GM: An Example of America Autrocity

In a desperate panic GM spent the last week lobbying Congress to pass some kind of bail out to assist the SUV heavy American Auto Industry. It’s not surprising to see GM leading the way in factory closings, as the glut of high mileage SUV’s and Trucks fill the back lots.

In Oct. GM announced the closure of factories in Ohio, Wisconsin, and Michigan that build SUV’s costing America thousands of jobs. Democrats have insisted that any bailout should require these auto companies to build higher efficiency vehicle if it was to consider bailing them out, and that the money should be used for retooling in the wake of $147 a barrel oil.

The problem that most law makers suggest is a recession that cannot be solved by better consumer products even though the price of oil has fallen to half of the price it peaked at. People are still not going to buy new vehicles right away for home economic reasons, unemployment, and or credit tightening. It’s just bad timing for the auto industry in America.

Ironically GM built an electric car and leased something like 6,000 of them to test the market in the late 90’s. A company called Ovonic built a lithium Ion battery which was capable of pushing the car to over 100 miles per hour and had a range of 200 miles. The project, for some reason, was scraped and these perfectly working vehicles were all smashed. Maybe it had something to do with Texaco buying Ovonic, but who really knows.

Now the same company, who had a chance to move into one of the fastest growing markets in automobiles, wants the America it shelved in order to stay the course, to bail it out… without so much as a plan to change the way it addresses the American consumer markets. It’s not surprising that Congress isn’t responding.

One thing, and I consider this a positive in America, is it’s appetite for change. Too long have the Corporations of this country kept us in a perpetual state of outdated technology. It is a historical fact that the Internal Combustion Engine and its proverbial use of gasoline ran concurrent with the invention of the Hydrogen Fuel Cell. Circa 1839… I sometimes wonder if that was merely because Standard Oil and Nelson D. Rockefeller’s corporate influence.

The fact is that it is an American habit not just to produce a product, but also to destroy any competition. It doesn’t always work though. Thomas Edison led a campaign against Nikola Tesla, after firing him, when Tesla began to expand his Alternating Currency technology, using the argument the AC was dangerous because it was used at the time for capital punishment.

To most Corporations, in this era of Capitalism, the consumer represents an index point on a spread sheet and employees are either assets or liabilities. Competition is like the Archangel of the “In God We Trust” and I think people are past getting tired of it. It makes us look stupid as a society.

We are in the midst of an era of self empowerment. With tools like the internet at our disposal there is no excuse for not investigating our choices, when it comes to purchasing. This power makes up two-thirds of the American Economy and every choice we make either empowers companies like GM or not, and can empower our future and an example we desire for our generations to follow.

The US Financial Crisis: Confidence or the Lack of

There’s an old saying that goes, “If it ain’t broke, don’t fix it”. The irony of this statement, in today’s broken financial system,

Bernanke and Paulson testify before Congress

is the concept that what is broken here is the system, when in fact what is broken is confidence in that system.

According to Secretary of Treasury Henry Paulson and Federal Reserve Chief Ben Bernanke the banking system needs more liquidity in order to restart the banks ability to loan to each other. The belief is that they are not lending due to earlier commitments called Drawdowns, prearranged loan agreements to businesses.

The fact is that banks are not loaning to each other for two entirely different reasons. One, the possible write downs from their Subprime Mortgage Security positions, and two, the possibility that anyone of these banks could collapse at anytime. Hense the lack of confidence.

What really needs to be solved in this situation are the things that are truly broken. The biggest break I can see is the continuing collapse of homeowners. Something like 2 million Americans are at risk of loosing their homes this year, either through variable rate mortgages they were sold, or unemployment. This is the foundation of the bigger problem that has led the US to this position and crisis, and it is no longer exclusive to the US. Fannie Mae today announced 29 Billion Dollars in 3Q losses due to foreclosures or delinquencies.

Giving the banks more money to shore up the loses from their overwhelming risk taking won’t solve the problem, as Japan found out after 14 years of recession. What needs to happen is transparency. Banks need to write-OFF all these Subprime Securities and the SEC needs to force them to do it. There is no way they will volunteer to do it on their own for fear of stock holder sentiment being lost, but which is the bigger threat.

Th US Government also needs to do it’s part in a real way, instead of buying shares and Nationalizing companies, or buying up all the bad paper. This kind of give away of American Tax Payers money is reckless and ignorant. This direction is Paulson’s, who actually led the way to giant risk taking out of greed and now he wants to fill the empty coffers of the guilty. read more

The double edged sword of Bailouts sends the message that there is something gravely wrong. It may solve the immediate need for the banks, which by the way are hording this money, but creates it’s own monster. That being loss of confidence. In fact it may be motivating banks to do nothing to solve their own mistakes in order to get their cut. Greenspan may have been guilty of bad decisions, but he was never guilty of bad PR when it came to sending out news.

According to Adam Smith, the father of theoretical economics based on Free Enterprise, nothing in this economic system is really broken. Economics is similar to Natural Selection. If economic systems become outdated, something will rise out of the collapse to take it’s place. He called it supply and demand, that if were left alone it would naturally define itself. What is not in demand, in this instance, is the heavy risk taking that led to this crisis. You can see this in the Libor to Over Night Spread.

So, should we seek to stabilize it and prolong it’s lack of usefulness, by stimulating it like a heart patient who has flatlined, or let it collapse and allow Natural Selection to have it’s day. Personally I believe that America and the World for that matter have the resilient strength to arise from the challenges to be stronger, wiser and better than the past it was created out of.

