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GOVERNMENT AND CARS

Tue, 28 Apr 2009 21:53:44 -0400

The government is rarely held accountable for anything they do. Sure sometimes a politician is voted out of office for poor performance, but as a whole, government chugs along chewing through as many tax dollars as it can with very little to slow it down let alone stop it. Once government and its bloated bureaucracies get their evil hands on anything accountability dies.

President Obama and his henchmen have seized control of a portion of the American automobile industry through government loans to GM and Chrysler. When a company borrows money from a bank there are rules called covenants. The covenants lay out a set of guidelines that must be adhered to by the borrower. If the borrower doesn’t comply, the loan can be considered in default and the lender can order the loan to be paid back in full. I don’t know the details of the loans made to GM and Chrysler but they obviously have some very intrusive covenants attached to them. I use as evidence, the firing of GM CEO Rick Wagoner by the Obama Administration. There was apparently something in the loan covenants that allowed for the government to dictate who would sit in the CEO chair at GM. Why? Because it is the Board of Directors job, not the US Presidents, to fire the CEO. Yet, Obama was able to force Wagoner out without any objection from the Board. I think it’s safe to conclude that this was one of the conditions spelled out in the loan. As for Chrysler, they are required to meet certain goals by April 30th, including a deal with Fiat, in order to receive addition government aid. If these goals are not met, Chrysler will be forced to file for bankruptcy. Because of these loans the government now controls the inner workings of GM and Chrysler and they’ve shown they aren’t afraid to exercise their power.

One American automobile manufacturer, Ford Motor Company, refused the loan offer from the government. Ford has been on a cost cutting campaign for years and even though they continue to lose money it looks like they are headed in the right direction. Their losses are decreasing even though the market continues to produce dismal sales figures. This bodes well for Ford because when the market does turn around they will be in a much stronger position financially then either GM or Chrysler. Refusing the government loans may be Fords biggest advantage, as they will not be taking orders from Washington D.C., like GM and Chrysler.

The free market holds companies responsible for their decisions on a daily basis. If a company puts out a bad product that people don’t buy, they lose money and market share. The customer holds the company accountable for putting out a bad product and punishes it by purchasing a competitors product. When the company loses money and market share, the stock market holds the company accountable and punishes it by selling off the stock; thus causing its price to drop. These are a couple of examples of how companies are held accountable for their actions by the free market. Obviously there are many others.

Unfortunately the government operates outside of the free market. Therefore it is not subject to its rules, which is the main reason it is so inefficient. Now the government is meddling in two companies that operate in the free market with little or no understanding of what they are doing. President Obama, the community agitator, has never run a for- profit business, successful or not. And for those of you that point to his campaign that does not count. Campaigns are based on fundraising and bamboozling people into donating money. Obama used his community agitator skills, along with David Axelrod’s marketing savvy to raise the funds and ultimately win the election. So you have a United States President with no private sector experience getting involved in the complex business of designing and manufacturing vehicles. The government is selling this to the American public as a good thing. What does Obama know that the insiders at these two companies don’t? How to make a profit? I doubt it. How to style a vehicle people will buy? Many trained stylists haven’t done that. How to negotiate a better price for a supplier part? We’ve seen how Obama negotiates; he gives away the farm! Obama will treat GM and Chrysler as if they were part of the government and play by the same rules ignoring free market forces.

The downfall of GM and Chrysler will be delayed thanks to the government loans but I predict, if the government gets too much say in the products they put out for too long, both companies will ultimately fail. Ford on the other hand is to some extent controlling its own destiny. The market downturn and government regulation aside, Ford controls what products they put out, at what price and when. This is a big advantage considering Obama and his crew are likely too use GM and Chrysler to further their “green” agenda and help out their union cronies; two things that really have nothing to do with producing a desirable car. Unfortunately, the government can dictate fuel efficiency standards having an effect on some decisions made at Ford. Despite the potential adversities, I see Ford coming out the winner while GM and Chrysler become shadows of their former selves, if they survive at all.

