The President's Budget
1. Increase Taxes
2. Increase Government
3. Hurt Business
The president of the United States of America seems to be forcing its decline. Or he is an absolute economic ignoramus. Or he is an absolute Left-wing idealogue.
Budget Summary:
Commerce Department: -36%
Justice Department: -13%
Synopsis: less business, less justice
Energy Department: +7%
Education Department: +6%
State Department: +6%
Synopsys: more pet liberal spending
Government workers: + 15% (Over Obama's two years)
Synopsys: duh!
Surprise: VA: +7%
Tuesday, February 2, 2010
Monday, February 1, 2010
Center of free-enterprise: Washington DC
Center of free-enterprise: Washington DC.
Well, there is little free-enterprise left in America, but the center of commerce in the United States of America is Washington, District of Columbia, USA. The latest proof of this is in the activities of the new Chief Executive Officer of the largest consumer banking institution, by deposits, in America, the Bank OF America. Mr. Brian Moynihan has been CEO for all of one month. During this time has Mr. Moynihan been visiting his employees in his bank's wide-spread branch system? No. Has he been holding meetings with his aforementioned employees? No. Has he been gathering together his executives and strategizing how to re-start consumer and small-business lending the country needs so desperately? No. Likely, he's been visiting major customers. No.
Mr. Moynihan has been visiting the center of 'competitive' activity in this country: Washington, DC. Visiting with Ben Bernanke, chairman of the Federal Reserve System; Timmy Geithner, President Obama's Secretary of the Treasury; Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation; John Dugan, Comptroller of the Currency; Deputy Treasury Secretary Neal Wolin; Valerie Jarrett, President Obama's "advisor" on Socialist Activities or something. But America aside, Mr. Moynihan jetted (commerical no doubt) to Davos, Switzerland, to meet Jean-Claude Trichet, European Central Bank chief and attended the World Economic Forum. Hey, Bri-bri what about business?
Mr. Moynihan is a lawyer.
He donated primarily Democrats' campaigns, including Chris Dodd and John Kerry.
Before taking office he told Ms. Jarrett and Lawrence Summers, top White House economic aide (whom Mr. Moynihan met at Harvard) that he wanted to work with the White House to help it achieve its policy objectives, according to the Wall Street Journal, February 1, 2010, Page C 3. They said, "loan modifications" (sort of like "plastics" to Dustin Hoffman in 'The Graduate'). And his bank became the first to enable Obama's administration's pandering to those taken advantage of by big, greedy, immoral...banks...by modifying as servicer the bad loans made by it and others.
Mr. Moynihan's global strategy chief and marketing officer, Anne Finucane, who came with the new CEO from B of A's acquisition of FleetBoston Financial, is close to the likes of Christopher Dodd (D., duh, Conn.) Senate Banking Committee Chairman and Barney Fife, err, Frank, (D., for Democrat from Massachusetts) House Financial Services Chairman., but not too close, as he's gay, and apparently House Oversight and Government Reform Committee Chairman Edolophus Towns (Democrat, dontcha know, from N.Y. What kind of a name is 'Edolophus'?).
Mr. Moynihan's two predecessors, Hugh L. McColl Jr., and Kenneth D. Lewis actually had the gall to want to compete in the marketplace, with McColl building the bank through canny acquitisions and Lewis eschewing political gamesmanship enough to resign. Perhaps also he didn't contribute to Democrats in general and Obama in particular so got pressured to resign. Perhaps.
To all who are reading this: America's so-called 'Capitalism' is now running on Favoritism, Partialism and Equalitism from Washington DC. where both the Capitol and Capital are. President Obama and Democrats have taken the ISM out of Capitalism.
Super-sad-American.
Well, there is little free-enterprise left in America, but the center of commerce in the United States of America is Washington, District of Columbia, USA. The latest proof of this is in the activities of the new Chief Executive Officer of the largest consumer banking institution, by deposits, in America, the Bank OF America. Mr. Brian Moynihan has been CEO for all of one month. During this time has Mr. Moynihan been visiting his employees in his bank's wide-spread branch system? No. Has he been holding meetings with his aforementioned employees? No. Has he been gathering together his executives and strategizing how to re-start consumer and small-business lending the country needs so desperately? No. Likely, he's been visiting major customers. No.
Mr. Moynihan has been visiting the center of 'competitive' activity in this country: Washington, DC. Visiting with Ben Bernanke, chairman of the Federal Reserve System; Timmy Geithner, President Obama's Secretary of the Treasury; Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation; John Dugan, Comptroller of the Currency; Deputy Treasury Secretary Neal Wolin; Valerie Jarrett, President Obama's "advisor" on Socialist Activities or something. But America aside, Mr. Moynihan jetted (commerical no doubt) to Davos, Switzerland, to meet Jean-Claude Trichet, European Central Bank chief and attended the World Economic Forum. Hey, Bri-bri what about business?
Mr. Moynihan is a lawyer.
He donated primarily Democrats' campaigns, including Chris Dodd and John Kerry.
Before taking office he told Ms. Jarrett and Lawrence Summers, top White House economic aide (whom Mr. Moynihan met at Harvard) that he wanted to work with the White House to help it achieve its policy objectives, according to the Wall Street Journal, February 1, 2010, Page C 3. They said, "loan modifications" (sort of like "plastics" to Dustin Hoffman in 'The Graduate'). And his bank became the first to enable Obama's administration's pandering to those taken advantage of by big, greedy, immoral...banks...by modifying as servicer the bad loans made by it and others.
Mr. Moynihan's global strategy chief and marketing officer, Anne Finucane, who came with the new CEO from B of A's acquisition of FleetBoston Financial, is close to the likes of Christopher Dodd (D., duh, Conn.) Senate Banking Committee Chairman and Barney Fife, err, Frank, (D., for Democrat from Massachusetts) House Financial Services Chairman., but not too close, as he's gay, and apparently House Oversight and Government Reform Committee Chairman Edolophus Towns (Democrat, dontcha know, from N.Y. What kind of a name is 'Edolophus'?).
Mr. Moynihan's two predecessors, Hugh L. McColl Jr., and Kenneth D. Lewis actually had the gall to want to compete in the marketplace, with McColl building the bank through canny acquitisions and Lewis eschewing political gamesmanship enough to resign. Perhaps also he didn't contribute to Democrats in general and Obama in particular so got pressured to resign. Perhaps.
To all who are reading this: America's so-called 'Capitalism' is now running on Favoritism, Partialism and Equalitism from Washington DC. where both the Capitol and Capital are. President Obama and Democrats have taken the ISM out of Capitalism.
Super-sad-American.
Sunday, January 31, 2010
Slavery returns to the U. S.
Please, please don't leave my blog now, but read it.
President Obama wants the federal government to take over the college student financing industry, and has forced most private sector participants out of it already.
Student loans are not dischargeable by bankruptcy. When a student owes the government, (s)he must pay unless the government somewhat arbitrarily extinguishes the debt. And in time it will discharge the debts of favored citizens. Right now the president is asking for debts to be extinguished after 10 years IF the student goes to work for the government, or into "public service" (as defined by President Obama, no doubt. Including ACORN no doubt), the favored few, or many as many will stay out of the private sector to discharge their debts. This takes potential entrepreneurs and workers out of productive innovation and wealth production and forces -- yes forces them into the public sector. This clearly diminishes the wealth of the U. S. and forces former students into indenture servitude at the government's whim. Today it's "public service" tomorrow, who know what? Discharge debts of voters who pull the lever for Democrats? Today, or, let's say, yesterday, partially-government-financed ACORN rounded up the lonely and destitute to vote for Democrats.
And the president arbitrarily set 10% of some part of a student's disposable income (as to be defined by the Democratic administration) as the maximum (s)he'll have to pay to service the debt the government loaned. Government just as arbitrarily set it at 90% or 1%, and the government could just as arbitrarily establish a lower number for the disabled, or dispossessed, or addicts, or gays, or blacks, or whatever affinity group is then arbitrarily in favor.
Or the government could desire infrastructure repair and force the indebted to work for $2.00 an hour to repay the debt. Sounds ridiculous, but arbitrary is arbitrary. Or $25.00 for union members. Or $1.00 for white people.
