I have never used one four-letter word before in my blog, but I will do so in this post. After five weeks as President, Barack Obama via his words and actions has done enough to convince me that he is a terrible president. He pushed through a horrible stimulus spending bill, a bill which does little but to give huge amounts of additional money to existing government departments and government entities. For the most part, real details on how all this money is to be spent is left up to various politicians and government bureaucrats, which means that politics will largely determine how most of this money is spent. And this is despite Obama’s public comments that this money will not be wasted and that politics will play little or no part. That man is truly a political scam-artist when he talks, more like a demagogue.
The final straw for me is the budget which he has just proposed. Specifically, I find much of this budget atrocious, and Obama’s public comments on this budget are not only harmful, but show his populist, far-left leaning and even socialistic roots. I’ve already touched in my February 27th post on this ridiculous “green energy” business, which is part of this budget and which will cost us many billions of dollars; it will not make us energy-independent but instead increase our energy costs. His proposed budget also calls for huge increases in government spending on education; but the facts are that per-pupil expenditures on public education have increased a lot during the past 30 to 40 years, and the results have been poor. Public education has been going downhill for years, and despite the state governments and federal government throwing more money at the problem, the extra money did not at all help. Obama said that oil and gas companies won’t like losing nearly $30 billion in tax breaks, but then he said, “that’s how we’ll help fund a renewable energy economy”. Well, I’m all for eliminating those tax breaks, but they will in no way even come close to funding a “renewable energy economy”, and to push for this latter type of economy is a sophomoric, ideological and even stupid thing to do, especially at this time.
Some recent news articles on Obama’s budget and his comments can be found here and also here. An “opinion piece” on Obama’s budget can be found here. This latter accurately describes Obama’s budget and Obama’s comments as harmful to investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds. But it is only these people and groups which produce real economic growth and prosperity, and yet Obama castigates these people and groups with his rhetoric. For example, he said, “I know these steps won’t sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they’re gearing up for a fight. My message to them is this: So am I.” Some analysts say Obama’s proposals are almost radical. But he said all of them were included in his campaign promises. “It is the change the American people voted for in November,” Obama said. Well, Mister President, you are either a damn liar or a damn scam-artist. The “change” that some people voted for in November was never really defined during your election campaign. You used the word “CHANGE” as a slogan, and in such slogans as “Change We Can Believe In” and a few more. And as to your comments about the “special interests and lobbyists”, let me tell you precisely who most of them are: they are the people and businesses who, for the most part, produce real wealth in this country. Their “special interest”, as with nearly all businesses, is to make money, and in the process of doing so they create jobs and increase productivity, thus helping increase the standard of living in the United States. Now when you and your administration suddenly propose government actions that will damage their efforts, well then of course they are going to object!
I had previously said that Obama was clearly not stupid and that I did not think he was very ignorant. Well, I still say that he is not stupid; on the other hand, he is not very intelligent either, except perhaps in a political sense, and in his understanding about how to use the English language very effectively. I must conclude that he is ignorant of economics, and perhaps very ignorant on that subject. I must also conclude that he either has a far-left, socialistic ideology which is very favorable to government controls on the economy and wealth redistribution, or that he publicly pretends to such an ideology via his words and actions since he thinks that will help him politically. After all, it did help him get elected President. He is a demagogue who sometimes chooses his words carefully in an attempt to hide that fact, often with success. But after his public speech on the budget today, I finally know much about this man, and he is as I described him. He is definitely harmful.
I thought President Bush was bad, especially in his last year with respect to the economy. I was concerned that Obama would be worse. Well, I now know that he is. Damn Obama ! That man is severely damaging our country!
