Tuesday, June 2, 2009

The US is Committing National Suicide

By Alan Caruba

Growing up as a teenager in the 1950s, I could not wait to get my license to drive and I liked the sporty look of the British MG. These days I drive a Volkswagen. In that short tale can be found the seeds of the end of the American auto industry.

Here’s some history. In 1952, the merger of several British auto companies resulted in the British Motor Corporation. It was the largest of its day with 39% of British output. Despite established dealerships for the various models, a series of poor management decisions resulted in the loss of market share.

By 1968, British Leyland was formed out of British Motor Corporation and became British Leyland Motor Corporation Ltd. In 1975, it was partially nationalized and the government became a holding company. UK market share barely changed and despite brands such as Jaguar, Rover and Land Rover, the government motor company continued its decline.

By 2005, the MG Rover Group went bankrupt, bringing to an end the production by British owned companies. The MG became part of Chinese Nanjing Automobile.

The 1970s were difficult economic times for the United Kingdom and its Labor government (1974-1979), as noted above, created a holding company with the government as the major shareholder. At that point British Leyland employed 159,000 people in its many divisions that included a bus and truck operation.

In 1984, Jaguar Cars became independent once more through a public sale of its shares, but the Leyland truck and bus operation was sold to Volvo in 1988. The Rover Group was sold by the government to British Aerospace that in turn sold it to BMW. Suffice it to say, the British auto industry is now largely owned by companies in other nations or operating as a mere shadow of its former self.

Anyone who thinks that General Motors will revive is wrong. As Larry Kudlow, the radio-TV business maven, recently wrote, “Taxpayers won’t get their money back” and that figure now stands at $50 billion.

Both GM and Chrysler should have been allowed to choose bankruptcy months ago, but the U.S. government in its infinite wisdom has thrown our money down a rat hole created by bad management and excessive labor union demands over the past four decades. Meanwhile, as was the case in the UK, Chrysler is now owned by an Italian auto manufacturer.

The U.S. government now owns GM, AIG an insurance company, and billions in housing mortgages through the government entities of Freddie Mac and Fanny Mae. Kudlow said, “We’re talking about hundreds of billions of taxpayer dollars that will never be repaid.”

That news is bad enough, but consider now that the U.S. government has just increased the standards of how much mileage must be achieved from a gallon of gasoline at the very same time it demands that more of that gasoline be mixed with ethanol. Ethanol reduces mileage. President Obama has already made clear that he wants GM to manufacture “green” automobiles. No one will buy them.

The Telegraph, a British newspaper, recently did the math on the price of “green” cars, noting that the present UK models cost the equivalent of more than about $5,000 US than a comparable non-green model. “To benefit from the difference in fuel efficiency, you would have to drive 198,000 miles, the equivalent of driving around the world eight times.” The same will apply to comparable American-made “green” cars.

Here in America, the biofuels industry receives a 45 cent tax credit for every gallon of ethanol or biodiesel it produces or about $3 billion a year. The US government requires that 10% of all gasoline be blended with these biofuels whether consumers want it or not. This mandate is scheduled to double by 2015.

Not only will the automobiles cost more and get less mileage per gallon, but the Congressional Budget Office last month reported that “the increased use of ethanol accounted for about 10% to 15% of the rise in food prices.” That’s because the main ingredient of ethanol is corn. That is insane.

At the same time, the government refuses to permit exploration and extraction of known oil reserves in the nation’s interior and off its continental coastal shelf despite estimates of literally billions of barrels of untapped oil.

In the Bakken Formation under North Dakota and Montana, there are an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil. And we’re not even talking about the billions of barrels off the coast of California, Florida and other coastal states. The U.S. by some estimates has eight times as much oil as Saudi Arabia, eighteen times as much as Iraq and twenty-two times as much oil as Iran.

There is one, single reason why we can’t get at those oil and natural gas reserves, as well as being denied access to the massive amounts of U.S. coal reserves. It is the environmental organizations that maintain a campaign against energy use in the nation.