Please think about the possibilities. Or what if Republicans got in power, they'd absolutely discharge all the student loans of kids whose parents make over $250,000 a year or are executives at big business. And then the $2.00 of servitude would be paid to poor people, blacks and gays.
Just think about the possibilities!
Superamerican.
President Obama wants the federal government to take over the college student financing industry, and has forced most private sector participants out of it already.
Student loans are not dischargeable by bankruptcy. When a student owes the government, (s)he must pay unless the government somewhat arbitrarily extinguishes the debt. And in time it will discharge the debts of favored citizens. Right now the president is asking for debts to be extinguished after 10 years IF the student goes to work for the government, or into "public service" (as defined by President Obama, no doubt. Including ACORN no doubt), the favored few, or many as many will stay out of the private sector to discharge their debts. This takes potential entrepreneurs and workers out of productive innovation and wealth production and forces -- yes forces them into the public sector. This clearly diminishes the wealth of the U. S. and forces former students into indenture servitude at the government's whim. Today it's "public service" tomorrow, who know what? Discharge debts of voters who pull the lever for Democrats? Today, or, let's say, yesterday, partially-government-financed ACORN rounded up the lonely and destitute to vote for Democrats.
And the president arbitrarily set 10% of some part of a student's disposable income (as to be defined by the Democratic administration) as the maximum (s)he'll have to pay to service the debt the government loaned. Government just as arbitrarily set it at 90% or 1%, and the government could just as arbitrarily establish a lower number for the disabled, or dispossessed, or addicts, or gays, or blacks, or whatever affinity group is then arbitrarily in favor.
Or the government could desire infrastructure repair and force the indebted to work for $2.00 an hour to repay the debt. Sounds ridiculous, but arbitrary is arbitrary. Or $25.00 for union members. Or $1.00 for white people.
Please think about the possibilities. Or what if Republicans got in power, they'd absolutely discharge all the student loans of kids whose parents make over $250,000 a year or are executives at big business. And then the $2.00 of servitude would be paid to poor people, blacks and gays.
Just think about the possibilities!
Superamerican.
Tuesday, January 19, 2010
HOPE
It is D-Day for the Leftist, collectivist, social justices...the Democratic Party. From nowhere, a
Massachusetts state Sen. Scott Brown a conservative Republican is neck-and-neck with Democrat
Martha Coakley, Massachusetts Attorney General.
Did I write that Brown is a Republican? And the seat "belongs" to dead Ted, former U. S. Senator-for-life (which ended with his death) Edward Kennedy. Oh, did I write that Kennedy owns the seat? I guess maybe not, since a Republican --- Oh, did I write that Kennedy the supposed-seat owner was a Democrat? -- might obtain the seat from Ted's estate and its representative, AG Coakley.
And flying in as savior, President Barack Obama parachuted into Massachusetts to save the day for the Left.
Will he achieve his saviorship or will Coakley croak?
Stay tuned. It is only 9:11 AM PST...There's much time left before the election is over and the results known.
Superamerican.
Massachusetts state Sen. Scott Brown a conservative Republican is neck-and-neck with Democrat
Martha Coakley, Massachusetts Attorney General.
Did I write that Brown is a Republican? And the seat "belongs" to dead Ted, former U. S. Senator-for-life (which ended with his death) Edward Kennedy. Oh, did I write that Kennedy owns the seat? I guess maybe not, since a Republican --- Oh, did I write that Kennedy the supposed-seat owner was a Democrat? -- might obtain the seat from Ted's estate and its representative, AG Coakley.
And flying in as savior, President Barack Obama parachuted into Massachusetts to save the day for the Left.
Will he achieve his saviorship or will Coakley croak?
Stay tuned. It is only 9:11 AM PST...There's much time left before the election is over and the results known.
Superamerican.
Tuesday, January 12, 2010
DELICIOUS IRONY SECTION
One David Gelbaum was a significant far-left donor to such liberal sinks as the Sierra Club foundation, the American Civil Liberties Union and the bastion of whatever social justice is, the Democratic Party. He recently announced he was slashing his contributions because he was placed "in a highly illiquid position" from obviously stupid and ideologic investments in...alternative energy firms. Nearly $48 million to the Sierra Club and $94 million to the ACLU over the years 2005 to 2009 are at risk.
To Mr. Gelbaum: Ha, Ha, Ha. Maybe you can ask Green Billionaire Al Gore for a handout. Perhaps you lost some money to Al's companies. But be happy, Al got paid well.
Superamerican
To Mr. Gelbaum: Ha, Ha, Ha. Maybe you can ask Green Billionaire Al Gore for a handout. Perhaps you lost some money to Al's companies. But be happy, Al got paid well.
Superamerican
Thursday, January 7, 2010
HAPPY NEW YEAR, COMRADE
HAPPY NEW YEAR TWENTEN TO ALL OF YOU WHO DON'T READ THIS BLOG
AND, OF COURSE, TO ANY WHO DO.
After a year of misery for this country's freedom I sit and ponder the future as do millions of people. While I am an intelligent, rational person I tend toward planning for the worst. I feel the worst is happening with a bunch of economic ignoramuses, at best, in charge of managing our economy, managing our country. Reflexively our Democratic Leaders have a need to make certain that every segment, every corner of this country is running as they "know" is the right way. And we thought Carter micromanaged!
Obama and his cronies make anal look wild and crazy. And they are winning. A partial list: The real estate industry. The mortgage industry. The financial industry. The credit card industry. The automobile industry. Industry in general. (In the same way the Congressional Democrat/Leftists started on the mortgage industry in 1971: Do what we want or you are not allowed to grow by acquisition. The Community Redevelopment Act. Then banks could not acquire other banks without making loans to those people the Democratic Congress wanted to have loans, e.g. those unable to pay their mortgages, the "underserved". That led through Barney Fife through Fannie Mae and Freddie Mac to the financial crash of 2007, 2008, 2009 and the current near 20% effective unemployment and former recession. No doubt with control through coercian of industry in general Democrats will manipulate it to calamity.)
Upcoming, if they can extort or reward their way to success: healthcare industry.
But that is only economic control.
For social control, using taxpayer money Democrats will kill American's spirit of competition by forcing upon us little Obamamobiles, or Lemmingmobiles. Little, underpowered, electric "Volkswagens" the people's wagons, all the same, all faceless, nameless and less. But mostly running indirectly on coal. And they intend to kill the coal industry. Think! Where will this leave us?
Democrats see the people -- us -- the proletariat -- as the masses to subjugate as they see fit. They are the cadre, we are the masses. Taking from us the internal combusion automobile, the epitome of Americanism, the essence of our differentiation, our competition, our individualization will take from us our spirit. Uniform automobiles, the democrats' uniform we will be forced to wear and pay for. It goes with taking our transfats, our smoking.
Now I've got to go watch Fox News.
AND, OF COURSE, TO ANY WHO DO.
After a year of misery for this country's freedom I sit and ponder the future as do millions of people. While I am an intelligent, rational person I tend toward planning for the worst. I feel the worst is happening with a bunch of economic ignoramuses, at best, in charge of managing our economy, managing our country. Reflexively our Democratic Leaders have a need to make certain that every segment, every corner of this country is running as they "know" is the right way. And we thought Carter micromanaged!
Obama and his cronies make anal look wild and crazy. And they are winning. A partial list: The real estate industry. The mortgage industry. The financial industry. The credit card industry. The automobile industry. Industry in general. (In the same way the Congressional Democrat/Leftists started on the mortgage industry in 1971: Do what we want or you are not allowed to grow by acquisition. The Community Redevelopment Act. Then banks could not acquire other banks without making loans to those people the Democratic Congress wanted to have loans, e.g. those unable to pay their mortgages, the "underserved". That led through Barney Fife through Fannie Mae and Freddie Mac to the financial crash of 2007, 2008, 2009 and the current near 20% effective unemployment and former recession. No doubt with control through coercian of industry in general Democrats will manipulate it to calamity.)
Upcoming, if they can extort or reward their way to success: healthcare industry.
But that is only economic control.
