Major Correction in this piece, originally posted yesterday....
We are facing monumental problems with our economic system--health care costs and pension costs---with GM and Delta leading the way to huge corporate bankruptcies. Socialized Medicine will be here within five years as will brand new pension plans.
Oil and the "bubble" price....Seems a little off to me. We import 11 million barrels of oil per DAY. That comes out to 300 mil per month and we have 270 million 700 in SPR. I don't think that is a lot of oil. Three months and we are toast. The reality is that the Bush Administration has done nothing to encourage R&D into hybrid or fuel cell development. Therefore only Toyota and Ford are in the game. GM is facing bankruptcy, a disaster for our economy and a shock to Europe's as well. Everyone can piss and moan about the UAW and their greed at the bargaining table---which is a huge factor in GMs problems----but unattractive cars that up until a year or so ago were not as reliable as many Japanese or American cars are a real problem. Now with the European cars suffering from terrible quality---even Mercedes Benz is in the toilet---it is so bad that there is even a pissed off Mercedes owners site; GM has nothing they can use to fill the gap. We may be looking at a two car future: Ford and Toyota, if there will be anyone left who can afford them.
To give you an idea of the GM situation consider this:
the average cost of providing health-care and pension benefits is around $1,360 a car. That’s more per car than General Motors spends for steel. At Honda Motor’s (HMC, news, msgs) U.S. operations, the health-care and pension-benefit cost is only $107 a car.
There is no way for GM to overcome this gap other than bankruptcy. See HERE for major article. All the other car companies are in Socialized Medicine countries so individual companies don't have to pick up those costs. There are big changes coming and the Republicans will not be able to solve them
Late correction: the total in SPR is 700 million barrels. A lot of oil to be sure, but only three months worth. This is a weapon that gets weaker every day that it is used.
