Georgia Specialty Plate to Include Confederate Battle Flag

Posted by PITHOCRATES - February 23rd, 2014

Week in Review

Between combat and disease the American Civil War claimed some 620,000 lives.  The bloodiest war in U.S. history.  Killing more than all the wars from the Revolutionary War through the Vietnam War.  The North lost about 360,000.  While the South lost about 260,000.  So the North suffered about 100,000 more dead than the South.  However, the population of the South at the end of the war was approximately 3,000,000.  While the north had about 29,000,000.  So as a percentage of their population the North lost about 1.3% of her population.  While the South lost about 8.6% of her population.  Which is why some in the South want to honor their war dead (see Group puts Confederate flag on Ga. specialty tag by AP posted 2/19/2014 on Yahoo! News).

Georgia officials have once again approved a specialty license plate featuring the Confederate battle flag, infuriating civil rights advocates and renewing a debate among those who believe the symbol honors Confederate heritage and those who see it as racially charged.

Southerners call the American Civil War the War of Northern Aggression.  In which they fought for states’ rights.  After their control of the federal government faded thanks to the population growth in the north.  They lost control of the House.  And the only way to keep control of the Senate was by admitting new states into the union as slave states.  Finally, the Fugitive Slave Law was the last straw for some in the north.  Requiring them to capture and return runaway slaves even though those slaves were legally free in those northern states.  So a large federal government was good when it helped southern slave owners.  And states’ rights were bad when it didn’t help southern slave owners.

The rich southern planters controlled the government in the South.  They had the wealth.  And the slaves.  Their lives were like the lives shown on the plantations in the movie Gone with the Wind.  A landed aristocracy.  Just like it was in feudal Europe.  Only with slaves instead of peasants.  Wealth and power were concentrated in few hands.  Creating great wealth inequality.  Most southerners were dirt poor and worked on family farms and were too poor to even own a slave.  But it was these people the rich planters used to fight a war for them to preserve their landed aristocracy.  Not the American dream the Founding Fathers envisioned.  Or the dream these dirt-poor southern farmers were trying to live.  The freedom to be left alone to work their own land.  Which is, of course, why they went to war.  Someone was invading their land.

No government is going to allow a Nazi swastika on a license plate to commemorate the SS.  Because the SS did some bad things.  Some would even say they were evil.  The Confederate soldiers, though, were not evil.  They were Americans.  Who were lied to by the planter elite.  So they could maintain their Old World aristocracy.  These men fought bravely in battle.  And suffered horrible casualties.  Even Abraham Lincoln held no ill will towards these men.  When a general asked Lincoln how the defeated Confederates should be treated he said, “Let ’em up easy.”  All they had to do was sign paroles saying they would no longer fight and they could go home and resume their lives.  There were to be no retributions.  For once the war was over they were fellow countrymen again.

So putting a Confederate battle flag on a license plate is less of a sign of racism and more of a remembrance for those who fought in the battlefields of the Civil War.  Especially for the 8.6% of the population who perished.  Leaving behind widows.  And orphans.  So many that it was hardly possible for someone in the South not to have lost someone in that war.

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Contrary to our Public Education Slavery Preceded and Succeeded America’s Original Sin

Posted by PITHOCRATES - October 20th, 2013

Week in Review

President Obama escapes a lot of criticism.  The mainstream media is very gentle with him.  Unlike they were with George W. Bush.  Who they pilloried on a daily basis.  But not President Obama.  Part of the reason is because he is a Democrat and the mainstream media has a liberal bias.  But there is something else.  He’s black.  And there are some who will call any criticism of a black president racism.  Something no one wants to be accused of.  But there is still something else.  And it goes back to America’s original sin.  Slavery.

If you’re not familiar with world history you probably think that the United States invented slavery.  And that the white Founding Fathers created a racist nation.  Which only ended when the great ‘Democrat’ Abraham Lincoln freed the slaves.  ‘Democrat’ is in quotation marks because Lincoln was not a Democrat.  He was a Republican.  But as our kids leave our public schools believing that Republicans are racists they just assume the Great Emancipator was a Democrat.