Archive for February, 2009
I’ve had it with Obama
Saturday, February 28th, 2009Electricity from Green Energy
Friday, February 27th, 2009For residential and commercial use, electricity can be produced from a variety of sources. In the United States the most common sources are natural gas and coal. Nuclear, petroleum and hydroelectric, although not as common, still collectively contribute to roughly one-quarter of our electricity production. Note that of all these mentioned, only “hydroelectric” is considered a renewable energy source. I guess it might be slighly more politically-correct to call renewable energy “green energy”, although I am not too sure about that. Other renewable sources of electricity production such as wind power and solar make up only a small fraction – some number less than five percent. I must note that nuclear energy, although not really “renewable” in the strict sense of the word, is actually quite “green” since almost no “harmful” gases are emitted during its production such as nitrogen oxides and carbon dioxide. But many people are very leery of nuclear energy because of the fears of radioactivity and nuclear waste, whether these fears are entirely justified or not.
In Texas most residents have the option to select their own “electricity provider”. Where I live in Texas more than two dozen companies are available, and most of these provide more than one electrical “plan” that I can select. For any given company, the plans usually differ in the sense that some provide fixed rates for different time periods, and at least one plan does not provide a fixed rate but rather a variable rate. A few of these companies also provide a plan which is totally “green”; that is, a plan in which all of the electricity produced comes from recognized “green” sources such as wind and solar.
As a test, for my area in Texas there are over 100 different plans available. I looked at about the first 3 dozen, as they were listed alphabetically, by name of the company. About 30 percent of these plans were “green”. The remainder were not “green”, although roughly half did use between 1 and 4 percent of renewable energy. The average price per kilowatt-hour for the “green” energy plans was 13.92 cents. The average price per kilowatt-hour for the energy plans that were not “green” was 12.60 cents. So the price for “green” energy was about 10 percent higher than that for energy that was not “green”.
Frankly, I think that this obsession with “green” energy is not good. It definitely costs us more money. In fact, since much of it is subsidized in one way or another by government, some of its “extra” cost is not normally visible to us. I am definitely upset with Obama’s spending plans which tout the use of “green” energy. These plans will increase subsidies and increase research, all at our expense. I have already touched a bit on this matter in this previous post of mine.
The Speech
Wednesday, February 25th, 2009i did not watch president Obama’s speech on Tuesday night. In fact, I never watch any politician giving a speech. That’s mostly because their speeches are usually designed to make the politician look good and to possibly gain some political advantages. Obama’s speech did not differ in this regard, at least according to the various news reports that I have read about it, which included some passages from his speech. From what I have read, his speech basically said little more than that our country is in a serious state, but that we will come out of it because we are a strong people and the government will help. The speech was apparently designed to be encouraging, and not depressing. One of the reports that I read was on this web page, and it touched on some major items in the speech, and it also quoted some of Obama’s statements. In case that page is no longer available, I will reproduce some of it below:
OBAMA: “We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It’s a plan that won’t help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values.”
THE FACTS: If the administration has come up with a way to ensure money only goes to those who got in honest trouble, it hasn’t said so.
OBAMA: “In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use. We will root out the waste, fraud and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.”
THE FACTS: First, his budget does not accomplish any of that. It only proposes those steps. That’s all a president can do, because control over spending rests with Congress. Obama’s proposals here are a wish list and some items, including corporate tax increases and cuts in agricultural aid, will be a tough sale in Congress. Second, waste, fraud and abuse are routinely targeted by presidents who later find that the savings realized seldom amount to significant sums. Programs that a president might consider wasteful have staunch defenders in Congress who have fought off similar efforts in the past.
Yes, I have to conclude that Obama’s speech was typical political speech, with few real details but a lot of la langue de bois. Of course in Obama’s case his use of the English language appeared to be above the norm, and it contained a lot of rhetorical flourishes. So what? Yes, he is a good public speaker, but good in a sense that really matters? I don’t think so. I do note that one of “THE FACTS” written in the above article which I referenced did say that the administration has apparently not come up with a way to ensure that money for the “housing plan” only goes to those who got into honest trouble. As I had mentioned on February 20th in this page on my web site, it would be very difficult for anyone to do this – to distinguish “responsibility” from “irresponsibility” – although politicians and those with political connections will certainly claim to do this. (A recent, interesting blog post which relates to housing foreclosures and the “housing plan” can be read here.)
