I thought Mitt Romney’s op-ed opposing the Detroit bailout had the right combination of free market instincts, industry knowledge, patriotic compassion, and credibility. It reminded me of why I voted for him. I say that as someone who recognizes the unfairness of bailing out Wall Street while letting this strategically important industry suffer. But there’s no reason to throw good money after bad. The Unions have screwed themselves, management has done little more than make excuses, and the only way to get it right is a “cut to the bone” slashing of workers, debt, and other costs in a Chapter 11 proceeding. I don’t buy the criticism that Chapter 11 is the death of GM or Ford, not least b/c the actual products are decent enough and warranties can always be exempted from the stay, something that occurs routinely in manufacturers’ bankruptcies. But without changing their cost structure, all these companies are dead, to our collective detriment as their well-paid workers do not have skill sets that can be easily transferred, and there are a lot of reasons America should be making its own cars.
This bearish report by Gerald Celente predicting tax riots and mass homelessness rivals my own bearishness and, sadly enough, comes from a guy that has been right on everything from the Panic of 2008 to the Asian Financial Crisis of 1997.
This analysis of the ebb and flow of “idealism” in American politics was interesting. Some of my favorite homeboys like Burke and Oakeshott make an appearance. I’m glad the author noted that Obama is at best a pragmatist but, more likely, a purveyor of washed up 60s-era Welfare-statism. One thing I wish Obama and his supporters would remember is that deficit spending is not wealth-creating, the government rarely “invests” right, and that all this money for bailouts to failed sectors and infrastructure and healthcare must be siphoned out of the healthy parts of the economy, which risk suffocation under the burden of “spreading the wealth around.”
The David Brooks thing on the “formerly middle class” is depressing, but worth absorbing. I’ve met more such people (or people on the brink) in the last 12 months than I have in my entire life previously.
On a related note, I perused gunbroker.com recently. It’s the ebay of gun buying. Colt 6920s are now going for $1700. CMMG, STAG, and other generic M4s are north of $1000. Thirty round PMAGs have crept north of $20, though they were previously available for about $14. Ammo prices remain ridiculous, in spite of the drop in commodity prices. This panic will probably last a while, both from the fear that Obama, the former Brady Campaign/Joyce Foundation board member, will make guns now available banned forever and untransferrable to boot. I think the overall conditions also suggest fear of increasing crime, disorder, and Depression-era conditions. My gut instinct on this is reinformed by the ridiculous premiums over spot–20-30%–for silver and gold coins.