Obama’s surrogates and spokespersons are out on the news talk circuit, re-setting expectations for the Anointed One’s first year in office. The massive socialist spending spree promised during the campaign is now being repackaged as an economic stimulus and ‘infrastructure investment’ to quell fears on Wall Street and the world banking system. As before, they blame the ‘failed Bush policies’ for the current economic problems, but there’s a new twist - they’re now openly condemning our entire economic system. That’s right, Obama’s people are attacking free-market capitalism and the concept of private business. They’ve called free-market capitalism a ‘failure’ and they mean to change it. The $800 billion Obama intends to blow in 2009 is a down payment on a brand spanking new socialist economic system, complete with quasi-governmental corporations (remember Fannie Mae and Freddie Mac?), oversight boards loaded with government union representatives, and thousands of politically connected ‘consultants’ and ‘experts’.

Where are the media folks on this one? In fact, where are the Republicans? There is no doubt that Obama will be setting the agenda - he wants his marxist vision implemented quickly, before the masses understand what’s happened to them. This isn’t a matter of hyperbole or reactionary zeal. This man and his backers fully intend to take America down an irreversible path to socialism with a uniquely American twist. Wealthy liberals like the Kennedy’s, Kerry’s and much of the East Coast’s social elite will be protected from confiscatory income and capital gains taxes with rifle-shot exemptions and loosened regulation of private foundations, which are overwhelmingly pro-liberal. Read Phil Kent’s Foundations of Betrayal to get an eye-popping overview of how private foundations influence political discourse and shape national policy.

Working under the premise that repeating a lie often will find it accepted as truth, Obama’s people will relentlessly pound the ‘free-market failure’, drumming this nonsense into the heads of unwary and unsophisticated Americans simply looking for a handout in troubled times. Our fellow citizens will give away their economic freedoms and hope for the future in exchange for a government handout that will be gone in a week. Obama’s counting on it.

Republicans will sit back, shake their heads and pronounce that nobody’s stupid enough to give away economic opportunity in exchange for some cash, and this couldn’t possibly happen. They’re wrong. American voters have proven gullible to a breathtaking degree and demagogues like Obama have taken full advantage of it.  Never underestimate the shortsightedness of parasites or their champions.

The 20th century was certainly America’s greatest age - the first half, at least. The bitter and divisive Reconstruction Era of the 1870s and 1880s transitioned into a more or less cohesive national perspective on America’s place in the world by 1900. The Spanish American war, concluded successfully just two years earlier, gave American military leaders confidence in their abilities to wage war on a global scale. And so, when World War I erupted, president Woodrow Wilson wasn’t intimidated by Germany’s U-boat attacks and quickly mobilized a huge army that effectively won the war in Europe and elsewhere. World War II was a repeat performance on a larger scale. America emerged from WWII as a superpower. The armed forces executed their missions superbly. But it was the home front that made overwhelming victory possible - the manufacturing might of America’s relatively new steel and automotive industries, as well as shipbuilders and munition makers, was the key strategic factor. It wasn’t the Roosevelt administration or government bureucrats who were responsible for developing this overwhelming advantage. It was America’s entrepreneurs and business leaders. For example, under direct Army supervision, aircraft makers were turning out one B-17 bomber every four days. Under direct Ford Motor Company’s supervision, the output was increased to one B-17 bomber every four hours. America didn’t become a superpower on just the courage and dedication of its military personnel. Our military entered combat with more armor, more firepower, more munitions, more fuel, more food and more technology than any other armed forces on land, sea or in the air. It’s a position of strength we’ve never relinquished.

After WWII, the former Russian Empire, run by Josef Stalin and his thugs, emerged as an unintentional and adversarial superpower. They were a brutish, unsophisticated and xenophobic bunch. Soviet Russia was a superpower only in a military sense, and even that was questionable. Much of the government’s resources were consumed in keeping their own citizens under control. Russia’s non-military economy was a tiny fraction of even a war-ravaged Europe, much less that of the United States. In the end, Soviet Russia collapsed not because it couldn’t maintain an iron grip on its subjects and not because it couldn’t compete technologically with US weapons systems. It collapsed because America could out-manufacture and out-spend the Russians 10 to 1 and they couldn’t keep up.