For social control, using taxpayer money Democrats will kill American's spirit of competition by forcing upon us little Obamamobiles, or Lemmingmobiles. Little, underpowered, electric "Volkswagens" the people's wagons, all the same, all faceless, nameless and less. But mostly running indirectly on coal. And they intend to kill the coal industry. Think! Where will this leave us?
Democrats see the people -- us -- the proletariat -- as the masses to subjugate as they see fit. They are the cadre, we are the masses. Taking from us the internal combusion automobile, the epitome of Americanism, the essence of our differentiation, our competition, our individualization will take from us our spirit. Uniform automobiles, the democrats' uniform we will be forced to wear and pay for. It goes with taking our transfats, our smoking.
Now I've got to go watch Fox News.
Friday, December 25, 2009
Merry Christmas America - Nanny State
The term "Nanny State" has much to benign a sound. What the Democrats are doing to America is far, far more dangerous. It is closing in on a social-justice oligarchy of Obama, Pelois and Reid. They are quickly diminishing our freedoms, freedom of speech, enterprise, religion. Not to mention what we drive, what we eat... Has it gone too far? Maybe. Big-business corporations are as dependent as 75% or our citizenry. Only small business entrepreneurs, some successful citizens and a smattering of others are still left alone. All of education not only poisons little and large minds with one-sided liberal hate but with higher-education is creating a national "company store" where all college graduates will be dependent on government. And, in time, Democrats will threaten to raise interest rates on student loans (on one side, the stick) or forgive them on the other (the carrot) to be able to dictate what jobs they may or may not take. Think about that. Or, in healthcare, same thing. Give diagnosis and treatment (the carrot) or withhold it (the stick). YOu think my writing here is right-wing insanity, think about it. Think of how Obama is fixing prices (healthcare, banking), manufacturing (childrens' toys), compensation (financial industry), controlling venture capital for innovation (billions of taxpayer monies going to so-called "green" stuff that Obama loves). They control virtually all the economy, except unions and trial lawyers, they are free.
Merry Christmas America.
Merry Christmas America.
Monday, December 7, 2009
The end of Periodictablet for 2009
I think it's time to go on vacation for the rest of 2009. Amid Democrats hoping to pass legislation to blow another $100,000,000,000 to extend unemployment welfare and COBRA payments. Deficit, what's a deficit? These people are insane. Obama cronies have completed the takeover of General Motors with CEO for life ("only a year, maximum") Whitacre and UAW henchman-advisor-and-critic Girsky and the blank, signed check from the U. S. Treasury have already committed $6,000,000,000 of taxpayers' money on money-sieve Opel. That is $6 billion of U. S. money going to Germany and China. And they've promoted youngsters and retired the old folks. Puke now, puke later, doesn't matter they will to break the U. S. in their mad dash for power. Throw in healthcare and environmental takeover, antitrust, agriculture, immigration, FDIC takeovers, and, ladies and gentlemen I present the Death of America for 2009. Goodbye. Our financial "house" is in shambles courtesy of Fannie Mae and Freddie Mac now retired from low -own payment lending, now given to the Federal Housing Administration's 3-1/2 % down payment and Obama's $6,000 cash to home buyers. Redistribution.
Companies are hoarding cash, not investing, still shedding jobs and silently praying this will pass, while noisily supporting government largesse. They will not begin investing until they see some stability in the government and return of the Rule of Law, but Obama is an ignorant buffoon and is having the time of his life flying all over the place and doing our my money to his friends on the Left.
I can't write any more, only apologize to my kids for not teaching them more about the free-enterprise system, capitalism. They have few chances in America now.
Goodbye 2009, Goodbye America.
Companies are hoarding cash, not investing, still shedding jobs and silently praying this will pass, while noisily supporting government largesse. They will not begin investing until they see some stability in the government and return of the Rule of Law, but Obama is an ignorant buffoon and is having the time of his life flying all over the place and doing our my money to his friends on the Left.
I can't write any more, only apologize to my kids for not teaching them more about the free-enterprise system, capitalism. They have few chances in America now.
Goodbye 2009, Goodbye America.
Thursday, December 3, 2009
End of 2009, End of America?
While compared to the Civil War, World War I, World War II, the Korean "War", the Vietnam political loss and the Great Depression, 2009 wasn't so bad. However to my way of thinking it is the fullcrum year with the Left pulling down the country to failure and bankruptcy on one side and the Right fighting to regain weight to counteract the Left. As I forecasted way before his election President Obama is a far-left, inexperienced, naive, weak and bumbling president. One who either doesn't know the truth, or cannot bring himself to express it when it might be a criticism of him or his work. Characterized as the "Whirling Dervish to Failure" in one of my blog posts a few months ago.
Now the country is opening its eyes. President Obama is hurting this country economically and in the eyes of a laughing world. Every breath in his body is political, every person hired by his administration is political, virtually every agency, bureaucrat, and regulator is political. They all know they must boost Obama and keep Democrats in power at any cost to keep their jobs. And the country is dying from it. Business is dying. Conservative blogs are understanding and expressing this, finally. Even far-left bloggers and pundits are starting to question their ignorant, blind, faith in a man with no experience, no vision, no backbone. And I might add, disappointing intelligence.
My blogs of the past 18 months predicted then described the ineptness of the man who had no clue he would actually win the election and the bitter cunning of his top advisors. The healthcare takeover and the cap 'n trade legislation are the two premier examples of whether the country can regain its sense of self and stop the bills or emasculate them to ineffectiveness and send enough Democrats packing in November 2010 to neutralize Congress. If so, the country has a chance and can overrule, change and cancel Obama's insane attempt to take this Democratic, free country into the socialist realm of "Social Justice" and the then-upcoming dictatorship. He herded the masses and now they are becoming thinking individuals.
I wish us luck. I will contribute to beat back the socialist surge.
Superamerican, December 3, 2009
Merry Christmas America.
Now the country is opening its eyes. President Obama is hurting this country economically and in the eyes of a laughing world. Every breath in his body is political, every person hired by his administration is political, virtually every agency, bureaucrat, and regulator is political. They all know they must boost Obama and keep Democrats in power at any cost to keep their jobs. And the country is dying from it. Business is dying. Conservative blogs are understanding and expressing this, finally. Even far-left bloggers and pundits are starting to question their ignorant, blind, faith in a man with no experience, no vision, no backbone. And I might add, disappointing intelligence.
My blogs of the past 18 months predicted then described the ineptness of the man who had no clue he would actually win the election and the bitter cunning of his top advisors. The healthcare takeover and the cap 'n trade legislation are the two premier examples of whether the country can regain its sense of self and stop the bills or emasculate them to ineffectiveness and send enough Democrats packing in November 2010 to neutralize Congress. If so, the country has a chance and can overrule, change and cancel Obama's insane attempt to take this Democratic, free country into the socialist realm of "Social Justice" and the then-upcoming dictatorship. He herded the masses and now they are becoming thinking individuals.
I wish us luck. I will contribute to beat back the socialist surge.
Superamerican, December 3, 2009
Merry Christmas America.
Tuesday, December 1, 2009
Political Death Blow for Seattle Times?
As much as the Seattle Times would wish the compassionate clemency given cop-killer Maurice Clemmons by former governor Mike Huckabee would be, as it wrote: ( A) "Political death blow for Huckabee?" [http://seattletimes.nwsource.com/html/localnews/2010392864_huckfallout01.html] it might more likley be one of continuing death blows for the far-left and failing Seattle Times. These two articles take up the highly-read entire first inside right-hand page A 3 of today's Times, December 1, 2009 (the page's headline article is: "Persuasive appeal helped Clemmons win clemency" which includes a giant copy of Huckabee's signed proclamation.[http://seattletimes.nwsource.com/html/localnews/2010392867_shootingclemency01m.html]. I venture to say that if it was a Democratic governor it'd get maybe a paragraph. Maybe. The factual Wall Street Journal is the number one newspaper in the country and the likes of the New York Times, Washington Post et. al. are losing readers and dropping like flies. These liberal rags don't believe that their readers can handle factual information, espedcially that which might cast a dark light on liberals and liberal policies. So rather than give their readers a chance to gain knowledge, they print biased garbage like the above-mentioned articles. Shows the contempt these papers and liberals in general have for the "masses"...us the citizens, voters and readers in the United States of America.
