout? Well, I would say so if it means that the hundreds of thousands that work in the auto industry will not go unemployed, not to mention some of the largest companies that call the USA home going bankrupt isn’t exactly a great thing either. That said, if they get one, they should not only demonstrate that they can, but also come through on becoming as if not more competitive than their foreign counterparts. Honda, Toyota - these brands have become more popular because of the lower amount of upkeep, but also in longevity, which is a problem that has plagued GM and Chrysler, and Ford for decades. If they can’t come up with more energy efficient vehicles or something that will keep people from importing Nano’s, or the $2,000 car then perhaps they really don’t deserve a bailout.
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