by Michael Smith
Washington, DC., December 12, 2008: The bail out desired by the US automobile makers such as GM, Ford, and others did not go through in the US Senate and was rejected.
In the light of this the market has taken a nose dive on Friday, December 12, 2008, and it can only be expected to get worse. This aside from the fact that, if he automakers cannot get finance from other sources, we will be seeing a lot more job losses in the USA, and elsewhere, such as the UK, as this will be having a knock-on effect with the subsidiaries of those companies over this side of the pond, that is to say Ford and Vauxhall, in the UK, for instance.
That kind of direct knock-on effect aside there will be a far great knock-on effect hitting home as well, as an difficulties with the automakers will also affect those companies that supply products to them.
Very much like the toppling dominoes this spells real problems for the economy, and not just for the US economy or that of Britain.
On the other hand, had the US government given the automakers the desired billions then they would have to go and help out others as well.
In the UK and the USA a bailout of the banking system started this all and while the reason for the banking bailout may just about make sense in that a collapse of the banks, and especially more or less the entire banking system, would have crippled not just the economies of the respective countries and much more, other bailouts just do not make sense.
No government, theoretically, can go and say “we bail out the banks and the automakers, but no one else”. That certainly would not go down very well indeed and it is something that cannot be done. Otherwise the likes of Woolworth too, where in the UK alone 30,000 jobs are at stake, also needs to be bailed out and this would then mean each and every business affected would, automatically, qualify for government assistance. That, I do not think, could be done.
Hence, while it may be cruel, aside from the banks no other businesses should be able to even get as far as the automakers did get. There is no limitless supply of money there and we must not even contemplate the idea of printing more money to finance such efforts. It does not work.
As harsh as it may sound, many businesses just have not been very prudent when times were good and have been throwing money about left, right and center to CEOs and the likes. Those people were on salaries of millions and were given annual bonuses in the millions but nothing was invested really into the companies and nothing was laid up “for a rainy day”. While CEOs ended up with salaries in the millions and bonuses in the same region the poor workers were given a pittance compared to those salaries.
It is now, unfortunately, as always, the poor workers who are going to have to take the brunt for it will be them that end up losing their jobs while the fat cats have enough money stashed away to make a lovely retirement without having to worry. But then, what's new about that? Was is not always the same.
There is a depression coming, folks, and it is time to batten down the hatches. Prepare while you still have the funds to do so and, where you can, get a garden going to have at least some food that you can grow.
Also have a look at how you can protect you own assets and what skills you have that can get you some additional finances and skills that you can use for providing for yourself and your family in time of crisis. The crisis which appears to be just over the horizon.
The British PM Gordon Brown and his Chancellor Alistair Darling try telling the people – and the world – that this is only a little recession and that there is no full blown depression looming but to most of us common people, I am sure, it would appear that the dreaded “D”-word is just a short way away.
Be prepared, must be the motto and we must look at what we can do to aid ourselves. No government is going to come along to help. We are already now, in Britain, being prepared for the fact that there is going to be virtually no unemployment benefit going to be paid in due course and that everyone will have to do some slave labor to get the little bit of money that is currently called “job seeker's allowance”, the dole as it was once known as.
The Subotnik idea was spoken about some years back and that is also still in the offing in which every one is supposed to do some forced voluntary work “for the good of the community”. This is, no doubt, going to come to a community near all of us in due course. “Pre-warned is pre-armed”, as the motto of the old Royal Observer Corps used to go.
© M Smith (Veshengro), December 2008