China and the US Economy

News that a Chinese company may buy Hummer from GM along with Secretary of Treasury Geithner's comments that "China feels secure with the US economy," seems startling.  Several years ago a the Chinese government voiced it's interest in purchasing Standard Oil, the company started by John Rockefeller, but the idea was quashed by the government.  Now that we, the taxpayer, owns Hummer, along with the rest of GM, we may sell it to China.  

So let's see how this works.  The largest polluting country in the world purchases a large, gas guzzling car manufacturer.  Analysts say the company would be moved to China to sell Hummers to Chinese and Russians.  Adding, of course, more carbon into the air as well as consuming more oil.  Makes sense?

Then, of course, there is the comment by our own Secretary of the Treasury.  He went to China to assure them, our largest creditor, that we are solvent.  Think about that.  He did what thousands of home owners are having to do, call their mortgage company to tell them the check is in the mail!  

May we live in interesting times.

What's Good for America

Rarely in my life have I felt that every time I glanced at headlines I would consistently shake my head in amazement.  But these past few months have been non-stop eye popping headlines.  Today's is no different.

Charles Wilson, the chairman of GM during the early 1950s was appointed by President Eisenhower to be the Secretary of Defense.  During his confirmation hearings he was asked whether he could make decisions which could adversely affect GM.  His answer, often misquoted is: I thought what was good for the country was good for GM and vice versa.  We all know what the misquote says, but this statement is actually playing out today.  

The problem is that, among other things, no one who is of an age, say under 40, that will continue to buy cars, is buying American made automobiles.  Something like 40% of Americans under the age of 40 have at one time bought an American made car (that is, a car made by Ford, GM, or Chrysler).  

Regardless whether the "Big Three" fumbled the customer needs test, the lack of manufacturing jobs in America is deeply troubling.  Michigan used to be the epicenter of middle class jobs for blue collar workers.  And those jobs were relatively color-blind.  If you could train to screw bolts, you made good money.  And those employees bought cars, appliances, homes, took vacations, went to the doctor, had dinner out, and raised their kids.  Money flowed throughout the economy like blood through arteries.

The tragedy in this bankruptcy filing is the utter failure of American manufacturing.  We pride ourselves as a smart, technologically savvy country, but the failure of our "made in America" companies seems to be prescient to a worsening of our economy.  

It also has to be noted that the federal government is "guiding" GM through this bankruptcy.  It makes me wonder who is "guiding" all the homeowners desperate for help with their mortgages that are deeply underwater and in delinquency.  Ah, but that is right, the tables have turned, and what is good for GM certainly doesn't seem to be good for the country.

There's Something Reassuring About a Robin

As soon as there was a hint of light this morning, I heard Robins.  Robins, wrens, sparrows.  But it was the Robins that particularly caught my attention.  "Spring is on it's way," I said to myself, dodging the sudden shower while I ran uphill (is there no justice?).  

Our world right now is changing so rapidly my head feels foggy trying to keep up with the news.  Today, General Motors issued it's Annual Report and stated, essentially, that it's very existence is problematic.  I am young enough to remember "what's good for General Motors is good for the country."  And certainly that line has become even more evident as the policy makers count the number of jobs that will be in jeopardy if General Motors fails.  

In a magnificent display of gravity, home values continue to plummet, causing many people who believed they were accumulating some savings, to realize not only their security is gone, but the owe more than the house is worth.  

And the one economic sector which a mere two years ago was hot (retail sales) is now posting dismal figures, reminding us that we are all too afraid to spend money, much less credit.

But, this morning, there were the Robins.  As if to say life does go on, seasons do change, and sooner or later we will understand why the world seems so chaotic right now.