America’s car industry is dying… again. Congress wants to bail them out (again) but I am not sure if that is the right thing to do. I can’t help but wonder if the car industry is like a dying person who would be artificially kept alive if given an injection of money. I don’t know if GM and Ford can continue on their own any more and if they can’t then why should we keep them going? Maybe these companies have run their course and it’s time for them to close their doors.
I think what we may be seeing is the final death throes of manufacturing in this country. For the past fifty years we have slowly been evolving from a manufacturing society to a service society. I don’t know if this is even something bad but merely a result of becoming a more advanced nation. This is not an original idea yet I don’t hear people talking about it very much and I think we need to have this national discussion. For my own edification I want to think through how we got where we are and then try to figure out if this is good or bad and what we should do next.
As this country advanced we have continuously evolved and yet each time it took violence to help us move up the chain of evolution. Like most new nations, America first started out as an agricultural nation. Once this country’s metals were discovered then ambitious and sometimes ruthless men began to find ways to manufacture these metals into needed products. Steel, ore, iron, coal and the like were the building blocks on which this nation stepped up a level on the evolutionary chain.
Yet moving from an agricultural society to a manufacturing society was a brutal and bloody transition. It started with the Civil War which was primarily a fight between the manufacturing North against the agricultural South. The final blow to our agricultural dominance was the Dust Bowl during the Great Depression which destroyed millions of acres of farmland.
War World II ushered in the peak manufacturing years. After years of disuse during the depression, our factories were producing at maximum levels to provide the materials and products needed to fight a war. After the war, these same factories continued on peak levels but now to produce all the new products that the young and growing middle class were clamoring for after years of deprivation. Not only was there a demand for goods but there was also a new demand for housing. This country lost for good untold millions of acres of what could have been productive farm land. Now this land was irrevocably gone as the suburbs were being born.
During the 1950’s and 1960’s America couldn’t manufacture items fast enough to satisfy this country. The birth of the suburbs issued in a whole new array of needs from all the things housewives were now demanding to have in their house to the products required to maintain the new lawns. Midwife to the birth of the suburban appetite for products was television which now told everybody what they needed to have.
By the early 70's the high demand for products tapered off yet as the need for big ticket items diminished, the 1970s started a whole new world of consumer goods – electronics and computers. Not only were these products in high demand but due to continuing technological advances products quickly became obsolete thus requiring new purchases. Since the 70's entire industries were born, thrived and then died within a handful of years. Think 8 track cassettes and VCR's for example.
Although our demand for products still remains high, at some point we stopped producing these goods. America is moving up one more step on the evolutionary chain from being a manufacturing country to being a service country. Yet when and how did this happen? Was it inevitable and simply the result of being an advanced nation? If that is true, then government’s plans to “rescue” these factories with obscene amounts of money may be pointless and a complete waste of our money.
I want to explore this some more but its time to take a break so I will finish this up in a day or two. Meanwhile, here is something to think about. If Congress is this upset over the possibility of losing our car industry would they be willing for their children or grandchildren to forego a higher education in order to work in a car factory? Would you?
My concern with doing nothing for the auto industry is the collateral damage their failure will inflict on the economy.
ReplyDeleteConsider the myriad of other industries that depend on sales to the auto giants to keep their people employed. (Tires, seatbelts, steering wheels, brakes etc., etc., etc.) Not to mention auto dealers (new and used) and repair shops.
Isn't it possible that doing nothing could well result in a world wide depression that COULD make the one in the 30's look puny.
Diamond Jim