So with this background a lot of white people went to the polls in 2008 and voted for Barack Obama.  To atone for the sins they never personally committed.  To finally end racism in America.  To absolve the nation of its original sin.  The ‘creation’ of slavery.  Even though the Americans did not invent slavery.  Nor did the abolition of slavery in America end slavery in the world.  In fact, it still exists today (see New global index exposes ‘modern slavery’ worldwide posted 10/17/2013 on BBC News World).

Nearly 30 million people around the world are living as slaves, according to a new index ranking 162 countries.

The worst offenders are included in a table:

Estimated Number of Slaves

Western nations that embrace free market capitalism are conspicuous by their absence from this list.  Which just goes to show you that with economic freedom comes liberty.  For when people buy and sell in mutually beneficial exchanges the people win.  When the government controls the economy and decides what’s best for the people the people lose.

The index was compiled by Australian-based rights organisation Walk Free Foundation using a definition of modern slavery that includes debt bondage, forced marriage and human trafficking…

The organisation’s estimate of 29.8 million slaves worldwide is higher than other attempts to quantify modern slavery. The International Labour Organisation estimates that almost 21 million people are victims of forced labour…

For all the faults the left says America has (it’s racist, unfair, favors the rich, etc.) there is no debt bondage, forced marriage, human trafficking or forced labor.  In fact, the people from every country on that list would love to trade their debt bondage, forced marriage, human trafficking or forced labor for life in the fault-ridden United States.  No matter how bad the left says America is.

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2012 Endorsements: Abraham Lincoln

Posted by PITHOCRATES - October 25th, 2012

2012 Election

The Slave Owners were the Social Elite and Holders of Political Power Similar to the Aristocracy in European Feudalism

General Motors (GM) required a government bailout and bankruptcy protection because of rising labor costs that prevented them from selling enough cars at a price to cover their costs while being profitable.  Their problem goes back to FDR.  During the Great Depression his government placed a ceiling on wages.  To encourage companies to hire more people.  By paying more people less money instead of fewer people more money.  So businesses had to do something else to attract the best employees.  And the employee benefit was born.  Pensions and health care benefits.  That were very generous when there was no competition and car companies could sell cars at whatever price they chose.  But that wasn’t the case in the 21st century.  Competition put great cost pressures on those companies with rising health care and pension costs.  And the job bank paying for workers who didn’t work.  Until they could be put back to work.  Adding a lot of costs to each car.  And sending GM into bankruptcy.

Slavery as an economic model had a similar problem.  High costs.  Which goes contrary to the public perception that slave labor was free labor.  George Washington wanted to sell his slaves and hire paid-laborers.  Because his slave families had grown so large.  So he had a growing slave population.  But they all weren’t working.  The young children could not do the work of a young man in his working prime.  Nor could the elderly.  Or the sick or infirmed.  (Who he couldn’t sell along with the healthier and stronger ones in their families.  So he kept his slaves, keeping those families together.  Freeing them upon the death of his wife.  And including provisions in his will to help them integrate into free society.  Giving them some job skills to help them find gainful employment so they could care for their young, elderly, sick and infirmed.)  Yet Washington was feeding them all.  While the growing amount of food they ate couldn’t go to market.  As the years passed his costs went up and his revenue fell.  Just like at GM.  For both had long-term labor commitments that became more inefficient over time.  Which is why slavery was a dying institution in the United States.  The industrial North was slave-free.  As they used more efficient paid-laborers.  Drawing a lot of immigrants to those northern factories.  And slavery was dying out in the South.  Until the cotton gin came along.  Allowing workers to comb (separating the seeds from the fiber) huge amounts of cotton at a time.  Greatly opening the market for that labor-intensive cotton crop.