Ronald Reagan realized this when he was developing his political platform in the late 1960s. America’s manufacturing muscle was our de facto arsenal of democracy. Not only did we have the latest and best weapons systems, we had more of everything than anyone else. Once he was elected President, Reagan put his strategy into action. Without firing a shot, Ronald Reagan was able to destroy Russian rule over its conquered neighbors by simply outspending the Soviets on every level. They couldn’t keep up. And once their economy  started to crumble, the political machinery unraveled as well. Soviet Russia was unable to keep an iron grip on its conquests. Millions of Belorus, Ukrainians, Poles, Czechs, Slovaks, Kazakhs, Georgians, Armenians, Lithuanians, Latvians, Estonians, Finns, Prussians, Ossetians, Turkmen, Azerbaijani, Tartars, Uzbecks and a dozen more ethnic groups now had a chance at freedom and self-determination.

Our manufacturing sector was responsible for ending the Cold War. Unfortunately, that manufacturing sector has been under attack for the last two decades. Poorly considered free trade policies, unscrupulous trading partners like Japan, India and China, the raping of corporate assets by trial lawyers, unrelenting pressure from environmental groups and a massive expansion of government have combined to deal a mortal blow to domestic manufacturing. Our own government has carried on a relentless assault, literally driving manufacturers out of business, some of whom were critical to national security. For example, our government drove the last domestic manufacturer of hand grenade detonators out of business by allowing non-US companies to bid on US military contracts. The only company in the world that can supply those detonators is located in Switzerland. When the US invaded Iraq, the owners of that private company refused to supply grenade detonators to the US and any other country that entered the war as part of the coalition. This is only the tip of the iceberg. No one knows how many mission-critical parts and pieces are manufactured in countries that aren’t particularly concerned with our national security. And no one within the government is talking.

From a military and national security perspective, it’s absolutely stupid to put American companies out of business and outsource critical technical components to China, Japan, India or just about anywhere but here. The US military relies heavily on foreign sources of microchips, memory and logic controllers. It is unbelievably easy to compromise weapons and communications systems with a little bit of re-engineering that’s almost impossible to detect. This is not paranoia. The China government sanctions and funds daily cyber attacks on Department of Defense servers from so-called ‘military academies’ and institutes within China. And, China has already leapfrogged American Internet technology by embracing TCP/IP and mobile protocols at least two generations ahead of our current versions.

From an economic stability perspective, it’s absolutely stupid to beggar our skilled and unskilled manufacturing workers by pitting them against workers in other countries who live and work in unbearable conditions. Unemployed Americans in the hundreds of thousands create economic instability and political problems. In their desperation, they fall prey to demagogues and panderers who promise them hope and handouts in exchange for their votes. If the government is going to ‘invest’ in America, the first place to make that investment is in revitalizing the manufacturing sector, and specifically, the repatriation of defense manufacturing. Every nut, bolt and screw should be made in America, not because it’s a trade protectionist urge, but because it truly protects the country to do so. Given the astounding level of waste, greed, corruption and inefficiency in government, rebuilding our domestic manufacturing capability is a low-cost, high-return investment.

The Democratic Party and its left-wing supporters aren’t happy with America, the Constitution, the tax code and the role of government. If only they could remake America in the image of other failed socialist endeavors, like England, Canada, France, Sweden or even the old Soviet Union. Then, they would love that America more than the one our founding fathers envisioned. If only they could scrap the Constitution and rewrite it for a more ‘contemporary’ society to eliminate any reference to God, duty, personal responsibility and public virtue. Then, they could begin to ‘believe’ in the Constitution.

