How the Press Helped Destroy the Auto Industry
Detroit's Collapse: the Untold Story
By EAMONN FINGLETON
Click to read the full article at CounterPunch.org
...For decades American press coverage of global car industry competition has been abysmal. Reporters and commentators have almost never dug below the surface and their idea of fact checking has too often consisted merely of "accurately" recycling previous observers' errors. Worse many commentators have displayed an almost venomously elitist bias against Detroit. In short, readers of the American press have been fed a diet of falsehoods, while key facts that give the lie to the foreign trade lobby’s special pleading have been swept under the carpet.
Much of the most egregious press coverage moreover has emanated from writers and editors at some of the most “respected” media organizations, not least the Wall Street Journal, the Economist, the Washington Post, and the New York Times. Reuters and Associated Press have not been far behind and even the automobile trade press has often unforgiveably spun the story to Detroit's great disadvantage...
Mom, Apple Pie, and Hyundai?
The auto industry has been a bulwark of the American middle class. If Wall Street warrants a bailout, why not Detroit?
By Pat Choate
Click to read the full article at The American Conservative
...The primary causes of the current U.S. auto-industry crisis are threefold: a financial freeze in which even well-qualified borrowers are denied credit to buy vehicles; fluctuating oil prices that have driven the price of gasoline from less than $2 per gallon to more than $4 and then back to $2, all in less than 10 months; and a consumer panic that has cut retail sales to 15-year lows.
The failure of the U.S. Treasury Department and Securities and Exchange Commission to monitor, let alone regulate, Wall Street has created today’s financial wreckage and the resulting consumer panic. And despite the obvious need for a far-sighted energy policy, the last four presidents and Congress have done little but encourage more drilling.
The longer-term inability of America’s auto industry to export competitive products has its origins in U.S. trade policies that accept closed foreign auto markets and the payments of massive export rebates by other governments to their automakers. How can U.S. automakers be expected to compete in a world where German producers get a 19 percent export subsidy on every vehicle sold in the United States, China undervalues its currency by up to 50 percent, Japan keeps its auto market tightly closed, and the U.S. government allows South Korean automakers to sell more than 700,000 subsidized vehicles in this market annually, but tolerates Korea’s restriction of U.S. imports so tightly that fewer than 7,000 American-made vehicles are sold there each year? The Big Three and the UAW are not at fault for these distortions of competition...
Auto Bailout: Et Tu, Toyota?
To raise funds, the top automaker is asking for a loan from the state-backed Japan Bank for International Cooperation
By Ian Rowley
Click to read the full article at BusinessWeek.com
...According to reports in Japan's local media, Toyota is in talks to borrow a little over $2 billion from the state-backed Japan Bank for International Cooperation (JBIC) to secure funds for its U.S. operations... ...But Toyota is just the latest Japanese automaker to ask for government assistance. Last month, Nissan (NSANY) and Mitsubishi Motors both signaled their intent to ask for loans from the Development Bank of Japan. Meanwhile, Toyota's European arm is planning to request funding from the European Investment Bank to finance research and development into clean technologies... ...Analysts responded positively to the news that Toyota is talking with JBIC, saying automakers should tap easily available government funds at a time when credit at reasonable interest rates is otherwise so tight....
What is an economy for ?
James Fallows
Click to read the full article at "ecocorner"
...EVERY country and culture is unique, and the "Asian" economic system naturally is something different in Singapore from what it is in Thailand or Japan. There are comparable variations among European and North American styles of capitalism. In their emphasis on industrial guidance and national policy, France and Germany are more Asian than they are American. In their approach to leisure and the good life, the Europeans are less like the new Asian model than like Americans. Still, four main patterns distinguish the Asian system from the prevailing Western model. Some of them are descended from old clashes between the German and Anglo-American philosophies of economic competition which were outlined here last month. They involve:
The purpose of economic life. In the American-style model the basic reason for having an economy is to raise the consumer's standard of living. In the Asian model it is to increase the collective national strength. Ideally, the goal is to make the nation independent and self-sufficient, so that it does not rely on outsiders for its survival. The American-style goal is materialistic; the Asian-style goal is political, and comes from long experience of being oppressed by people with stronger economies and technologies.
The view of power in setting economic policies. Anglo-American ideology views concentrated power as an evil ("Power corrupts, and absolute power ..."). Therefore it has developed elaborate schemes for dividing and breaking up power when it becomes concentrated. The Asian-style model views concentrated power as a fact of life. It has developed elaborate systems for ensuring that the power is used for the long-term national good.
The view of surprise and unpredictability. The Anglo-American model views surprise as the key to economic life. We believe that it is precisely because markets are fluid and unpredictable that they work. The Asian-style system deeply mistrusts markets. It sees competition as a useful tool for keeping companies on their toes, but not as a way to resolve any of the big questions of life -- how a society should be run, in what direction its economy should unfold. This is, in Western terms, a military view of economics. Within the American military the Army competes with the Navy for funds, and competition within each branch keeps both the Army and the Navy sharp. But the services don't cast votes or place bids to decide where the nation should fight. Decisions like that are not left to a market.
The view of national borders and an us-versus-them concept of the world. People everywhere are xenophobic and exclusive, but in the Anglo-American model this is thought to be a lamentable, surmountable failing. The Asian-style model assumes that it is a natural and permanent condition. The world consists of us and them, and no one else will look out for us...