My response is a Letter to the Editor of the Seattle Times:
Seattle Times, your coverage of Huckabee's "fault" for the former governor's clemency ofinsane murderer, even obliquely, is dispicable. You Liberals want teens who've been convicted of crimes to be released, but when they are and commit some more crimes, you express anger, outrage and then try to blame others. The poor boy was only 17 when I am sure poverty and the "wrong crowd" forced him to steal a purse and hit a woman. That boy was sent to prison for 35 years. Without the light of what he's done that sentence looks like discrimination for a poor black kid in Arkansas. And if Maurice Clemmons wouldn't have brutally and cold-bloodedly killed four people, I believe that virtually every Democrat and liberal would agree that 35 years was unfair and discriminatory for the kid and that to let him out was fair. But Clemmons did kill and now this newspaper paints the fault on former Gov. Mike Huckabee, a Republican, by the way, with a full page anti-Huckabee spread today (page A 3) and the same blame game yesterday and, I think, Sunday. At least Huckabee had the courage to stand up in national television and take responsibility like a man.
Superamerican
My response is a Letter to the Editor of the Seattle Times:
Seattle Times, your coverage of Huckabee's "fault" for the former governor's clemency ofinsane murderer, even obliquely, is dispicable. You Liberals want teens who've been convicted of crimes to be released, but when they are and commit some more crimes, you express anger, outrage and then try to blame others. The poor boy was only 17 when I am sure poverty and the "wrong crowd" forced him to steal a purse and hit a woman. That boy was sent to prison for 35 years. Without the light of what he's done that sentence looks like discrimination for a poor black kid in Arkansas. And if Maurice Clemmons wouldn't have brutally and cold-bloodedly killed four people, I believe that virtually every Democrat and liberal would agree that 35 years was unfair and discriminatory for the kid and that to let him out was fair. But Clemmons did kill and now this newspaper paints the fault on former Gov. Mike Huckabee, a Republican, by the way, with a full page anti-Huckabee spread today (page A 3) and the same blame game yesterday and, I think, Sunday. At least Huckabee had the courage to stand up in national television and take responsibility like a man.
Superamerican
Tuesday, November 10, 2009
Can Democrats manage anything?
Yes, of course Democrats can manage to destroy the dollars they collect in taxes. Check the recent results for Fannie Mae and Freddie Mac, both licking boots of Congress to get more money for continued massive losses. But they've cut back on risky sub-prime-like loans. Not to worry those of you who can't afford a home, the Democrats to the rescue. The Federal Housing Administration, formerly an also-ran in lousy loans, is stepping up in new risky loans and already-bad ones. It was started by FDR's New Deal and did what it was supposed to, until recently Congress gave it marching orders to save defaulting "families". It expects 24% of its loans made in 2007 to default. 24%! But tightening up in 2008, it expects only 1 in 5 (20%) to fail. It has run out of margin and may join Fan and Fred in boot-licking for money. It is another in a long line of Democrat losers.
This might be a corollary to my "Government Successes in Running Businesses" post of September 1, 2009, and upgraded from time to time since then. There is an article in today's Wall Street Journal, September 4, 2009, page one: "States Shut Down to Save Cash". [http://online.wsj.com/article/SB125202235182685075.html]. It is an interesting article with a chart on page A 6, listing states with budget gaps of more than $1,000,000,000. Of the top 10, only one is a Republican-dominated state and 9 are Democratic: (In order of size of edficit) California, New York, Illinois, New Jersey, Massachusetts, Pennsylvania, North Carolina, Connecticut, Oregon. Combined Democrat budget deficit: $114,400,000,000.
And a corollary to the corollary is an editorial in the same paper (page A17, "The Coming Reset in State Government" [http://online.wsj.com/article/SB10001424052970204731804574390603114939642.html], in which governor Mitch Daniels of Indiana, a Republican, opines that states will continue to be financially challenged way into the future. Over the past decade he writes that states have increased their spending 6% a year (8% in 2007 - 2008), building up government bulk. GDP growth over history is 3.5%. A collision is underway. Governor Daniels' state has met its obligations and has $1,000,000,000 in reserve he writes and explains why in the article. He reformed his government, cut taxes and government employees, and cut spending an average of 1.4% a year. REDUCED a total of 7% since 2004. REDUCED to being the 6th thriftiest state after being near bankruptcy five years ago. He then says his state is attracting companies with its relatively low taxes. But in searching about Indiana, its unemployment reached 10.6 percent versus the national unemployment average in June was 9.5 percent. (The state’s monthly unemployment record was 12.8 percent, set in November 1982.) While its rust belt location is affecting it, according to its governor, Indiana is ready for the future, unlike most Democrat-Party controlled states.
And yet another article ("The Michigan Example", page A 16, same issue [http://online.wsj.com/article/SB10001424052970204313604574328792152010638.html] highlights the folly and failure of central command and control of economies. Copied by the always trendy Mr. Obama, Michigan for the past 14 years has been making centralized anti-free market decisions about its economy. For $3,300,000,000 in tax credits and another $1,600,000,000 in direct spending(nearly $5,000,000,000 for a single state) to create new jobs, it has completely and utterly failed. The goal was to create 500,000 jobs and $440,000,000,000 in new investment by 2010 -- coming up pretty soon. The result? Lost jobs! (Its thorough study indicated 95 LOST JOBS for each $1,000,000 of tax credits.) And the highest unemployment rate in the nation, 15%. The subsidies and tax credits went to broadband ("One of the biggest flops in state government" said the Democrat State Senate Majority Leader.) Hollywood liberals got another bunch, creating $700,000 in income for a $4,000,000 "investment" as liberals like to characterize spending. And on and on. Michigan's Democrat answer? Raise taxes on companies in industries its government eschews, to become the third most anti-business state. But crows Governor Granholm: "President Obama's priorities are nearly identical to ours." Really.
But prudence aside, what are these states doing? California is delaying $1,200,000,000 of checks and calling it "savings". New York is putting advertising on garbage trucks, taxing sugary drinks 18%, increasing taxes on cigarettes 46% and wine 58%. Illinois has suspended a poor-people stipend for funerals of $1,103 and $552 for burial. Pennsylvania is legalizing video poker, and taxing gambling takes 50%. Oregonians must be smoking something because it asked to tax medical marijuana and for the state to grow it. These, however, died in committee. Even though Michigan isn't on the list, it's proposed a $250 licensee fee on strippers at the state's 83 topless clubs. What can top- that? -Less government?
This might be a corollary to my "Government Successes in Running Businesses" post of September 1, 2009, and upgraded from time to time since then. There is an article in today's Wall Street Journal, September 4, 2009, page one: "States Shut Down to Save Cash". [http://online.wsj.com/article/SB125202235182685075.html]. It is an interesting article with a chart on page A 6, listing states with budget gaps of more than $1,000,000,000. Of the top 10, only one is a Republican-dominated state and 9 are Democratic: (In order of size of edficit) California, New York, Illinois, New Jersey, Massachusetts, Pennsylvania, North Carolina, Connecticut, Oregon. Combined Democrat budget deficit: $114,400,000,000.
And a corollary to the corollary is an editorial in the same paper (page A17, "The Coming Reset in State Government" [http://online.wsj.com/article/SB10001424052970204731804574390603114939642.html], in which governor Mitch Daniels of Indiana, a Republican, opines that states will continue to be financially challenged way into the future. Over the past decade he writes that states have increased their spending 6% a year (8% in 2007 - 2008), building up government bulk. GDP growth over history is 3.5%. A collision is underway. Governor Daniels' state has met its obligations and has $1,000,000,000 in reserve he writes and explains why in the article. He reformed his government, cut taxes and government employees, and cut spending an average of 1.4% a year. REDUCED a total of 7% since 2004. REDUCED to being the 6th thriftiest state after being near bankruptcy five years ago. He then says his state is attracting companies with its relatively low taxes. But in searching about Indiana, its unemployment reached 10.6 percent versus the national unemployment average in June was 9.5 percent. (The state’s monthly unemployment record was 12.8 percent, set in November 1982.) While its rust belt location is affecting it, according to its governor, Indiana is ready for the future, unlike most Democrat-Party controlled states.
