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GM, Chrysler, and Ford are in the same business. Two years ago, GM and Chrysler made strategic financial decisions that were different from Ford's.

The two automakers are now in a worse financial shape than Ford. So Washington's refusal to immediately use taxpayer money to bail out all three has more than an element of soundness. It even seems a good decision.

It is possible that GM and Chrysler are mammoths on their way to extinction; joining others like Studebaker, British Leyland and Rover Cars. Ford Motors might be the only major U.S. car manufacturer that, for the time being, survives this brawl.

What does this mean for us lot at 32N64W?

Principally, it means that the deeply troubled U.S. economy will likely be in for prolonged turmoil and even more downturn.

This translates into a longer recession as the whole U.S. economy loses some of its global manufacturing share, and has to retool and reshape into an economy reaching for a bigger and different share of the global economic pie.

As the U.S. economy slows, shunts, and shifts, U.S. citizens will have to suffer through a prolonged period of lower employment and reduced incomes, and all this amidst a shortage of U.S. - and global - capital.

But out of this, as happened with the U.K. between 1960 and 1990, will likely come a renewed and stronger U.S. economy, rising employment, and a citizenry with a new concept about its place in the world.

Between 1960 and 1990, Great Britain transformed politically, socially, economically, and intellectually, into the U.K.

The same is likely to happen, over time, to the U.S. Indeed, Dubya's unwise 2003 thrust into Iraq may prove to be the turning point equivalent of the 1956 French-British 'Suez Invasion'.

With the elephants stomping and raging, what's likely to happen to us hoglets in the grass at 32N64W?

Will tourists still come to Bermuda? Even though U.S. East Coasters suffer massive job losses - yes. However, they will not come in the large numbers they once came, and those that do come will be far more value-conscious.

Will Bermuda's Re-Insurance Industry and other International Business stay? These entities are here because of Bermuda's financial laws, regulatory environment, international reputation, and socio-political environment.

If Bermudians don't 'race them away' with excessive human-resource legislation coupled with a less than welcoming national attitude, then yes, both are likely to stay.

However, significant parts of Bermuda's insurance sector and other international business sectors can still be driven out of Bermuda by a combination of severe hounding; by an Obama-led U.S. government determined to get IRS hands into what they see as a Bermuda honey-pot that's full of tax-avoiding U.S. dollars - and by an Obama-led government that nibbles away at every past agreement between the U.S. and Bermuda.

We Bermudian hoglets-in-the-grass need to closely watch this elephant fight. It is likely to get even fiercer after January 20, 2009.

We might not be able to influence much, but we do need to act strongly, positively, and wisely about all that we can and do control.

One thing we can control is our national understanding of how, in 2008 and beyond, Bermuda really does function.

How we Bermudians actually pay for our nice flat-screens and new rides. As well, we can examine and re-shape our national attitude about what Bermuda and all Bermudians need to do to maintain our unique - and currently still successful - economy.[[In-content Ad]]

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