The administration is continuing to pursue an agenda of military engagement in the middle east, while the Republicans are talking about balancing the budget by cutting back on spending at home, ranging from education to infrastructure to medical care and social security. Neither of these are the right agenda. The right agenda is to quit trying to pay off Pakistan and get out, to leave Iraq, to leave our bases in the rest of the middle east, and to pull out of Afghanistan. The whole enterprise is a waste of American treasure. And where will our departure leade? It will undercut the whole message of the Muslim extremists and open the door for the young people of the region to do what they have been longing to do from the beginning: embrace western values. Only when we quit fighting will we win.
In our own country, we need to reconceive how the government gives the economy support. The bank bailouts started by Bush and continued by Obama were never the right answer. What should have been done was to extend FDIC guarantees to the securitized mortgages. This would have meant that they would have regained value and the credit default swaps would never have come due. Lehman Brothers and AIG would never have needed a bailout. Absorbing the inevitable defaults among those mortgages would have been far less expensive than doing what was done, which was essentially to buy them all from the banks.
We need to ALWAYS find ways to do what is needed without throwing money at it, and there is almost always a way to do this. An example of what was done right is the motor bailout. This is because the government tied intelligent demands for industry reform to the loans it extended. As a result, GM and Chrysler finally started making cars that are competitive with import offerings, and are enjoying a resurgence of buyers as a result. And they are rapidly paying off their loans, and the government, in the end, will make a profit on the deal. Not to mention that the collapse of the two companies would have led to over a million job losses.
Only by following the middle way of creative thinking and intelligent compromise are we going to remain a great country. We should not listen to either the left or the right. They do not have the answers, not a left that offers only more regulation and more complication, and a right whose prescription for change will destroy our infrastructure here at home and turn this into a third world country.
Subscribers, to watch the subscriber version of the video, first log in then click on Dreamland Subscriber-Only Video Podcast link.
Just a little counterpoint to
Just a little counterpoint to your remarks, “This is because the government tied intelligent demands for industry reform to the loans it extended. As a result, GM and Chrysler finally started making cars that are competitive with import offerings, and are enjoying a resurgence of buyers as a result.”
As someone who follows the industry quite closely, that’s a bit of revisionist history. Most people don’t realize that it takes years to bring a new car to market, generally about four years is a good rule of thumb. Some years before the economic collapse in 2007, and in part under the leadership of “car guy” Bob Lutz, GM was already well underway to engaging in a complete product renaissance. Only able to do so much so fast, GM cars of the mid-decade were more in catch up mode, but the products planned at that time for release in the last couple of years to the present have been highly competitive in the U.S. and the world, with several awards to show for them. These cars and trucks, including the new Volt, were underway and approved a year or more before the serious specter of GM bankruptcy. Many people mistakenly believe that the extended range electric Volt was made as a condition of a supposedly green-leaning Obama administration, and that all these new products miraculously appeared because the government set them straight, but that’s simply not factually true. Also, people like to attribute some kind of heroic status to Ford for avoiding the bailouts, but they would have been in the same straights if not for the fact that they had luckily secured a line of credit from the private sector not long before getting such credit would have been impossible, and that credit would carry them through the crisis without government intervention. They were really no more flush with cash that GM and Chrysler were, who not having that line of credit lifeline turned to the government to make them loans, with nearly disastrous results. People also like to point to how those owning GM common stock lost their investments, but forget that people could have lost similar money on Ford stock had they dumped it for as little as $1 a share following the bank-led recession and at a time when it looked like the entire automotive sector in the U.S. might collapse along with GM (it’s now around $18 a share, so there was also real opportunity there.)
In the end, I think we agree that rescuing these companies was essential to the American economy and our ability to remain a manufacturing power in the world (for example, GM is the largest non-Chinese car company in China and also was before the “bailout”, with more than 1 million cars sold there in the last year- Buick is a very prestigious brand to the Chinese.) Even if the government doesn’t recover all of its investment, it was a much smaller price to pay than the extra roles of the unemployed that would have resulted. And don’t forget that much of that money that kept GM floating went right back into the domestic economy as their normal course of business. Leading Republicans obviously wanted to roll the most dangerous of dice and sink GM and Chrysler during those terrible times, many apparently hoping that the transplant import manufacturers in their southern home states would be the beneficiaries, not to mention destroy the UAW, which they obviously despise. I’m really not sure America would have ever recovered from the far-reaching effects of what might have happened.
I agree on the Military
I agree on the Military withdrawal, it is draining our resources at home. Let Cultural Imperialiam do the conversion. Our values,movies,books,music , VOA broadcasts , etc..have done wonders to the young generations of other countries.