Obama (left) Bolsters U.S. Hybrid Automobile Sales in Waning Consumer Market … President Barack Obama's administration has bought almost a fourth of the Ford Motor Co. and General Motors Co. hybrid vehicles sold since he took office, accelerating federal purchases as consumer demand wanes. The U.S. General Services Administration, which runs the government fleet, bought at least 14,584 hybrid vehicles in the past two fiscal years, or about 10 percent of 145,473 vehicles the agency purchased in that period, according to sales data obtained by Bloomberg under a Freedom of Information Act request. In fiscal 2008, hybrids accounted for less than 1 percent of government purchases, the data showed. The government is boosting investment in a technology that has failed to win broad acceptance after more than a decade in the marketplace. Consumer sales of hybrids are headed for their third consecutive yearly decline. – Bloomberg
Dominant Social Theme: Incredible surprise.
Free-Market Analysis: "Competition is a sin," said one of the richest men in the world; his approach to commerce trailblazed the ruthless, capitalist way of modern business. In fact, a tiny, intergenerational, familial Anglo-American power elite of incredible wealth runs the Western world the same way today so far as we can tell. It fosters whole industries and corporate participants as it chooses. It creates these industries through mercantilism, by pulling government levers for private gain. Over time it installs such privately run facilities as central banks and government regulatory agencies that operate under the color of law but benefit a very few at the expense of the many.
In this article we will examine again (as we have before) how the power elite builds whole industries using government policies and monopoly power – and why investors, especially, need to understand the larger mechanism that lurks behind what is apparently a free market. In fact, business-as-usual in the West at its higher levels usually flies in the face of free-markets. But in the 20th century, a new communication technology – the Internet – has increasingly exposed the monopolistic/mercantilist price-fixing of the elites and presented the naked and even ruthless power behind Western corporation and multinationals.
The nascent "Green Industry" is a classic example of the syndrome we are trying to describe. Back in the 1970s, the power elite in our view made a determined effort to introduce environmentally friendly industries into the West. Solar power, wind power and electric cars all made their appearances. But as Western recoveries picked up steam in the 1980s and the evident artificial scarcities of oil and gas subsided, "green" businesses were exposed as the inefficient operations they mostly were. Most withered and died (a fitting metaphor, yes?) and the ones that survived changed significantly.
Now it is happening again. The greening of General Motors is a good case in point. We recently wrote about General Motors and how we believed the Obama administration was urging companies like GE (a huge government provider of goods and services) to purchase horrid, little electric "GM Volts" that have a range of about 40 miles (on battery power alone) and need eight hours of plug-in time per day. The Volt costs US$41,000 before government incentives and there are considerable questions about how long their batteries will last. The speculation is that the Volt is nothing more than a loss leader designed to bring people into showrooms where they may purchase something else.
GM is only one example though. The Obama administration and its enablers made a determined effort in the past few years to push green business much as the Carter administration did in its day. Of course it is not just US Democratic administrations that are involved with this sort of government/private sector endeavor. Throughout the West this is how business is done. The carbon-trading exchanges that have been established on European bourses are another example in point. Here was a whole industry that was going to be introduced – one that might eventually be worth US$10 trillion or more – based on the faulty idea that people's breathing was causing a terrible rise in greenhouse gasses. In an article entitled Chinese Statists = American Ones, we wrote the following about this phenomenon, generally:
When one examines Western capitalism, one continually comes to the conclusion that it has evolved away from entrepreneurialism and private markets and that this evolution is accelerating. While the Western model and especially the American model is complex, the statist bent is increasingly notable and has been for a while. Western governments may not fully own the means of production but they set the private market agendas of the businesses that operate within their boundaries. We can see this clearly – and most recently – in the announcement that GE is going to buy 12,000 Chevy Volts from General Motors, as reported recently in Forbes magazine:
This story has the fingerprints of GovBiz (to coin a term) all over it. Of course to analyze it one has to begin with the Anglo-American power elite itself, which sets the larger promotional agenda. When it comes to what is occurring with GM, the course of events is fairly clear and has to do with an effort to promote a "green" corporate agenda. To this end, GM (rescued from bankruptcy by the US government) has begun to pursue an aggressive environmentally conscious business plan …
One could, of course, make the argument that all this makes sense, but we don't think so. We don't see an exceptional level of private demand for wind farms and solar energy – both of which come with plenty of drawbacks. When it comes to GM's fascination with electric cars, we find ourselves even more skeptical. It doesn't make sense on a number of levels, beginning with energy generation which has now takes place at coal-fired plants that produce the electricity that Volts need. One has essentially taken a step back from clean-gas burning cars to coal plants that may indeed be "dirtier" for the environment.