And yet another article ("The Michigan Example", page A 16, same issue [http://online.wsj.com/article/SB10001424052970204313604574328792152010638.html] highlights the folly and failure of central command and control of economies. Copied by the always trendy Mr. Obama, Michigan for the past 14 years has been making centralized anti-free market decisions about its economy. For $3,300,000,000 in tax credits and another $1,600,000,000 in direct spending(nearly $5,000,000,000 for a single state) to create new jobs, it has completely and utterly failed. The goal was to create 500,000 jobs and $440,000,000,000 in new investment by 2010 -- coming up pretty soon. The result? Lost jobs! (Its thorough study indicated 95 LOST JOBS for each $1,000,000 of tax credits.) And the highest unemployment rate in the nation, 15%. The subsidies and tax credits went to broadband ("One of the biggest flops in state government" said the Democrat State Senate Majority Leader.) Hollywood liberals got another bunch, creating $700,000 in income for a $4,000,000 "investment" as liberals like to characterize spending. And on and on. Michigan's Democrat answer? Raise taxes on companies in industries its government eschews, to become the third most anti-business state. But crows Governor Granholm: "President Obama's priorities are nearly identical to ours." Really.
But prudence aside, what are these states doing? California is delaying $1,200,000,000 of checks and calling it "savings". New York is putting advertising on garbage trucks, taxing sugary drinks 18%, increasing taxes on cigarettes 46% and wine 58%. Illinois has suspended a poor-people stipend for funerals of $1,103 and $552 for burial. Pennsylvania is legalizing video poker, and taxing gambling takes 50%. Oregonians must be smoking something because it asked to tax medical marijuana and for the state to grow it. These, however, died in committee. Even though Michigan isn't on the list, it's proposed a $250 licensee fee on strippers at the state's 83 topless clubs. What can top- that? -Less government?
General Motors NATIONALIZED - Free-Market Going, Going, Gone
December 1, 2009, or a few days before to the surprise of everyone except me "Fritz" Henderson, Obama's selection as CEO of GM was tossed under the GM bus and replaced on an "interim" basis that will last years ("I can't find an adequate CEO" Edward E. Whitacre, Jr. will plead time and time again.) But truthfully this buddy of Obama handler, Rahm Emanuel, connived to get this top job the minute Emanuel appointed him as "outside", "independent" Chairman of the Board of General Motors. He's been undermining Henderson with the Obama-appointed board from the beginning. Now, like the war in Afghanistan, General Motors is Obama's property. There is no way either Obama, Emanuel or Whitacre can lose. They have the treasury of the United States to finance this corporation forever, into green, electric, small, whatever he wants it to be. He has nationalized once the largest corporation in America.
The Obama Administration is afraid American consumers won't buy its electric cars (duh!) so he's bribing companies to make them, no matter if anyone wants them. The method is as complicated as the federal tax code and Medicare regulations (150,000+ pages). (Government does NOT want its citizens to understand its laws.) But essentially the arbitrary new emissions standards can be gamed by producing electric cars which don't count as emitting carbon because Obama says so. (That nearly half of the electricity in America comes from dirty carbon-emitting coal, and another 22% from fuel oil and natural gas doesn't count according to President Obama, who apparently can't count.) This will bring a glut of electric cars: more than a dozen car makers are rushing to take advantage of Obama's bribes. Including Al Gore, politician extraordinaire taking financial advantage of the "green politics" he helped create and popularize. He has backed one. And Mr. Gore is reported to be reaching a billion dollars of net worth in "green" politics. Back to the electric cars: oversupply with low demand, will bring...yes, more government purchases and tax credits, rebates anything to prove Obama was not wrong. Obama is wrong.
The following article ("Politicians Butt In at Bailed-Out GM" Wall Street Journal, October 29, 2009, front page[http://online.wsj.com/article/SB125677552001414699.html#articleTabs=article]) explains why government should butt out of the private sector. In additon he is "lending" $8.5 billion for car makers to retool plants and "innovate" green stuff. President Obama and I'd guess well ober 75% of Congress do not understand, have not experienced and dislike the private sector/free enterprise/and capitalism. Please read, and cry for America.
Jerry Flint, Forbes columnist on cars (November 2, 2009 page 38) writes that America will lose in trying to build "midget cars", being we're a country of tall and large people. (3.8 million of us are 300 pounds or more and 400,000 over 400 pounds.) Japan has always been a better builder of small cars, and India and China are looking at our markets. Obama's obsession with tiny, "green" cars is ludicrous and dangerous. Peer group popularity is for what he's searching while killing jobs and America. Goodbye Michigan, Indiana, Ohio, Iowa and Missouri. And for what? Global warming isn't. And cars are 25% of the greenhouse gas emissions, less than power plants, but so what anyway? Build big cars for Americans and win. Prosperity, jobs, wealth and an increased standard of living. All seemingly anathema to President Obama. Sad for America.
GM plans to dip into another $2,500,000,000 to reinvest in bankrupt Delphi Automotive LLP. GM's market share crept up by it spending $4,000 to bribe customers to buy cars. Looks good President Obama. GMAC -- financier to GM and Italy's Fiat subsidiary Chrysler -- borrowed another $2,900,000,000 in debt guaranteed by the U. S. and in addition has its hands out to Obama for an obscene $2,800,000,000 to $5,600,000,000 more directly from the government in equity, which won't be paid back. Its in hock to us (the taxpayers of the U. S. government) $12,500,000,000 already and lost $3,900,000,00. Nice investment to protect your unions, Obama. And at the same time Ford Motor Co. is close to selling Volvo to China's Geely Holding Group Co. creating another fierce competitor to GM and, for that matter, Ford itself.
Fisker Automotive Inc. will use government funds, "loans" it likely won't be able to pay back as a start-up, to purchase a closed General Motors plant in Wilmington, Delaware, just coincidently Vice President Joe Biden's home state -- it pays to know a Democrat. The half-a-billion taxpayer dollars is planned to reopen a 62 (sixty-two) year old plant to make a "plug-in electric" car. If opened successfully it could employ 1,500 employees. The United Auto Workers has been closely involved in the talks. Huh? If all the $528,000,000 is spend for those 1,500 jobs that's $352,000,000 per job. Ditto start-upTesla Motor's $465,000,000 Quite a coup for ObamaEconomics...well I am pretty sure much of it will end up in the coffers of the Democratic Party and United Auto Workers, one way or antother. Competition by who you know and your ideology! And it'll ONLY be a couple billion dollars write-offs of taxpayer money. Or three. Or four, all depending on 1) when Obama admits the mistake or 2) when he is out of office.
I have written posts about Chinese automobile makers. It's difficult to place them in this post or in the "China eats the United States for Lunch" post. Mostly it'll go there, but first, China is overtaking the United States of America as the world's biggest car maker, and is expanding from there. While General Motors -- once the largest auto manufacturer in the country which was the world's biggest car maker, the U. S., of course. With weak leadership afraid of its union bosses and lousy products, the U. S. has committed automobile industry suicide. Next up? The upcoming suicide of the United States of America itself!
But wait. Cash for Clunkers was such a success that car and light truck sales for September for the United States' two major industrial holdings, General Motors and Chrysler, absolutely bombed. GM off 45% (to a 20.9% market share down markedly from 29.3% a year earlier) to 155,679 and Chrysler off 42% to 62,197 (40% of which went to rental car companies)! The U. S. total sales were off 23%. Non-U.S. Ford only dropped 5% to 114,241 vehicles (with a market share of 15.3% up from 13.5% a year earlier) and Toyota, off 13%. Some people think Cash for Clunkers only stole sales from September, and possibly October, at a cost to U. S. taxpayers of $3,000,000,000 and the wanton destruction of 700,000 operable vehicles that poor people could have purchased and driven. President Obama get us out of the auto business and the "stimulus" industry, you don't know what you are doing.
