G20 Babylon: Automakers' Tale of the Unforgiven

      

By Georgios Zoumpoulidis

At first, GM was your nowadays typical "too big to fail" company, so the taxpayer had to pick up the bill; as the stock price and capital reserves evaporated, much needed capital was infused in a desperate effort to save GM.

Then apparently something changed, and bankruptcy became an option, although it wouldn't be the usual, most endearing process of Chapter 11 better known as the "vanishing act" after the necessary "catch-me-if-you-can" court drama: nope, in this case something would eventually emerge as a more or less functioning entity of sorts. And until then you shouldn't worry, because your car will be serviced by the public sectors finest; in fact now, more than ever before, you should buy your new car with the utmost confidence, because the warranty is backed by the United States of America. (To get an idea where all this is based on, check out http://blogs.wsj.com/washwire/2009/03/30/obama-remarks-on-us-auto-industry)

It is not too hard to understand that the hand of policy makers seems practically forced, within the narrow confines of their event horizon. In fact, if you can back your way of thinking with the smell of freshly printed money, you can never go wrong - until the economy is finally put out to pasture, that is.

What happens if Germany decides that BMW, VW or even GM-owned Opel is too big to fail? They'll just need to sell a few more Bunds or have Trichet print some extra Euros, hoping no one will notice. The land of Rising Sun, probably desperate not to be left behind might also consider a few of its own pet companies as too big to fail; how about Toyota, for instance?

Although I do know a bit about sake, I admit I've no idea about which beleaguered automaker of his own Medvedev or Putin might decide is too big to die out in the vast cold stretches of Russia. And I'm equally certain Korea and even UK, France or Italy might have some firms of their own to add to the alarmingly growing list. In fact, who can spell "total confidence program" in Chinese?

If we all play the game equally well - and I'm positive Chinese government printers, for example, are just as effective as their European or US counterparts - soon nobody will be making fun of the situation, as money will rapidly turn into funny money, possibly invested in tax free, AAA rated government junk bonds not worth the fine paper they are printed on. Who will then save the day is considerably less evident, because although the stage is set, the script still remains to be written (or so I hope). And although the US is not exactly in the best shape possible, even this arguably sorry state seems to be a lot better than Europe's finest performance so far - or the even less attractive alternatives available.

Open society infrastructure comprises a healthy bank sector, minimal state intervention and moderate money flow. The rest is up to the markets and markets without fail will go up and down as they see fit - that is the way of the living. Nobody is too big to fail and nobody is too old to die. That's how something new actually gets the chance to come to life every now and then. It's no rocket science.

There has to be another way, because saving the auto industry undoubtedly is a worthwhile cause, and also because despite their shortcomings, open markets are fundamentally indispensable, period. There has to be another way - because if the US and Europe pull a "perestroika" on free enterprise and entrepreneurship, I'm pretty sure the next hot theoretical debate in Europe will be the impact of Trotski on working class self-determination and we'll all soon be blissfully enjoying the latest (3 DVD set), brand new remake of Battleship Potemkin, 24/7/365, in Dolby surround, approved, censored and duly stamped.

Georgios Zoumpoulidis (georgios.zoumpoulidis@yahoo.de)is a freelance translator, writer and journalist who never enjoyed Battleship Potemkin in any way, shape or form whatsoever.