It’s “on the table”
Tuesday, February 24th, 2009I am getting sick and tired of the phrase “on the table”, as frequently used by politicians, those who work for politicians, and political pundits. A recent article in the online Wall Street Journal wrote about the possible bankruptcy of General Motors and Chrysler. The article mentioned that “outside advisers to the U.S. Treasury have started lining up the largest bankruptcy loan ever”. The article continues :
« Administration officials involved in the auto talks said they are trying to find a way to restructure the two companies without resorting to bankruptcy proceedings. They stressed the latest efforts were “due diligence” on the part of the government advisers, and that bankruptcy financing may not be necessary ». The article goes on to say :
« “Everything is on the table right now,” one person involved in the matter said, adding that President Barack Obama doesn’t want to see more massive job losses in the auto industry. His administration also doesn’t want to anger the United Auto Workers by appearing to push for bankruptcy, this person added ». There is that darn phrase “on the table”. Clearly this phrase is often used simply to “leave an option apparently open” when the option is one which is supposedly not a good one for certain people or groups, although it usually is good for others. (In this particular example, the bankruptcy option is not good for the United Auto Workers Union. As I said in a previous post, Obama is almost certainly going to avoid letting General Motors go bankrupt. So “bankruptcy” for General Motors is really not on the table. Wanna bet?)
Other examples which use those three words are:
- A military solution has always been an option on the table.
- This has always been an option on the table.
- All options are on the table.
- The question of islam is now on the table as never before.
- We must keep all options on the table.
- Right now, our aim is to put it on the table as an option.
- An Arab initiative offering peace will not remain on the table forever.
Who gives you actual health care?
Monday, February 23rd, 2009According to this article on a New York Times web site, since last fall many of the leading figures in the nation’s long-running healthcare debate have been meeting secretly in a Senate hearing room. Now, with the blessing of the Senate’s leading proponent of universal health insurance, Edward M. Kennedy, they appear to be inching toward a consensus that could reshape the debate.
So who are the people attending these meetings? Well, according to a recent blog post on the web site www.medpagetoday.com, the 20 people who regularly attend the meetings on Capitol Hill include lobbyists for AARP, Aetna, the A.F.L.-C.I.O., the American Cancer Society, the American Medical Association, America’s Health Insurance Plans, the Business Roundtable, Easter Seals, the National Federation of Independent Business, the Pharmaceutical Research and Manufacturers of America, and the United States Chamber of Commerce.
Yep, that’s just what we need. When it comes to government money and government policies which are going to directly affect our healthcare, we certainly need the right people. We need the American Association of Retired Persons (AARP); we need labor union leaders; we need representatives of all kinds of business associations; and we certainly need at least some representatives from the insurance industry. Odd that not a single one of these people, or the groups that they represent, give me actual health care. Doctors, nurses, hospital workers, medical technicians, nurses’ and doctors’ aides all provide me with actual health care. Even the low-wage man or woman who mops the floors in a hospital does more for my actual health care than any union, insurance company, association of retired persons, or most private businesses. In fact, these latter do nothing for my actual health care except to add to its cost. (Oh, many doctors do belong to the American Medical Association, and they do actually do something for my healthcare. Yes, let’s not forget the doctors, for heaven’s sake.)
Although President Obama himself is not participating in these meetings, it is nice to know that the White House has been kept informed and is encouraging the Senate effort as a way to get the ball rolling on health legislation. At least that is what was said in that New York Times article.
Obama – Messiah or political scam artist?
Sunday, February 22nd, 2009During Obama’s first month in office as President, he and his adminisration have passed a “stimulus” bill which calls for additional government spending of nearly 800 billion dollars. With the interest that will have to be paid when that money is borrowed, the total cost for that will be closer to one trillion dollars. (I note that only three Republicans in Congress voted for this atrocious spending bill.) In addition, last week Obama proposed an additional spending plan in order to “help people keep their homes” by reducing home foreclosures. This will be done with 75 billion dollars “given” to borrowers and lenders, plus another 200 billion dollars given to Fannie Mae and Freddie Mac, for a grand total of 275 billion dollars; with interest that will total at least 300 billion dollars. So Obama is already committed to spending at least one trillion, 300 billion dollars more than the government typically spends. Still to come are the actual government budget, which is always huge and will now get bigger, followed no doubt by additional costs incurred by “reforms” to the health care system, followed by gosh knows what else. Clearly all of this will add huge amounts of money to the already very large federal budget deficit.
