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Imagine if Wall Street had been the main line of business in the United States after Pearl Harbor?

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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:46 AM
Original message
Imagine if Wall Street had been the main line of business in the United States after Pearl Harbor?
We'd be S.O.L., as there'd be no "Sleeping Giant" to awaken, as Adm. Isoroku Yamamoto is reported to have then called us.

Heres a bit of history about the importance of Detroit home of the nations manufacturing base.

When Detroit Stood at Attention

There's no disputing the city's major role in helping the United States become victorious in World War II. Here's what people and the news media said back then:

"The hottest town in America," crowed a 1943 article in Variety, the show business trade paper.

"A miraculous city, a city forging thunderbolts," wrote The New York Times, soon after the United States entered World War II.

"The wonder city of America," said novelist Erskine Caldwell in 1942, while talking about how much Germany and Japan wanted to bomb Detroit.

"Detroit is winning the war," Soviet dictator Josef Stalin reportedly told President Franklin D. Roosevelt three months before the Germans surrendered.

And Gen. Dwight D. Eisenhower, who commanded 3 million soldiers in Europe, said the weapons he valued most were the jeep, 2 -ton truck, bulldozer and transport plane -- all partly or fully made in Detroit.

Source: Peter Gavrilovich, Detroit Free Press, Sunday, May 31, 2009

These are important issues to consider when thinking about our future economy. What is needed for true national security? A safe haven for bankers and paper assets or an economy based on manufacturing, filled with well-paid workers and goods of real value?

Today, with our nations wealth real property in the form of financial instruments, We the People are second class citizens to the mighty and their corporate spreadsheets.

It's ironic. Without the average American serving in the armed forces, backed by America's industrial might, these financial institutions might not exist today.

Who knows how different history would be? My guess is, under an Axis occupation, they'd be secondary compared to keeping the manufacturing plants running.

And without Detroit and America's industrial might, we could very possibly be writing and reading these words in German or Japanese right now. If we were lucky.
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Captain Hilts Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:48 AM
Response to Original message
1. Correct. An industrial base has inherent value that financial firms do not have. nt
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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 11:47 AM
Response to Reply #1
5. Paper airplanes, like paper bullets, don't fly far.
They certainly can't do that much strategic damage. Same goes for the national economy: The United States has the largest in the world, yet the wealth is concentrated in the top percentile. There, the wealth remains in paper form. Staying safe, invested where the returns are highest, it hasn't much been used to build factories or create jobs in America in a long time. And it certainly hasn't trickled down to the rest of us, despite the promises of Ronald Reagan's supporters and friends on Wall Street.
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Rabrrrrrr Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:59 AM
Response to Original message
2. Those financial institutions existed before industrialization.
Hate to burst your bubble, but that's the truth. Money and economics is what moves countries and changes history; the ability to manufacture is but a part of that.

Without those financial institutions, there would have been no money for the companies and the government to borrow to retool the factories to make weapons of war, and then to make them at the quantities we made them; there would have been no money for the atom bomb project; there would have been no money for the research and development of other weapons and devices (RADAR, for instance, and code breaking); there would have no money for development and gathering of the raw resources needed to build all that shit.

Who do think handled all the war bonds and other borrowing the government had to perform?

Sorry, but your premise fails. Manufacturing and finance together made it all happen.

Financial institutions and corporations have been the backbone of pretty much all exploration, development, technological progress, and making the world what it is today, from the cod fishermen of the first millennium, to the beginnings of the spice trade in the 1500s, to the Internet of today.
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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 12:00 PM
Response to Reply #2
6. True. But in all that time, the money has stayed concentrated in the pockets of the few.
Manufacturing, around when Henry Ford started paying autoworkers $5 a day, is what started the Middle Class and de-concentrating the wealth. What the Wall Street bailout shows is that the government -- supposedly We the People -- exists to serve the interests of the ownership class. Otherwise, the first thing fiscal policy would do is make life better for ALL Americans -- not just those with trust funds.

BTW: I don't care if you burst my bubble. Learning something new usually doesn't make me cry -- never, when I'm wrong. For starters, Larry Chin makes me think I'm right:

Bailouts and Manipulations: Save Wall Street, at the Expense of Main Street
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madokie Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 07:28 AM
Response to Reply #2
9. But without manufacturing finance had no chance to make anything happen
thats how I see that anyway
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MindPilot Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:04 AM
Response to Original message
3. 9/11 was equated to Pearl Harbor almost before the second plane hit
But George Bush did not call Americans to any kind of action other than "go shopping". As we gave up our freedoms to appease those who supposedly hated us for having them, we cowered under color-coded alerts afraid of anyone who dressed or spoke differently.

After Pearl Harbor we earned our "home of the free, land of the brave" title; after 9/11, we gave it away.