And, if only they could change the tax code so that it was more like Sweden, where the upper income ranges were taxed as high as 85%, then maybe there would be more to like about America. Never mind that it kills personal incentive and/or moves wealth out of the country. It would be more ‘fair’ to those who don’t achieve, don’t outperform and lead lives with low expectations. And finally, if only government could intrude and control every aspect of every one’s lives except the ruling elite then finally there would be an America even a Democrat could love with all his/her/its heart.

America isn’t perfect. The Constitution isn’t perfect. But both are a whole world better than anything dreamed up by anyone else on this planet at any point in time. When the poop hits the fan, who does the world turn to for help, France? Russia? No, when there’s a tsunami, a famine, an earthquake, ethnic cleansing, economic distress or despotic excess, everyone in the world expects America to jump into the fray and lead the way. Then, they can sit back and armchair-quarterback our actions, especially that cesspool of corruption - the United Nations.

When nations are finally able to throw off the yoke of communism, socialism or totalitarianism, what is their first impulse? They look at America’s system of government, our free market economy and a largely classless society as a worthy ideal, and attempt to organize a constitutional republic. Which begs the question, if the American ideals are so desirable, and most free people hope to emulate it, why are the Democrats so fiercely invested in changing them? Why do Democrats and their leftist masters hate what America and Americans have accomplished over the last 200 years?

The answer is simple. They weren’t responsible for this country’s greatest achievements. Everyday working Americans, entrepreneurs and yes, capitalists, were the ones who built this country into a world power. And now, the socialists want to remake it into some kind of hopeless and dreary utopia. Perhaps they can find someplace else to work their experiments. Canada is nice this time of year. Much like Siberia.

Champagne corks are popping in Detroit’s most exclusive clubs and watering holes. George W. Bush, anxious for a positive lift at the end of his presidency, skirted Congress and even his own Treasury Secretary to dole out taxpayer funds to money-hungry carmakers. For the moment, GM’s chairman and his hapless crew can hold on to their jobs, while across town Chrysler’s crippled top management breathes a sigh of relief. The $14 billion dollars is a stop-gap, a temporary plug for a sinking ship. Imagine what that $14 billion could have done in the hands of thousands of small entrepreneurs and business owners. But, that’s neither here nor there. The management and non-union staff of the domestic carmakers aren’t really going to benefit much from the handout. Neither will George Bush’s legacy or the American taxpayer.

Given that labor unions will be the single largest beneficiaries of the auto bailout, UAW president Ron Gettelfinger acted like a typical union ingrate when the handout was announced. He figuratively spat in George W. Bush’s face, defiantly announcing that the union will sacrifice absolutely nothing in exchange for the money. This in spite of the fact that Bush’s gift merely suggested some concessions. Gettelfinger went on to say that his union would revisit the deal once Obama and the new Congress were installed. This isn’t suprising. It’s not even outrageous by union standards. It’s a cancer that’s been growing for decades. And with Obama in the White House and Democrats controlling Congress, the UAW and its sister unions are poised for a comeback.

The unions have in fact given up absolutely nothing, while asking everyone else, including their own members, to make sacrifices, however modest. It’s important to understand that the union organization itself is a separate entity. UAW president Ron Gettelfinger’s salary and benefits are not being threatened. Neither are those of union local presidents, union administrators, benefits planners, money managers and other union employees. The dues-paying ‘members’ are employees of the carmakers, not the union itself. And they do need to be reminded of that occassionally. It’s not the UAW or the AFL-CIO that created their manufacturing jobs. It was a for-profit corporation.

One can always condemn the unions for their reprehensible behavior and the fact that union leadership encourages the rank and file to work as little as possible for the highest pay rate possible. But, the blame for that union attitude rests squarely with GM, Ford and Chrysler management, as does pretty much everything else that ails the auto industry. It’s the short-sighted, self-serving and chaotic management style of this insular and clannish business community that’s wreaked havoc with hundreds of supplier companies, the lives of thousands and now threatens the greater economy.

At the height of the bailout crisis just days before the Bush announcement, GM management ordered its EDS supplier to prepare a company-wide email blast that all bonuses and raises for 2009 would be cancelled. Once the Bush bailout money was announced, that email blast was cancelled. In other words, the taxpayer money would allow GM to continue with business as usual. One would think that given this is taxpayer money, those bonuses and raises would be curtailed as a responsible measure to safeguard the public’s interest. No way. That’s not how Detroit works.

