Thursday, April 02, 2009

The Death of GM and the Obama Chilling Effect on Capitalism

by Howie Rich, Thursday, 02 April 2009

The tombstone for General Motors really should have read 1908-2008.

That’s because December 2008 is when the bell finally tolled for GM – when the marketplace determined that a combination of poor management decisions, union pressures and a slumping economy had made the automotive giant’s continued existence mathematically impossible.

Of course, that was also precisely when the administration of former President George W. Bush stepped in with a $17.4 billion bailout for GM and Chrysler, with further funds contingent on the two companies creating a “path to profitability.”

At the time, a skeptical American public heard talk of all the concessions that were being made by company executives, car dealers and the notoriously inflexible union bosses.

But it was former Treasury Secretary Henry Paulson who hinted that this massive infusion of taxpayer cash might be nothing more than the world’s most expensive delaying tactic.

"If the right outcome is reorganization or bankruptcy, then isn't it better to get there through an orderly process where every effort is made to avoid it, and if it can't be avoided, everyone's prepared for it?" Paulson said at the time, comments which were echoed by the Bush White House.

Fast-forward to February 2009, when the “reorganization plans” of Chrysler and GM were unveiled – and shown to be nothing more than requests for even larger taxpayer funded bailouts.

Still, the “tombstone moment” was delayed another month until this week, which has brought us perhaps the most bizarre – and disturbing – chapter in the evolution of the bailout culture that has infected our nation’s capital.

This week, the President of the United States insisted on the removal of a private sector CEO. And once he had been removed, that CEO’s severance package was governed by Treasury Department regulations.

No longer just bailing out companies, the White House is now determining who should run them and what their retirement packages should be.

Not only that, Obama has taken the unprecedented – and unnerving – step of guaranteeing all GM and Chrysler warranties.

Thank about that for a moment, in its ongoing attempts to revive a dying patient, the Obama administration has just put every American taxpayer on the hook for potentially billions in auto repairs!

Obama’s auto task force is also calling the shots on which models GM should produce and sell, and telling Chrysler who to merge with and for how much – all the while holding additional bailout billions over the heads of the two “private” corporations in case they refuse to abide by the government’s wishes.

One pro-free market commentator told me that “Obama might as well have reached into the corporate boardroom and started running that company.”

“That’s exactly what he did,” I said.

Obama’s actions "should send a chill through those who believe in free enterprise,” said Tennessee Senator Bob Corker.

How true.

And yet even as the government is guaranteeing GM’s warranties and providing an undisclosed amount of interim operating cash during this latest two-month reprieve, Obama and his socialist sycophants are pretending that they have administered some “tough love” to the company.

Nothing could be further from the truth.

America should have never taken those first, fateful steps down the road toward our present socialist experiment. And yet $13 trillion later, with the market still in shambles, jobs still on the decline and income levels flatter than pancakes, we’re stuck with an administration that seems hell bent on pushing the envelope of government control as far as it will go.

How bad has it gotten for what’s left of our free market?

Consider this – three months ago language like “socialist sycophants” would have been considered over the top.

Not anymore, though. What used to pass for rhetorical “red meat” among true free market supporters is now putting things mildly.

With each fresh interventionist encroachment, Obama is twisting the knife deeper into the belly of an economic system that founded, built and sustained these United States through generations.

Certainly, based on tens of billions of dollars lost and tens of thousands of jobs lost, Rick Wagoner deserved to be shown the door at GM.

But that should be a decision reserved for GM shareholders.

The fact that such a decision was made unilaterally by the President of the United States – holding the taxpayers’ checkbook in his hand as he made it – runs completely counter to everything this country stands for.

Yesterday’s invisible hand has become today’s iron fist.

We must unclench it, or risk joining our former Cold War adversaries on the ash-heap of history.

The author is the Chairman of Americans for Limited Government.

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Jay Leno's Obama-is-out-of-the-country joke

Yesterday, Barack Obama made his first trip as president to
England. Here is my question: If the President is in England, who's
running General Motors?

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Tuesday, March 31, 2009

Obama, the nation's CEO

By: Mike Allen and Jim Vande Hei , Politico, March 31, 2009 04:32 AM EST

President Obama, with seven days of unprecedented market intervention capped by Monday’s ultimatum to U.S. automakers, has made one thing emphatically clear: He is the most powerful player in American business today. [full article]

The President has always been Commander in Chief of the nation's armed forces; now President Obama is grabing power to become Commander in Chief of the nation's economy. This is scary stuff. What's next?

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March 30, 2009 WASHINGTON, D.C. – U.S. Senator Bob Corker (R-TN), a member of the Senate Banking Committee and lead Republican during Senate negotiations of legislation to aid the domestic auto industry in December, made the following comments today in reaction to President Obama’s announcement on the auto industry.

“Firing Rick Wagoner is a sideshow to distract us from the fact that the administration has no progress to announce today,” said Corker. “The administration is hoping the media and the public will stay focused on Wagoner and fail to notice that negotiations have not progressed since December.