When these horrific events occur, it is very important who occupies the white house.
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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 07:15 AM
Response to Reply #3
7. All Bush sacrificed for the 'war effort' was his golf game.
Not much of a game. Not much of a sacrifice.

Unlike the smirking idiot, who, for some reason, got played as the heroic leader for 8 years,
Detroit gets slammed for so much in the national press.

This town is where the middle class was born. Detroit was the Arsenal of Democracy in World War II.

It has what it takes to do both, again.
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Occam Bandage Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:12 AM
Response to Original message
4. History fail.
Edited on Tue Jun-02-09 10:17 AM by Occam Bandage
Wall Street predates the Detroit auto industry. The NYSE can be traced back to 1792. The bimetallist controversy that consumed American politics in the last few decades of the 19th century was entirely about whether financial power should remain in the hands of East Coast bankers, or whether it should be in the hands of small businesses and prospectors (no points for guessing who won). The Wall Street crash of 1929, combined with widespread overinvestment and debt, was instrumental in kicking off a decade-long economic depression. And as Rabrrrrrr points out above in the thread, the Wall Street economic engine was the force behind the growth of the nation's industrial base (as well as the financing of the war). Don't believe it? Look at every nation that's tried to build an industrial base without having built a financial base first. There are generally two paths: try and fail, or borrow another nation's financial base through loans, trade, foreign aid, or investment. China under Mao spent decades trying to industrialize itself, and yet it was only when Deng Xiaoping opened China up to foreign investment that China actually began industrializing at any appreciable rate.

And frankly, America today is a heavily militarized state, while America in 1935 had no military or military industry to speak of. In WW2, we needed to convert auto plants and refrigerator plants to aircraft plants and weapons plants. During the early days of the Cold War, we established a second, parallel industrial base, to ensure we would never need to waste time retooling one type of factory to another when the Commies came. Eisenhower saw how dangerous and wasteful this could be, and tried to warn the nation of the growing military-industrial complex.

Today, we have an army capable of fighting multiple wars against industrialized nations at once. (Our failures in Iraq and Afghanistan came because we invaded with an army designed to defeat the Chinese, the North Koreans, and the Russians all at once; we didn't really consider "what if we decided to occupy some desert country for a decade or so") We have an enormous military-industrial complex. In the event of war with China, we wouldn't reconvert GM plants. We'd simply expand our Raytheon plants, our Honeywell plants, our Lockheed plants, our Boeing plants, our General Dynamics plants.
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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 07:24 AM
Response to Reply #4
8. Glad you brought up the military industrial complex as the only manufacturing left in the U.S.
Some company in China bought GM's Hummer division. Tactically, those vehicles are very useful war machines.

China thinks strategically, though. Ever hear of Magnequench? GM once owned them, too.

Outsourcing US Missile Technology to China

The Saga of Magnequench

Weekend Edition
April 7 - 9, 2006

Magnequench is an Indianapolis-based company. It specializes in the obscure field of sintered magnetics. Essentially, it makes tiny, high-tech magnets from rare-earth minerals ground down into a fine powder. The magnets are highly prized by electronics and aviation companies. But Magnequench's biggest client has been the Pentagon.

The neodymium-iron-boron magnets made by Magnequench are a crucial component in the guidance system of cruise missiles and the Joint Direct Attack Munition or JDAM bomb, which is made by Boeing and had a starring role in the spring bombing of Baghdad. Indeed, Magnequench enjoys a near monopoly on this market niche, supplying 85 percent of the rare-earth magnets that are used in the servo motors of these guided missiles and bombs.

But the Pentagon may soon be sending its orders for these parts to China, instead of Indiana. On September 15, 2004 Magnequench shuttered its last plant in Indiana, fired its 450 workers and began shipping its machine tools to a new plant in China. "We're handing over to the Chinese both our defense technology and our jobs in the midst of a deep recession," says Rep. Peter Visclosky, a Democrat from northern Indiana.

It gets stranger. Magnequench is not only moving its defense plants to China, it's actually owned by Chinese companies with close ties to the Chinese government.

Magnequench began its corporate life back in 1986 as a subsidiary of General Motors. Using Pentagon grants, GM had developed a new kind of permanent magnet material in the early 1980s. It began manufacturing the magnets in 1987 at the Magnequench factory in Anderson, Indiana.

In 1995, Magnequench was purchased from GM by Sextant Group, an investment company headed by Archibald Cox, Jr-the son of the Watergate prosecutor. After the takeover, Cox was named CEO. What few knew at the time was that Sextant was largely a front for two Chinese companies, San Huan New Material and the China National Non-Ferrous Metals Import and Export Corporation. Both of these companies have close ties to the Chinese government. Indeed, the ties were so intimate that the heads of both companies were in-laws of the late Chinese premier Deng Xiaopeng.


The common denominator? Money. Corporations and individuals who put money ahead of the national interest.