And intelligent private market businessman Roger Penske said "no? to buying GM's Saturn brand, which now will be wound down "quickly". The Saturn born in 1985 as an innovative approach to auto making with the United Auto Workers union bosses and General Motors executives on the same page. Workers were 'technicians' and were paid 80% of UAW with the rest from a sharing of Saturn's profits. Key decisions were shared by an exec and union boss. Vision, passion and collaboration courtesy of the UAW's GM guy, Donald Ephlin. There were broad dealer market areas and 'no haggle' prices. Even now-green VP Al Gore touted the concept. But it was not to be. Union bosses feared collaboration would spread, and make them useless, so then-ew UAM militant, Stephen Yokich underminesd it. And its GM-executive-promoter, CEO, Roger Smith retired in 1989. Saturns were boring, underfunded and 'joined' the GM family in 2003 woth its dysfunctional relations with the UAW. When Obama finally killed it, Roger Penske thought he could re-innovate, but no., once again it was not to be. And not to be are collaborative relations of industry and its union bosses, who exist to create conflict.
So much for GM's brilliant new management, and super-CEO, Barack Obama.. Seven weeks ago amid pomp and circumstance, GM announced it was going to sell its cars on eBay. Today the last day of September, it's a bust and being discontinued.
U. S. Government- and union-owned General Motors is trying to sell its Opel unit to Magna International. But here is the matter with central control and planning. The deal with magna seems to be unwinding because the Spanish government, the German government, the English government, the Belgium government...all don't care a whit about the financial success of Opel, they are only interested in getting reelected for which they need their union bosses. So these governments only really care about holding onto union jobs. Opel has factories in each of these countries. A deal might not get done, shackling GM with the huge Opel losses. Stay tuned!
This is a series of comments about President Obama's takeover of GM and Chrysler for the primary benefit of his major supporters, labor union bosses. And other auto-industry stuff.
More Washington DC manufacturing. For the three-wheeled Aptera 2e, Aptera Motors Inc.,Vista, CA, like everyone else, wants some government money. Only $75,000,000 though from the Energy Department, but Congress then (2007) said three wheelers don't qualify. So what to do? Get the Democrat Congress to change the rules. Especially when Aptera's investors are long-time and large contributors to the Democratic Party; in 2008 just a few accounted for $1,000,000. So obviously it's not the free-market vetting start-ups, it's money for re-election. (Tesla Motors another California start-up along with Ford and Nissan has already received $8,000,000,000 in "loans" from Democrats with taxpayer money.)
I don't know whether this should go into some post about central command and control of government or the end of the free enterprise system, or here. So here it is.
Fisker Automotive will be lent -- and how does a start-up repay? -- $528,000,000 to develop two plug-in electric cars including Karma a $87,900 sports car certainly targeted toward Obama's middle class sweet spot. The money will go toward engineering since the car will be manufactured in Finland, but with bribes to buy Karma, it will ONLY cost $80,000. The Obama People's Car.
Update as of September 15, Chrysler's sales in September are expected to fall 30% year to year, double the decline for the U. S. in general. Yes, Mr. President, you put in cash for a clunker and gave it to an Italian. Good move.
So the future of the American taxpayers' investments in the auto industry it would seem is based on President Obama's decision to "go green" and that even given U. S.-made cars' much higher price, perceived lower quality, and mediocre technology and what is shaping up to be fierce competition not only to sell cars but to get U. S. government largesse, GM and Chrysler, among other auto-realted companies, must sell many, many more cars. In a market which so far has not bought a lot of "green cars" why will Americans suddenly want small, slow and difficult cars? I doubt they will. And a really funny irony is that the new green Obamamobiles run not on electricity -- electricity is a middle-man -- but on coal (48.5% of U. S. electricity production), natural-carbon gas (21.3%) and petroleum (1.1%), and nuclear (19.6). Other than hydroelectric (6%), so-called alternative energy accounts for 3% of U. S. electricity production. So exactly what's green Mr. President?
Even though Chrysler is planning to produce the Fiat 500 in Mexico (so far) thus opposing the United Auto Workers Union (so far) Obama will not do the same to trial lawyers, major supporters of the Democratic Party. Chrysler will allow and finance future tort lawsuits against it even though they could have been legally abrogated in bankruptcy court. A major financial victory for trial lawyers and the Democratic Party. Not so great for the U. S. however, or for the UAW for that matter.
So American Axle & Manufacturing Holdings Inc. has reached agreement to get $210,000,000 from GM whose dough comes from the U. S. Government, its major owner; well actually not the government, from taxpayers, well not actually from taxpayers, from lenders like China. Is this like a Ponzi scheme?
Buick the upper-end brand for old folks from GM is jumping into the crowd. It will stake some of its future on a...Duh!...hybrid, thanks to its owner, the U. S. Government and the Democrats. Buick will apply for a $500,000,000 loan (and who will pay it back?) from the $25,000,000,000 program to fund production of more fuel-efficient cars. And GM's battery supplier will apply for another $400,000,000 (and who will pay it back?) Just a cautionary question from a businessman. If all car companies take the U. S. government's money and build millions of (so-far unproven) hybrid's just who will buy all of them. The industry will be flooded with these cars, which are also unproven in the marketplace. That's one of the great things about having one czar run the czars: he makes the decisions, the messy market doesn't. And if it all fails? Mr. Obama'll retire a very rich man.
August 17: Chrysler made an announcement that it is planning to produce its Fiat 500 subcompact in Mexico. Take that, Obama. Take that, UAW. I am betting that the decision will be changed and the car will be made in America by the UAW, owner of 55% of Chrysler to the U. S. Government's 8%.
Trade restrictions caused the Great Depression, among the three major causes. With the U. S. government owning most of GM and some of Chrysler is there any doubt that policies will favor those "investments"? And thus will come counterbalancing restrictions by other countries possibly Japan, South Korea, Germany, India, China? I guess the only thing that would weigh against that is the humiliating fiasco of Obama's Cash for Clunkers that sold 1) Toyota Corolla 2) Honda Civic 3) Toyota Camry 4) finally an American brand, Ford Focus FWD 5) Hyundai Elantra 6) Nissan Versa 7) Toyota Prius 8) Honda Accord 9) Honda Fit and finally number 10) another American brand, Ford Escape FWD. Where were the U.S.-owned brands, GM and Chrysler?
GM's new strategy in part driven by AT&T's former chairman, now Obama's pick (actually Rahm Immanuel's pick as he recently did a deal with Whittaker) for chairman of GM is to culitvate a "green image". Sure to sell a lot of cars in the United States where horsepower can be compared to the size of a man, so to speak. That Chevvy Volt with a range of 40 miles should certainly be a big seller. I can hear the former Corvette owner saying, "Dude, I can get 40 miles to one charging and go from zero to, hmmm,35, Dude." Even with the government's $7,500 bribe it'll be markedly more expensive at $40,000 than Toyota's Prius at $22,000. GM's chief executive Henderson is on the Fritz. And Obama and his czars must be back on cocaine.
Today (August 25, 2009) GM reconsiders selling its Opel and Vauxhall -- a strategic reversal. GM prexy Fritzy Henderson thinks maybe he'll put together a $4.3 billion financing at the direction of the Obama Board of Directors, and maybe will keep the company which has lost money since 2000. The former near-sale to Canadian Magna International and a Russian-state-controlled bank, OAO Sberbank and OAO Gaz car company with the support of the German Government. (Much of Opel's parts are made in Germany by highly espensive union plants.)
But a couple days later, GM is pummeled by Germany politicians and union leaders for its turnabout. "What are they thinking", Germany must think, a broke GM would need $4,300,000,000 to try to turn around Opel (money it doesn't have and that its superCEO, Barack Obama, stated it wouldn't get) and which might not EVEN count $2,100,000,000 the German government made to Opel to keep it breathing during this sale process. STAY TUNED!
Managed like Katrina, but praised by the liberal media for causing more cars to be sold because it was conceived and (mis-)managed by Obama, Cash for Clunkers ("CARS") will terminate over this weekend. If Bush would have run it, it would have been a highly-publicized fiasco when neither car wreckers(owners)nor auto dealers were getting paid by the government bureaucracy, but not now. Complaints aside, the fact that cars were crushed and new Japanese and Korean cars, and a few Americans, were ordered but not paid for, it was deemed a smooth success. Yeah, sure. And, of course, auto sales will fall off a cliff soon because of its end.
