GM: We Don't Have to Save it

There is increasingly insistent talk on Capitol Hill to give Federal money to GM and potentially Ford and Chrysler, this is a terrible idea and should be discarded

G.M. and perhaps the other American automakers have headed into a seemingly irreversible tailspin and are calling on the Federal government to rescue them from an almost certain demise.  The prospect of a Federal bailout of the Big Three raises two important questions: first, why on Earth would anyone spend money to allow the GM et al to continue running a bad business; and second, why should the government intervene to save any company, big or small, that can’t survive on its own?  The answer lies I think in what Americans tend to want from their economic system: they want a system that provides the benefits of both a capitalist and socialist system, which simply isn’t possible.            

Put bluntly the American automobile industry is a mess; inefficient production models, inflexible vehicle development programs, and years of increasingly generous UAW contracts has stripped the auto companies of the ability to perform their core function: producing a car that people want to buy for a profit.  Stiff competition from foreign manufacturers, increasing gas prices, and decreased consumer spending has exacerbated these woes to the point that GM, Ford, and Chrysler are reported to be on the point of bankruptcy.  Capitalism dictates that the companies be allowed to fail; if people don’t want what they’re selling at the market price let them go out of business.  This cruel process leads to the demise of thousands of small business every year and occasionally to the failure of a big company too.  Why let the companies fail, both big and small?  Efficiency.  Capitalism allows resources to be used in the most efficient manner possible and allows people to consume products according to their tastes.  This is the great benefit of our economic system and it has created the most vibrant and powerful economy in the history of the world.  The downside to a capitalistic system is of course its cyclical nature as well as the painful transition as goods and production are reallocated throughout the system. 

 Which brings me back to GM.  If the Federal government gives more emergency loans (yes more, a first round of loans was already approved a month ago) to the company it is in essence saying that the value of the jobs and resources tied up in the company are worth enough to the economy to allow it to use an inefficient system to keep making cars that no one wants.  This valuation is inherently flawed and should be discarded.  When the typewriter industry started dying in the late 80’s and early 90’s no one wanted to save it because there was a clearly better alternative; such is the case now.  No company or industry is so vital that it should be exempt from the trying fire of the market; while there will be pains associated with the end of American auto making as we know it, the pains of maintaining the automakers on life support will be even greater in the long run. 

NY Times also wonders about Obama and his Democratic Congress

An Op/Ed Contributor for the NY Times has reached basically the same conclusions as I did in terms of Obama being successful in Congress (see my post on November 5th), it will definitely be intersting to see how things go on January 21, 2009.  Check it out: http://www.nytimes.com/2008/11/10/opinion/10ehrenhalt.html?partner=permalink&exprod=permalink

Calling it Quits to the War on Terror

The Pundits are already calling it quits to the War on Terror under Obama, can they really be serious?

An Opinion article in Friday’s New York Times mentioned favorably the possibility of Obama “turning the corner” on the war on terror.  Although the tone of the article was jesting there was probably more than a grain of truth to this jest; Americans are tired of the war on terror, they’re tired of hearing about their sons dying in far-off places they’ve never heard of and couldn’t find on a map without help, and they’re tired of seeing their national wealth siphoned away into the desert sand.  I understand all of these frustrations and agree with many of them, yet for all that I am surprised and a little disconcerted by this idea that a new president can come into office and simply “turn the corner” on the war on terror. 

Perhaps one reason the article’s author (and maybe most Americans) thinks about ending the war on terror is a conflation of the war on terror and the war in Iraq.  Although President Bush presented the war in Iraq as an important element of the war on terror no one who thought too hard was ever misled, the two are and always have been separate conflicts.  While the war on terror was precipitated in response to the most deadly attack on civilians in the history of the United States, the Iraq war was started for reasons no one (including President Bush or Dick Cheney) could ever honestly or clearly explain.  American forces never should have been sent to Iraq and they should be brought home as soon as can be reasonably arranged.

Does the end of the war in Iraq mean the end of the war on terror?  Hopefully not.  National security is important, not as a Republican or Democratic question, but as an issue for all Americans.  To the extent that the war on terror means maintaining vigilance at home and abroad, it should be continued.  The horrors of September 11^th were not a figment of George W. Bush’s imagination, neither is the possibility that they could happen again.  Even though Barack Obama may reframe the issues and rephrase the rhetoric surrounding the war on terror, there is nothing he can do to erase the necessity of high levels of security in the world today.  To think otherwise is either foolish or a joke in very bad taste.

The Most Pressing Question: Can Barack Obama Lead His Party?

If Barack Obama wants to become the transformative President his
supports hope he will be, he'll first have to learn to govern the
forces within his party.

In many ways Barack Obama’s election to the presidency is historic. Perhaps more important than Obama’s impressive list of election day accomplishments is the mood that swept him into office; people from across America have placed their hopes and dreams in Obama in a way that has not been seen in American politics in a generation. The good news for Obama is that he will be able to use his clout with the American people to pursue an aggressive political agenda. The bad news for Obama is that there is a strong possibility of his becoming yet another Democratic president who failed to live up to his potential.

For the second half of the twentieth century and into the twenty First Democrats have been reactionary, sluggish, and unable to define the political issues that drive American politics. Presidents like Lyndon Johnson, Jimmy Carter, and even Bill Clinton are perfect examples of the chronic Democratic woes in leadership. Each of these presidents allowed their failings, whether personal or political, to keep them from reforming a party in need of repair. The lesson for Obama to take from his predecessors is that redefining and building an enduring mission for his party must be a central aim of his presidency. The obstacles he faces in doing this are significant.

The first challenge Obama faces is the simple fact that his personal beliefs about the proper direction and course for American social and political life are not reflective of the American mainstream. Obama isn’t a socialist, but his views are definitely are few steps left of what most Americans see as the proper course for American politics and culture. President Obama will have to resist the temptation to build a party in his own image, which cannot survive long, and instead craft his party as a picture of the great American political middle. If Obama can accomplish this then his next job, getting the Democratic Congress on his side will be much easier.

Taming Congress and bringing it onboard will be a significant challenge for Obama even though his party has commanding leads in both houses. Jimmy Carter, despite Democratic control of Congress, was stymied by legislative battles in almost all of his efforts. If Obama pursues too left leaning of an agenda or if he takes his Democratic colleagues in Congress for granted he will suffer a fate similar to Carter’s. On the other hand, Democrats in both the House and Senate will welcome a leader who can finally articulate a mission and cause that reaches out to the American people at large and again makes the Democratic party a household brand across America.

There is a great deal riding on President-elect Obama; if he succeeds at building his party up correctly he can assure Democratic dominance in national politics for years to come. If Obama fails, either because he cannot resist his own leftist urges or because of his own personal arrogance he will join the long list of democratic have-beens. This failure will be sad, because more than ever, America needs a president and a party who can address and solve the problems of our day.

The Inaugural Post

Welcome to thesoundbite.org.  The purpose of this blog is to allow for an interjection of rational thought into the mix of everyday vitriol that surrounds the internet discourse on political and social issues.  While the political leaning of the posts is probably a little to the right and the social inclination is conservative, logic and rational thought more than personal inclination will come to the forefront of our discussions.  We hope you enjoy.