End Times Signs

by Eric Peters
EricPetersAutos.com

Here is a startling tidbit; an urgent wake-up call, really:

Business Week has just reported that GM sold more than 2 million cars in China for the second straight year in a row – 2.35 million this year – and now sells more cars in China than it does in the United States.

Sales of Cadillacs in China are up a staggering 73 percent; sales of Buicks are up 24 percent and sales of Chevrolets are up 18 percent.

GM is also reportedly getting ready to launch a $4,000 price-buster (in China) and company spokesmen say that GM’s near-term goal is to “have 75 percent of its sales” outside the United States.

Your tax dollars at work.

And, a canary in the coal mine.

America is dying.

China and India are the future; we are the past. GM is moving to where the money is, and that ain’t here.

The United States has arrived at the same point that now not-so-great Great Britain found itself occupying after the end of WWII: A bankrupted and exhausted imperially overstretched power that no longer had the will or even the capacity to keep up with the emerging colossus across the Atlantic, which was devoted to commerce primarily – not wars (and empire) the world over.

Today, the colossus is across the Pacific, but the essentials are the same.

In China, it is 1960.

The government encourages business rather than taking pleasure in throttling it, as is the case in the United States. The automakers are largely free to build cars, as automakers were once largely free to do here – but aren’t anymore. The Chinese only possess one aircraft carrier, not a fleet of them – despite having four times our population.

In China, you do not have to “buckle up for safety” – and you can ride a bicycle without a helmet, legally.

The sad truth is that communist China is a freer place in many respects than the U.S. – both for individuals and for businesses. It is why the Chinese middle class is growing while our middle class is shrinking – and why China is literally rolling in cash, with an export-driven economy, while we are not just broke but massively in debt and import almost everything except Internet pornography and professional sports.

All the while, American taxpayers – an ever dwindling group – are forced at gunpoint to provide the capital which GM uses to build its business in China (and India and elsewhere) but what do we get in return – except the bill?

Here’s the inside skinny: GM knows the United States is a dying market for new cars – mainly because Americans are increasingly no longer in a position to buy them. And they are no longer in a position to buy them because they have become so expensive (an average mid-sized family sedan such as the Toyota Camry or Chevy Malibu typically sells for around $25,000). And they have become so expensive because of the endless conveyor belt of new diktats issuing forth from the DOT and EPA in Washington. It also becoming cost-prohibitive to manufacture anything in this country. Hence, almost nothing is in fact made in this country anymore.

Until The Crash, we were able to pretend we could afford all this and more via the helpful hand of easy credit and by dipping into the bubble-financed “wealth” of artificially (and temporarily) jacked-up real estate values and 401k portfolios.

Now it’s all gone – and not likely to return.

But even as the EKG goes flatline, the mandates continue to flow (most recently, the congressional edict that all new cars average 50-plus mpg within a few years – irrespective of the cost).

GM knows there’s no future in this – or here. And that is why it is shifting its corporate gaze to greener pastures, like China, where it expects it will be doing 75 percent of its business within just a few years.

Already, GM sells many more Buick in China than it does in the United States. In fact, Buick is the most popular nameplate in China.

You can’t really blame GM for this – as galling as it may be to recall that American taxpayers were forced to chuck over billions in “bailout” loans – money used to finance the move to those greener pastures, and with it, the movement of all those manufacturing jobs to places like China.

Americans won’t get the $4k car, either.

Even though it would have a sticker price that’s lower than the government’s loathsome “cash for clunkers” giveaway – which forced some taxpayers to subsidize the purchase of a new car by others. Instead of ripping off one group of taxpayers to provide a government giveaway to another set of taxpayers, GM’s $4,000 car would represent honest productive effort, free exchange – goods produced by a market that freely consents to buy them. People would get the basic, inexpensive transportation that has largely disappeared from the new car marketplace – and which is desperately needed right now.

GM would make money. People would save money. Capital would be built up here rather than being exported over there.

What a concept.

But instead of the $4k car, we’ll just get the bill for it.

Meanwhile, the Chinese colossus will continue to thrive – at least, so long as the Chinese are smart enough to not follow our example.

Reprinted with permission from EricPetersAutos.com.

October 21, 2011

Copyright © 2011 Eric Peters

The Best of Eric Peters