Here in Seattle, the federal government is throwing around "millions of dollars" (according to the Seattle TImes, August 6, 2009, page B 1) to equip streets and homes with charging stations for the electric cars of the future. 2, 550 stations for an unknown amount of cash spread "around the Seattle metropolitan area, including the eastside". And what's great it'll only take four to six hours to charge at home, shorter for the fifty "fast commercial chargers" which will charge a fee.
They will be established by Ecotality, parent of Electric Transportation Engineering Corporation (eTec). eTec is Caymen Islands-registered penny stock traded in the "pink sheets" typically inhabited by speculative, money-losing and many times ethically-challenged companies. The Company recorded a net loss for the quarter ended June 30, 2009 of $3,600,845 million, compared to a $909,602 net loss for the quarter ended June 30, 2008. ECOtality recorded a loss per share of $.02 for the period ended June 30, 2009, compared to the loss per share of $.01 for the same period in 2008. For the quarter ended June 30, 2009, ECOtality achieved revenue of $1,747,085 compared to revenue of $2,936,150 for the quarter ended June 30, 2008. August 19, 2009: it closed at 24 cents per 206,900,000 shares with a high of 46 cents and a low of 2 (two) cents and is traded on the so-called "pink sheets' And looking at the "management" team and one sees a group of what seems like hustlers, who obviously know someone in government. I have seen similar companies tout their stock prices, and unload when the time is right. I am not accusing eTec or its management team of anything. Yet. More to come. Oh, here's a government connection:
Colin Read, Vice President of Corporate Development, ECOtality, with the responsibility of overseeing the marketing, public relations, strategic initiatives and business development. Read has significant experience in politics, public relations and traditional media. Before coming to ECOtality, Read was the Assistant Finance Director on a successful congressional campaign for an Arizona Democratic in the 2006 national mid-term election.
Ford Motor Co. is launching a "Smart" charging technology for recharging the planned electric cars that are upcoming in months or years ahead. This unproven technology is supposed to curtail recharging of these non-existing cars during high-cost peak grid-use times. There are over 3,000 different utility companies all of which will provide electricity differently. And, oh yes, wind and sun will provide some electricity too, somehow. Apparently Ford cars (GM has it too, it said) will communicate with utilities through some magic. GM's magic is OnStar, a wireless thing? Whatever. But you and I -- we -- are providing $5,900,000,000 to Ford from the Obama Department of Energy to retool some of its plants. And to make get this 5,000 - 10,000 electric cars in 2011. $5,900,000,000 divided by 10,000 is $90,000 per. I hope they simply give them to Congress and the Administration. This "Smart" technology seem pretty "Dumb". Not to mention expensive.
An article in today's Seattle Times (August 11, 2009, page A8) [http://seattletimes.nwsource.com/html/businesstechnology/2009635915_autoupstarts11.html] discusses entrepreneurs in the automotive manufacturing business. Enterpreneurs are the basis for the wealth of America and from little 41-employee Coda Automotive in Santa Monica to hugely successful Penske Group (shopping for cars to sell through the Saturn dealership network it agreed to acquire from GM) they are taking aim at innovation in the industry in order to gain wealth. Actually Chinese and Indian companies are looking here, too. But the Obama administration's insane support of union labor bosses in throwing taxpayer's money at Chrysler and GM will make success by non-government entities difficult but not impossible because competing against and bettering government "companies" which don't have monopolies is pretty easy. The $100,00,000,000 into GM and Chrysler might be deemed a monopoly by any rational person. But Obama is going after Microsoft and Yahoo, brilliant successful innovators, instead.
WASTE NOT, WANT NOT. NOT. (Not if it might a mean re-election cash giveaway.)
Obama crushes cars and gives away $3,000,000,000 of taxpayers' money (well, borrowed from China). His "Car Allowance Rebate System" ("CARS"), throws away billions of dollars worth of privately-owned, generally perfectly good and running automobiles to keep the union workers working. (Just some calculation: $3 billion divided by $4,500 equals 666,666 cars thrown away. If each is worth, say, $10,000 -- I'd guess a low figure -- that's $6.7 billion of assets thrown away. Thrown away. Disposed of. Torn up. Burned. (In a recession purposely destroying $6.7 billion is insanity.) And targets $2,400,000,000 to jump start votes in upcoming elections in the midwest (which is hidden as electric car manufacturing.) Venture capital? Nahhhhh. Democrats pick which companies -- 48 different ones -- to back. And the government would buy thousands of electric cars from GM, Chrysler and Ford. Toyota in the meantime is struggling to sell its highly-publicized Scion-brand "green" cars (sales crashed 58% so far in 2009). So take billions of taxpayers' dollars from them (money THEY could use to choose cars they want to buy), destroy thousands of used cars they could buy, offer electric cars they don't want to buy, and have the government buy those unwanted electric cars. Free-enterprise? With no wealth creation we will be bankrupt in 5 years. The wonderment of enterprise by power-mad people using others' wealth. ANGRY? YOU BETCHA.
Top ten destroyed cars: 1. Ford Explorer 2. Ford F150 Pickup 2WD 3. Jeep Grand Cherokee 4 WD 4. Jeep Cherokee 4 WD 5. Dodge Caravan/Grand Caravan 6. Chevrolet Blazer 4 WD 7. Ford Explorer 2 WD 8. Ford F150 Pickup 4 WD 9. Chevrolet C1500 Pickup 2 WD 10. Ford Windstar FWD Van.
Top Ten New Car Purchases: Cash for Clunkers 1. Toyota Corolla 2. Ford Focus FWD 3. Honda Civic 4. Toyota Prius 5. Toyota Camry 6. Ford Escape FWD 7. Hyndai Elantra 8. Dodge Caliber 9. Honda Fit 10. Chevrolet Cobalt. Americans want Japanese cars.
Oh, by the way, where will all these government employees charge their government-purchased and -owned electrics? No where. There is no infrastructure to do it. So certainly the government will put wires and plugs all over the place for billions more. But to do so will take huge and highly-dangerous 240-volt charging stations (Only 110-volt current is widely available in homes and offices). What are these royal idiots thinking?
"Cash for Clunkers" $1,000,000,000 blown in a week starting July 24. Good planning Obama. Katrina-like. So now go to Congress and get a couple more. What did it cost to write regulations? To keep dealers honest, I imagine. They need to exactly adhere to Obama's 136-page manual for dealers including how to kill the Clunkers engines with sodium silicate. 136 pages! But wait, the Environmental Protection Agency developed a list after reviewing 30,000 different car models of acceptable cars. But wait! It changed its mind and revised mileage ratings eighty-sixing 80 models and adding 50. This week. (At what cost?)Clearly, all this will cause more sales of new cars, but 1) will it simply steal from the future? 2) steal from the past, with new buyers having waited for it, after its announcement? 3) do anything for the future jobs and the economy? $1 billion down and $2 billion more apparently coming. The plan is expected to result in 250,000 new sales, or 110,00, or 40,000. No one knows and there'll be no way to prove anything other than $1,000,000,000 or $3,000,000,000 will be borrowed from China to pay for it. (I wonder if my children or grand-children will have to pay this back.)
Just read that our wise administration loves BMWs, Mercedes, and, I suppose, Indian Jaguar, not to mention Suzuki and other Japanese car companies that compete bitterly with Obama's own GM and Fiat/Chrysler. Heck these guys won't have to curb greenhouse emissions if they sell under 400,000 cars in the U. S. each year. What is this CEO of America thinking? Obviously he doesn't have a clue about competition and free enterprise. GM and the American taxpayer will be the big losers. And as for Obama's GM initial public offering next year? What a sad, sad laugh.
GM sales off 32% for the second quarter from the year before, in North America and off 15% globally. Keep up the good work, Mr. Obama.
Private-market Ford Motor Co., however without government largesse returned to profitability in the second quarter
As of July 23 the U. S. Government will be into its auto industry another $6.2 billion by taking on the retirement plans of 70,000 retired Delphi Corp. employees.
Conflict in management. Bob Lutz, car-guy at GM (and architect of its new hot-selling Camaro) said GM would keep its high-horsepower Pontiac G8 by turning it into a Chevvy. But finance guy and CEO Fritzy Henderson said no. It has too much horsepower and Obama wants slow cars with high gas mileage. None of this macho stuff for our urban president, even though the G8 sales are up 57% this year. But as it will continue to play out, sales prospects (which might bring those hated profits, have little to do with Obama's automobile agenda.
