It may be prophetic that among the brands GM chose to kill was the Pontiac Firebird, a classic hot car of the 1960s sporting the fabled Phoenix on its hood. In mythology, the Phoenix was a colorful bird that incinerated itself in its nest, then rose from the ashes as its own offspring. GM too, says Michael Moore, could be reborn as something else. In a June 1 eulogy of sorts, he wrote:
"So here we are at the deathbed of General Motors. The company's body not yet cold, and I find myself filled with-dare I say it-joy. It is not the joy of revenge against a corporation that ruined my hometown Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job. But you and I and the rest of America now own a car company!"
What would we want with a car company? Moore suggests that the bankrupt mega-builder of obsolete gas guzzlers can be transformed into a mega-builder of things we need more-mass transit vehicles, including bullet trains, light rail mass transit lines, energy efficient clean buses, hybrid or all-electric cars, and alternative energy devices such as batteries, windmills, and solar panels. The factories that built the cars that destroyed the environment can become the tools for cleaning it up. This would, of course, take some investment; but Moore suggests that to pay for it all, the government could impose a two-dollar tax on every gallon of gasoline.
It sounds good right up to the gas tax, a regressive tax that would hit hardest in the wallets of the poor and would raise alarm bells for politicians, the oil lobby, and voters. Isn't there some way to fund the plan without driving up the tax burden or the national debt? In fact, there is.
To Put Our New Car Company to Good Use, We Just Need to Own a Bank
The federal government could create its own credit with its own government-owned lending facility, on the model of the Reconstruction Finance Corporation used by President Roosevelt to fund the New Deal. But instead of merely recycling borrowed money as Roosevelt did, the new facility could actually create credit on its books. Its capital base could be leveraged into many times that sum in loans, in the same way that private banks routinely create money (or "credit") today. Assuming a reserve requirement of 10%, if the $300 billion or so that remains of the TARP money were deposited in the new bank, this money could be leveraged into $3 trillion in loans. If the money were counted as capital, at an 8% capital requirement it could become $3.75 trillion in loans, or 12.5 times the original sum.
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Out of the Ashes of GM: the Phoenix of Renewable Energy
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Path to a New Economy
By Ellen Brown
Yes! Magazine, Posted June 16, 2009
Straight to the Source
