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Good Morning Middle America, your King of Simple News is on the air. GM is closing four more plants as sales of trucks and SUVs decline. I indicated a while back that the SUV market would become non-existent. It’s hard to contemplate that anything is gone forever, but SUVs most likely are. The auto industry is slow to respond to current conditions and certainly planning is not anywhere in their culture; but was it ever in our culture to accept change? Consider what the horse drawn wagon manufacturers must have thought when told that the “horseless” carriage was going to put them out of business; fat chance. In the movie “Other Peoples Money,” Danny DeVito said that he bet the last factory that made buggy whips made the best damn buggy whip in the world, but they still went broke. My point in all of this is that sweeping change really does come, but is normally forced rather than welcomed. We don’t plan for things to be different because we don’t want things to be different. For those towns and those workers who depended on GM for their livelihood, the poor planning by GM is a crushing blow. We have known for more than fifty years that a fuel shortage was coming, but we failed to plan. Even big GM who pays their executives millions, failed to heed the warnings and instead built trucks and autos that would rid the world of steel and fuel as soon as possible. Ya see the SUV and giant pickups of today are simply the horse drawn wagons of yesterday and like the wagon manufacturers, they will go down in history as those who failed take notice of a changing time. The end of cheap oil will be the most sweeping and life altering event in the history of this country; trust me on that. Just last evening the results of airline restructuring was announced and it appears that some 100 cities will lose their commercial service while hundreds of flights will be eliminated nation wide. Pure economics are at work here. Have you ever heard of the “Essential Air Service program?” It was a program designed to provide air service in places that economics couldn’t. In other words, a welfare program for folks who live in small places, don’t want to move, but still want to fly. About 140 rural communities across the country receive the subsidies, which range from $13 to $677 per passenger. But Brookings SD whose 3 regular passengers daily were receiving the $677 subsidy, is about to lose this status as sanity seems to be prevailing. But wait, maybe not. Sen. John Thune, R-S.D., argued that air service is truly essential to Brookings, saying “Ensuring access to communities like Brookings strengthens the local economy, provides consumers with choices and makes the entire commercial airline network more valuable.” Senator Thune is a politician because he failed economics 101 and because he is an idiot. Senator Thune sits in a big room in Washington DC with hundreds of other idiots who discuss important issues like subsidizing their constituencies to get reelected; all with your money, rather than allowing reality to creep into their lives. America will soon be filled with towns like those that GM pulled out of, due to our government’s nonexistent plan for anything other than planning for reelection. But that doesn’t mean that you should do the same. Plan now to throw the bums out. And then plan your own life, certainly GM and our government aren’t up to the job.
www.kingofsimple.com Mike Folkerth is the author of "The Biggest Lie Ever Believed" and is not your run-of-the-mill author of finance and economics. The former real estate broker, developer, private real estate fund manager, auctioneer, Alaskan bush pilot, restaurateur, U.S. Navy veteran, heavy equipment operator, taxi cab driver, fishing guide, horse packer and few jobs too embarrassing to mention, writes from experience and plain common sense. Mike's humorous systems of "Mikeronomics" and "Mikemathics" drastically simplify the economic and mathematic formulas commonly used by very smart, but terribly sheltered individuals.
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