When there used to air travel, and cars . . .

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So we must provide a bailout because a GM bankruptcy would make the US auto industry evaporate. Just like airline bankruptcies wiped out air travel in the U.S.

 

Younger readers may not remember the time before the airline bankruptcies, when anyone could go to an airport, get on a big powerful jetliner, and travel anywhere in the world in a matter of hours. The skies were filled with those jets, taking millions of people hither and yon at great speed and convenience.

 

Of course, that’s all gone now. Since the airline bankruptcies it’s become a quieter world, with only the occassional military aircraft visible in the skies. Our horizons have narrowed considerably, limited as we are to slow cross-country travel by automobile, and on ships to different continents. Sadly, soon the cars will go away also, and we’ll return to duller lives in which most people never travel more than 20 miles beyond their home village.

 

~~~~~~~

  

Too bad the government doesn’t create a process by which companies that can’t pay their bills could get temporary protection from creditors, contingent on their fixing the problems that got them in trouble in the first place. I suppose federal courts could oversee the process. It would allow those companies  to actually come out not just with clean balance sheets, but better able to compete in their markets. Ah well – maybe in the old days our government would have been able a create a common-sense process like that, but of course those days have passed.

 

Oh, wait a minute . . .

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12 Responses to “When there used to air travel, and cars . . .”

  1. Rougman Says:

    I’m sad we don’t have airplanes and even sadder that cars will soon disappear from America. What makes me saddest of all though is our lack of steel in this country. I’ve already had to replace too many plastic furnaces.

  2. Jason Gillman Says:

    Or the internet.. with all the Dot Com busts losing Billions.. making the internet untenable.. I sure miss that too.

  3. Bruce Hall Says:

    There are always alternatives.

    – American steel is as vibrant as ever… well maybe not
    – American television manufacturers are as vibrant as ever… well maybe not
    – American textiles are as vibrant as ever… well maybe not
    – American balance of payments are as strong as ever… well maybe not
    – American middle class is growing and prospering… well maybe not
    – American per-capita wealth is growing faster than any place else in the world… well maybe not
    – America is producing the highest percentage of the world’s Ph.Ds than ever… well maybe not

    There is a difference between self-sufficiency and self-delusional. America no longer sees value in producing what it needs. Rather it seeks to find the next get-rich-quick scheme… dot-coms… flipping houses… oil stocks.

    You are correct. We don’t have to produce trucks and cars. We can allow the system to collapse and the Japanese and Koreans and Europeans will continue to state-sponsor their own industries. Likewise, we don’t have to manufacture our own aircraft because the French and British and Russians and Chinese will be happy to do so.

    Likewise we don’t have to produce our own energy or food. The Saudis and Venezuelans will handle the oil while we can get our food from South American and Latin America.

    Why, we don’t have to do anything except blog and take vacations and consume and have university professors talk about CO2 and politicians talk about sharing the wealth.

    And then we live happily ever after… well maybe not.

  4. jmchugh4u Says:

    That’s the wrong lesson, Bruce. In fact, there is a thriving, growing U.S. auto industry that’s not in any danger of banruptcy – it just doesn’t happen to be headquartered and located in Michigan and states with similar regulatory burdens, and it hasn’t had the same regulatory burdens imposed on it by the feds. See Holman Jenkin’s “Uncle Sam goes car crazy.” http://s.wsj.net/article/SB122463178413656455.html

  5. Bruce Hall Says:

    Ah, I see. Punish the domestic industry because our government allows treaty violations and currency manipulations in those countries whose manufacturers set up assembly plants here… and call them our manufacturers.

    Yes, unions have been a problem with underlying costs. But the larger issue is that our government has been a willing co-conspirator against domestic manufacturers and now sits back in judgment against those manufacturers.

    Furthermore, in time of national crisis, will those Toyota facilities or Honda facilities step up? Oh, wait. With Obama at the helm, we don’t have to worry about that anymore. All will be peace and love.

    Do you feel the same way about Boeing and Lockheed? Why not? Airbus can come in and set up shop. The French will be glad to help us out.

  6. jmchugh4u Says:

    There are two ways to make competition unfair, and both create a net-decline in prosperity.

    One way is to place artificial handicaps on the members of your own “team,” like those imposed on the Detroit three by the feds as described by Holman Jenkins, and those imposed by the state of Michigan on all businesses here as described by the Mackinac Center.

    The other is to place artificial handicaps on the other “team” in the form of tarrifs or non-tariff trade barriers. Economists of all stripes recognize the destructive effect of this variety of handicap, but some of them have a blind spot with regard to the other.

    Bruce, if the Germans bomb Pearl Harbor again or some other type of national emergency occurs that requires the type of mobilization you insinuate, the Japanese aren’t going to pack up those “trans-plant” auto factories and haul them back to the Empire. Most of the managers and engineers in those plants are American, and they won’t go anywhere either.

    More important, the world has changed in fundamental ways and there’s no point in wishing for a past in which the rest of the world was impoverished compared to us, or blown-up by us in a war. Given increases in productivity, it won’t be long before less than 10 percent of the workers will be able to produce all the stuff consumed by the inhabitants of our industrial civilization, similar to the evolution of agriculture. What will the other 90 percent do? The “cute” answer is “whatever they want,” but there’s a deeper truth to that.

