Many people in the United States are being hurt by the recession, and although they understand that there are people in most other parts of the world – Europe, China, Brazil and India – who are also having to cope with the largest economic downturn in the lifetime of most of us, it is cold comfort. Hundreds of thousands of jobs are being lost, especially in the car industry, and this causes hardship.
If you cannot earn a wage you cannot pay your bills, including your mortgage instalments, which means that your home is at risk and may be repossessed by those paragons of vice, the banks, which have already wasted your savings and your pensions. The people who suffer in the recession will feel as though they have been mugged by a banker licensed by the government to burgle. The people despair.
Thoreau, a philosophical American, wrote that most men live lives of quiet desperation. You can see the truth in this today. The desperation of most ordinary people is made quiet by hope
Hope for the majority of Americans lies in the being of a new President who will take office in January. I do not know whether Mr Obama will be a good President but I do know that people in despair need hope.
Mr Obama will face the same problems that leaders of every other developed nation are confronted with today. He will have to enact measures which will move the economy out of recession. He will need to create permanent jobs, ensure that the major strategic industries of his nation are put into good shape while fixing the enormous environmental problems that his nation leads the world in creating. The engine of America needs repair, and the American people will hope that Mr Obama has the skills to repair it, rather than patch it up with short term fixes.
Most modern western economies are driven by the engines of the motor vehicle industry, and this is particularly true of the United States. Those manufacturing giants, Ford, Chrysler and General Motors, are in big trouble. The demand for their product has fallen to very low levels and what seems worse from a business point of view, they have developed the wrong products – the Sports Utility Vehicle, the large sedans which take up large road space and have big thirsty engines, and such environmental obscenities as the Hummer.
The US car makers have few smaller more efficient products compared to those that are made by Japanese and European car companies. The picture shows an example of American built cars outside the Genersys USA’s office in Orange County. Most people are turning away from large vehicles, even in the home of the gas guzzlers after the frightening periodic bursts of fuel price increases and with the increasing realisation that if you drive a gas guzzler you poison your children’s future.
The US car makers have gone to Congress to beg for money. They need around $25 billion from the taxpayers. The car makers argue that America needs them to provide the jobs which will improve the economy. They are too important, they argue in effect, to be allowed to collapse into bankruptcy. They have made strategic decisions years ago, which were just plain wrong, they have exercised poor judgement, they have failed to buy into climate change, and disdainfully ignored the environmental and logical case for smaller more environmentally friendly cars.
And now they want the US taxpayer, through his or her toil and time, to provide them with the money to pay for their past mistakes on the grounds that they employ too many people and are therefore too important to the economy to be allowed to fail.
This is a curious argument for capitalistic free enterprise industry to make. I am sure that in their dealings with the little companies they exercised none of the altruism of which they now seek to be the beneficiaries. No doubt there are many suppliers who made mistakes and exercised poor judgement in their dealings with the car companies and those small suppliers were allowed to fail even though in their own communities they must have been as important as the car makers are to the whole American nation.
Further, it is doubtful to say the least, whether the Chief Executives Officers and senior management of the car makers have the skills and enterprise to transform their businesses in the ways that are necessary. If they do not have these skills then they will be back with the begging bowl in a few years time.
If the car makers cannot make their businesses work within their own means they will go into bankruptcy but people will still need cars and other car manufacturers will fill the gap and new car manufacturers will emerge. Jobs will come back. A better use for the $25 billion would be to use it to insulate those whose jobs are lost in the automotive industry, perhaps retrain, perhaps pay some of their mortgage instalments while they put themselves on their feet.
Mr Obama is not able to make these decisions for the time being. For the car workers there is despair and hope and if their jobs are not to be saved, it is better for everyone that the decsison is quickly made so that people can get on with rebuilding their lives.
Filed under: carbon emissions, climate change, global warming | Tagged: American car makers, chrysler, financing american cars, Ford, general motors, job losses in america automotive industry, taxpayers money, Thoreau | 2 Comments »