This coming week Obama will announce his initial plans for the budget. The initial word coming from Obama and his administration says that he wants to slash the federal deficit at least in half by 2013, as reported here and also here. Given the rapidly expanding size of the federal deficit, a lot of it due to the present and future spending plans of Obama and his administration mentioned in the paragraph above, this will clearly be an impossible task. However, perhaps Obama is a messiah, in which case everything is possible !
On the other hand, Obama could either be stupid, very ignorant, or a political scam artist. He certainly is not stupid, and I do not think he is very ignorant. Therefore he must be a political scam artist, at least of a certain type. I personally find his stated goal of reducing the budget deficit at least in half to absolutely contradict his previous month’s performance and stated goals. In these latter he called for massive increases in federal spending, some of which he already got put into law, the rest of which will be put into law within a year or so. Frankly, I think this is evidence that Obama is a smooth-talking politician – a suave scam artist of a certain type. I note in this article previously referenced that Obama is quoted as saying that his first budget was “sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don’t, and restoring fiscal discipline. We can’t generate sustained growth without getting our deficits under control”. Note the clear mention of “fiscal discipline” and “getting our deficits under control”, which is something that he and his adminstration have not practised during his first month in office. What the heck is going on here? What a contradiction! I also note that Obama uses the word “investing“; he says that he will “invest” in what we need. That is political scam artist talk, and it is a common expression used in some langue de bois. Well Mister President, an investment is something for which you get a tangible return. When investing something, not only do you get all of your original investment back, you also get a bit more. That is the usual sense of the words “invest” and “investing”, and the only real meaningful sense. The only “return” that I see coming from Obama’s “investing” will be political favors given to him, his administration, some politicians, and some politically-connected friends and business associates of Obama’s administration. (Oh, I almost forgot; he will also get adulation from that part of the electorate which is not too bright.)
Relax, Obama will not waste our money
Saturday, February 21st, 2009Thank goodness. The nearly 800 billion dollars in the recently-passed economic stimulus bill will not be wasted. In a meeting with many city mayors yesterday, Obama warned the mayors that he would use the “full power” of the presidency to expose and crack down on them if they misuse the stimulus dollars. Obama made several comments that made clear that he would insure that none of all this stimulus money is wasted. For example, he said – “If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it. And I want everybody here to be on notice … if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.” In the article referenced above he also reportedly said – “We have asked for the unprecedented trust of the American people to deal boldly with the greatest economic crisis we’ve seen in decades, and with that the privilege of investing unprecedented amounts of their hard-earned money to address this crisis. With that comes unprecedented obligations to spend that money wisely, free from politics and free from personal agendas. On this I will not compromise or tolerate any shortcuts”. Thank goodness! Our money will be used wisely and not wasted, because Obama will crack down hard on anyone who attempts that. And it will be free from politics!
However, I do have one big problem with all of this. And that problem is this – exactly what constitutes “waste“? Exactly what constitutes money not spent “wisely“? You see, I have looked at many portions of the actual stimulus bill, as passed, and boy do I have questions! (You can look at the bill yourself by first going to this government web site and then carefully following a few links. Or you can just read it directly here on my web site. In either case you will need to have Adobe Acrobat reader.) After I looked through this bill, (not every page of course), it soon became evident that a large majority of it consisted of adding specified amounts of money to already existing government programs, some of which date back to the 1930′s. There are hundreds of paragraphs which begin with the words “for an additional amount. . .” followed by an actual sum of money and the title, name or description of a government “program” or government entity, most of which already exist. (I counted 100 such paragraphs in the first 54 pages, and there are 407 pages in total.) As to real specific details about how all the various amounts of this money are to be spent, very few are given. So when it comes to “waste”, I can not determine from this bill what is “wasteful” and what is not.
