Years ago, back when I was a small child in the 1950's, America revolved around manufacturing. My father and most of the people my parents knew had some type of factory job. When I was working my way through college I worked summers at Ford Motor Company. Almost no one I met, back then, worked in the financial or service industries. Over the past several decades times and conditions have changed.
Today manufacturing makes up a third of the overall economy of our country. The bulk of jobs are in the financial and service industries. This shrinkage has resulted in a loss of clout for manufacturers in Washington. Politicians only remember manufacturers and those they employ during presidential elections. Every four years you have the spectacle of wealthy men, from both national parties, taking off their expensive ties and rolling up their designer shirts to shake hands with factory workers and discuss their problems. After the votes are counted, those workers and factory owners slip back into obscurity until the next election when all politicians claim to be the friend of the working man.
Here at Zycon, we contact and speak to manufacturers every day. Most of those manufacturers we speak with are doing surprisingly well. Their chief concern is not orders or business but whether or not they can rely upon their bank to get financing for orders, as they come in. Most of them are also surprised at the double standard employed by the President and the Congress when it comes to dealing with Manufacturers and Financial Institutions.
The election is less than a month old. In that month, we have seen the financial institutions of America crumble under their own greed and mismanagement, caused by their shilling for unstable pyramid schemes involving Collateralized Debt Securities. We have also seen these same institutions go begging to Congress for a bailout. Surprisingly they got the initial bailout and now Citicorp has gotten another huge bailout. Most of these bailouts are with out any strings attached and no guarantees of benefit to the public, such as a promise to ease mortgage foreclosures or to ease the credit markets.
At the same time we have seen the Auto Industry go to Congress and be deliberately humiliated by that Congress. Our Congress has asked the Auto Manufacturers to jump through artificial hoops and spell out a detailed plan of how every penny the Congress may give them is to be spent. They must also promise never ever, ever to make a product marketing mistake in the future, and also improve the gas mileage for their cars. The Congress conveniently forgets that the reason the Auto Industry is in trouble is that there is no available credit for the average auto buyer. This Congress has failed to address the reason they presented as justification of that bailout of the Financial Industry, the drying up of the credit markets.
We believe there is another reason for the financial bailout that is more pragmatic to the Congress. That reason is their personal investments and those of their friends. Over the past several years, investments in financial stocks and securities have become a common place occurrence among the investing class of America. Investment in manufacturing has become very un-glamorous. Financials are the darling of the elite classes of America, and we believe that is where their money is. This would explain the mad dash to save the inept Financial Institutions while demanding that Manufacturers not bother our busy Congress and just go through Bankruptcy. Members of Congress should disclose their current investments in any Financial Institutions before they allow these unregulated bail outs of the Financial Industry to continue. It would only be fair to those manufacturers who now find themselves jumping frantically through Congressional Hoops.