The typical image of the South in 1860 is endless plantations each with hundreds of slaves working the fields.  Which is wrong.  Most people worked a small family farm.  In fact, most of the Confederate soldiers who fought in the American Civil War came from those small family farms and never owned a slave in their life.  The actual numbers of large slaveholders will probably surprise you.  Approximately 0.84% of the southern population owned at least 20 slaves.  Only 0.05% of the southern population owned at least 100 slaves.  And the number of big plantations owning at least 500 slaves?  Twelve.  So it was a very small population that had a vested interest in the institution of slavery.  Yet the South seceded from the union over the issue of slavery.  Why?  Because of who those slave owners were.  The social elite and holders of political power.  The Planter Elite.  People similar to the aristocracy in European feudalism.  An Old World nobility.  The very wealthy few who ruled the South.  And for awhile they ruled the United States thanks to an unfair advantage they had in the House of Representatives.  Where they determined their representation by not only counting the free population but by counting every slave as 3/5 a free person as well.  And this southern nobility was determined to maintain their aristocracy.

Popular Sovereignty created a Bloodbath in Kansas as ‘Free’ and ‘Slave’ People raced there to Settle the State

Which was easier said than done.  Because of that industrial growth in the north attracting so many immigrants that they swelled the northern population.  Transferring control of the House from the South to the North.  Which left only the Senate (and the presidency) for the South.  As each state got two senators the race was on to admit free and slave states to the union.  Which didn’t really solve anything.  It only made the differences between the North and the South greater.  And intensified the bad feelings between the North and the South.  The North was full of abolitionist busybodies trying to tell southerners how to live.  While the southerners were a bunch of immoral slaveholders.  Bringing shame to the nation that was supposedly a place where all men were created equal.   Words enshrined in the Declaration of Independence.  Words written incidentally by a southern slaveholder.  It was finally time to address the nation’s original sin.

Congress passed the Missouri Compromise (1820) after Thomas Jefferson bought the Louisiana Territory from the French.  Adding a lot of new land to form states from.  The compromise prohibited slavery north of the border between Arkansas and Missouri (except in the state of Missouri).  They added new states in pairs.  A free state.  And a slave state.  Maintaining the balance of power in Congress.  Then came Kansas and Nebraska.  Both above the Missouri Compromise line.  Well, that meant two new free states.  And a change in the balance of power.  Which the South couldn’t have.  So Senator Stephen Douglas introduced the Kansas-Nebraska Act.  And the idea of popular sovereignty.  The idea of letting the people in these new states decide for themselves if they should be a free state or a slave state.  Creating a bloodbath in Kansas as ‘free’ and ‘slave’ people raced there to settle the state.  Fighting and intimidating each other so they would be the ones to vote on making Kansas free or slave.  It was anarchy.

Abraham Lincoln had reentered politics in 1854 to campaign for fellow Whig Richard Yates.  Who opposed the Kansas-Nebraska Act.  Democrat Stephen Douglas was making a series of speeches in Illinois.  In response to one of Stephens’ speeches Lincoln gave his Peoria speech.  In commenting on letting slavery into Nebraska and Kansas Lincoln said, “I hate it because of the monstrous injustice of slavery itself.  I hate it because it deprives our republican example of its just influence in the world—enables the enemies of free institutions, with plausibility, to taunt us as hypocrites—causes the real friends of freedom to doubt our sincerity and especially because it forces so many really good men amongst ourselves into an open war with the very fundamental principles of civil liberty—criticizing the Declaration of Independence, and insisting that there is no right principle of action but self-interest.”

