Listen very carefully. Did you hear that? It was the sound of thermometers bursting, as blood temperatures rise off the scale.

“Why so serious?” Well, it concerns GM, and a rumour going around that, if it proves right, could just be enough to make US unions, some members of the electorate and some senators see their blood boil right over.

The rumour concerns a plan supposedly hatched by GM.

GM, the mighty GM, once an icon of all that was great about America, has availed itself of rather a lot of taxpayers’ money – around $15 billion in all.

To say this company is important to the American economy is an understatement. It is not just those who work directly for the firm, but all the sub-contractors, even the car dealerships.

Even other car makers rely on GM, because they often outsource to the same specialists. If GM went under, these specialists may go out of business, cutting off their skill sets to other car makers – oh, what a tangled web.

The rumour is that GM is considering outsourcing key parts of the business abroad – you remember that place, it’s a horrible land full of non-Americans, some of whom speak English with an accent, others don’t even speak it all.

China and Mexico are two of the main countries cited as possible homes for all this outsourcing.

In America they fear the death of manufacturing, and they don’t think it is fair that American firms should have to compete against firms employing workers on a pittance. Some Americans fear something awful might happen, and that the US will go the way of the UK, once a home of advanced industry and now a land of hairdressers and shopkeepers.

It is difficult to see how such a move from GM can do anything other than wind up these people to an unbearable degree. At the time of writing, GM is neither confirming nor denying the rumour.

It is just that the truth is different. For one thing, some of the money being pumped into saving GM is being borrowed from abroad – from, say, China. So globalisation provides the US with the money it needs, but globalisation is making US-based manufacturers less competitive. You can’t have it both ways.

Sure, these workers in developing countries are on low wages, slaving away for pennies. So why do they do it? It is because the alternative is so much worse. Globalisation has lifted literally hundreds of millions of people out of poverty. The logical conclusion of those who argue that American firms need to be protected from manufacturers based in countries where wages are lower, is that US strength should be paid for by keeping others poor.

Besides, did the UK go wrong because it lost its manufacturing base, or was there another reason? How much did the UK go wrong anyway? On a per capita basis it is not that much poorer than the US. Maybe the UK’s real problem is that she lived in the past, was afraid of change, hung on to businesses with no future, and failed to embrace the modern world. Until Margaret Thatcher came along, that is.

Maybe the US is in danger of making that mistake. Paranoia over China is little different from US paranoia over Japan right up to 1989 when Japan entered economic malaise.

This is what you get when you subsidise firms because they were once great. US fears over China and globalisation are its real problem. To quote the man who was president during the last great economic crisis – Franklin Delano Roosevelt – “the only thing we have to fear is fear itself.”

© Investment & Business News 2013