The government is to blame, of course, but you can thank Greenpeace USA, Friends of the Earth, the Sierra Club, the Environmental Defense Fund, and the United Nations Environmental Program, among countless others that have fought against any and all development, any and all economic expansion and growth.

This campaign is coming to a head with a “Cap-and-Trade” bill making its way through Congress that would impose a huge tax on “greenhouse gas emissions” by every industry and business that produces or uses energy. It has no scientific justification. Even the Environmental Protection Agency’s Office of Transportation and Air Quality has released a study demonstrating that the reduction of CO2 emissions would be minimal at best, but such reductions are absurd because there is no global warming.

Reducing greenhouse gas emissions in the midst of a historic economic crisis, at a time when such emissions will continue in other nations around the world, and when such emissions are known to have no effect whatever on a totally bogus “global warming” or “climate change” is a program for national suicide.

Government control of the auto industry is now merely a prelude to its eventual end. Jobs will disappear forever. “Green jobs” are a myth. The economy will suffer a grievous loss. And, if you draw the lessons from the British experiment, you can accurately predict the future of our auto industry.

Only if control of Congress by the Democrats is ended can measures be taken that will permit the nation to turn away from the destruction being inflicted upon it. Vote in October 2010 as if your life, your children’s lives, and your grandchildren’s lives depend upon it, because it does.


Bob Devine said...

Thank you for a well stated post. I was also a teen in the 50`s and have come to the same conclusions as yourself. The biggest challenge associated with all this is how does the general population get this information? They are not using the MSM as you can see by the bankruptcies because of lack of readership etc. and they will not get it at school with the social engineering type of education that is the norm these days. I would say we are in a conundrum.

Valverde said...

Our present government is the most arrogant and hubris filled bunch to occupy the halls of government ever, in my lifetime, which, though in comparison to the age of our country is not all that long. Nevertheless, I am getting on up there.
I would like someone in the hallowed halls of government to explain to me how one can take water from the deep end of a swimming pool and pour it into the shallow end, expecting the water to somehow "average out" for the water to somehow make more water that doesn't somehow become any deeper (inflation). Yet, we are told, "Don't worry folks, trust us." If Jesus said this I would certainly trust, but our so-called messiah is only a MESS-iah and is making things worse.

Pelalusa said...


A brilliantly written piece!

Thank you,

Robert W.

Alan Caruba said...

Thank you, Robert. This commentary wrote itself because the history of what occurred in the UK and what is occurring here makes certain conclusions obvious.

Add in the lies and insanity of the measures taken to avoid a bogus "global warming" and it's fairly easy to see where wee're heading.

Alan Caruba said...

Valverde: I cannot recall a time when so many Americans began to doubt the intelligence and judgment of a new President so swiftly. He is scaring the hell out of everyone but his most devoted followers...and maybe a couple of them, too.

goonxxi said...

Despite history's frequent evidence to the futility of our government's actions, intents and policies, we pursue them nonethe less and contrary to common sense, sound economics and scientific reasoning. Insanity is the only apt descriptor.

libertyforusa said...

have you seen the Hot Air tour put on by Americans for Prosperity to "Expose the ballooning costs of Global warming"?
Pelosi issued an ultimatum today to make sure Cap and Trade gets passed through committee.
We will all be heading for the caves to live again soon!

Michael said...

I've been reading your words for quite some time and you hit a home run every time. Quite often when I think about this country going down the tubes as it slowly turns into a third world country I think about what you and so many others, including those that replied to your blog, and it gives me hope that better days are ahead. I know you can't do it alone so please keep reminding us all how important it is for us to vote in 2010. Thank you for always fighting the good fight and for doing it with such class.
Mike McGowan

Alan Caruba said...

Thank you, Mike, and the others who take the time to comment. I, of course, appreciate your kind thoughts...and it is my intention to continue.

Scott said...