If Lincoln were Alive Today he would Likely Endorse the Republican Candidates Mitt Romney and Paul Ryan

The fallout from the Kansas-Nebraska Act splintered existing political parties apart.  Created new ones that disappeared later.  And gave birth to the new Republican Party.  The party of George W. Bush, Ronald Reagan and Abraham Lincoln.  Who became the leading spokesman of the party.  The Republicans lost the 1856 presidential election but won majorities in most of the northern states.  Tipping the balance of power further away from the South.  When Lincoln won his party’s nomination to run for senator in 1858 he gave his ‘House Divided Speech’ saying, “A house divided against itself cannot stand. I believe this government cannot endure permanently half slave and half free. I do not expect the Union to be dissolved—I do not expect the house to fall—but I do expect it will cease to be divided. It will become all one thing, or all the other.”

When slave Dred Scott traveled to a free state with his owner his owner died.  Scott said he was then a free man.  The Supreme Court thought otherwise.  Saying that Scott was still a slave because neither Congress nor any territory legislature had the authority to change that.  Which meant no one could restrict the movement of slaves because no one had the right to restrict the movement of private property.  Thus opening all the new territories to slavery.  Making the South very happy.  While infuriating the North.  Who refused to enforce slave laws on the books like the Fugitive Slave Law.  A provision included in the Compromise of 1850 for the states’ rights South.  That called for the federal government to force northerners to return slaves or face arrest and penalties.  States’ legislatures in the North passed laws saying a slave living in a free state was a free man.  The Supreme Court struck down these laws.  Favoring southern states’ rights over northern states’ rights.  So the states just refused to help the federal government in any prosecution of a violation of the Fugitive Slave Law.  Then abolitionist John Brown’s failed slave revolt at Harper’s Ferry, Virginia, further angered the South.

Then came the 1860 presidential election.  That Abraham Lincoln won.  Which was the last straw.  The South lost both Congress and the presidency.  Worse, the new president, though not an outright abolitionist, opposed the expansion of slavery.  Leaving the South with one last option.  Secession.  Which they did.  Leading to the American Civil War.  Which the South lost because of everything they believed in.  For an Old World nobility just could not defeat a modern industrial power.  Lincoln won because he had modern factories building whatever he needed.  The northern economy was large and diverse providing war financing.  Railroads crisscrossed the North.  A large navy controlled the interior rivers and blockaded the southern ports.  Cutting off the South from the outside world and starving it.  When the South desperately pursued the British for recognition Lincoln issued the Emancipation Proclamation.  Making it impossible for Britain to ally itself with a nation fighting for the institution of slavery.

No president entered office with a heavier burden than President Lincoln.  Standing on principle he made the hard decisions.  Becoming the most hated sitting president of all time.  He did not look for an easy solution like every other politician had up to his time.  Only making the inevitable solution more costly.  And more painful.  He would do what had to be done.  Regardless the price he would pay.  Politically.  Or personally.  A cost so high that it made him a one term president thanks to an assassin’s bullet.  He didn’t base his decisions on the polls.  Or populist movements.  But on principles.  Drawn from the Constitution.  And the Declaration of Independence.  As well as the Bible.  So if he were alive today who would he endorse in the current election?  He would, of course, support his party.  Out of party loyalty.  And because it tends to stand on principle more than the Democrat Party.  Which often used an activist Supreme Court to get what they couldn’t get in the legislature.  Which tends to use populist movements and character assassination to advance their agenda.  Such as the so-called war on women to scare women into voting Democrat because they can’t persuade them to based on a successful track record in office.  Also, the Republicans are more pro-business and more pro-military.  Which gives you the ability to win civil wars.  And other wars.  As well as protecting US security interests around the world.  Maintaining peace through strength.  For anything was preferable to the hell he went through during the four long years of the Civil War.  And to have so much blood on his hands.  The war being so horrific because of a policy of continued failed diplomacy when there was simply no common ground.  He said that there was only one of two possible outcomes.  All free.  Or all slave.  And he was right.  But it took someone willing to be the most hated sitting president to have the courage to act to bring about the inevitable.  So if Lincoln were alive today he would likely endorse the Republican candidates Mitt Romney and Paul Ryan.  Not the party that wants to delay the inevitable by refusing to address the systemic problems of Medicare and Social Security.  And a growing welfare state.  Systems a declining population growth rate can no longer fund.  Because aging populations bankrupt nations with expanding welfare programs.  Just like an aging workforce can bankrupt a car company like GM.

