Everyone knows or should have known that from time to time governments go to bat for industry, or their capitalist friends. Some of this is crony capitalism, and some is the belief that it is simply necessary to maintain industry economic vitality in a key sector, or to protect the country's critical supply chain, jobs, or military strength.
Oh you know there are 100s of reasons why, some viable, most not, but this is what governments do, all of them, and although the US is better than most, we are not perfect either, surely we can agree to some level of honesty in this conversation right? Okay good, then let's continue the dialogue here today.
Now then, one of the big problems with state-run-capitalism or government sponsored businesses and industries are that they forgo some of the brilliance of free-market capitalism theory and our international goals of free and fair trade. How about a case in point to lead this off? There were several articles published on September 17, 2012 after the Obama Administration decided to file charges at the WTO against China for automotive parts;
1. Wall Street Journal article; "US to File Charges on China" by Carol E. Lee and Damian Paletta.
2. New York Times article; "US to File WTO. Case Against China Over Cars" by Keith Brandsher.
3. Reuters News article; "US launches auto case against China, Beijing fires back" by Jeff Mason and Tom Miles.
All of which mentioned that the Chinese government has subsidized over $1 Billion in cars and car parts. Okay so, this is absolutely no surprise to the Auto Industry, at least no one I know in the auto sector, everyone knows that China is subsidizing things, yet, why did it take so long to do anything about? Well, it's an election year, Ohio is a swing state and Obama needs that state to win the election, so his move is politically motivated as much as it is overdue.
What wasn't mentioned in Obama's speech to the unions or in the media propaganda put out by the administration was the multi-decade problem of Chinese knock-off parts coming to our shores. Imagine, counterfeit GM parts coming to America and for sell at half the price of authentic GM parts, perhaps made by GM or perhaps under a license. Delphi filed bankruptcy long before GM, how could they compete with Chinese fake parts pretending to be real in some cases and in others touting the fact that they were not original therefore half price.
Worse, imagine those factories making those parts were subsidized somehow by the Chinese government? Ouch, talk about adding insult to injury. Does the Obama Administration want us to believe that this is the very first time they'd noticed, so now they are doing something about it?
Ah, horsecrap, this is an election year, that's what this is about, they should have done something about this on day-one of the Administration and to do it now is merely pandering for votes. So, that to me is just pathetic. Please consider all this and think on it.