GM and Chrysler will burn through the money that the labor unions allow them to keep in about 60 days. They will return to Washington for another Oscar-winning performance. One would think these captains of industry abhor the notion of groveling in front of Congress for money. Nothing could be further from the truth. Don’t assume that these guys are entrepreneurs or capitalists. They are neither. These auto execs are bureaucrats and politicians as skilled as those facing them in Congressional chambers. They don’t have the vision, the guts or the leadership skills to pull these automakers out of the mess they themselves created. They have the savvy and decision-making skills of a potted palm. And the American taxpayer is going to make sure that they, along with their union counterparts, enjoy the ride.

Executives on Wall Street will be sharing $1.6 billion in year-end bonuses after a disastrous year that saw trillions of dollars in personal wealth erased. They’re called retention bonuses - money to keep high powered talent from bolting and joining a competitor. But, given that most every firm on Wall Street has partaken of the government’s generosity, where would they run to? Wall Street asks that the taxpayers put this all in perspective. After all, the bonus pool is down considerably from the $45-60 billion handed out last year, when the geniuses on Wall Street thought the world was their oyster. Yes, they must be suffering terribly. No chartered yachts in the Mediterranean at $100,000 a week, no helicopter skiing in Gstadt, and that 5th or 6th home is just not going to happen this year.

Meanwhile, the national debt foisted on the taxpayer has increased by another 3 or 4 trillion when all is said and done. Let’s be clear who the taxpayer is: It’s not any household earning less than $60,000 annually. It’s not any household earning more than $1.5 million annually. It’s the 15% of the population in between those figures which shoulders 75% of all taxes paid. That small group of taxpayers also includes their dependents - the spouses and children who must cut back, economize and delay. Oh, but they have so much! They should pay their ‘fair share’, after all. In this season of giving, exactly what is ‘fair’? Is it ‘fair’ to take away five times as much from someone who’s bothered to complete their education and worked for years to achieve a good-paying job?

The progressive tax scheme is patently unfair. It penalizes personal ambition and achievement. It destroys personal incentive and self-reliance. It rewards parasitic behavior at the top and the bottom of the socioeconomic scale. Wall Street is a perfect example. The pay scales for middle management and executives is so incredibly lucrative that they gladly give away half to the government. At their pay scales it’s like winning the lottery. But, that’s cold comfort for someone who’s putting in 80 hours a week to take down $200,000 in gross compensation. Losing half of that to the tax man is a bitter pill to swallow. But it’s an everday reality for millions of well-educated, dedicated and professional Americans. And yet, they can’t complain, because they’re ‘rich’, they’re ‘privileged’. Well, they’re being looted and there’s nothing they can do about it. 

These are the same folks who paid off their college loans, got a good job and worked hard at it. They saved up their money to put a deposit on a home and this is where they were going to raise their kids. They have good credit scores, some investments and a nice, big mortgage. They’ve seen their house values deteriorate while their property taxes increase. They’ve had the credit card companies punish them with 33% interest rates for being one day late with a payment. And, they’ve had their income taxes raised at the local, state and federal level. Some have even endured the pleasure of the ATM tax scam. At some point, these people are going to stop trying so hard to get ahead. They’re going to put their feet up and lower their expectations, just like the bottom of the socioeconomic scale. Where will government turn to collect their taxes, Santa?

The Anointed One came to Washington during the Christmas season, bringing Her Majestic Bad Self and the two kiddies along, searching in vain for a place to stay. First, they stopped at Blair House, but were turned away, because tradition has it that no President-Elect can occupy that House before January 15, long after the Christmas season has ended. The President offered the Anointed One and his family a pleasant home amongst the soldiers, but Her Majestic Bad Self would have none of it. After all, the Anointed One had called the soldiers butchers and murderers, and it wouldn’t do to live amongst them in the holy season.