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Libya is free from Kadafi, so what’s Next? Peace? Or more Blood?

Posted by PITHOCRATES - August 27th, 2011

Living in Peace is one Advantage of an Oppressive Dictatorship 

Tripoli has fallen.  Kadafi‘s days are numbered.  Now it’s time for a glorious rebirth.  And peace.  If they can make peace.  And keep it (see Some fear post-revolution Libya may look like Iraq by Borzou Daragahi posted 8/27/2011 on the Los Angeles Times).

Although young men protect their own neighborhoods, major institutions such as banks, ministries and historic sites remain relatively unprotected. A number of banks and commercial towers have been thoroughly looted. Law enforcement is left in the hands of rebel fighters, some of whom had never been to their country’s capital.

Young men continue to pillage military sites abandoned by Kadafi’s men, carting away huge stores of weapons, just as Iraqis hauled off guns and explosives later used to make car bombs and launch attacks on Iraqi and U.S.-led forces.

Stores of weapons in the hands of angry young men?  Rarely does that end well.  And rarely does lawlessness just spontaneously turn into lawfulness.  Put the two together (angry young men with weapons and lawlessness) and what do you get?  Woe to anyone that is identified as a loyalist.

Reports also have begun to surface of reprisal killings of suspected loyalists, although few accounts could be fully verified given the chaos and lack of communications in Tripoli…

More obvious right now is the visceral violence of rebel forces hammering away at residential neighborhoods known to be strongholds of Kadafi supporters.

Rebel fighters use artillery and antiaircraft guns in such districts, which include Abu Salim, Hadba and Salahadin. At one point this week, rebels were firing assault rifles into residential apartment blocks in Abu Salim, where they suspected a sniper was holed up.

Civil wars tend to be the cruelest of wars.  And the bloodiest.  They split up neighborhoods.  And families.  With vengeance often being the battle cry.  For these aren’t soldiers on a distant battlefield who don’t know each other.  This is far more personal.  It’s typically someone you know killing someone you know.  And what makes it especially cruel is that before the war these were people you called friends.  Or family.  This kind of killing unleashes an indescribable hatred.  And searing anger.  Hence the vengeance.

Members of the district council insisted that the men had taken up arms against the revolution and were being held pending trial. But they also said some of those arrested included people pulled out of their cars at checkpoints because they looked “suspicious,” often code for dark-skinned Libyans and others of sub-Saharan African descent…

Said one Tripoli taxi driver, “I have a fear that one day we’ll be like Iraqis, wishing for the days of Moammar Kadafi.”

As bad as Saddam Hussein was, at least he kept the peace.  That’s the advantage of an oppressive dictatorship.  People live in fear of the state.  Not each other.  And if you behave properly, the state might just leave you alone.  As long as you’re not an intellectual.  Can read.  Or wear glasses.  If you’re not a threat to state power, or a perceived threat, life can be good.  All you have to do is to say nothing.  Avoid eye contact.  And never, ever complain.  For if you thought things were bad, just wait until after you complain.

Typically in Civil Wars, the Winning Side often Unleashed a Bloody Purge on the Losing Side 

Many people may not know this but the American Revolutionary War was part civil war.  Those loyal to the Crown fought for the Crown.  Against the Patriots.  And the bloodiest fighting during the Revolution was between Loyalist and Patriot.  Especially in the South.  Where some unspeakable horrors took place.

