September 4, 2008 (LPAC)--For 100 years, the auto industry has been America's largest repository of crucial machine-tool capacity, when necessary, its "Arsenal of Democracy," the reservoir of potential industrial progress that separates a developed industrial nation from the Third World.

But the long-oversold automobile market is now in collapse along with the general economy, with auto sales likely 25% lower in 2008 than they were in 2005. The U.S. economy's "machine-tool principle" is being closed down. Some 13 million cars are likely all the overindebted American households can buy this year, down from 17 million in 2005. That was when economist Lyndon LaRouche, foreseeing this collapse, proposed a new mission for the auto/machine-tool sector: building vital economic infrastructure, with Federal credits, under a Federal corporation on the WWII conversion model.

However, some in Congress, and both Presidential Candidates are now calling, instead, for a pathetic "retooling" of what capacity isn't shut down, to build small and "mini" cars. Do they think we need little electric cars, rather than new electric power plants and transmission capacity? Or perhaps they are just going along with desperate automakers' management, who demand a $50 billion "retooling" bailout just to survive?

"PPP's are the real issue," LaRouche declared, because if the auto industry is converted, away from just building cars and personal transportation vehicles, and into the business of building serious infrastructual-grade components for a nationwide economic recovery, "the fascist PPP program gets crushed."

Maybe we should ask those gullible congressmen and incompetent management at the "big four" automakers: Are Felix Rohatyn and Michael Bloomberg playing with your PPP?*

 

* Public-Private Partnership