    Let me finish with one area where you and I agree and where you are doing good work, and that’s debunking the notion that “we’re all gonna die” because weather changes or because we can’t produce the energy an industrial civilization requires. As you know, with nukes and geothermal and other innovations we CAN produce enough juice, and we can also transition to a mostly-electric economy. THAT will look a lot different too, but it will be a good thing, not something to run away from.

  7. Bruce Hall Says:

    Jack,

    I agree that no one segment of our economy or production is essential to our survival. But certain actions strength us internally and others weaken us… not necessarily just economically.

    The genesis of our nation was self-determination and self-sufficiency. We have moved away from those principles with the notion of “centers of excellence” or “lowest cost producer.”

    To the extent that we allow our government or foreign organizations to say “here are your choices,” we become the King’s subjects again. Certainly, we can and already do allow foreign governments and corporations to control what is offered to us and what we will pay for what is offered. And, yes, there is “market competition” for our dollars. But at what point does “finding the best bargain” supplant self-sufficiency?

    You didn’t really answer the question about Boeing and Lockheed. Is there any point where bargains are not bargains? Is progress truly progress if we are dependent on others to define what that means?

    And just how far can we move away from being a producer nation to a consumer nation before producers ask us for something more than devalued dollars in return? Compare the value of our dollar now with that of 20 or 30 years ago. Then answer the question.

  8. jmchugh4u Says:

    Bruce, there’s just no going back to a world in which each nation was an industrial “silo” with a manufacturing base independent from all the other national “silos.” The world economy is increasing just one giant inter-connected “silo.”

    That new reality is scary, and the Norman Rockwell world of your and my youth was a lot more comfortable, but I do believe that the changes since are evolutionary in the sense of being “organic” and inevitable – this future wasn’t chosen, it was “selected for.” The lesson is that we can embrace the present and future by discovering our true comparative advantages and removing our self-imposed artificial handicaps, or not, and eventually find ourselves on the dust heap.

    ~~~~

    “Self determination” means everything for individuals, but could it be that it’s largely political buzz-word when applied to nations? And isn’t what you’re really talking about is “self-sufficient.” No nation has been completely self-sufficient since the first trader started taking goods from one village to another, at least to the extent of producing all it’s material goods.

    OK, the US came close for a while, but in part that was a historical fluke (in the post-war period, when we were the only fully functioning industrial economy), and in larger, longer-term sense it was an evolutionary “phase” that has passed as industrialization has spread to vast populations that not long ago eaked out bare subsistence livings.

    And even then were weren’t “self determined” if we wanted coffee, bananas, etc. (We went to war over imported tea, and along the way got hooked on imported java!)

    PS – I wouldn’t look too closely at the domestic content percentage of Boeing et al.

  9. Bruce Hall Says:

    Jack,

    I can only hope you are correct, but I see a different outcome in 1/4 century.

    China will use it’s population advantage for production and military to become the dominant power in the world. Think not? Image the U.S. in 25 years after our military is gutted and the means of production outsourced to other nations’ control.

    China will have both the means and the will to use its power to politically influence Africa, Asia, the Middle East and, eventually, South America. They are smart enough and focused enough to use our own system against us.

    We no longer have the will to tell our suppliers that they must conform to OSHA standards. We are content to regulate our domestic manufacturers into oblivion.

    Then we can become like Great Britain… not-so-Great Britain… that can’t go after pirates attacking western ships because they would have to grant the pirates asylum because the pirates’ home nations would execute them and GB doesn’t tolerate that. Philosophy before reason.

  10. jmchugh4u Says:

    You make two points, one on china and one on the US shooting ourselves in the regulatory foot. We’re certainly capable of that, but it’s not guaranteed, and betting against America generally hasn’t paid off well. Past results are no guarantee, etc., but be suspicious of “it’s different now” claims.

    One thing IS different though, and that’s China. But dude – there was no way 1.5 billion people with a Confucian work ethic were going to stay poor and stupid forever. Yes, prosperity means they will assume a greater importance in the world, and no doubt will seek to make mischief where that is perceived to be in their interest. What they perceive to be in their interest will change as their prosperity grows, however, and they are traditionally a people whose primary focus is on their own Middle Kingdom, so warlike imperialist aggression aggression on the massive scale of the 20th century aggressors is unlikely – it’s not their style.

    Which is not to say they won’t nibble around the periphery and make mischief elsewhere. But I don’t foresee the need to start cranking out thousands of Abrams tanks and Liberty ships in this new world (not to mention the technological advances that make such things obsolescent – Predator drones and such.)

  11. Bruce Hall Says:

    Nope, not their style, Dalai Lama.

    I wouldn’t bet the house that the Chinese haven’t learned a few tricks during the past century. They certainly have learned that a military presence is an effective way to gain entry and influence in foreign markets.

    I agree that we will not be building tanks or planes or missiles or spacecraft to confront the Chinese. They are more than willing to just play protracted “chicken” until we get tired of it and let us diffuse or resources fighting political and military brushfires elsewhere.

    It’s a matter of will… and I perceive that will eroding rapidly in the U.S. Perhaps that is an unavoidable consequence of past success. The hunger and drive are gone.

    I truly hope I am wrong. But I see us on the same path as Great Britain when it became just Britain.

  12. Cars Might Disappear (like airplanes did) « Trying Liberty Says:

    […] McHugh with a sober reminder: and with the SFE […]

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