Now typically in civil wars, the winning side often unleashed a bloody purge on the losing side.  But not in America.  At the end of the war there were no reprisals.  No hangings.  No persecutions.  At least, not by those in power.  Most of the Loyalists just left.  They went to Canada.  Or back to the UK.  General Washington resigned from the army.  And the elected civilian authority made the peace.  Quite shocking.  For few generals ever voluntarily give up near absolute power.  And returned to their farm.  He was the American Cincinnatus

About a decade later, the French Revolution erupted.  A more classical civil war.  Far more bloody.  With plenty of reprisals.  And guillotining.  The streets of Paris ran with blood.  The Reign of Terror purged political enemies.  Than the people who unleashed the Terror fell victims to it themselves.  The fighting unleashed Napoleon Bonaparte onto Europe.  And the Middle East.  Made him a great general.  Even impressed a composer by the name of Ludwig van Beethoven.  A fan of republican government.  Even dedicated his Third Symphony to him.  And then Bonaparte made himself emperor.  So the revolution to overthrow a king ultimately ended up with an emperor.  Infuriating Beethoven so that he slashed the dedication page from his symphony.

Two revolutions that were part civil war.  One atypical.  The American.  And one more typical.  The French.

Winning the War was one Thing.  Winning the Peace was Another. 

At the time these were some pretty nasty wars.  But they pale when compared to the American Civil War.  Some 620,000 died.  That’s a huge number.  About 2% of the population then.  To get an idea about how devastating 2% of the population is consider this.  With today’s population that would equal some 6 million dead.

Winning the war was one thing.  Winning the peace was another.  The war was horrific.  And a lot of Northerners wanted a hard peace.  To make the South pay.  But Abraham Lincoln wanted an easy peace.  Near the end, shortly before Robert E. Lee’s surrender, Lincoln met with General Ulysses S. Grant, General William Tecumseh Sherman and Admiral David Dixon Porter.  He discussed the easy peace he wanted.  He said he did not want any retribution.  Any trials.  Any hangings.  If the defeated Confederates would sign paroles promising to never pick up arms again against the United States, they could simply go home.  He wanted to bring the South back into the Union.  As quickly and as painlessly as possible.  Forgive and forget.  Echoing his sentiments in his second inaugural address:

With malice toward none, with charity for all

The South was beaten.  Lee was surrounded.  The question was what would Lee do?  Surrender?  Or disband and head into the hills.  Carry out guerilla war?  This was weighing on everyone’s mind.  It terrified Lincoln.  Grant and Sherman feared it, too.  Even Lee.  When Grant met Lee at Appomattox to discuss surrender, Grant offered very generous terms.  In keeping with Lincoln’s wish for an easy peace.  It had a very favorable affect on Lee.  And his men.  Lee surrendered.  And once his war was over he dedicated his postwar life to making peace.

A similar surrender was negotiated between Sherman and General Joseph E. Johnston.  Despite the assassination of Lincoln.  Which happened after Lee’s surrender.  Sherman waged hard war throughout the South.  But he did not hate the South.  War was war.  And once the war was over, he followed Lincoln’s directive for an easy peace without hesitation.  Eager to ‘let the South up easy’.  And bring them back into the Union.

Lincoln’s assassination infuriated the North.  They wanted vengeance.  They wanted retribution.  And they wanted to hang Lee.  But Grant stepped in.  Said he made the deal with Lee.  And the deal would be honored.  Or he’d resign.  President Andrew Johnson relented.  And Grant wrote Lee to assure him there would be no trial.  His terms would be honored.  And Lee reciprocated by dedicating his remaining life doing what he could to bring the South peacefully back into the Union.

Let us Judge not, that we be not Judged

The Civil War ended in 1865.  It easily could have gone on.  But thanks to Lincoln, Grant, Sherman, Lee and Johnston, the war ended.  And the peace began.  The Southern people looked to Lee even in defeat.  For he was like George Washington to them.  Loved.  And respected.  Washington’s and Lee’s words and deeds carried great weight in their postwar years.  And made peace possible.

But Lee surrendered to Lincoln as much as he did to Grant.  And it was Lincoln that made the difference in this civil war.  Made it different from other civil wars.  For he could see beyond the conflict.  To a higher plane.  As he said in his second inaugural address.

