The US Cash Cow & The Dying Auto Industry, Etc., et al.

Democrats, Liberals, Unions, old methods, laziness, old technology, better cars, and too much expansion have killed the auto industry. While the trickle-down effects of a possible collapse would hurt, is it right for the auto industry to be bailed out based on their bust? Is it right to continue to let banks and financial entities line up with their hand out?

Our do-nothing, socialist Congress is trying to cripple an auto industry that has already been suffering for years, with the approval of the UAW's elected leadership.

The union invariably endorsed Democratic candidates and they, as well as the ones already elected, are dead set against drilling for oil in the Arctic National Wildlife Refuge and on the outer continental shelf, as well as converting shale oil, tar sands and coal to usable fuel. They also oppose building new domestic oil refineries. Those positions are all auto industry killers.

The union officials probably have a wall full of pictures at home of themselves shaking hands with the Obamas, the Clintons, Nancy Pelosi, Al Gore, etc. For decades, they've sold out the rank-and-file membership for a series of photo ops to puff themselves up. I can't decide whether it's just stupidity on their part or whether they are traitors to the people who elect them. But if Obama doesn't have a problem with $4 a gallon gas, then the union leadership must think that way, too. And granted, the retards in Congress cross all partisan lines. The Republicans are just and undilligent and stupid as the Democrats (but more idocy belongs to the Democrats). Which is why true Conservatives are of neither party - the agendas of these parties change yearly.

During the 1970s and 1980s US car companies like Ford (NYSE: F) and GM (NYSE: GM) got into trouble for building low quality cars. They tended to have to be in the repair shop more than the Japanese cars coming into the US and that lead buyers to move to the quality of imports. There was a time when Detroit felt that quality was not terribly important, at least over the long haul. Americans liked to replace their cars every two years.

Unfortunately, Detroit started to make better cars and the Japanese kept their quality high. That lead to a situation where keeping a car for several years was a real options. In an ironic way, the improvement in quality is coming back to haunt all of the companies that sell cars in US market. As people feel pinched for money they want to delay buying a new car. And, their current car or SUV is still in good shape.

According to The Associated Press "In 2007, 41.3 percent of all cars were 11 years or older, compared with 40.9 percent the year before." The median age for a car moved up to 7.1 years.

None of this bodes well for car sales in 2008. Auto makers already predict a domestic market with total vehicle sales at about 15.5 million down from 16.1 million in 2007. But, the extended life of the car could push the number of new cars sold this year below 15 million. That would take about $25 billion in car sales out of the economy.

GM and Ford are betting that 2008 is the year in which they will turn the corner toward profitability in North American during 2009. That is not going to happen. The cars they make last too long.

Also, consider this - expansion by the big U.S. auto makers has killed them, too. Their thinking was to have a dealership with a fancy showroom within reach of everyone. In fact GM has over 7,000 dealerships nationwide, while Toyota has only 1,500.

And corporate taxes are doing their part in killing the U.S. auto industry

Let’s agree that lowering corporate and capital gains taxes will result in more stimulus for U.S. auto makers than pouring taxpayer monies into them. The Toyota example may suggest an incongruent factor that disproves the thesis, but Toyota doesn’t have the UAW on it’s back either.

To make matters worse, the main competitors that are not Japanese all operate out of countries with much lower tax rates than the United States. When profits pile up in the good years, U.S. companies pay about 34 percent more in taxes than those operating elsewhere in the Organization for Economic Co-operation and Development–an international group of the richest nations. This drains cash reserves that are necessary for retooling when the bad times hit.

I've never been an advocate for a bail out of any kind. If we have all this money give away, why not give it to the people to pay down their debt and stock up for hard times ahead? And the world is headed for such desperate times it will make the worldwide depressions of the 20s and 30s look like a cakewalk. Naturally, the government doesn't think this way because they forget who is really in charge. They think they are, but the government is not in charge. Actually, the light is on, but no one is home. The Executive branch like to posture, the Legislative branch like to pose, but it's all show, and frankly, it disgusts me to no end. The change or revolution people were expecting will not come to pass, I'm afraid to tell you. Obama's time in office will make little or no different as he is not concerned about getting this country into more debt with handouts, bailouts, stupid social programs and uplifting the masses as he so often did as an rancorous community organizer straight off of Crack Street USA.

But all is not lost, there is good news in the continuing world wide economic strife. It will weed out the bad, the overbearing, the weak, the stupid influences of our country and our weak minded culture. It will also breed new and better opportunities - the best ideas and money making propositions come out of such times - and I'm not talking about the scammers; there'll be plenty of them, to be sure. It will also toughen us up. We are nothing like the generation that saw the Great Depression. We have become spoiled, lazy, decadent, selfish boring people and no nothing of saving, sacrificing, conserving. We have been dummied down by our silly obsessions - X-Boxes, slick cars and cool gadgets. This will change us and for the better, I think.

Let the banks and the brokers die on the vine, let the auto makers fizzle out, let homeowners work with banks as they have been to work things out. How does a nation teach responsibility if it doesn't keep its politicians and companies in check? Does their mismanagement, greed and poor decision making have no consequence whatsoever? You and I as individuals could never get away with this - not that we would try. It just wouldn't be tolerated on the individual level. We'd go to prison - sent there by a group of our peers.

The smart will survive and Darwin was right. These are a great example where the fittest will survive and as individuals, we will have revived ambition to help others through it without the government's help. Take note Democrats, Liberals, Socialists and others who suck on the teat known as the U.S. Government, it will not save you. It won't have enough money to bail everyone out and still have enough for you to suck on.

I'm banking on it.

Walter