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Re: Crash Test Wham-O: GM (General Malaise) Hits the Wall

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  • Tue, Jun 02, 2009 - 05:32pm

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    Re: Crash Test Wham-O: GM (General Malaise) Hits the Wall

Paul said: … but ‘what’ would be a good idea? I mean, eventually there has to come a time, probably out of the next from tenth highest level of fear, where an idea is put forward that’ll probably be the right one.

Regarding GM, I think we need to understand the problem before coming to a rational solution.  While there may be a myriad of problems that led to the demise of GM, one stands out front and central – "free trade."(H/T to Elaine Melankis for the chart)

Remember Ross Perot and the great sucking sound as NAFTA and free trade suck the life out of American industry – well, he was absolutely right.  We may distract ourselves vilifying trade unions, social programs and our inability to compete with third world labor rates, but the real reason why our industry has been decimated is because of free trade; which should be immediately replaced by "fair trade" that serves our national interests first.

And we continue the insanity of damaging trade policies as evidenced by this: "Nissan Motor Co. is likely to receive more than ¥100 billion in low-interest loans set up by the U.S. government to promote the development of and transition to electric vehicles and other fuel-efficient cars, sources said Friday." So, we will go deeper into debt so that Nissan may better compete with GM, which is now owned by the taxpayers.

We threw away one of the few Weapons of Mass Production: tariffs and barriers.  Few Americans know that before the Federal Reserve and the income tax laws, our entire government was funded by tariffs and barriers!  All of it!  And ran in the green, too!

It helped our own factory system to develop into the mega-monster of WWII fame!  It made ‘Made in America’ a boast and not a rarity!  It created General Motors.  It made our cities big.  It made our nation an empire.  Free trade killed our nation and turned it from a creditor nation to a debtor nation.  Our rivals don’t need tariffs and they most certainly have many, many barriers to trade still….they benefit from free trade because the US has no BARRIERS and tax the workers to pay for our entire empire, all of it.  Corporate taxes are extremely small and the very rich park their profits offshore!

Many, many text books…make tariffs look evil!  Oh, the horror.  Things cost more but we had more workers who got higher and higher wages as they organized to get their share of the profits.  And the great middle class began to swell from holding less than 20% of the wealth to over 50%.  Now, it has shrunk back down to less than 30% and dropping like a rock.

Eventually, people will wake up and figure out why GM was able to become a major corporation in the first place: TARIFFS AND BARRIERS.  And why it is now dead.

Larry