A Plan to Revive American Economic Mobility - Part 1

I have intercalated pictures and comments and made attribution wherever possible.

Background of Problem?

According to the WSJ, a Morgan Stanley report in 2019 estimated that a full transition to electric vehicles would lead to 3 million lost automotive jobs and cost auto makers tens of billions of dollars in restructuring cost. According to the research firm IHS Markit, engine and transmission plants accounted for about 44% of all automotive factories globally. This report was written in 2018.?

Whereas we do not know how many of these plants are located in midwestern US states, we do know that the 15 top US car production plants are located in Missouri, Michigan, Alabama, Kentucky, Georgia, Tennessee, Ohio, South Carolina, Texas and Illinois.?

"Observe the lilies of the field…"

The conservative and Republican response to the impending crisis facing the mobility industry, America and the world has been as FDR described;

and a devolution;

to demagoguery, the greatest fear of our founding fathers and mothers;

Update:

Bloomberg:?Credit Suisse's Horrible Year Is Just Starting

The Swiss bank's capacious appetite for risk is at the heart of its Bill Hwang and Lex Greensill calamities.

By?Elisa Martinuzzi

March 30, 2021, 7:45 AM EDT

An impossible job for Thomas Gottstein??Photographer: FABRICE COFFRINI/AFP

Credit Suisse Group AG’s recent history has been marked by a spying scandal, executive brawls and huge fines. But even by its low standards,?2021 is shaping up to be a horrible year. Within the space of a few weeks the Swiss bank has been caught on the wrong side of two spectacular financial-market implosions. An unfortunate coincidence? Unlikely. The firm’s ethos and business model are at the heart of the mishaps.

This is a systemically important lender that’s known for its capacious appetite for risk.?Hence the Swiss bank forged deep ties to Lex Greensill’s murky invoice-financing business and is now struggling to return $10 billion of supply-chain funds to investors after Greensill Capital imploded this month.

Then last week it emerged that Credit Suisse was among half a dozen securities firms that backed the secretive, whale-like bets of Archegos Capital Management, now at the center of one of the largest ever margin calls.

Losses on the blowups could be material, the bank has said — as much as $3.5 billion on Archegos alone, according to some analyst estimates. That would erode capital and force the lender to scrap a planned stock buyback. On Monday its shares posted their biggest intraday decline since the 2008 financial crisis.

Dealing with the immediate financial hit might, however, be the easier task. Reshaping the business is a tougher prospect.?

Credit Suisse, whose business relies increasingly on wealthy clients entrusting it with their savings, must tackle a glaring weakness: a culture for unbridled risk taking that emanates from the very top of the organization. And it will need to do so without destroying its investment banking franchise, which is bound to lose talented staff as it absorbs the heavy losses and refocuses on less hair-raising business.?A year after taking the reins, Credit Suisse Chief Executive Officer Thomas Gottstein?

must wonder whether this is an impossible job.

Unlike many of its peers, Credit Suisse survived the financial crisis largely unscathed. And yet, the Swiss lender’s spirit of entrepreneurial adventure has long differentiated it from its bigger domestic rival UBS Group AG. Credit Suisse moved boldly into the U.S. securities business in the 1990s and 2000s, creating a number of power bases within the firm that management has failed to keep in check.

Gottstein’s predecessor,?Tidjane Thiam,?had a stated mission to de-risk the bank. That was hardly successful. While Credit Suisse did pare back its securities business and pivot to the steadier activity of managing money for the rich, the recent episodes suggest governance is far from where it needs to be.

Broadening the Scope

US Governance, Education and Taxation

A new and old leadership is needed to "fix" America. It is old because common sense has thrived in America since the time of Thomas Paine;

and George Washington at Valley Forge, as inspiration;

This leadership exists in American and global management and leadership today - as evident with Berkshire Hathaway;

and Peter Buffett's revival of Kingston, NY; with Best Buy’s Hubert Joly;

with Inditex/Zara’s Amancio Ortega, the man who listens;

with Walmart’s educational initiative;

"BENTONVILLE, Ark., July 27, 2021 — Today, Walmart announced it will pay 100% of college tuition and books for associates through its Live Better U (LBU) education program. Starting Aug. 16, the $1 a day fee will be removed for associates, making all education programs paid for by Walmart. This means approximately 1.5 million part-time and full-time Walmart and Sam’s Club associates in the U.S. can earn college degrees or learn trade skills without the burden of education debt. As the largest U.S. private employer, Walmart is committing to invest nearly $1 billion over the next five years in career-driven training and development."

These manifestations of competence have taken place despite the Representation without Taxation of our multinationals (MNCs) and the Republican/Conservative blocking strategy of promoting mediocrity;

its support of the privatization of American entrepreneurship;

and in ensuring that no Republican is elected President for 20 years hereafter, as occurred after Hoover;

Back to Autos

The United States has an extensive network of automotive parts suppliers serving the industry. This network directly supported almost 600,000 U.S. jobs in 2018. According to a?study conducted by IHS Markit?and released by the Motor & Equipment Manufacturers Association in 2015, the total employment impact of the auto parts industry in the United States was estimated to be over 4 million direct and indirect jobs.

Economic Impact

The economic impact of transitioning to the manufacture of electric vehicles whose engines and drive trains have 20 parts as compared to the hundreds of moving parts of internal combustion (ICE) and diesel engines and transmissions. The re-education and retraining of engineers and technicians, the retooling of factories and the laying off of workers because fewer of them are needed to produce electric vehicles, all will bear an enormous cost and will cause great dislocation if not managed competently. We have not even addressed the costs of moving from a cartelized fossil fuel economy to a cartelized economy based on electric mobility; an economy dependent on lithium, copper, nickel, cobalt and rare earths, much of which is not found in profusion in the US. Naturally, electric vehicles require an infrastructure of electric recharging, battery exchange stations or kiosks;?

to replace the hundreds of thousands of present-day gasoline and diesel stations, to say nothing of their retail outlets and all the retail engine and transmission parts distributors, retailers and repair shops that will be going out of business or changing their businesses - at an additional cost.?

Next- Part 3 Solution?