BUD BREWER
One Man's Opinion
PLEASE, MR. OBAMA, LOOK BEYOND GETTING REELECTED.
Sometimes we see numerous problems right in front of us but in our effort to handle them quickly or try to make their impact less serious or damaging, we lose the perspective of our actions over the longer term. Such is the case with Obamanomics and the President’s efforts to ease the pain that a collapsing housing market, rising cost of energy, health care needs for the poor, the pending bankruptcy of our major automobile industry and of course the nation’s commercial and investment banking industry, is having upon all of us. The strategy the President’s administration has employed to save the jobs of the auto workers, keep the banks from failing, help the homeowner stay in their homes even though their mortgages are in default, and assure that housing prices don’t fall too far and threaten even lower prices, looks reasonable from the perspective of someone sinking into the quick sand of a weakening global economy. But just how far into the business of business is the Government willing to go? We see they are employing a strategy of interdiction and attempting some level of nationalization based upon their forcing “bailout capital” or the mandates of new regulations upon not only banking and investment banks but also the automobile industry and their suppliers. Mandating average 35 MPG standard for auto manufacturers to meet by 2016 is the wrong approach. If you want the American people to stop buying or using gas guzzeling autos put a surcharge on the fuel to run all vehicles. Place these tax revenues into subsidies for alternative energy research or battery and fuel cell research, but don’t make it illegal to drive those cars that the consumer feels best serve their needs at an operating cost he can afford and is willing to assume. The mandate approach is never a good idea, but changing the behavior of consumers via their pocketbook almost always is. This attitude of government to provide bailout capital to struggling banks or auto companies or insurance companies or the supplier of services or materials to these companies all seem like such good (needed) ideas? But are they really? When government brings cash to a struggling company, one that is about to go under, you can bet the management and workers in that company don’t care much about the strings attached, “just give us the money”. But you don’t get a free ride from the government, especially this one that has made their intentions well known relating to their desire to influence business to be more compromising and egalitarian like in their management efforts toward their workers and toward the consumer. When management takes the money, the company loses the right to spend it using their own business judgment and discretion. The government wants to have a seat at the table and be able to approve or disapprove management’s business decisions so that they will be in conformity with the government’s view of what is best for the American consumer (voters). Instead of letting the market determine if a company is viable, the government merely makes a command decision and says the company is too big to fail, so they keep them from failing by inserting capital and then directing what management can and cannot do. In the case of General Motors, I hear that keeping this company in business through their bankruptcy will require further loans of over $50 Billion. The long term problem for America and for the developing countries of the World is that foreign leaders who have been influenced by American free market economic growth and have been slowly moving their economies into free market capitalistic mode are beginning to rethink their plan and wonder if they should revert back to their old command style economy since even America is doing so. This is disastrous and will set world trade and world citizens back decades. Mr. Obama, look beyond those tele-prompters you are using and step back to see the influence you are having upon emerging private capital free market participants in the global economy. Let the markets operate! If you must do something, provide some assistance to those in need as a consequence of the market working but don’t take the wheels off this wonderful engine that has been the driving force over the last two centuries giving rising standards of living for all.