It must be said, that like the breaking of the great dam, the American decent [sic] into Marxism is happening with breath taking speed…
- Pravda Online, “American capitalism gone with a whimper”

Pravda is the Russian word for “truth.” It is also the name of Russia’s most well-known daily newspaper, with roots dating back 1908.

Boris Yeltsin shut down the initial Pravda in 1991. It perhaps seemed fitting that, after 79 years as the official organ from the Central Committee of the Communist Party, the voice of the Soviet Union would die using the Ussr.

But towards the end from the ’90s, the paper had resurrected itself in multiple new forms – together with a tabloid version and an online version – because of the tenacity of former Pravda employees.

The irony is exquisite, don’t you think? At any given time once the American free press is unabashedly fawning in its coverage from the White House and also the overall handling from the financial crisis, a former Soviet-era broadsheet sees fit to lecture america on its embrace of Marxism.

“Americans learn more about their favorite TV dramas then [sic] the drama in DC that directly affects their lives,” thunders Pravda Online. “They care more for their ‘right’ to choke down a McDonalds burger or a Burger King burger compared to their constitutional rights.” Oh, ouch…

But does the “Marxist” charge (see opening quote) genuinely have merit? Or is it just a mix of sour grapes and hot air?

In answering that question, the overall Motors saga – for all intensive purposes now Government Motors – seems a fair focal point.

The foundation of Government Motors

GM used to be seen as a bastion of pride… a typical bearer of quality (if you’re able to believe it), and even a hotbed of innovation… a shining illustration of everything was good and noble within the U.S. free market system. For a long time, what was great for General Motors was, indeed, good for America.

The Beach Boys once sang songs about GM cars. Are you able to think of the songs that might be sung now?

For nearly eight decades, GM was the biggest carmaker in the usa (and therefore the planet). But for the last three of those decades at least, GM was on the trudging death march… a long, slow, denial-fueled slide into stagnation and decay.

So what happened?

The best way to consider this, in your humble editor’s opinion, is to recognize that the transformation from “General Motors” into “Government Motors” actually began in the past. It has been an extended, long road. This whirlwind of cram downs and rule changes and bailout billions is merely the coup de grce.

In many ways, Vehicle ended up hostage to the own fortune. At the height of its power, the iconic company am dominant and thus profitable that everybody in the usa imagined GM to be an unstoppable juggernaut.

But the bigger and bulkier GM got, the more the company was viewed as a cash cow… no more a lot a lean, mean free market enterprise like a sprawling American institution, rich enough to hand out freebies to everyone – or at best anyone smart enough to get their hand in the till.

It had been this vision of never-ending profits and unchallenged dominance that cost General Motors dearly. The GM executives who made disastrous long-term handles the unions within the ’50s and ’60s no doubt imagined the organization would be just fine. Close to the peak of its power, it was all but impossible to assume a time when times wouldn’t be so flush.

A One-Way Participation…

Is the story beginning to sound familiar yet?

The greater profitable and dominant GM became, the more pressure the company faced (from union members and politicians alike) to “share the wealth.” The union members ultimately made it basically impossible to seal down production or close factories (other than at enormous cost). Politicians did exactly the same thing at the state and local level, making it all but impossible to close down dealerships.

The problem with all this wealth-sharing is that the whole thing would be a one-way street.

Inside a more functional, two-way relationship, there is a recognition from the distinction between good times and bad times. Like in a business partnership, for example. When times are great, the partners in the business prosper. However when times are hard, the partners in the industry do poorly. They share the pain of hardship.

General Motors didn’t have capability to share the pain of hardship with its “partners” – the unions, dealers, politicians and the like who all lined up for a piece of the juggernaut. Within this GM was like a car that had no reverse gear. The political costs of doing business could be ratcheted up, but they couldn’t be ratcheted down again.

And so “General Motors” really started becoming “Government Motors” long before the handouts came, because this is exactly how governments work too. When times are prosperous, people want their government to become generous. When times are difficult, people want their governments to be much more generous. There is no reverse gear.