Consider just one part of this bill, which applies to the DEPARTMENT OF AGRICULTURE, specifically “AGRICULTURE BUILDINGS AND FACILITIES AND RENTAL PAYMENTS”. The bill states « For an additional amount for ‘‘Agriculture Buildings and Facilities and Rental Payments’’, $24,000,000, for necessary construction, repair, and improvement activities ». Well, I have to ask myself what repairs and improvement activities are really necessary; the bill itself gives no answer. I would assume that if they are not really “necessary”, then this would be some of the “waste” that Obama talked about. But to me it seems clear that the determination of what is really “necessary” will be determined by politicians and those who are politically-connected. This will clearly be a gray area, where what is “necessary” to one person is only a “want” to some other person. In fact, one could say that any and all of this additional money is waste, since one could argue that none of it will actually bring our economy out of its current crisis. What bullcrap this all is.
Consider another part of this bill, which applies to the BUREAU OF INDIAN AFFAIRS, and specifically to the OPERATION OF INDIAN PROGRAMS. The bill states – « For an additional amount for ‘‘Operation of Indian Programs’’, for workforce training programs and the housing improvement program, $40,000,000 ». No specific details are given, so one has to wonder just what “new” workforce training programs will be “waste” and what specific housing “improvements” will be waste. The bill gives no answer. And one could argue that all of it will be wasted since it will not really help to bring our economy out of its current crisis. Again just more bullcrap.
As one final example here, consider a part of this bill which states – « GRANTS — From 60 percent of the amount not reserved under subsection (a), the Secretary (of Health and Human Services) . . . shall award emergency grants in accordance with section 8007b of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7707b) to eligible local educational agencies to enable the agencies to carry out emergency repairs of school facilities ». Well, what exactly constitutes an “emergency” repair? To some people a specific repair may truly be an “emergency”, but to others it may only be something considered “necessary” or just “very useful”, with no emergency existing. No answer in this bill about what constitutes an “emergency” here. Well, don’t worry; I’m sure the politicians and politically-connected school administrators will figure that out correctly.
In one of Obama’s statements mentioned above, he said, “”If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it”. Note the clear implication here that some if not many specific projects are not even specified in this bill! And that is the case! I have looked at much of this bill, and many projects have yet to be determined, let alone the specific details on these projects! But that is a very poor way to conduct business and to spend money! In the past, before our government passed a law which spent money, the specific projects on which the money would be spent would not only be specified, but even detailed, at least to a certain extent. That gave politicians and citizens many weeks, (if not months), to peruse a proposed bill and carefully study and debate the proposed projects before voting on the bill. But that has not been the case with this huge stimulus bill. Instead this bill was hurriedly drafted, and then passed into law within a few days. Clearly that was not enough time to actually choose specific projects and determine details on these, in which case much is just “left up in the air” for various politicians to decide. If anything, this hasty action and methodology just calls our for a huge amount of spending, with few details and controls, so some “waste” and “unwise” expenditures will naturally have to occur. If you want to avoid waste, well then you must first determine exactly on what the money will be spent and on exactly how the money will be spent. This hastily thrown-together bill does very little of that.
Sorry President Obama, but the entire bill is “waste”. Except for some small tax breaks that most ordinary taxpayers will get, most of what I see in this bill is a large expansion in existing government programs, many of them “social” type programs. As I read this bill, the winners will be some of the “poor and disadvantaged”, but most especially politicians and those who are politically-connected, such as those politically-connected contractors who will have to be given some contracts to do some of the “work”, such as studies, research, building repairs and various “improvements”. It is perfectly obvious from reading this bill that it can definitely not be free from politics! Oh, and clearly the federal government will have to hire some more government employees. State and local government officials will also benefit, although the bill contains few specific details about exactly what they are to do with the money given to them, so what would be “waste” would be nearly impossible to figure out. (Many people would say that it is not impossible to figure out; all of it is waste.)
