Thursday, June 4, 2009
AP source: GM studying more temporary shutdowns
If you need a new car you'd better go buy one now! If you want to make money as a speculator forget gold and oil and foreign exchange, go buy some cheap, used cars and park them in your garage. In six months or a little more you'll be selling those cars for three times what you paid for them.
This is all going to happen because of the terribly destructive "solution" to what "ails" the U.S. auto industry. Forced downsizing of an industry that produces some of the most necessary real assets in a growing population (a growing world population) is just, plain, stupid.
The fact that the Administration is also doing this at a time when the industry itself has cut back significantly on production shows how ignorant they are of economic reality and how deeply they are held by a destructive belief system. ("Taxpayer on the hook.")
More than anything the Fed has done in setting interest rates (raising the level of reserves in the banking system), the destruction or elimination of productive capacity in key industries that supply some of the most important real assets to our economy ensures: a)lower productivity in the future, b) higher real inflation in the future, c) a lower standard of living in the future.
This is the real way that taxpayers will be put "on the hook."
Sustaining GM and Chrysler (and the jobs of the workers who labored for them) at the bottom of an economic cycle at a time when the government itself was working hard to buoy the economy would have made all the sense in the world. That's precisely why it didn't happen!