Obviously, someone needs to pay for all that largesse. But as long as the check writers have been in the minority, the majority can have its merry way. (Perhaps for this reason Thomas Jefferson is reputed to possess said, “A democracy is certainly not a lot more than mob rule, where fifty-one percent of those may take away the rights of the other forty-nine.”)

…And a Long-Time Transformation

So the first step within the transformation of GM was the cultural entrenchment of largesse – treating the organization as though it were an ever-expanding arm of government, rather than a free market enterprise that needed to retain the ability to bend and flex using the times.

The 2nd step came when GM lost its way, and the official government (Uncle Sam) found increasing have to part of and help.

Longtime car buffs reason that GM’s precipitous decline really began within the 1980s, with CEO Roger Smith. A reorganization gone badly wrong, combined with tough new competition in the Japanese, led to utter disaster. Quality went into freefall even as car plants began to idle. “By 1989,” BusinessWeek reports, “GM was losing more than $2,000 on every car it built…”

Internally, GM’s bureaucratic corporate culture was another disaster. In an internal 1988 memo, one insider complained that “our culture discourages open, frank debate… there’s a clear perception among the rank and file of GM personnel that management does not receive bad news well… our most serious problem relates to organization and culture.”

As BusinessWeek further reports, former GM board member Ross Perot complained that same year that “At GM the stress is not on getting results – on winning – but on bureaucracy, on conforming towards the GM System. You’re able to the top of General Motors not by doing something but by not making a mistake.”

A lot more than Two decades ago, General Motors already looked, felt and acted just like a de facto Detroit wing from the U.S. government out of all methods mattered – the shoddy quality of its products, the epic scale of its largesse, and also the ham-fisted way it was run.

Maybe it was inevitable, then, that “Government Motors” would finally be produced official… and thus sadly fitting for The government to take an outright 60% stake (with the unions obtaining a fair chunk from the rest).

If so, perhaps we ought to consider this event not as a death, but a birth. Maybe GM is like some horrible moth, breaking from its multi-decade chrysalis stage finally. Government Motors is dead… long live Government Motors.

A lot of Same

Back in December 2008, the not-yet-defenestrated Rick Wagoner predicted a GM bankruptcy might cost taxpayers as much as $100 billion. As it turns out, Wagoner is on track to become right. Unless, of course, that number happens to be conservative – so it most likely will, when all of the hidden costs are considered.

In total, Washington will be lending an awesome $49.5 billion towards the reorganized GM – a brand new $30.1B on top of the $19.4B already doled out. Those sums will then convert in to the fore mentioned 60% stake. The governments of Canada and Ontario will also be pitching in another $9.5 billion approximately.

In the bankruptcy filing, GM listed $172.8 billion price of debts (enables you to whistle through your teeth, don’t it?) and most 100,000 creditors. The fallen icon is going to be kicked out of the Dow next week.

Same goes with the new Government Motors be a success – a leaner, meaner, more responsive car company as Washington hopes? Will the brand new GM be able to move with “pure, unadulterated speed” as interim CEO Fritz Henderson suggests?

Don’t hold your breath.

As Einstein pretty much opined, one cannot solve an issue with exactly the same consciousness that created it. Unfortunately, since GM continues to be sprawled face-down in the bureaucratic ditch for many years now, changing the business’s political ownership status from “unofficial” to “official” isn’t likely to possess much effect.

Real, honest-to-God companies are beholden to profit-seeking ownership interests, not largesse-seeking ownership interests. This is exactly why it is such a bad deal letting the federal government own much of anything. The moment an asset or perhaps a resource becomes public property, it instantly becomes fair game for all types of special interests and beady-eyed schemers to take advantage of.