I am getting some freebies !
Friday, February 20th, 2009As I mentioned in a previous post, I bet that President Obama will provide General Motors with all the money that they need to avoid going bankrupt. Well, in this recent article some details are provided about why General Motors finds itself in the sorry state that it is today.
Although I always knew that the financial health of General Motors was severely hampered by union legacy costs (pensions and retiree healthcare), I never knew just how large those legacy costs were. I still do not know the financial figures, (although I have read in the past that they amount to roughly $3,000 per car that General Motors manufactures today). But in the referenced article I did get some new information. For over a quarter century, union auto workers could retire with full pension and generous healthcare benefits after 30 years on the job, regardless of their age. And very many of them did retire after only 30 years, refusing to work any longer. Today only non-union employees no longer get healthcare benefits when they retire, having to rely on their own resources, although they can get Medicare when they reach 65. In addition, the article points out that many employees who actually spend their time on union work when “on the job” in an auto factory, get paid by General Motors and not by the union, even though they spend little time working for General Motors building cars, instead doing “union work” such as working as shop stewards and being on various union committees. (I know a fellow who once worked as a shop steward for the United Steel Workers’ Union, and although he did spend a fair amount of time working for a steel company when he was “on the job”, he also spent some time doing union work when he was “on the job”. This even included travel to union meetings. He was paid when doing “union work”, but that pay still came from the steel company and not the union.)
I used to think that very darn few employees in the private sector were able to retire with full pension and benefits immediately after only 30 years on the job. I did know that many “civil servants” who worked for local, State and the federal government could retire with full benefits after only 30 years on the job. Military personnel can do so. Some of these civil servants, such as many policemen and military personnel, could retire with at least partial pension and benefits after only 20 years on the job. Of course these generous early retirement benefits for our “public servants” have contributed to the financial mess that many States and localities now find themselves in. By the way, do not confuse the above pensions and benefits with those still provided by a few private companies. It is true that some of these companies allow you to receive a pension even if you have only worked as little as 10 years for the company; however, in nearly all of those cases you can only start collecting the pension when you reach 65; also, the pension amount is small, a few hundred dollars a month at most, and almost always without any other benefits such as healthcare. That’s better than nothing, of course, but that does not come close to the auto workers’ pensions and benefits, let alone those of our many “public servants”.
Unfortunately, (or fortunately, depending upon how it affects you), some regular citizens also benefit from at least modest retirement benefits, such as most of those who get Social Security “pensions”. Although Social Security pensions are not at all large, they are inadequately funded, and as the referenced article pointed out, they are a ticking time bomb thanks to actuarial trends and inadequate funding – in the same sense that the auto workers’ union pensions and benefits are a ticking time bomb which have, in fact, now exploded. Well, I now do get a Social Security “check” every month, given my age, so I too am getting some of these “freebies” which are contributing to the poor financial status in which our federal government now finds itself.
Oh no ! Say it ain’t so !
Thursday, February 19th, 2009It is hard to believe. According to this Associated Press article, the
«Obama administration and the new Congress are quickly handing over to Republicans the same “culture of corruption” issue that Democrats used so effectively against the GOP before coming to power». The article mentions the tax and possible corruption problems that some of Obama’s nominees for cabinet posts ran into. In addition, Representative Charles Rangel, a Democrat from New York, is the subject of a House ethics investigation; he is the chairman of the House Ways and Means Committee, a very powerful political post. And Federal agents raided two Pennsylvania defense contractors that were provided millions of dollars in federal funding by Representative John Murtha, a Democrat from Pennsylvania; he is the chairman of the House Appropriations defense subcommittee, also a powerful political post. Surely all these Democrats can’t be even mildly corrupt! After all, almost everybody knows that most Democrats, unlike the Republicans, are really public servants who work for ordinary people, and not just the rich. And they certainly do not work to enrich themselves! Now we hear that the Democrat Roland Burris, appointed to the Senate by the corrupt Illinois governor Blagojevich, himself a Democrat, may have lied when questioned about his past dealings with Blagojevich and/or some of his aides. Surely this ain’t so ! Well, one potentially bright spot concerns our Treasury Secretary Tim Geithner. He was approved for his position despite a failure to pay some taxes, but I never have heard or read of his political affiliation, so it is quite possible that Geithner is not a Democrat but is himself one of those corrupt Republicans.
