“Yes, private enterprise is very flexible, but it’s good only within narrow limits.
If private enterprise isn’t held tight in iron claws, it produces beasts: the people of the stock exchanges, who don’t want to accept any restraint on their desires and their greed.
Capitalism was doomed ethically long before it was doomed economically!”
Isn’t it a surprise to learn that this text was written in 1968?
By Aleksander Solzhenitsyn in his book “The cancer ward”.
Recently we have seen how banks and their representatives in the USA have been selling mortgages to customers of who they knew that they would be unable to re-pay it in the longer term.
The banks and their representatives cashing the bonuses and the profits at the short time.
Selling the dirty mortgages fraudulently as low risks to financial institutions worldwide.
Creating the financial mess we are all in now.
Remarkable is that the persons responsible get away with it without any problem.
They are not investigated nor sued.
And the banks have the best of both worlds: they are now bailed out by public money.
They stole from the people and now they get even more money from the people.
Those bank-CEO’s must be in a constant cramp of laughing how dumb the world is and how richer they become.
We are now getting a similar situation with the USA auto industry.
Last week, General Motors posted a $2.5 billion third-quarter loss and ominously said it could run out of money before the end of the year.
Ford reported a $129 million loss but said it burned up $7.7 billion in cash for the period.
The Detroit Three are closer to collapse than ever, and likely won't make it without billions in government loans.
Now, why is that?
While companies elsewhere like BMW in Germany and Toyota in Japan are doing relatively well?
"There's been 30 years of denial," said Noel Tichy, a University of Michigan business professor and author who ran General Electric Co. (GE)'s leadership program from 1985-87 and once worked as a consultant for Ford.
"They did not make themselves competitive.
They didn't deal with the union issues, the cost structures long ago, everything that makes a successful company."
At Ford Motor Co. they called it "Blue," a team set up around the year 2000 to design an array of small, fuel-efficient cars to compete with the Japanese.
It didn't get far because no one could figure out how to make money on low-priced compacts with Ford's high labour costs.
Besides, the automaker was racking up billions in profits by selling pickups and sport utility vehicles.
Times were good and gas was cheap.
The Government helping by putting import restrictions on small fuel-efficient cars from Europe.
"Blue" is only a small blip in automotive history, but it tells a big part of the story about why Detroit automakers are in a mess so critical they could be only months away from bankruptcy.
What are those Detroit CEO’s, who were generously paid over the last years for their mismanagement, screaming now?
The Government has to bail them out.
Expecting now billions of Dollars from Washington to stay alive.
How about nationalizing the American auto industry?
Like some banks were recently in Europe.
Send home those incompetent and greedy CEO’s.
And force the auto industry to make cars that are more making sense.
Nobody is served with a Hummer except as to inflate ego.