The Anointed One offered his family the humble apartment where he stayed whenever there was a need to visit the great capital of the land, which wasn’t very often. But Her Majestic Bad Self refused that, as well, saying it was too small and too humble for their new station in life. And the Anointed One let the scribes and the storytellers and the town criers know that Her Majestic Bad Self was unhappy that the President wouldn’t throw the occupants of Blair House into the street so that the Anointed One and his loved ones could repose in comfort, or had insulted them by offering a home amongst the soldiers. And so the scribes and the storytellers and the town liars ran through the streets, proclaiming that the Anointed One and his cherished family had been turned away by the heartless rulers of the city, who were mean and vindictive because their rule was over, and the Anointed One was soon to assume the mantle of power.

And though the inns of Mayflower and Hilton offered them suites, Her Majestic Bad Self would have none of it, for these suites were for the common people, the peons and certainly not majestic enough for the Anointed One, Her Majestic Bad Self and the kiddy-kins. And so they stayed, fuming, in the cold windy city from whence they came. And perhaps, the Christmas season will find them there, instead of the slightly warmer and party-cloudy climes of the great capital. And there will be hell to pay on a holy day.

Wall Street is synonymous with capital formation - raising money from investors worldwide to fund the growth of corporations. Wall Street is also synonymous with finance - raising money from investors worldwide to lend money in the form of bonds to business and government. And, Wall Street is synonymous with securitization - taking capital or lending risks and breaking them up into bits of paper that individuals or institutions can purchase. In all of this, Wall Street itself takes no risk - all of it is borne by investors in one form or another. Wall Street firms make money from the transactions, the creation of the paperwork and the buying and selling of stocks, bonds, commercial paper, derivatives and so one. Wall Street firms make money whether the markets go up or down, whether the dollar is rising or falling, whether the economy is growing or shrinking. The only thing that affects the well-being of Wall Street firms is volume. The money made on a huge volume of transactions is what keeps those billion dollar bonuses going.

Wall Street is all about the transaction. The people running these firms, the people offering Americans investments don’t really care if their customers make any money. It’s all about the transaction. It’s about getting a piece of the action, a little bite out of that stream of cash. It’s how they make their money. That’s why Wall Street is constantly inventing new ‘products’ to sell investors, each one more toxic and risky than the previous one. And in each case, there’s a cut for somebody on Wall Street. Unbelievably, these are the ‘legitimate’ offerings. In addition to these decidedly predatory and parasitic practices there are the out and out frauds who work alongside the ‘legitimate’ broker-dealers, advisers, investment banks, underwriters, analysts, ratings agencies, traders and the rest of the Wall Street apparatus.

Bear Stearns was infamous for its cozy relationships with shady stock promoters, bucket shops and boiler rooms who regularly fleeced small investors. Bear Stearns handled the securities paperwork for these frauds because they weren’t licensed to do so on their own.  Bear Stearns took a healthy fee for its part. The profits from the transactions were so lucrative the firm was willing to take the heat and scrutiny from the SEC and the New York Attorney General’s office. The shady operators would go in and out of business, in and out of jail, but Bear Stearns just kept on handling their paperwork. This kind of mentality permeates Wall Street.

Unfortunately, the various watchdog and governmental agencies that are supposed to oversee Wall Street aren’t doing their respective jobs. Wall Street doesn’t need any more regulation. What’s needed is for those already charged with the responsibility of oversight to actually do their jobs. Bernie Madoff is a prime example. It doesn’t take much of an imagination to speculate that Madoff was able to manipulate, intimidate or buy off individuals within the state, federal and industry regulatory entities that could have spotted this scam many years ago. How someone so visible can conduct a Ponzi scheme of such magnitude for decades is unfathomable. But then, of course, it’s all about the transaction. Was anyone else getting a piece of the action?

