An American Dream in Retrospect

Well Peachtree City as if you didn’t know it..we are officially in a recession!  In fact we have been in one since 2007.  Recently, I heard two people discussing the state of the economy and were debating the difference between a recession and a depression.  I wanted to tap them on the shoulder and put in my two cents worth.  A recession is when your neighbor losses his job…a depression is when you lose yours!  But are these day and times just the tip of the iceberg?

In the meantime, I keep hearing all this rhetoric that way out of this is through more spending. Unbelievable?
I’d never would have believed that the way out of this problem that resulted from too much spending would be by spending more?  Who is dumb enough to believe that!  Well, listen to what our top leaders, gurus and strategist on the economy are telling us. Is it just me?

Well in theory they are stating…. In theory?. Theories don’t amount to a hill of beans! We’ve all seen that. They all believed in the free-market right up to the moment the free-market seemed to be failing. Then, they believed they had to “do something” to protect people. Protect them from what? Protect them from getting what they deserved!

Stay with me now….this week the luminaries at Goldman got spanked yet again! Their stock tanked
after rumors of $2.5 billion loss for the third quarter began hitting the circuit. That puts Goldman stocks down 70% this year! What were their expectations? Remember this is the company that Hank Paulson put on massive doses of steroids and developed a fiendish financial engineering department that designing those sophisticated investment bridges you wouldn’t want to drive over.  Do they deserve it?

Then there is the Big 3.  Detroit is in the house! Yes, the Detroit automakers are back on the hill in Washington looking for about $32 billion in taxpayer’s money.  GM says it needs $18 billion or its bust by the end of the month!  So what happens if these guys don’t get the money. I don’t know! They say its the end of the auto industry as we know it….they’ll be forced to turn to the Swedes or even worse…the Chinese!

Folks, here are companies that have been around for an entire century. Plus this is the good ’ole USA….the best auto market in the world! If you couldn’t make it in the car business in the U.S you need to find another occupation.  Nobody buys more cars than Americans! These companies had every advantage, not to mention they had plenty of cha-ching!…..money!  These guys had the sales and service networks into every city and town in the nation. They knew their customers better than any of their foreign competitors. And they didn’t have to ship their cars across the pond to sell them.

So what happened to the Big 3?  It’s been all downhill for quite awhile for the Americans. They were victims of their own iconic success.  They squandered their money!  Detroit missed their market target, they saddled themselves with so many costs that gave them a disadvantage and hobbled them so greatly it was almost impossible for them to compete - even with the playing field tilted in their favor.

To add insult to injury, even when asking for a handout, Detroit’s executives couldn’t seem to get its signals straight. They flew into Washington on their freekin private jets…apparently unaware that anyone would notice.  Yes we saw you… We also noticed on the return trip that you drove in hybrids.  Now the humble Big 3 is back to submit their plan, the Auto Workers are willing to make concessions…and America is waiting to see if they get what they deserve. 

What is that you say?  Well with over 2 million jobs being affected and as Fortune magazine put it in perspective…it would be the death of an American Dream.  Mark Zandi from Moody’s testified that they should get it but the real cost would be between $75 billion and $125 billion.  OMG!! However, I suspect that they will receive some sort of loan or bailout.  At least they came to the table with some sort of plan.  But do they deserve it?  More importantly who may be next?

So what do we as tax payers deserve? How about let’s just start with the truth, we are already picking up the tab.