In that light, the “new” GM is going to be “owned” by a bewildering variety of special interests – from union members, to environmentalists, to protectionists, to countless local interests in the state and federal level in multiple jurisdictions (and not simply in the U.S., but Canada to boot). What percentage of those new owners are we able to expect to be worried about actual profits, versus carving the biggest slice of the pie they are able to get? Hmm…

Oh, contributing to That Marxism Charge…

So, are the Pravda cynics right? Is America descending into Marxism at breathtaking speed, with General Motors serving as “Exhibit A” for that prosecution’s case?

As with all our most entertaining discussions, I’ll allow you to be the jury on this one. Before you answer, quick – what is the most famous thing Karl Marx ever said?

For most of us, 1 of 2 phrases immediately comes to mind. First: “Workers of the world, unite!” And second: “From each according to his abilities, to each according to his needs.”

The first of these statements – on workers uniting – is noble in the own way. Despite appearances to the contrary, your humble editor isn’t 100% anti-union. The drive for union representation certainly made sense in the past of the industrial revolution, when children were put to work as labor slaves and workers were generally exploited within an inch of their lives.

The actual trouble came later, once the tables turned so thoroughly the exploited had become the exploiters. Union power overstepping its bounds, i.e. “Workers Unite!” taken too far, is among the main threads of the GM story for that other half of the Twentieth century. Perform some unions exists for good reason and advance their causes justly, to this day? Obviously. At the same time, possess the unions – specially the auto unions – covered themselves in glory these past fifty years? I do not think so.

The second statement – “from each based on his abilities, to every based on his needs” – is far more frightening than noble. You cannot possess a system that allocates the “from” and the “to” without putting a small circle in men (or women) in power… and also to really do it right they require absolute power. Via Washington’s Byzantine labyrinth of smoke and mirrors, where a lot of the actual power is wielded out of sight and behind closed doors, some would argue we are headed in that direction already.

Battered by the adverse impact of the global economic deceleration, the Indian SME export sector has been recording poor performance because the last year. Going by the projections and prevailing hostile trading conditions, a significant turnaround in the dipping export growth curve looks unlikely within the next few quarters. The first two quarters of 2009-10 is anticipated to be challenging for that domestic export sector. Hence, SME exporters are now pinning their hopes on the newly elected government for supplying them some respite within the upcoming budget.

Need for exporters

The Indian exporters have previously drafted a proposal, seeking sops in the upcoming budget to be able to revive the export volumes. Rationalisation of tax structure and hike in the reimbursement rates tops the recommendation list that has been drawn through the various export organisations in India for that government.

“Tax exemptions including exemption from payment of fringe benefit tax (FBT), exclusion from the payment of service tax, tax exemption for five many withdrawal of other taxes can ease the burden on the Indian SME exporting units,” commented A Sakthivel, President from the Federation of Indian Export Organisation (FIEO).

Priority to Indian SME exporters

Export associations will also be seeking increase in the input duty reimbursement rates under schemes like Duty Entitlement Pass Book Scheme (DEPB) scheme and duty drawback rates to assist maintain the edge against your competitors from the small-scale exporters against their counterparts in neighbouring countries like China, Vietnam and Bangladesh.

“Extension of export incentives and reduction in taxes can ease the recessionary pressures, which have stifled the development from the SME export sector. In the present scenario, it is imperative for that government to provide priority towards the export sector and supply these benefits,” commented OP Agarwal, Chairman of a tea exporting house in Kolkata, AMBO Exports.

The philosophical comparison of social developments such as economy towards the particle related quantum mechanics may look incidental or incoherent but conceptionally said the human perception has changed from certainty and simplicity to uncertainty and complexity too, therefore the perception of principle understanding processes in economy philosophically must change too the actual way it is different in Physics and Mathematics , since the “uncertainty” from the information for particles in their “position” and “momentum” goes much farther in social sciences in which the “uncertainty” from the social-economic developments and processes as reported by Governments or private groups are much more unclear and subjective. The similarity of the old “certain” and “simplified” approaches in Physics where particles were taken as measurable and static was well used in Philosophy and Economics where the processes were simplified and taken as measurable or at best easily place in systems of evaluation; thus there is not difference between the approaches in Physics and Economics in terms of thought and conventionalizing of simplifying processes and what in science seems irreversible is the constant conventionalizing complex reality. More “uncertainty” must go in the same way and affect Philosophy and Economics too.