Fox News reported that some homeowners are deliberately missing their monthly mortgages payments even though they can easily afford to make those payments. Evidently, they’re hoping for some kind of bailout or readjustment of the interest rate and/or the principal balance. Where did they get that idea? From the banks, insurers and investment houses that have been bailed out by the government for making stupid mistakes. From auto company executives who are asking that the rules of capitalism and a free market system be broken with a government bailout. Even the Gaffmeister himself, VP-Elect Joe Biden, blathered about resetting the outstanding principal balance on home mortgages so that payments totaled no more than 31% of household income. 31% is a rather precise figure. Not 30%, not 32%, but 31%. From what dark recess did he pull that number? How could that possibly apply to the myriad of financial conditions that describe each and every household in the US? This is how central planning works - it indiscriminately applies the stupidest principle across the board.

Now, re-setting what people owe on their homes sounds like a noble gesture. Except that it encourages people to go into delinquency, knowing that the socialists in Washington will come riding to the rescue. Also, what does this do to the homeowners who are living within their means, sacrificing on luxuries so that they can meet their financial obligations? It punishes them. If mortgage balances are allowed to re-set, banks will incur huge losses, much larger than the calamity we’re now experiencing. Banks will tighten credit and raise interest rates to cover their losses. Further, the value of all real estate plunges even lower. The combination will hurt homeowners who’ve been making their mortgage payments and paying their property taxes on time.

The clowns in Washington are trying to help. They don’t know how, so they’re playing with the knobs and levers of government, screwing up the economy further and delaying a rebound. Can they please take a rest?

Barack Obama once promised to put George W. Bush and Dick Cheney on trial if he were elected President. A year has passed since that comment, and nothing more has been said, either by Obama or the ever-watchful and unbiased media cabal. The same holds true for any investigations into Freddy Mac, Fanny Mae, the Wall Street CDO pandemic and the resulting global economic crash. That’s strange. By this time, the media could have surely identified, convicted and sentenced somebody responsible for this mess. The media firing squads would be back in their barracks, cleaning their muskets in anticipation of the next round of public executions.

Instead, there is silence. No one other than a few right-wing zealots have called for investigations into the actions of Barney Frank, Chris Dodd or Joe Biden as they related to Fanny Mae or Freddy Mac, much less other Democratic members of Congress, much less Obama adviser Franklin Raines. George W. Bush has not publicly stated his rage and frustration with Democratic maneuvering that blocked investigations into Freddy Mac or Fanny Mae when there was still time to save the economy. The President hasn’t commented publicly on the various bits of short-sighted legislation dating back as far as the early Clinton years which formed the underlying causes of the most current Wall Street debacle. Maybe he has, and the media cabal has effectively ignored him.

Should George W. Bush have made more noise about the impending disaster that engulfs our country and now the entire world? Did in fact he do so, only to be drowned out by American Idol, Brangelina, reality shows, Big Ten football, crime sprees of the rich and famous, etc., etc.? Will ‘historians’ blame George W. Bush for the economic collapse of the United States of America and its subsequent fall into socialism? Yes, they will. Except, it won’t be worded quite that way. Instead, Bush will be characterized as a foolish, impetuous leader who got us involved in a pointless foreign war, while ignoring the looting on Wall Street prompted by Republican-led deregulation. And it was only with great effort and foresight that heroic Democrats, with Obama in his winged chariot, surrounded by a heavenly host and a chorus of socialists, were able to pull the country back from the brink of anarchy and give everyone exactly what they wanted just by taking it away from the rich. That’s how mythologies are started, after all.

Appearances are deceiving. It may look like Republican senators are unwilling to help fellow Americans keep their jobs and save an ailing industry. That’s how the mainstream media outlets play the story. Inconvenient facts like Ted Kennedy abstaining or that a nearly equal number of Republicans and Democrats voted against the measure are ignored. Americans don’t need to know that. They only need to know that rich and elitist Republicans voted against it. George W. Bush, a virtual recluse soon to be evicted from the White House, is scrambling around for a few spare billion. In the end, the automakers will get their money. Democrats will declare victory. Union members will continue to hate George W. Bush, dutifully following their leaders. The media will continue to bash Republicans even though most of them wanted to see a successful bailout bill.

