This from Today’s Financial News:

Just like most of the nation, I too view General Motors (NYSE:GM) as one of America’s great corporations. The company epitomizes every thing that made this country great, at least over the past few decades. Right now, on the other hand, it represents some of the nation’s greatest problems.

GM, just like its union-fed employees, wants something for nothing. The American taxpayer did not get the automaker into this trouble. Its management and its union concessions did.

You and I are not the ones that promised to pay defined retiree benefits for hundreds of thousands of past workers. We are not the ones that promised to pay wages to a “bank” of workers we no longer need. And we are not the ones that produce inferior products few consumers demand or are proud to own.

We all know, if you or I ran our businesses the way GM is run, we would have been on our butts a long time ago. And most certainly, there would be no congressman pulling strings to hand us huge sums of money to fix our senseless mistakes.

In America, we have two choices that must be made today. We can take the easy route and write a check to Detroit and its supply chain, essentially putting off the auto industry’s problem until the next recession.

Or we can make the hard choice and let GM fight for its life in bankruptcy court, just as the free market is dictating. Yes, this would propel America into a deeper recession and unemployment would almost certainly reach double-digit proportions. But most importantly, it would ensure that 10% unemployment, like Europe has become used to, does not become the accepted norm in America.

Temporary pain, permanent improvement

If we cut GM loose, we will endure a lot of temporary pain, but the nation’s future will be much brighter. The wounds will heal. The job market will rebound. And a new, much more profitable industry will emerge from the ashes.

We already have a huge segment of the nation’s population trapped in the gutter thanks to overly ambitious social welfare. Now America is about to make an even larger mistake and embark on what will essentially be permanent corporate welfare.

It is a mistake that will haunt this country and its growth potential for generations. If Bush signs any legislation into law, the corporate nation will never look the same.

Life support is for bodies that have a chance at healing and getting stronger, not for fat ladies that will continue to eat themselves to death.

It is time to pull the plug on GM and see what happens.

Source: General Motors (NYSE:GM): Let the fat lady sing

In the 1980s, a smallish newspaper chain called Gannett went on the warpath. It patched together feeds from dozens of local sources, married it with hot design and created a new national newspaper called USA Today. It was a shocker… color on the front page… graphs, boxed stories…

USA Today became, and still is, the only truly national newspaper in the United States. The New York Times and Wall Street Journal are read coast to coast, but they do very little news coverage outside their cities except for national and world news.

At the same time that Gannett was building USA Today, it began buying even more independent papers in small towns. And wherever Gannett moved in, competitors began to fall as if the mob had come around and demanded protection money. The results would have been about the same. Gannett used its huge cash pile to operate its new papers at losses long enough to drive their local competitors out of business.

In 1978, Gannett had 78 papers in the U.S. and another 21 in Canada.

Today it has 85 dailies in the U.S., more in Canada and the UK, and about 1000 non-daily newspapers altogether. A lot of success at Gannett meant a lot of failures in other places.

Now another creative destructor is doing the same unto Gannett – the Internet. Advertising revenues keep slipping as people read newspapers online. It’s even worse after the housing crash because those real estate listings were an important revenue stream.

Gannett is laying off 3,000 workers. This means 3,000 people with no salaries. Not exactly good news for the economy’s recovery when consumers lose incomes. But the stock market cheered.

Meanwhile, in Boston, the venerable Christian Science Monitor announced it will cease printing its daily paper and deliver entirely online during the week.

So far this year, about 12,000 jobs have been cut in the newspaper industry.

So if you find any great newspaper stocks going for very low valuations… don’t buy. Cheap ratios are not values. Cheap ratios on companies with good earnings and growth prospects are.

Source: Creative Destruction Still at Work