I'm afraid I owe President Obama an apology. Since he and his government started meddling with the auto industry I've said numerous times that the President is a fascist. Recent events have made it very clear that the Obama is not a fascist. He is most obviously a socialist.
It might not surprise you to know that the above fact doesn’t exactly give me the warm fuzzies. I’m not a big fan of either fascism or socialism. If I have my druthers I’ll stick to good, old-fashioned capitalism, thank you very much.
However the Obama Administration’s recent manipulation of the auto industry makes me think I might not have that choice for much longer. Obama has made it clear that he is going to use his new power over the auto industry to create the types of cars he thinks we should be driving. Our current choices, he says, tend to be excessive of our needs and bad for the environment. After all, who actually needs a Hummer or a Suburban?
“Daniel, you’re nuts”, you say. “I’ll just by my SUV from Ford, or Toyota or one of the many other companies that will still make the cars Americans want to buy. GM will eventually have to go back to making marketable cars to compete.”
In a free-market, you’d be right. However, the new American auto market will be anything but free. You see, Ford’s, Toyota’s and the others’ biggest competitor will be owned by the Federal Government and the UAW. The Government makes the rules under which the auto makers operate and the Union currently negotiates the labor contracts for all Ford’s employees and will soon do the same for all American employees of all the car companies. Make no mistake, the Government and Unions will ensure that the new entity that was GM will survive and be competitive, not by making products Americans demand, but by making GM’s rivals less competitive.
New regulations and CAFÉ standards already do not favor the cars Americans will want to by and other companies will want to sell. The deal GM is getting with the Unions will ensure that Ford and the other, soon-to-be unionized auto companies won’t be able to competitively price their vehicles. Additionally, while Ford and Toyota have to worry about the pesky problem of profitability, GM will not. It will have Government funds available which will enable it to run at a loss-at least in the short term. The government will soon impose tariffs which will make it difficult to sell cars not made in America-unless, of course, they are made by the new GM-probably in China. Don’t believe me? Look up the speech the UAW chief made when he announced that the Government and GM had reached an agreement with GM’s bondholders.
Ford has a solid overseas market and as long as that remains profitable, it will be able to avoid bankruptcy and to avoid falling into the trap the Government has set and that GM and Chrysler have fallen into. However, the cost of its unionized workforce and its inability to make the cars it sells in America overseas may eliminate Ford as a player in the American market. It’s kind of ironic that the brand that began America’s love affair with the automobile may disappear from the American market because rival brands were unable to compete with it in a fair market. Oh well, I guess that’s the price for success in Obama’s America.
The bottom line is that over the next few years, many of the choices we, as individuals, have enjoyed on how to live our lives will disappear. The Government’s takeover of the auto industry, is only the first in a series of moves in that will fundamentally change our economic and political system. The energy and healthcare industries are next. Free choice, the market forces that free choice generates, and the increase in quality and decrease in consumer prices market forces produce, may soon be things of the past. And, sadly, most of America will not only sit by and let it happen, they’ll not even notice the changes until it’s too late. Of course, if Government tries to take over American Idol in order to regulate the contestants’ song choices, folks will be taking to the streets in protest.
Until next time, be well, be free and be happy,
DW
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