Normally an article accusing Democrats of wrong-doing would not bother me much since such articles tend to come from those harmful right-wing sources. But the article referenced above came from the Associated Press, and as far as I know the Associated Press is not right-wing. I can only conclude that Obama is going to have to crack-down on those Democrats who appear to be straying to the dark side.
Wanna bet ?
Monday, February 16th, 2009The continuing saga of the financial health of the auto companies is reaching an important point. Given the past amount of taxpayer money “loaned” to General Motors and Chrysler, these latter companies are obliged to submit a “cost-cutting” plan to the government on February 17th. The Obama administration will then take about six weeks going over these plans; if these plans are not “viable” then the companies will be required to pay back the loans, and no additional government (taxpayer) money will be forthcoming. The companies will then go into bankruptcy.
The situation as it exists today is briefly described in this article. Of note in that article are these two sentences – « GM and Chrysler have pledged to meet the requirements of the loans, which require them to prove they’re viable and have a plan for reaching a “positive net present value.” But the loans leave the definition of viability up to the administration ». The article also mentions that to date president Obama has not given much of an indication as to how he will approach this matter. Wanna bet? I bet that he will most definitely push to keep General Motors alive, even when that requires additional “loans” of many billions of dollars. Sure, I expect him to subject management, creditors and the unions to some sort of rhetorical tongue-lashing, but at least in the case of the unions I expect that will be mild. In the meantime I have continued to read stories about talks among all the interested parties, especially between company management and the unions. It certainly appears to me that the unions are refusing to give up very much at all in the way of pay, work rules and pensions. Well, why should they? Their leaders are smart, and I’m sure they expect Obama to be on their side, and I bet that he is.
The Obama adminisration definitely wants the auto companies, General Motors and Chrysler included, to be “green”; that is, to provide more fuel-efficient cars and cars which produce less greenhouse gases. The referenced article at least does make the point that “greener vehicles come with higher costs in design and manufacturing and, ultimately, higher sticker prices“. Exactly. I suspect that Obama is aware of this, although he will probably not publicly admit it. In addition, I recently read that Obama will probably not appoint a “car czar” to oversee these auto companies during the period after their cost-cutting plans are “approved”; instead he will appoint a committee. Yep, that’s just what we need, a government committee, steeped in politics, to run an auto company. (We don’t need a “car czar” either.)
So get ready American consumers. Get ready for more taxes in order to loan additional money to the auto companies. Get ready for at least moderately higher sticker prices on many of the new cars that these auto companies will eventually produce. After all, as the referenced article states, Obama said that a disorderly automaker bankruptcy could be disastrous for Michigan and other states. (Hey, how about an orderly bankruptcy? If you think that’s an oxymoron, then how about a Chapter 11 bankruptcy in which the company is allowed to survive, under Court supervision; true cost-cutting measures and useful restructuring can then take place, and in a reasonably orderly manner.)
As background, the Bethlehem Steel Corporation was the second largest steel company in the United States for much of the past century. In fact, for a relatively long time it was the second largest steel company in the world. When it (and other steel companies) got into financial trouble, most of that due to high union wages and benefits, they pushed for tariffs on imported steel, and occasionally tariffs were imposed. But eventually the government did less in this regard. Bethlehem Steel Corporation, hampered by increasing union legacy costs in pensions and health benefits, finally went into Chapter 7 bankruptcy, being totally wiped out. So why not let General Motors at least go into Chapter 11 bankruptcy? After all, although the bankruptcy of Bethlehem Steel did cause some major disruptions, including in my hometown of Bethlehem, these disruptions were eventually resolved. Even my hometown of Bethlehem became prosperous again.