The similarities between science in Physics and Economics goes even beyond the evolving perception from simplicity to complexity in to the reality of realization of “unpredictability” and “uncertainty” once the same manner when in Physics was remarked that a “particle” is in constant change there isn’t way it could be measured without error. It isn’t just because from the insufficiency of the human technology but because of multiple and mutually changing realities and even farther since the reality is extremely unpredictable and unknown. Exactly the same way in Philosophy and Economics might be easily remarked that social economic processes are not static but “unpredictability” and “uncertainty” of ever changing social economic realities are not measurable at all therefore to consider that using a few statistical measurements might provide us with an authentic picture of the economic situations is unrealistic and uncertain but even past the processes in social and economic structures are so different and changing that they’re a lot more like the particles in quantum mechanics then to the theoretical explanations of the statistic economics or principle of evaluations of Philosophical conceptions for example Marx’s or John Lodge’s or whoever’s. The ever changing reality and the uncertainty coming out of it may only be theoretically explained by some theories and philosophical conceptions however these couldn’t provide an adequate picture from the ever changing and uncertain social-economic reality by which especially economic processes are in probably the most unpredictable and uncertain. The ideologies of some economic structures for example Communism or Capitalism, or Socialism which are conventionalized based on philosophical conceptions are a long way away from explaining the social-economic processes but much more likely they are providing some “security” in a very different and insecure realities; these ideologies did work somehow in a political world of cold wars and ideological confrontations when one was better then the others, but don’t operate in a wide open free world where these philosophical conceptions do not find any applications or support.

To measure statistically or anyhow an authentic picture from the social-economic processes is uncertain the developed tools and indicators for such measuring are inadequate and limited but even they were developed to perfection they still wouldn’t be able to measure these processes because the processes on their own are uncertain and may not be measured.

The processes in social-economics could be only given “parameters of expansion or contraction” to allow them to develop in “certain areas” to “certain extend” after which changed or adjusted, it may be completed in a way to disperse accumulating energy so rather than big wave: the methods energies are accumulated and create big waves may be the example of Real Estate market appreciation: which is positive for the economy towards the extend of providing additional capital and equity thus expanding individual capitalization and investing but as we saw in the present crisis when this process of appreciation expanded over its positive for the economy effect such over appreciation had devastating consequences to literally crashing the existed economic structures; the negative accumulation of energies because of the over appreciation wasn’t dispersed to the rest of the economy therefore the ripple effect was unavoidable; if the way possible to minimize such over-appreciation isn’t by not allowing or even limiting appreciation as basically by establishing “parameters” that will ring the bell for over-appreciations or even better they will automatically trigger “prevention valves” to limit the over-appreciation or under-appreciation as well.

The differences between your self adjusting what are known as capitalism or socialism economics where governments use very political tools to adjust these fluctuations; too Fiscal and Monetary policies and talk about distribution and redistribution of wealth or limiting or expanding business activities might not necessary be the right economic tools to create the appropriate “parameters” so “over expansion” or “under expansion” do not occur.

The “Iquanta” is really a quanta but is not anymore a part of a particle or an energy, or anything in physical aspect but a philosophical measured quantity of “energy” or just a “word” that could be looked at as an abstraction or an “imaginary particle” too, it depends from the point of view: when some could believe that social-economic processes have their own energies or some not; for me such believes have no meaning because the most important thing will probably be to establish the parameters of it; The same principles would affect “Iglued plasma” plus some others terminology taken from the Quantum Mechanics which will be used in this research.

