When we saw General Motor's results for the last quarter, we couldn't help remember another America in which it was oft said, "What's Good for General Motors is good for America". A lot's changed since then but we thought it was worth considering the same metaphor in a new light; i.e.; is what's good for MSFT or GOOG or YHOO good for America? And if so, what does that mean?

But first, we'll get back to good old GM. Once upon a time there were three American car companies and then there were two as Chrysler fell first into bankruptcy and then into foreign hands. In those days GM had about a 70% share of the US market and, at least through the rose colored glasses of nostalgia, made some pretty sweet cars. Never mind that the built in clock hardly made it off the sales lot before it stopped or that in the course of three years you could expect your fuel pump, your water pump, transmission and your battery to all need replacement. Of course, if you lived in a northern state, you also had to deal with the body around the wheel wells rotting out.

Today, GM has about a 27% market share and if you want to buy a competitive sedan or convertible from them you have to do some serious research. They, like  their major American competitor mainly make pick-up trucks, vans and SUV's. They have, it appears, been particularly hard hit by the recent rise in fuel costs, given the average size of the behemoths in their fleet but their problems go much deeper. Even in the large vehicle area, more and more of their potential customers are choosing autos made by their foreign headquartered foes that often beat them competitively, not on price but on design, quality, fit and finish.

Interestingly, GM hasn't made a profit on the vehicle it makes for several years so that even in years when they showed a profit, it all came from their financing operations. And, as everybody knows, GM has been selling more and more models over the past few years by inducing customers through 0 percent loans and other incentives. You don't have to be a financial genius to understand that if you are in the finance business loans that pay no interest are bad business. So, it should come as little surprise that as they got all their customers into ever bigger gas slurpers at monthly payments that reflect zero interest and when the price of gas went up, as everybody knew it would, especially with all those guzzlers, GM was looking at customers with less and less disposable income. Money that might have gone to their finance wing, was now flowing into the pockets of the oil companies and the producer countries.

Are we to be surprised, then, that GM just reported a quarterly loss of over 1.5 billion dollars?

We are, it appears, beginning to see the signs of the coming day of reckoning, when all of the contradictions of the last few years come to roost. What if all that deficit spending, all those tax giveaways that were supposed to spur investment just turned into the stuff of ever greater further deficits? What if Fed Reserve and government policies aimed at stimulating consumption succeeded mainly in stimulating the Chinese economy to build more capacity? What if trade deficits have put the US at the mercy of the foreign countries who hold all our debt? What if we ended up with interest rates so low and creeping inflation that would tie the hands of the Fed? What if we had invested over $300 billion dollars, the lives of 10's of thousands, and the country's prestige on a war that is coming to look more and more like a low level national cancer?

Two weeks ago, as if on prompt --which, of course, is their wont-- the sock puppets of the MSM (mainstream media) all started singing about the improvements in the situation in Iraq. This coincided with the two year anniversary of the "end of major combat". We were to believe that the three warring ethnic groups, Shiites, Sunnis and Kurds had lain down together like proverbial lambs and tigers, that the insurgents were losing interest and thinking about other targets. What these sock puppets failed to mention is that the cost of taking a taxi the six miles from the Green Zone in Baghdad to the local airport is $35,000. Now, we may be a little old fashioned here in Dymaxia, but 35 grand for a six mile taxi ride in the capital of a pacified country seems a little stiff. Until, of course, as we read yesterday, typically four people a day, even in armored Humvees, die trying to make the trip.

GM, its manufacturer, tried selling the Humvee in civilian form to the US public as the latest in fashionable bigness. Never mind that it gets around 5 miles to the gallon. To help them in their costly marketing campaign, Congress wrote a loophole in the tax code that allows all vehicles above 5 tons to get special tax depreciation treatment.

America's real business, we all agree, is not cars but high tech. Are our leaders fighting about how to get the population educated and trained for the demands of a high tech economy, are we worrying about laying the infrastructurefor a high-speed broadband that connects us and leads to the new applications that the world will need, are we encouraging more foreign trained engineers into our graduate schools, are we making connectivity a right rather than a privilege, etc.?

Of course, the answer is no, not in this US that is still fighting over things that should have been settled when GM really was king. We are buried in arguments over whether pharmacists should be forced to fill prescriptions for people whose habits they don't like, about what equipment is being carried below the belts of people who wish to live legally as couples, whether a person's spouse has the right to make medical decisions against the will of her parents, we are discussing whether our DNA links with other species on the planet means anything in the scientific scheme of things, whether the earth is really more than 5000 years old, whether we should shut down the government in order to potentially determine a woman's right to choose what's good for her body or whether stem cell lines that promise major health benefits should be allowed to come from fetal materials we commonly dispose of.

Maybe there is a reason we are in Iraq that doesn't have to do with oil and Saddam Hussein, maybe in this fixation for the rear view mirror we are really there looking for enlightenment from a society that has deep cultural roots in beliefs little changed in 1500 years.

7:18:35 PM