STAFF NEWS & ANALYSIS
Superman Beckons Council of Super-Heros to Rescue the Auto Industry
By Staff News & Analysis - June 25, 2009

A new government council will help workers tied to the auto industry transition to new manufacturing opportunities, including jobs in alternative energy, Vice President Joe Biden said Tuesday. Biden toured the northwestern Ohio headquarters of the Willard & Kelsey Solar Group, which plans to begin large-scale production this year of solar panels. The area around Toledo has been hit hard by job losses in the auto industry and now is banking on more green factory jobs. "I'm not going to sugarcoat this. Manufacturing is facing one of its toughest periods, in at least my lifetime," Biden said. But there's no reason why U.S. manufacturing can't be successful again, especially, for example, if auto workers are trained to work in the solar, wind or biotech industries, he said. There are close to 10 companies that are turning Toledo into a research hub for converting sunlight into energy. – AP

Dominant Social Theme: A responsible federal government blazes new trails.

Free-Market Analysis: Satirist Jonathan Swift writes the mainstream news today. Nothing is as it appears and there is no conversation that is not tainted by incoherent and untruthful underlying assumptions. According to the official American meme, the US car industry collapsed because it was not providing consumers the cars they wanted within appropriate price and quality parameters. Anyone who has been following cars for a sufficient period must know this meme is fundamentally flawed. But still it persists in the mainstream media, which uses it uncritically as a jumping off point for reports such as the one excerpted above.

In fact, the American car industry was killed by environmental rules, union demands, pension burdens and a central banking bubble that first lifted up American consumerism and then dropped it down, hard. Each one of these elements is put in place by government. It is government that has determined how "clean" cars need to be; government that has set up the environment in which the corrupt and anti-competitive union activism flourishes, government that helped support anti-competitive union elements as they piled on ever-higher and insupportable pension demands. Finally, it is government that provides the environment within which central banking money-creation expands the consumerist bubbles that, when punctured, can deflate whole industries – and did so in the case of US automobile manufacturing.

Is there anyone living in the United States who follows what has happened to the US automobile industry and who believes that the current administration's policies are going to revive it in a meaningful way? And while no one can gainsay the market "creed" of car companies – they evolved out of free-market competition – the idea that sun and wind power can generate the same kind of employment as General Motors at its height must be fairly risible to an unbiased observer.

Non-traditional energy is big-government energy. The industry has virtually been created by government mandate and its activities are supported by all sorts of government regulations both in America and overseas. If such industries thrived, then so would command-and-control economies. But command-and-control doesn't work. If it did, the Soviet Union would still be around. Here's another report on the same issue, this one appearing in the Washington Post.

3 Automakers Get Loans to Build More Efficient Cars … Three automakers will receive nearly $8 billion in federal loans to boost production of fuel-efficient vehicles in the United States. This first tranche of a $25 billion program will help Ford, Nissan and Tesla Motors offset the costs of retooling factories and creating advanced-technology vehicles to meet the government's new fuel standards. The U.S. auto industry has been awaiting this dispersal ever since Congress authorized the program in 2007. But the money wasn't appropriated until last year, and the Energy Department has been reviewing hundreds of applications. "Transforming the American automobile industry will not be easy, but we know it can be done," said Energy Secretary Steven Chu, addressing a crowd yesterday at Ford's Research and Innovation Center in Dearborn, Mich. The loans come as the U.S. auto industry is facing one of its biggest downturns. Car companies are cutting production and laying off scores of employees. President Obama yesterday signed an executive order to establish a White House Council on Automotive Communities and Workers, an interagency committee tasked with helping auto workers transition to new industries. Ed Montgomery, the president's point man on distressed auto towns, will serve as the executive director.

Not only is the American government encouraging workers to seek employment in green fields such as alternative energy, it is also handing out fairly significant grants to car companies to encourage them to make certain kinds of vehicles (smaller) with certain fuel efficiencies. It is possible in the short run that such a reshaping of the auto industry in America will be viable to some degree, but in the long run, industry tends to find its own path. The invisible hand winnows through uncompetitive ventures and selects viable approaches – and those may not be the ones that governments choose.

According to a new book by Dick Morris, the concerted attack and reshaping of the American car industry is just one prong of a possible four-pronged plan that the Obama administration is attempting to put in place as rapidly as possible (before it loses its congressional majority). In his new book "Catastrophe" Morris, who used to be a top advisor to President Bill Clinton, claims that the plan involves a broad immigrant amnesty, census control, supervision of financial institutions and, generally, control of as much industry as possible.

Of course, what Morris and his fellow apologists on the right won't explain is that these programs are actually supported by the same monetary elite that has embedded the destructive mechanism of central banking into the West's economy for over a century. The catastrophes that allow and even justify socialist approaches to economic growth are caused by central banking overprinting of money. Since people confuse central banking with capitalist engagement, the free-market itself becomes suspect in their eyes and socialism (government activism) becomes justified.

After Thoughts

The mechanism referred to above, when full-blown, is not just intended to engender socialism, according to many free-market thinkers. Instead, it works at a regular pace to undermine the fundaments of civil society and put into place an ever-more pervasive command-and-control economy run by the monetary elite itself. The tool used by the elites to nudge society toward chosen goals is apparently Hegelian thesis-antithesis – and writers like Morris are likely useful in polarizing the debate so long as they do not describe fully the underlying goals of those who have put into place such anti-market approaches. That such ambitions are ultimately dysfunctional is surely cold comfort to those suffering in the current downturn, or generally trapped in anti-market solutions offered by elite officialdom.

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