Both read the same Bible and pray to the same God, and each invokes His aid against the other. It may seem strange that any men should dare to ask a just God’s assistance in wringing their bread from the sweat of other men’s faces, but let us judge not, that we be not judged. The prayers of both could not be answered. That of neither has been answered fully. The Almighty has His own purposes.

This is what you need for reconciliation.  Do they have that in Libya?  Let’s hope so.  But history has shown this to rarely be the case.  You need great people.  A Washington.  A Lincoln.  A Grant.  A Sherman.  A Lee.  A Johnston.  Is this person in Libya?  Or is Libya to descend into terror?  Time will tell.

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FUNDAMENTAL TRUTH #20: “It is never a consumer that complains about ‘predatory’ pricing.” -Old Pithy

Posted by PITHOCRATES - June 29th, 2010

LOW PRICES.  GOD help me, I do hate them so.  I hate them with every fiber of my body.

Who says this?  Do you?  I don’t.  Of all the times I’ve spent shopping, I have never heard anyone bitch about low prices.  I’ve heard people bitch about high prices.  But never about low prices.  When gas approached $3/gallon, people bitched about that being too high and drove 10 miles to find ‘cheap’ gas to save a few pennies per gallon.  Let it approach $4/gallon and they’ll want Congress to take action.  To attack Big Oil.  To seize their oil and their profits and give us cheap gasoline in return.  But when gas was cheap, no one ever bitched about it being ‘too’ cheap.  It just doesn’t happen that way.  People bitch about high prices.  Not low prices.

So who bitches about low prices?  Competitors.  There’s a saying that competition makes everything better.  And it does.  It lowers prices.  And raises quality.  And who is looking for lower prices and higher quality?  Consumers.  Who isn’t?  Competitors.  Especially competitors with political connections.

WHEN THE BIG 3 were putting out crap in the 1970s, they did so because they could.  I mean, who else were you going to buy a car from?  So what if your car breaks down and the fenders and quarter panels rust away?  That just means you gotta buy another car sooner rather than later.  A pretty sweet deal.  Especially when there are only three places to go to buy a car.  And each of the Big 3 is selling the same crap.

Then the Japanese had to go and ruin a good thing.  They started selling cars in America.  These cars were smaller than your typical American car.  But there were other differences.  They didn’t rust like the American cars.  They didn’t break down as much.  And the imports were cheaper than the American cars.  Lower price and higher quality.  More bang for the buck.  Exactly what consumers were demanding.

So what was the response of the Big 3?  Did they rise to the level of their new competitors and deliver what the consumer wanted?  No.  They ran to government for help.  For protection.  And they got it.  Voluntary Export Restraints (VER).  The government negotiated with the Japanese to ‘voluntarily’ limit the number of cars they exported to the United States.  Or else.  So they did.  To avoid worse protectionist policies.  Problem solved.  Competition was limited.  And the Big 3 were very profitable in the short run.  Everyone lived happily ever after.  Until the Japanese refused to play nice.

The problem was what the Big 3 did with those profits.  Or, rather, what they didn’t do with them.  They didn’t reinvest them to raise themselves up to the level of the Japanese.  Protected, they saw no incentive to change.  Not when you have Big Government on your side.  And how did that work for them?  Not good. 

So look, the Japanese said, the Americans like our cars.  If the American manufacturers won’t give them what they want, we will.  While honoring the VER.  We won’t export more cars.  We’ll just build bigger and better cars to export.  And they did.  The Big 3 were no longer up against inexpensive, higher quality subcompacts on the fringe of their market share.  Now their mid-size and large-size cars had competition.  And this wasn’t on the fringe of their market share.  This was their bread and butter.  What to do?  Build better cars and give Americans more bang for their buck?  Or run to government again?  What do you think?