“The administration is pursuing much of what we pushed for in December, but the delay of several months has increased the severity and sent billions of taxpayer dollars down the drain. Now any investment is likely unrecoverable and we are putting more and more jobs at the OEMs (original equipment manufacturers) and the supply chain at risk in a politically charged environment.

“With sweeping new power the White House will be deciding which plants will survive and which won't, so in essence, this administration has decided they know better than our courts and our free market process how to deal with these companies.

“It’s been a long time since Washington has seen the kind of kowtowing that’s about to occur among members of Congress trying to curry favor with the administration to keep plants in their states open, and it will be interesting to see if the administration makes these decisions based on a red state and blue state strategy or based on efficiency and capable, skilled workers at each plant. If they use the latter, our GM plant in Spring Hill, Tennessee should do very well.

“This is a major power grab by the White House on the heels of another power grab from Secretary Geithner who asked last week for the freedom to decide on his own which companies are ‘systemically’ important to our country and worthy of taxpayer investment and which are not.

“This is a marked departure from the past, truly breathtaking, and should send a chill through all Americans who believe in free enterprise. I worry that in one fell swoop we’ve lost our moral high ground throughout the global community as it relates to chastising other countries that use strong arm tactics to invade on private property rights.”

This is an excellent analysis from Corkers office. I have little to add. If you look at the politicalization and the difficulty encountered when trying to close obsolete military bases, you are probably looking at the future of the management of auto production. One major difference however is that Congress has a roll to play in closing of military bases; managing GM will be in the hands of the White House Auto Task Force. The CEO answers to this task force. Do we really want the President deciding which auto plants stay open and which ones close? Do we want the President picking winners and losers? This is a frighting transfer of power from the private sector to the President of the United States. Is this the kind of change people were voting for when they elected Obama? This is unbelievable!

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Sunday, March 29, 2009

Jay Leno's Chris Dodd joke

"Hey, you hear about this? Very strange incident at JFK Airport in New York City today. An AIG executive going through security had to empty out all his pockets. You know what fell out? Senator Chris Dodd." --Jay Leno,

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Bill seeks to criminalize saggy pants in Tennessee

LUCAS L. JOHNSON II • Associated Press Writer • The Tennessean, March 26, 2009

She’s no fan of saggy pants, but state Rep. Karen Camper says she questions the constitutionality of a colleague’s bill making the low-slung legwear a misdemeanor.

Camper, a Memphis Democrat, said Thursday she opposes the bill sponsored by Rep. Joe Towns, also of Memphis, that passed the House Criminal Practice and Procedure Subcommittee one day before. [full article]


While this bill will not pass this year, since it has no companion bill in the Senate, I am amazed that it passed a House Committee.

It only takes one legislature to introduce a bill, so when I first read of this I dismissed it as one legislator probably introducing a bill at the behest of a influential supporter. A lot of bills get introduced that never see the light of day. I figured this bill would die in committee and that would be in the end of it. But, this thing may have legs. It passed a committee. It will probably be back next year.

I am no fan of saggy pants. They look ridiculous. I have watched kids, usually early-teen black kids, have to constantly pull at their pants to keep them form falling off. I have seen the pants down around the widest part of the hips. They are offensive to my sense of taste, but I have never witnessed any obscene body parts as a result of this fashion. Most of the time the kid with the saggy pants down around their hips are wearing boxer shorts that are at the waist where they ought to be.

The reason for banning these clothing cannot be due to a concern with indecency. If you go to any outdoor event in the summer you will see young girls exposing a lot more skin than is exposed by baggy pants. Also, if the law bans showing underwear, some of the silky tops girls wear as outerwear looks like lingerie. I wouldn’t want to ban those. We do not need to be in the business of defining when underwear is underwear.

The only reason for banning saggy pants it that they are ugly and people find them offensive. There are a lot of things I find offensive, such as clothing featuring the peace sign or images of Che Guevara, but because I find this offensive they should not be illegal. I don’t even want to ban the swastika if some nut wants to wear it.

As far as fashion, I find it offensive that people would pay $300 for a pair of new jeans that are paint spattered, frayed and stained to look dirty and look like Goodwill rejects, but I don’t want to ban them. There is a certain look that I find more ugly and more offensive than saggy pants. The look I am speaking of features tattoos, black clothing, hair either spiked or dyed weird colors, and multiple piercing of lips, eyebrows, the tongue, and ears. That is a very ugly look, yet I don't want to pass a law against it.

We need to get over the idea that because something offends us it should be illegal. People in a free society need a large degree of toleration for being offended. I think a lot of what is behind the war on tobacco is not a health concern but a desire to ban a habit that others find offensive. Part of the reason we can’t get wine in the grocery stores is because a segment of the community would be offended by its presence.

I find this effort to ban saggy pants more offensive than the saggy pants. We don’t need to make the police the fashion police.

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