Elections are held every two or four years depending on what office you are voting to fill. This is the only time we the people can change our representatives. The public votes daily, with its wallets, for the companies that offer them the best value, and against the ones that don’t. The government doesn’t deal well with this kind of competition because it doesn’t have to. If it did, it would usually lose. I predict we are going to witness first hand why government involvement in private industry is a bad idea. In this election it’s the US government vs. Ford Motor Company. People will be casting their votes when they decide what brand of car to buy. Will they vote for Uncle Sam or Henry Ford? Only time will tell. My bet is on Ford coming out on top.

FREEDOM FOR THE COMMON GOOD

Fri, 10 Apr 2009 17:28:19 -0400

Freedom is a word that is thrown around all the time but how many times have you thought about what it really means? There are many definitions for freedom; but I am going to focus on the philosophy, what it has meant to the United States of America, and the antithesis of this philosophy. According to dictionary.com the philosophy is “the power to exercise choice and make decisions without constraint from within or without; autonomy; self-determination.” I think this describes freedom well and this simple sentence explains why America has grown to be the great country it is today.

President Obama doesn’t believe this country is great and he doesn’t believe in freedom. I know what you’re thinking, how can I say that? Look at the policies put forth by the President. Every one of them goes against the ideals the country was founded on. This is why Mr. Obama wants to “remake” America; he sees the country as flawed and blames America for many of the problems in the world. I think the President looks at freedom with disdain because he believes the government is the answer to all of our problems; not the individual. To further his agenda, free thinking Americans must be silenced because they shine a spotlight on his intentions and clarify the misinformation that is being disseminated. In order for his goal of an overbearing nanny state to be realized, freedom must be taken from the individual. When the individual is stripped of freedom and forced to live in a tyrannical state, the individual loses his or her will to strive for an improved lot in life. The result of this is that creative and productive individuals either stop producing; or they leave for a place that will reward their activities. Because there isn’t anywhere left on the planet to get away from oppressive government, it is more likely that our producers will cut back on production and those that can retire will; causing the country to slide toward mediocrity. The more freedoms we lose, the more the country as a whole will suffer.

The President likes to talk about everyone pulling together for the common good, everyone doing their part. His idea of how this is accomplished and mine are completely different. His idea is actually an old one, “from each according to his ability to each according to his need” from Karl Marx in 1875. Mr. Obama wants to confiscate money from the “rich” by taxing them at exorbitant rates and redistribute the money to the poor. He came right out and said this during the campaign in an off-teleprompter moment with Joe the Plumber so we know for a fact this is what he believes. I believe, along with many other Americans, we don’t need government to pull everyone together for a greater good. We need government to get out of the way and allow individuals to work for their own sake. When individuals are given the freedom to reach their fullest potential the result is the betterment of society without violating the individual’s rights by confiscating their money. If the government creates an environment that fosters productivity and growth, a majority of individuals will use this to their advantage and progress will be realized. If the government institutes policy that hinders the individual in the name of progress we will instead see a regression in society. People are born inherently free and they operate more efficiently in a free environment. Because this is the case when you have a free society of productive individuals, the result is what Obama claims he wants if you take his words literally. Of course, the means to his end is through oppression of the productive not through a free society.

Why has America soared to such great heights while other countries languish in mediocrity? I think history tells the story and the fact is freedom for the individual citizenry in America has created the greatest country ever known to man. Socialism, Fascism and Communism have all failed to create anything even close to the greatness of America because those philosophies are unsustainable and destined for failure from the start. They go against human nature and that is their downfall. I’m afraid that if the Obama administrations policies are allowed to take root the United States will slowly regress from the exception country it once was and become a country no better than the ones in Europe and Asia. Unfortunately for all of us I think this is exactly what President Obama is striving for, a mediocre America.

NO FAILURE

Thu, 26 Mar 2009 19:42:46 -0400

What is it about the liberal brain that makes it think rewarding failure will produce anything other then more failure? Now granted they don’t reward all failure at least publicly. The AIG executive bonuses are an example where the liberals display “outrage” over tax payer dollars being used to pay AIG executives, most of whom are complete failures. Now forget the fact that Christopher Dodd (D) Connecticut put in the amendment that allowed for the payout of bonuses before February 11th 2009 from federal bailout monies, that’s not important. The important thing is how angry the politicians were over the bonuses, because that shows they care. Should we really be rewarding failure on any level? The answer is obvious to most people, no.

