Switzerland overtook the United States as the most competitive economy in the world, according to the global competitiveness index released this week by the World Economic Forum (WEF).
Though data shows that the U.S. economy only shrank at a one-percent annual rate during the second quarter of the 2009 calendar year, according to “preliminary” data released July 31 by the U.S. Commerce Department’s Bureau of Economic Analysis (BEA), that number may be unrealistically low, owing to government involvement in the markets.
Capital lending firm-turned-bank holding company CIT has patched together another $3 billion private loan to avoid bankruptcy and try to complete the transition to bank holding company.
Federal Reserve Chairman Ben Bernanke is on a public relations offensive to persuade Americans that he has the economy well in hand, and that he has an “exit plan” for the Fed's inflationary monetary policies if consumer prices should start to rise precipitously. Bernanke does see a time when banks are lending more freely, and the fractional reserve system for banks would again put additional inflationary pressure on the economy.
President Obama’s Auto Task Force Chairman Steven Rattner resigned suddenly earlier this week after reports that the New York Attorney General’s office was investigating Rattner’s role in a New York State pension bribery scandal.
Item: Writing in the online Newsweek for June 2, Daniel Gross observed: “It’s been a long time since American devotees of Marx … have had much to cheer about. But with the bankruptcy filings of General Motors and Chrysler, and the transfer of stock ownership from the firms’ long-suffering shareholders to the government and unions, communists of the world can rejoice. The workers are now, finally, significant owners of the means of production. The United Auto Workers control about 65 percent of Chrysler and 17.5 percent of General Motors.”
The ADP National Employment Report estimated that the national economy shed some 473,000 jobs in June, which may be enough to bring the national unemployment rate to the 10-percent threshold once official figures are tallied later in the month.
"Today's razor-thin vote in the House spells doom in the Senate," Sen. James Inhofe (R-Okla.) predicted to the Associated Press of the American Clean Energy and Security Act ( a.k.a. “cap and trade”) immediately after the narrow 219-212 vote.
Ford Motor Company was supposed to be the only major U.S. automaker not in need of a bailout, but this week Ford accepted a $5.9 billion loan subsidy under the Energy Independence and Security Act of 2007 (EISA). The EISA loan is designed to help the auto industry by supporting “capital investments in facilities designed to produce vehicles with greater fuel efficiency and reduced emissions.”
Many factors have enabled the United States to become the wealthiest nation on Earth: limited government, secure property rights, a free-market capitalist economic system, a relatively stable currency, and an abundance of available energy. One might note that all of these elements are increasingly under attack from politicians, but a successful assault on the access we have to the energy that powers our economy would devastate our country — even if we did everything else right.
Monday, June 1, was the end of an era for the American automotive industry. As nearly everyone not living in the jungles of Borneo knows by now, once-mighty General Motors, the flagship corporation of American automobile manufacturing and one of the most potent symbols worldwide of American industrial might, slid into Chapter 11 bankruptcy after the Great Recession dealt the long-foundering giant the coup de grace. In what is being billed as the fourth-largest bankruptcy in American history and the largest ever for an industrial manufacturer, GM claims $82.29 billion in assets against almost $173 billion in debt — this, be it duly noted, after billions in federal government bailout monies have been shoveled GM’s way.