Chthonic Thaumaturgy

From far below the earth comes my first blog on this site. A quick lesson in reality for all of you who think the government needs to save GM. First off they don’t really need our money. Sure GMAC went into the mortgage business and lost lots of money just like every other fool hardy lender in the world, but that is a topic for another blog.

The fact is GM is mostly owned by the Cerberus investment group. They have the cash to fix GM, but wont do it because they want the government to do it for them. Cerberus is sitting on tons of cash. They could prop up GM if they wanted to, or thought it would make money again. My opinion is the owners of GM (Cerberus) want to steal as much taxpayer cash as they can before they close the doors at GM. They were slowly shutting down factories, now they have accelerated the process. They are putting all the burden on the workers who make the cars. The (government) cash is going to “pay back” loans which where made by the same people who have been reaping all the profits for years, instead of paying off debt.

GM has a long history of building debt and calling it profit. This Ponzi Scheme is finally collapsing in on itself. The question we should be asking is not is GM too big to fail? Instead we should ask why aren’t we calling their bluff? The government should just walk away from GM and tell Cerberus if you want to see any more money from GM you bail them out. If they say no, we should let GM fail. The government could then take over GM, break it up into several smaller car companies, lend them some starter capital and let those good old market forces do there magic. In the long run this would save thousands of jobs. It would even create jobs at the new companies, as they start up.

Now before I start sounding like some off the wall market forces demigod let me make a few things clear. In a well regulated environment market forces can do a lot to build or destroy a company. Unfortunately over the last few decades (since the disaster called Reagan) we have done everything we could to remove regulation. This has given a huge completive edge to over capitalized companies instead of good companies. We have allowed huge companies to buy up competitors and reduce competition, until we have been left with nothing but cheap products, that can only compete because of monopolistic advantages. Nothing exemplifies this better than GM. They haven’t made great cars for years. Instead they have made cheap cars that can compete with the other cheap cars out there. Whenever someone comes along with a better car they are usually bought up and put out of business politely. We used to have antitrust laws that prevented this type of behavior. We removed many of those laws and didn’t enforce the ones we had left. Suddenly the whole economy is hinged on a few mega cooperations. They control so much wealth and employ so many people it seems unfathomable for them to fail. But fail they must. If we don’t let the GM’s and AIG’s of the world collapse, no one will rise from the ashes to replace them. We will be at their mercy, for the next few decades.

Now is the time for change. I have no doubt that the government will cave in and lend Cerberus a few more million dollars, err excuse me, that is billions not mere millions. But when we do it there must be strings attached to that money. GM and Chrysler need to be broken down into smaller companies. A lot of companies need to become smaller. We also need to have laws regarding profits that will prevent debt from being ignored.

We need to go back to enforcing antitrust laws. Those laws were put into place to prevent the kind of disaster we are in right now. Hopefully everybody learned our lesson. That lesson is; You can’t trust people who are getting extremely rich to rule the economy. They need to be watched like kids in a candy store.

Stalker Out!