But then, what about the money? $14 billion or $36 billion, the number really doesn’t matter, is basically a transfer payment to the UAW and skilled trade unions. GM and Chrysler execs will take a small cut for distributing the money in the form of paychecks. Union employees of GM and Chrysler will accept those paychecks, pay 35% in federal, state and local taxes, and then cough up another 4% to their respective unions. Who exactly benefited from this? Why government at all levels, of course. Taxpayer money given to the automakers comes back in the form of income, excise and sales tax paid by auto workers. Secondly, the union is guaranteed its income in the form of dues and management fees for retirement contributions and benefits taken from auto workers’ paychecks. And then, of course, auto execs can expect a little something under the Christmas tree this year for their heart-wrenching performance at the hearings.

The bailout money won’t be used to make the automakers more competitive, more stylish, more valuable or more environmentally friendly. The bailout will allow automakers and the labor unions to continue on as before, except that the government is now covering part of the horrendous operating losses. In order to be ‘responsible’ with taxpayer money, government bureaucrats will demand operating efficiencies from the car companies. And in response, the bureaucrats running those car companies will announce major cost-cutting programs designed to squeeze money out of everything and everyone.

Who gets hurt? Those who can least afford it. Stockholders have already been hammered, including GM retirees who held onto GM shares as part of their retirement programs. Banks and finance companies that have extended credit to GM and Chrysler are in a constant turmoil, re-stacking the loans and turning over paper so they don’t have to officially call in loans or notify the government that both firms are falling down on their obligations. GM and Chrysler employees who don’t belong to a union will take an awful drubbing. Many have already lost their jobs. The ones who remain are having an equally tough time. Just because GM and Chrysler have shed 20% of their white collar workforce over the last two years doesn’t mean that the work goes away. Designers, engineers, technicians, middle management and various specialists are working 50-60 hour work weeks, shouldering the load of their departed colleagues. Some are routinely working 80 hour weeks, frantically trying to keep ahead of a growing workload.

But those who suffer most and will suffer even more are the automotive suppliers - their shareholders, bondholders, managers and employees. And it’s the employees that hurt most. Unlike the major automakers, employees of auto suppliers are in a constant state of retrenching and readjusting their standard of living - downward. When auto executives demand better pricing for a tire, a piece of plastic or a radiator, the money comes right out of the pockets of supplier employees in the form of pay or benefit cuts, and/or working longer hours for the same net pay. If the supplier employees are themselves union members, the blow isn’t as severe, but the hurt is then pushed disproportionately onto unskilled, non-union employees. This is happening not because auto supplier managers are exploiting their workers. It’s that after a decade or more of cost-cutting demands from automakers, there’s no place else to go. Every ounce of fat has been squeezed out of these supplier companies.  Ironically, these supplier jobs are the ones that Washington claims to be protecting, along with automaker jobs. What will in fact happen is another round of pay and benefit cuts for supplier employees, or the plants close and the jobs move overseas.

The managers running the auto supplier firms aren’t doing much better than their employees. Fifteen years of aggressive cost-cutting and brutal global competition has left many auto suppliers in a fragile state - razor thin margins, shaky balance sheets and little, if any, working capital. The Detroit 3 have foisted the costs of their poor decision-making and inefficient business practices onto their supplier base, which is groaning under the load. The net result is that a single bankruptcy of a major automotive supplier can stop the flow of critical parts and supplies to an auto assembly line, shutting down production. If there are no vehicles to sell, there is no cash flow. No cash flow means nobody gets paid. Everything starts to unravel.

But there is a bright spot in this dark and dreary situation - only, it’s not in Detroit.  Ask any automotive supplier to name their most profitable, stable and problem-free account, and they’ll whisper the name of a Japanese, German or Korean manufacturer with plants in the US. Yes, the transplants are staying afloat and they’re fostering the kind of business relationships that allow their suppliers to do so, as well. Even in the midst of an economic free-fall, they’re doing better than their American competitors. Hhhmm. How could that be?