The Republican Party

What has happened to the Grand Old Party. It seems to be confused about its own Identity. Conservative has strayed from the path of Fiscal Conservative to Moral Conservative, which has left the Fiscal Hawks feeling left out and betrayed by their own party members. Many have turned to the Libertarian Party as a hope that they will someday overcome the 2 party rules in order to regain their voice. How did this happen.

In 1979 Ronald Reagan ran on a fiscal/moral platform, promising not only to reignite the economy through sound fiscal management, which included rewriting the tax code, lowering taxes to the rich (which he dubbed trickle down economics) and working out an agreement with OPEC to restore cheap energy. He also reignited the Faithful by promising to fill Judicial Positions with Justices that would help to reverse the Liberal trend that brought this country cases like Row vs. Wade. The tactic itself was so successful that it became a new shining foundation of the Republican Party itself and redefined the very word Conservative to mean Moral, leave the Fiscal behind.

Since Eisenhower was president each president, in order, had sought to reduce the Federal Deficit to GDP ratio. Reagan turned that around and found new ways for the government to borrow. One of those ways, borrowing from the Social Security Trust, still hasn’t been replenished. The problem with this kind of shift is that it has left the fiscally responsible without a Conservative Party. That is unless you are anti-abortion. I actually met someone who was voting for Bush in 2004 entirely based on his ability to put justices on the Supreme Court that would support her desire to stop abortion, which by the way never occurred. Row vs. Wade is still the law.

So what drives the Republican Party members and their supporters. It certainly isn’t the promises of trickle down economics, or fiscal responsibility. Is it just good PR that keeps people interested in their promises. This election, in my opinion, doesn’t really give us enough information about how people in this country feel about Republican Trends. McCain, in my opinion doesn’t represent the majority of the Faithful or the Fiscal, so the numbers don’t say much about it specifically, but where does this leave the Republican Party.

Personally I believe, as George Washington believed, that Parties have reduced our political system into a shadow of what it was intended to be, and the Media has been right there helping to reduce our elections into a media event rather than a fact based challenge of those who wish to lead the American People. The American Consumer masses are more interested in how a person presents themselves (easily influenced by the media), rather than what they represent, or David Kucinich and Ron Paul wouldn’t be such ghosts to the middle class, too busy slaving away to pay off the debt that has made them all so comfortable in their life-styles.

That is, until something goes wrong…

Cause and Effect: The Evolution of our Environment

I couldn’t tell you which brilliant philosopher said we we’re the result of our environment, but the more I look at the current Global and National environment, the more I feel our culture and the World’s cultures are being shaped by the events our environment are currently offering us. In the past events have helped, if not controlled, the shifts in our perception that allow change to occur.

In the early 30’s in America, we saw (historically speaking) a huge shift in the mainstream perceptions toward the purpose and our common agreement as citizens within our society. People had lost confidence in the markets and the banking institutions. This new sentiment led to the creation of the New Deal and a lean toward a more socialistic form of capitalism. Money being spent to shore up the welfare of the community and a sharing of the wealth in the area of technology and labor became the chant of the day.

There is so much more to say on this, but what’s the point… who cares! I’m just ready for something else!

Today we are seeing some of the same obstacles we saw during the prequel to the Great Stock Market Crash of 29. We see banks tightening, unwilling to lend to each other, let alone consumers. The markets are filled with giant waifs of exuberance and the biggest investors, while cheering us to invest in the future (albeit cautiously) are themselves pulling their money out of the markets in order to avoid the hefty fluctuation of volatility being exhibited. In September 210 billion dollars was pulled out of Hedge Funds, which collapsed the prices in everything from tech stocks to oil.

The Federal Reserve and the Treasury of the US have been hard at work trying to give investor something to trust by dropping trillions of dollar into the markets, mostly banking. This is an attempt to restore consumer and investor confidence. So, what if it fails as it did in the 30’s. The S&P 500 which in 1929 was at around $340.00 continued to fluctuate for another 3 years, rising with the morning news and crashing by the evening edition finally landing at $44. This I don’t find surprising whatsoever.

Many have called this Crisis a “Credit Crisis” and recently I had heard the use “Confidence Crisis”, but really what it amounts to is a “Truth Crisis”. The fact is that it is a Debt Issue we are talking about, as well as a Growth Issue. Growth is necessary for a couple of reasons, in order to keep up with things like: Interest, out dating of technology, repair, natural losses caused by acts of God, and my favorite… Acclimation. We as human beings get bored with the mundane. We constantly need something new and sometimes we can’t seem to find it anymore, no matter how many times we try to revive all the old styles. So, what’s missing…

What is it that leads us to create drama in our lives in order to see beyond it. My guess is that it’s all of these things, but mostly I believe it is truth. Consciousness will never be truly content with the satiation of lies as long as it keep us from the greater pleasure of collective happiness. This can only come through direct experience. If you don’t believe me visit an addiction group meeting and within a few minutes you’ll hear that the main theme of sobriety is real life experience, directly had.

Nothing short of death can really succeed to distract us from who we really are for very long, and if you look at some of the realities of our society it is easy to see that it isn’t distracting us the way it did when the technology was fairly new. I mean think about it. When was the last time you remember the family coming together in the den to listen to the Presidents Fireside Chats, or a Sci Fi Fiction for that matter. Face it, we’re bored!

So, why try to save the banks. No really, who cares if the monetary system collapses. Something new will yield from the ashes of the past. It is inevitable. What about life being the incentive for happiness, what about exploration and creative achievement, instead of watching TV or being a file clerk just to pay off the philosophy degree debt. To me it seems like we have sort of lost something between paychecks. What is it? Does anyone know where this is headed?