Like Wall Street movers Prescott Bush and Averell Harriman making big bucks from trading with both Adolf Hitler and Josef Stalin - it's just business.
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sl8 Donating Member (256 posts) Send PM | Profile | Ignore Wed Jun-03-09 08:06 AM
Response to Reply #8
13. H2/H3 Hummer isn't the same as AM General's HMMWV.
Perhaps someone little more knowledgeable than I can chime in, but I don't think that GM's sale of it's Hummer division affects AM General, with regards to its production for the US DOD.

The H2 & H3 are based on GM pickup trucks.

The Chinese have been making copies of the HMMWV / H1 Hummer for several years, the Dongfeng Motors EQ2050 and the SAC SFQ2040, albeit with some parts imported from the US.
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Occam Bandage Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 03:02 PM
Response to Reply #8
15. The GM Hummer is no more useful for war than any other SUV.
Surely you don't actually think that a GM car (that any Chinese with $50,000 or so could order for himself) represents advances in military technology China has not yet achieved?
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HiFructosePronSyrup Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 03:05 PM
Response to Reply #4
16. Ayup.
The soviets were able to turn out vast numbers of tanks, which completely outclassed our tanks, and they did so without Ford or GM.

I've heard this argument before, we can't let American car companies fail because we need them to make tanks and planes the next time we get invaded by some boogeyman, usually China. Of all the loony reasons why such and such needs to happen in this economy, that's just about the looniest.
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Soylent Brice Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 07:29 AM
Response to Original message
10. kick
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Octafish Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 07:36 AM
Response to Reply #10
11. How Wall Street Almost Killed Detroit
Thanks, Brice-San! Here're details:

How Wall Street Almost Killed Detroit

By Felix Salmon
Sun May 31, 2009 5:02pm EDT

Slowly, the blow-by-blow accounts of how Chrysler and General Motors (GM) ended up in bankruptcy court are beginning to emerge. Its actually pretty simple: Wall Street screwed Motown.

OK, sure, Detroit made some bad bets on trucks and SUVs and got killed when gas prices spiked last summer. But now that executives for Chrysler, already in Chapter 11, no longer have to spin comments for public consumption, a story is taking shape. The Washington Post has a good piece on the subject, with rueful commentary from deposed CEO Robert Nardelli.

The business of selling cars can look complex from the outside, but it really boils down to a basic issue: automakers want to build vehicles at a profitable price-point and then create financing opportunities for customers. (Forget whether vehicles are good for the environmentthats doesnt enter into the analysis.) Very few people pay cash, and pay in full, for a new car. This has created, over time, a proliferation of options: sweet, short-term, low-interest financing deals can be run, incentives can be offered, special leasing offers can be set up, dealers can turn lightly used cars into certified pre-owned vehicles and sell them for more than regular old used cars, etc.

Credit keeps this train rolling. So when the credit markets seized up last year, the automakers couldnt obtain operating capital (well, GM and Chrysler couldntFord secured its cash hoard earlier), customers couldnt get loans to purchase new vehicles, couldnt arrange lease financing, and the industry ground to a halt. Restructuring morphed into survival. And then lurched into bankruptcy.

At the core of this gruesome phenomenon was something starkly un-American. But we should have seen it coming. In the past decade, the finance industry edged closer and closer to the third rail of American life: ownership of tangible assets. This went beyond the shuffling of stocks and bonds that traditionally made up the business of Wall Street. Obviously, the big blow-up came in the housing market. But clonking the auto market didnt do anyone any favors, either. Most Americans borrow lots of money to buy two things: houses and cars. Thats all the leverage theyre worried about.


Greed is a terrible thing. It makes people do the wrong thing, like hoarding money in a Swiss bank account instead of banking it in the local S&L, making it available for others to use.
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Soylent Brice Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 01:20 PM
Response to Reply #11
14. excellent article, and eye opening.
it'll be interesting to see what other "revelations" begin to leak out.

also, the rich aren't stupid, just assholes. of course they put most of their money in swiss off-shores. why lose money when the controlled crash they engineered comes? pfft.

duh. lol

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JVS Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jun-03-09 07:52 AM
Response to Original message
12. That was before we had a separate "defence industry"
Military technology has greatly outpaced consumer technology as far as hardware goes (except for things like electronics). Back then the gap was small enough that car factories could switch to aircraft. The technology to produce a 12 or 16 cylinder engine was already mastered by any company that made luxury cars, all they needed was to be shown the plans for the aircraft engines and they could make tooling and make them. Construction of the aircraft's body was also more similar, although working with aluminum was a bit different although some car companies had toyed with the idea of using it before. Have you ever seen an early SAAB? They bear the mark of a car made by an aircraft company. In our time we'd be expecting a company that churns out 3.8 liter v-6's to make a jet engine. They'd have to learn to work materials that they have no experience with at all. Could you imagine the disaster that would be a GM manufactured F-18?
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