There were hundreds of thousands of mortgages written for people that did not have the means to make their payments so they have been and are going to be going into default. Now the liberals like to blame this on “predatory lending practices” but that makes no sense. What is a predatory lender anyway, have you ever thought about that term? Did Wells Fargo send armed men out in search of people to capture, bring back to the office and force into a mortgage? Did Quicken Loans set up a sting operation that lured in would be home buyers and then forced them at gun point to sign the mortgage papers? Obviously they didn’t because you can’t force anyone into a mortgage they don’t want. I have signed numerous mortgages over the years and every one was signed voluntarily after I read the terms and had a full understanding of what my obligations were to successfully repay the money I was borrowing. So what is the Democrats solution to these mortgages that can’t be repaid by the borrower? They want to allow the borrower to renegotiate the rates with the lender, pay down some of the principle with tax payer dollars and send one thousand tax payer dollars to the “homeowner” every year to help keep them on track. What are the real homeowners getting for being responsible and making their payments on time? They get to pay for the irresponsible, that’s what they get. This is a prime example of rewarding failure and the sad part is a lot of those people will still lose their homes because they won’t be able to meet the obligations of the restructured loans either.

Corporate bailouts are another example of rewarding failure. This is done under the label of “too big to fail.” It sounds really bad doesn’t it? Like the world is going to end if this company or that company goes under. Corporate failures are a natural part of capitalism it weeds out the weak companies and allows the strong ones to grow stronger. Now I’m not saying that if GM or AIG went bankrupt it wouldn’t cause a lot of pain because it would. But they would be forced to reorganize under the direction of a bankruptcy court with the intention of coming out as strong and viable companies on the other side. Instead the government is using tax dollars and borrowed money to either outright give, in the case of AIG, or loan, in the case of GM and Chrysler, money so they can continue down the path to failure. Some will argue the executives at these companies are trying to fix things, that’s fine but sometimes drastic changes are required and to this point it doesn’t appear that any have been made. So what about the companies that don’t require taxpayer dollars to keep operating, what do they get as a reward? They get nothing.

States are the last example we’ll discuss today. There are no lack of states suckling up to the federal government’s teat, California and Michigan just to name a few. These failing states are running astronomical budget deficits because the governors and legislatures are unable to trim the fat even a little. So instead of making budget cuts they go to the federal government to get a bailout disguised as a “stimulus package.” If these funds weren’t made available the politicians would have to figure out a way to cut costs or bankrupt their states. I’m betting they would figure out a way to cut costs. What are the states that haven’t begged for money getting? You guessed it, nothing.

Imagine if children were given an A every time they failed a test in school, they wouldn’t learn very much would they? The “homeowners,” corporate executives and politicians aren’t learning anything either when the federal government bails out bad behavior. Actually I take that back they are learning something and it’s not good, they are learning that it doesn’t matter how bad they screw up, mommy government will be there to catch them when they fall.

DIRTY WATERS

Thu, 12 Mar 2009 19:45:45 -0400

It looks like Maxine Waters (D) 35th District of California may have really stepped in it this time. If you want to see the details of what I'm talking about check out this article by the New York Times. I picked this particular article about the story because the New York Times is one of the most liberal rags in America. I figured that if Maxine Waters actions looked questionable through the rosy lens of the Times then there was something to the the allegations against her. Well true to form the New York Times attempted to sugar coat the story but if you look at the facts presented in the piece it's fairly obvious Ms. Waters used her position as congresswoman to help someone who she has financial ties to.

The short version of the story is Maxine Waters arranged for the CEO of OneUnited Kevin Cohee to meet with Treasury officials in September of 2008 to discuss how the mortgage crisis had affected OneUnited. OneUnited is one of the nations largest black owned banks and there is a branch that operates in Ms. Waters district. Maxine's husband, Sydney Williams, served on the board of OneUnited until early last year and held or currently holds, it's not clear if he still has stock or not, at least $250,000.00 in stock which he purchased with his own funds. The bank was in financial trouble and Kevin Cohee asked Treasury officials for a bailout at the meeting, taking the officials by surprise, because that was not the purpose of the meeting. So, did Maxine Waters arrange this meeting to help out a constituent, or was she trying to protect her families investment? I believe Ms. Waters intentions in this matter were less then pure.

