One who intends to leave others better off for his having existed.


Want to know why no auto plants in North Carolina? "National wealth was reduced by the auto bailouts"

"One theme of the false recovery narrative peddled by the Wall Street/Washington axis is that the leading symbols of the 2008 crisis—-the big banks, AIG, housing, the auto industry—-are all fixed owing to Washington’s drastic and massive interventions at the time and since then.

But the truth is just the opposite: Nothing has been fixed because all cans have been floated down the road by the Fed’s deluge of money printing. What has happened is that credit market debt outstanding—public and private— has soared from $52 trillion on the eve of the crisis to $59 trillion today, thereby putting a floor under the economy temporarily, but one which will become a huge burden down the road to households, business and governments alike as interest rates eventually normalize.

...This is temporarily providing a “wealth effects” boost to the discretionary spending habits of the top 10-20% of households, but one which will quickly reverse when today’s giant ...“risk asset” bubble finally bursts. And sectors such as autos which were hit by a sharp one-time inventory liquidation in the winter-spring of 2008-2009 have had a modest rebound to more normal levels of production and inventory. But this doesn’t represent investment and productivity based organic growth—-just a natural, short-term rebound from crisis conditions.

...the auto bailouts did not save or create a single new auto job. ...they just shifted 25,000-50,000 assembly plant and supplier jobs from south of the Mason-Dixon Line to the rust belt in Ohio, Michigan, Wisconsin and Illinois. That is, the North American and global auto industries were drowning in excess capacity on the eve of the crisis, and the question was whether consumer demand for new cars would be satisfied by the efficient foreign transplant suppliers located in Alabama or high-cost, long-in-the-tooth UAW dominated plants in the north.

Thus, the political decision of the Bush and Obama Administrations to allocate auto jobs based on electoral politics and crony capitalist coddling of the UAW and the Chrysler/GM business complexes did not add a dollar to GDP; it just reshuffled the given level of consumer spending on new cars among regions. And the ultimate result is that the free market was blocked from doing its job of liquidating excess investment and uncompetitive suppliers and plants.

In short, true national wealth was reduced by the auto bailouts.

...The bailouts have also enabled the rise of a whole generation of soap-salesmen CEOs who tout miracle “recovery” stories, thereby reinforcing the “all fixed” meme. Fiat-Chrysler is a standout case of the latter, and its CEO, Sergio Marchionne, is a bubble illusion merchant of the first rank.

...once the Fed’s latest financial bubble collapses and sub-prime loans dry-up and go into a new cycle of defaults.

In that context, the idea that Chrysler’s North American sales will grow by nearly 50% of the next five years, as Marchionne proclaimed at Chrysler’s recent analyst day, is a laughable delusion.

...By the time of the Great Recession, the Italian government had pumped tens of billions of subsidies into Fiat, and Chrysler was a museum relic that should have been liquidated. Its only viable parts—-the Jeep SUV and Ram Truck franchises—-could have been readily sold off to any one of a dozen solvent global auto markers.

...take-out the massive taxpayer subsidies, the one-time rebound of car sales and the phony-baloney “fresh start” accounting gimmicks that flowed from Chrysler’s faux bankruptcy and you have the next crisis waiting to happen."

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