I have my masters in history, and it is reasons like your post why I got into history. Excellent use of history. I agree there needs to be some kind of “change” in 2010, but sadly I feel my faith in the whole system is weak. If we do vote in republicans how much will they really change the direction of the obama administration? It was, in fact, bush who started most of this. I maybe going out on a limb here, but what if the American People used the power of the boycott? What if Americans, decide not to buy any “new GM” cars? In addition, what if Americans, come 2010, boycott the election? This would send, I think, a louder message to Washington, that the American People are very unhappy with the direction our government is taking us.

Alan Caruba said...

Use it or lose it, Scott. The right to vote is too precious (men have died to preserve it) to throw away by not voting.

A Congress in control of the GOP could significant slow and change the direction that Obama is taking us. Consider the effect of the 1994GOP win the ended 40 years of Democrat control.

Granted Bush and the GOP Congress spent a lot of money, but it took six years until 2006 and Obama and the Democrats have made all that spending seem like small change. They have increased our national debt by tripling it and want to add more by taking over the health system.

And, yes, do boycott GM cars. I suspect most consumers will. Keeping it going with government--our--money is unconstitutional.

Go back and read some history. When Harry Truman left office he had the same low ratings at Bush. My bet is that history will be very kind to Bush and possibly credit him with setting events in motion in the Middle East that may change it very much for the better.

Scott said...

Alan Caruba,

I hear your reservations about not voting. However, the right to vote means I have the right not to vote. We all have a right to own a gun. By not owning a gun that right is not taken away. In 2008 about 121 million people voted, while in 2004 about 120 million people voted. Bush in 2004 and Obama in 2008 both claimed they had a political mandate because of the voter turn out, when really they only won by a close margin. In theory if the number dropped to say 80 million that would grab everyone’s attention. This would cause the government to slow down and double check what they were doing. If I may go back a few years, during Napoleon’s reign they still had elections, but the voter turn out dropped significantly causing many in the government to wonder if Napoleon was really that popular. The lack of voters in elections encouraged the opposition along with other factors of course. You are right that if the GOP gained just a few seats in the Senate it would slow everything down. That might be just what we need to slow down the direction Obama is going, but I can’t see it reversing what has already been done. By exercising our right not to vote, it would send a powerful message to Washington. With that being said, I do understand your hesitation and it is good to have that hesitation.

You are right that Truman’s legacy has changed; however, how’s having Bush’s legacy be better save the nation from National Suicide? The first step in confronting someone with a problem is getting them to realize there is a problem. By having voter turn out drop by 20% or even 40% that would make the nation realize there is a problem. Then by voting in good representatives, who do care about the well-being of the nation, we can begin to rebuild America into the great nation that it once was, we might be even able to save the American auto industry.

Again, I really enjoyed your post.

Alan Caruba said...

Scott: Dictators love it when the patriots stay home and don't vote. It just lets them stuff the ballot boxes more.

Scott said...

Lets say there are two candidates in my district running for a seat in congress. The Democrat proposes we do more to make our cars fuel efficient. The Republican proposes if we just add more ethanol in the gas it would make the US greener. According to you and I would agree with you, both options don’t really help. Which way do I vote? Do I vote for the Republican because I think it is less bad or do I vote for the Democrat and hope for the best? Both choices according to you are not good ones.

Now, no where did I say I want a dictator. And if you want to split hairs, Hitler in 1933 was legally voted in by the People. Caesar Augustus was also voted in by the Senate, ending the Roman Republic. So one could argue; that if we vote just for the sake of voting, bad people get into office. I am not saying we stop voting period. As a Republic, it is the duty of the citizen to use his/her vote accordingly. So my question to you is what if candidate A and candidate B are really no different and you disagree with them both, who do you vote for? And why?

Alan Caruba said...

Democracy is messy and often offers a least-worst option. That is the one you vote for.

Republicans who stayed home last October are as much to blame for Obama than the idiot Democrats who voted for him.

Ultimately, we ALL pay the price for bad choices, but America has historically survived such choices in the past. Now the question is whether, in fact, there will be a future for the Constitutional government we have or whether the Marxist-in-Chief will abolish it?