You can see the article here: www.thedailybell.com/1533/Chinese-Statists-Equal-American-Ones.
Nothing the power elite does in our opinion is unrelated to its larger goal of building a one-world government. The reason to commercialize environmentalism is because it is part of a larger dominant social theme having to do with scarce resources and "living within our means." These scarcity-based memes are intended to frighten Western middle classes into turning over wealth and power to globalist authorities (like the UN) carefully constructed for that purpose.
Of course there are practical reasons as well. While some elite "green" solutions emphasize individualistic solutions to the faux-problem of "a society with limits," many solutions merely involve power generation at another source. Green cars such as the Volt power-up at night using electrical outlets that receive electricity from coal-burning power plants. One can make the argument that such solutions are actually contributing more "pollution" than they are removing.
Why would the elite argue for environmentally friendly activities that actually end up polluting more? There is something called Smart Grid coming on line in various regions and nations around the world. It is a new technology that will record one's power usage in great detail and we have written about it in several articles. We would offer the real reason to encourage electrical vehicles is because they will make use of the Smart Grid system.
Over time, various technologies can be introduced that will better control one's driving experience. We can even see the day where locks will be installed on certain home electrical outlets and people will not be able to remove their cars until they have taken garage-based breathalyzer test or gone back into the house to fetch a credit card to pay an overdue parking ticket.
There is always a method to the seeming madness of the elites. Even as Western governments are introducing backscatter X-ray scanners at airports and (in America anyway) intend to introduce them at railroads, sports stadiums and marinas, so electric cars are being relentlessly promoted as well. The result is a kind of security pincer movement where one's travel can be monitored at all levels – at home, driving a car or taking a train or boat, or even attending a sport event. None of this has much to do with "business." Here's an update on just how profitable some green businesses really are from RapidDaily.com:
The higher cost of renewable energy is hurting green energy sales. The lower cost of fossil fuels make conventional gas and coal plant's power cheaper than wind or solar power production. Although many Americans want to decrease fossil fuel use and support renewable energy projects, growth of new projects are slowing down, due in part to the recession and low coal and gas prices. In fact, the American Wind Energy Association reported the third quarter of 2010 was the slowest since 2007, with new installations dropping 72 percent. Many alternative energy projects have been canceled because utilities and government agencies do not want to increase consumers energy bills. In Virginia, Idaho, Kentucky and Florida deals have been scrapped or put on hold. In Virginia, regulators decided consumers needed to be protected from a wind power deal that would have increased their bills by 0.2 percent.
Now you would think the above would be big news – that wind-energy installations have dropped by nearly three-quarters in the third quarter of 2010. But did you read about it? The mainstream press, in fact, is entirely complicit in cheerleading for this phony industry. And it is not just alternative energy either. We could make the same arguments when it comes to the military-industrial complex, Big Pharma, Big Banking or even public education.
In each instance, we would argue these industries have been created virtually from scratch, using the awesome power of government (along with a complicit media and money power itself) to generate ever-vaster industrial enterprises – fulfilling what is basically an artificial demand. There is little or nothing of the free-market when it comes to elite promotions – and the biggest promotion of all in our view is capitalism itself – and the "sin" of competition.
Lately, the Internet has been exposing many of the interconnections that the power elite was able to keep hidden in the 20th century. Today, we can see, almost brick by brick if we look carefully enough, how the elite builds its world-spanning multinationals and even how it carefully creates demand for them. But when it comes to, say, Big Green business, we can also see how elite enterprises can fail.
The Internet itself has exposed the fraud of global warming and the larger environmental industry that was to be built up around "carbon credits" and atmospheric "poisoning" by carbon dioxide. Part of our brief is to urge people to analyze elite memes closely to see how much of an impact the Internet is having on them. In the 20th century, investing in business trends created by the power elite was almost a sure thing. In the 21st century, there are wind-energy installations, down by nearly 75 percent in a quarter. Ouch.
According to dBusinessNews (and other outlets), General Motors sold 478 million common shares at $33 each, raising $15.77 billion. For the preferred stock, GM had planned on selling $4 billion and instead sold $4.35 billion. This brings the total to $20.1 billion, or $7.1 billion more than projected. We don't know who bought all that GM stock, but we bet if we lift the curtain we find a lot of institutional buying; some of it with direct or indirect ties to enterprises doing business with the US government. That's the way the world works these days. It is increasingly difficult to see where "capitalism" leaves off and government begins.