This story brings to question how the $700 billion in TARP funds are being allocated. OneUnited received $12 million in bailout funds in December 2008 even after they were sanctioned by the FDIC in October 2008 for "unsafe or unsound banking practices." Of course Treasury officials claim Maxine Waters had nothing to do with OneUnited receiving those funds. What would you expect them to say? I can guarantee one thing, we will never know the extent of corruption involved in the distribution of these funds.

Maxine Waters would be funny if she was a circus clown but as a representative in Congress she’s dangerous. This isn’t the first time she’s made a spectacle of herself and it surely won’t be the last. She will be in that seat forever because her constituents don’t have enough sense to vote her out so look forward to plenty of entertainment from Maxine “Dirty” Waters in the future. Check out one of her finer moments in this short video, her lovely face appears about 35 seconds in.

SOLUTION TO A CRISIS

Fri, 27 Feb 2009 21:51:50 -0500

We are being told day in and day out that we are in the midst of the worst economic crisis since the Great Depression, I guess they forgot about the Carter years. President Obama tells us that only government has the resources to get our nation out of this crisis. The Obama administration is spending trillions of taxpayer dollars all the while telling the American people that the spending is necessary to jump start the economy. In the end all of this wasteful spending is going to do little to promote any substantial long term growth and our economy will limp along under the weight of all the debt that has accumulated.

I’m not one to criticize without offering some alternatives. I have three simple suggestions that I think would create a strong economy with sustainable long term growth. My path is much different then that of the Presidents, I rely on the ingenuity and hard work of the American people.

Taxes
Eliminate corporate taxes for five years on all companies with a majority of their employees and headquarters inside the United States. Actively court companies from around the world to relocate to America by offering them the same deal. Eliminate the capital gains tax for five years to spur investment. Give all taxpaying individuals a one year federal and FICA tax holiday, giving people more of their own money to spend. Allow people to deduct the full purchase price of a new car from Ford, GM and Chrysler for two years, with a limit of four cars per taxpayer. Because of the tax holiday the deduction would be carried over to the next tax year. This would jump start sales and help get the auto manufacturers back on the road to profitability. These steps would free up some of the capital needed in the private sector to get production and consumption moving again.

Regulations
Put a freeze on all regulations including CAFE, NHTSA and all environmental laws on the books for ten years, companies would operate under the current laws. This would include opening up onshore and offshore drilling for oil and natural gas and the construction of new refineries. The car companies would benefit because they wouldn’t have too worry about any new regulations for the ten year duration allowing them to focus their resources on more productive activities. Oil and gas companies would hire people to work at the new drilling sites and the price of energy would drop due to the extra supply that would hit the market when those facilities came online. We need to lighten the regulatory load that is placed on companies, this would help lower their operating costs and allow them to focus on their core activities.

Government Spending
Freeze all government spending both state and federal for a minimum of five years, and require a two percent cut in real spending per year for the five year duration. Government has become overbearing and bloated, cutting spending would help get government back to a manageable level. The only branch I would exempt is the military, they are critical to the safety and security of our country and their ability to do that job should not be hindered. Another negative of the continued growth in the size of government is its affect on the private sector. The government continues to borrow more money every year making it increasingly difficult for private industry to secure the capital it needs for growth and investment.

We have two crises right now, the economic crisis and the Obama administration. President Obama has no faith in the American people, he thinks only government can solve this problem. History shows this philosophy is a recipe for disaster. He has surrounded himself with very educated people that have no common sense and they have no idea what they are doing. They think they have all the answers but their ideas are old and tired. Watch any of them on television and I think you’ll agree. We must put our faith in the ability of the American people to turn things around. If government gets out of the way and creates an environment that encourages free market activity then the hard working people in this country will do the rest. The citizens of America will lead the world into a better future, but only if they are given the liberty to do so.