The Big 3 assaulted the Japanese under the guise of ‘fair trade’.  The cry went out that unless the Japanese opened up their markets to American imports (in particular auto parts), we should restrict Japanese imports.  To protect American jobs.  To protect the American worker.  To protect the children.  This was code for please make the Japanese cars more unattractive to purchasers so they will settle for the more costly and lower quality cars we’re making.  (Let’s not forget the reason Americans were buying the Japanese cars in the first place).

The Japanese response?  They took it up a notch.  They entered the luxury markets.  They launched Acura, Lexus and Infiniti.  They competed against Cadillac and Lincoln.  And well.  The quality was so good they even affected the European luxury imports.  More attacks followed.  Americans were losing their jobs.  Soon there would be no more American manufacturing left in the country.  So the Japanese built plants in America.  And Americans were now building the Japanese cars.  The Japanese actually created American jobs.

SON OF A BITCH!  So much for the loss of American jobs.  The Japanese threw a wrench in that argument.  So now the argument became about the loss of ‘high paying’ American jobs.  For the Japanese plants were non-union.  Didn’t matter that their workers were making better pay and benefits than many in their region.  No.  What mattered was that they were building a better product.  And they didn’t want THESE jobs in America.  But if they couldn’t get rid of these new workers, they should at least unionize them so their cars cost more.  To make them a little less appealing to the American consumer.  So far they have been unsuccessful in this endeavor.  The workers are happy as they are.

Well, these cars just weren’t going away.  So the Americans surrendered car manufacturing to the Japanese.  They couldn’t beat them.  (Of course, it’s hard to do that when you don’t even try).  They, instead, focused on the higher profit truck and SUV markets.  Then the Japanese entered those markets.  And at every level they competed with the Americans, the Japanese gave more bang for the buck.  And the consumers responded.  With their hard-earned wages.  It just wasn’t fair.  The Japanese kept giving the American consumer a better product.  No matter what political action the Big 3 took or demanded.

And there’s the problem.  They sought their answers from government.  Instead of making a better car.  They wanted to stop the Japanese from giving the American consumer what they wanted so they could force Americans to pay more for less.  All the while the economy was forcing the majority of consumers to get by on less (the majority of consumers do not have the wage and benefit package the ‘select’ few had in the Big 3). 

Fast forward to 2008 and we see the ultimate consequence of their actions.  Bankruptcy.  GM and Chrysler had to grovel for a federal bailout and in the process become Washington’s bitch.  Ford survived on her own.  As did the Japanese.  You can bitch all you want about costs, but if you have the revenue you can pay your costs.  And the Americans just couldn’t sell enough cars to maintain the revenue they needed for their cost structure.  By refusing to address the core problem (they weren’t making cars Americans wanted to buy), they only made their competition stronger and more entrenched in the U.S. market.

IT’S ALL POLITICS.  Political cronyism.  And crony capitalism.  It all comes down to political spoils and patronage.  That’s what happens when politics enter capitalism.  Big Business partners with Big Government and they enter into relationships.  You scratch my back and I’ll scratch your back.  But when government protects a business for political expediency, the industry suffers in the long run.  As the U.S. automobile industry has.  Ditto for the U.S. textile industry.  And the U.S. steel industry.

So what goes wrong?  When you protect an industry you insulate it from market forces.  You can build crap.  The problem is, consumers don’t buy crap.  So, for awhile, politics intervene and makes the crap more favorable.  Whether it’s predatory pricing, monopolistic pricing or collusion, business can’t win.  Big Government is there.  If your prices are too low, government will intervene.  If prices are too high, government will intervene.  If prices are too similar, government will intervene.  To make things ‘fair’.  And by fair they mean to reward those who play the game and to punish those who don’t.  And the spoils go to those large voting blocs they need.  And in return for their votes, they can count on patronage.  Government jobs.  Political positions.  Favorable legislation and regulation.  If you got the vote out, you were rewarded quite nicely. 

And consumers be damned. .

www.PITHOCRATES.com

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