This research is trying to challenge the status quo from the ideologically motivated Philosophy and Economics using the principle of uncertainty of the processes of economic development; to show the similarities existing between your Quantum Mechanics of Physics and also the Iquantum Economics of Social-Economics Philosophy; to create some “parameters” of social-economic processes which eventually might be utilized in practical Economics to limit “big waves” of economic recessions or at best explain these “parameters.”

To show that even unpredictable naturally and impossible to be put into one philosophical structure which could explain all of these social-economic processes, though you may still find some parameters which could limit the occurrence of big wave and never the least to show that economic downturns and recessions even uncontrollable are not a part or perhaps a tool of somehow “free market development”, however the violent adjustments are a result of occasional develop of energies to some big wave as well as in the same time a few of these energies could be put in parameters /diversified as a result it prevents these big waves from being so frequent approximately violent.

What’s an iquanta? – it is not a part of any particle it might be part of energies or part of conceptional particles for explaining certain philosophical conceptions which particles move, contract and expand in limited predictability. It is influenced by social-economic processes and developments. It accumulates energies mostly according to social-economic occurrences and fluctuations.

What’s igloued plasma?- the powers which connect the iquantas along with other areas of a continuously changing and moving occurrences and processes in social-economic processes; we are able to imagine these terminology as a mirror of those social-economic processes so thus they could be situated in their changes and explained within their changes, vibrations, accumulation of energies and creating violent social-economic adjustments. The physical quantities are made up by iquantas and other parts rapidly changing and moving, where the igloued plasma connects these parts and provides them the meaning of occurrence; the “energies” build up through the acceleration of the iquantas and other parts and also the fluent economic developments become violent big waves: like the monster waves within the ocean. Well, common qualities of such develop is concentration of energies between your neighboring waves but this observation is not a principle. In tangible development of the economies some factors have positive effect over expansion and progress in certain time and the same factors may have negative effect in various time or mostly when passing the level of an optimistic build up: (as an example the real estate appreciation has a positive effect on the economical development towards the extent once the market costs are not based on income to expanse ratios, or before the withdrawn and reinvested capital do not bring the supporting profit flow; or until becomes exuberant when compared to other business activities or maybe etc.), many number of conditions hence if particular waves within the physical quantities relate the real estate built energies which might push up the large wave which wave could shake a lot of other sections of the actual economy.

Spend each day at the beach watching the ocean. Settle in having a big umbrella and a tall cool drink. Take notice of the ocean. What do you see? Waves … and tides. The level of water rises like a wave crests, and down as the wave recedes. Some surf is bigger, some come just a little slower, but they all form a repeating pattern. Now add the tides, and also you see the waves as small oscillations superimposed on bigger slower repeating patterns. It’s all regulated fairly predictable.

Now, suppose time slows w-a-y d-o-w-n… The thing is the water rising. It just keeps coming. Does it ever stop? Am i going to drown? Then, at the last moment, the water recedes. Phew, relief. Not again, all of the water is going away! The fish will die. I’ll have no food, no ocean, no pretty beach, I’m losing everything!

Following a relaxing trip to the beach, let’s talk economics. Since the repeating patterns of economic cycles have periods of many decades, it’s oh so easy to forget that prosperity and confidence – personal, corporate, and national – rise and fall like waves and tides. Great times never last, and hard times never last.

But guess that this wave is not only a part of a cycle? Suppose that this wave may be the tsunami? Maybe, but the likelihood of a fiscal tsunami are just like the chances of rattlesnake bite in Manhattan. Sure it could happen, but…

What do you do when the tide goes out? You receive a whiff of that “low tide smell” and you reach wander the seabed harvesting some tasty shellfish from underneath the sand. You will know the water will return, so you relax and enjoy your day.

Economic prosperity WILL return as surely because the waves and tides. Only the exact timing is uncertain. Nationally, this is a time for you to spend lavishly creating jobs and restoring personal and business confidence. Spending now does NOT mean we ought to or will expend when the tide is high. Government spending and taxation also run in long-term cycles, hopefully in cycles that mitigate the economic cycles rather that amplifying them.