Politics as expected is rearing its non-profit head with GM's selection of a new plant to build its new compact car. The most selection criteria were 1) community impact and 2) carbon footprints. Michigan -- a key election state for Democrats next year -- was chosen over mainly non-union Tennessee and Wisconsin. Originally, of course, a business-like GM wanted to import the compact from China. NO WAY, said politicians who actually do run GM. It is expected that the U. S. build car will lose money upwards of $1,000 to $2,000 on each sale. Rep. Barney Frank (D-Mass.) is one of them guiding GM's plant closing strategy.
Chrysler appointed 5 new directors. A hedge fund manager, George F.J. Gosbee; Douglas Steenland former Northwest Airlines CEO; Scott Stuart, another hedge fund manager; Ronald L. Thompson, Chairman of Teachers Insurance and Annuity Association; and Stephen Wolf, chairman of R. R. Donnelley & Sons, Inc., a media company. Continuing Obama's course, none of these people have automobile industry experience and are supposed to put together a long-term plan to include small cars that Obama demands. Its sales were off 42% in June from a year ago. The government owns 8%, Fiat initially 20% and the United Auto Workers, represented by former Michigan governor James Blanchard, represents its 55% ownership. In all likelihood, Fiat will be running Chrysler as its CEO, Sergio Marchionne, is CEO of Chrysler also.
July 7, Fiat SpA which was given Chrysler for free by President Obama (and to the United Auto Workers Union also) is setting up a joint venture with Guangzhou Automobile Group to produce 140,000 cars and 220,000 engines in China when it gets running after May 2011. The total investment -- in money, unlike with Obama and Chrysler, will be about $559,00,000. Remember, China is General Motors largest market. So Obama's GM will be competing there not only with Chrysler, after its being given away by Obama, but possibly with itself in the form of Opel, which GM is selling.
Obama has had a new board of directors appointed to run GM. None seem to have automobile industry experience. Like his Auto Czar, Steven Rattner, they are major Democratic Party funders and fundraisers. (Actually Rattner resigned July 13, 2009. Leaving one to wonder if something about his hedge fund's, Quadrangle Group, fund raising might have been illegal.) Obama's GM Chairman, Edward E. Whitacre, Jr., turned AT&T into the largest U. S. wireless telecommunications company which is now being investigated by Obama's Department of Justice for antitrust. Oh, yes, Whitacre has zero auto industry experience.
STAY TUNED FOR THE LAW OF UNANTICIPATED CONSEQUENCES THAT THE OBAMA ADMINISTRATION AND ITS ADVISORS WITH NO AUTO EXPERIENCE WILL EXPERIENCE:
Chinese-government backed company wants to buy GM's affiliate Opel which has extensive sales in China to grab GM's technology as described in my post, "China Eats the U. S. For Lunch" below. If Obama allows it (GM wants the sale), his company, GM will compete in essence with itself in what is becoming the the largest market for autos and trucks in the world, China, against a Chinese-backed company. And Obama needs to continue to guarantee GM's survival to keep those United Autoworkers working. Dichotomy for a man who does not understand nor support business. China is on track for more than 11 million autos in 2009 up more than 15% while the U. S. market is expected to drop to well under 10 million, off over 30%. GM's China sales are up 38% for the first half of 2009, to over 800,000.
June 29, GM agrees to take on future unknown potentail liability claims from car-accident victims. Under the original bankruptcy plan these liabilities were to stay with the unwanted, virtually-valueless "Old GM". My guess is that the pressure of Democratic Party-co-owner the trial or tort lawyers wanting their cut of such future claims settlements, a portion of which flows into the bank accounts of Democrats, forced this "settlement" which also obligates the U. S. Government.
Interesting article, June 26 described GM's arm GMAC LLC curtailing financing for dealers of arch-competitor, Chrysler (given to Italy's Fiat -- a foreign company -- and the United Auto Workers with U. S. taxpayers' billions of dollars.) On the surface this seems somehow illegal or certainly immoral: using government money to hurt a competitor. But America you haven't seen anything yet. Also same date, GM announces plans to close a plant in Louisana -- possible 2012 presidental contender Bobby Jindal's state.
Old headline: "That's Obama Tough! Obama drives General Motors, unions get their wish"
Interesting car article in the Wall Street Journal, Wednesday, June 17, 2009 page D 3. ["Muscle Car's Test Drive Turns Heads" http://online.wsj.com/article/SB124518581645820381.html]. Apparently ObamaMotors' division General Motors' division Chevrolet ("Chevy") has a sellout. A sellout! In a car designed by Obama? Not quite. It's a 304 hp V-6 or 426 hp V-8 muscle car, the new Camaro. And it's outselling an Obama clone, the new Honda hybrid, the Insight, two-to- one. Meanwhile Chevy is killing another slow-selling Obama clone, the hybrid Malibu. But CEO Obama, you should stop the Camaro, and other fast-selling muscle cars, the Ford Mustang and Chrysler's 500 and Dodge Challenger before it's too late.
Fiat is coming back to the United States, courtesy of President Obama virtually giving Chrysler to it and the UAW free of charge. Its first entry here was a flop. Why? In the early '80's Fiat's quality reputation was so bad it was nicknamed, "Fix It Again, Tony" and couldn't sell enough cars to stay in the U. S. Hopefully President Obama will be on the line to check the quality of his cars.
But after giving Chrysler to a foreign company, note that Saab Automobile AB might be bought by an entrepreneurial boutique sports car company, Koenigsegg Automotive AB, from GM/Obama Motors for money. Christian von Koeniggsegg's company now makes very limited edition supersportscars for the supersportsrich. About $1,000,000,000 will be invested.
Auto bailout-management news in this continuing blog will be newest news on top.
Bad News for U. S. Auto Industry President Obama: Mitsubishi Motors Corp. expects only 2,ooo electric cars to be produced for 2010 (because of the high cost of its newly-launched i-MiEV, $46,500) and less than 20% of its production by 2020!
Here is an absolute outrage (June 5, 2009): General Motors, now "flush" with $30 billion of U. S. Government cash has agreed to invest some of it -- $2.5 billion, or 70% of the price -- to finance Tom Gores' Platinum Equity firm's buyout of bankrupt auto-parts company Delphi Corporation. WHAT? Obama is providing our cash for a highly-speculative investment, the rewards of which success will NOT accrue to the U.S. but to an individual. You can bet Mr. Gores or his friends and family have made significant campaign contributions to the Democratic Party in general and the Obama election specifically. I'll research this issue in the future. Update of June 11, U. S. Bankruptcy Judge Robert Drain blew off Obama's hand-picked winner of Delphi to sell the auto parts maker at an auction. At least one judge believes in the rule of law.
(And non-political-non-running-GM President Obama called the mayor of Detroit and reassured him that GM would stay there in the Renaissance Center. And more phone calls were made from the Administration or so sayeth the Detroit News.)
And there will a huge Obama expansion of Ethanol, proven to increase food prices by 10% - 15% and, according to the EPA's Office of Transportation and Air Quality, the new land (from slashing forests) to grow grain for Ethanol will increase greenhouse gases. In other words, Ethanol will bring an increase in greenhouses gases vs. simply using gasoline. And it only costs the taxpayers and consumers roughly $10 billion. But it buys the votes Congressmen want. That's what is important.
On the Web tonight (6/9/2009):
"EYES ON THE ROAD, by Joseph B. White
from The Wall Street Journal.
A new survey shows the economy has damped consumer interest in new auto features and gadgets, including hybrid technology and onboard navigation systems.
(http://online.wsj.com/article/SB124450736037596339.html?mod=djemroad)" But customers will certainly spend upwards of $2,500 more for Obama's Little Green Lemmingmobile that gets 27 Miles for Each Gallon consumed, that's certainly an attractive attraction, especially if the government pays the entire cost of the "car".
The Obama administration's less-favored auto company Ford Motor Company, because it didn't take his strings-attached monies, raised some 5-year money to finance customers. Price 8% interest. GMAC/Obama raised some money too, backed by us the U. S. Government. Price? under 2%. Competitive differential. Could be life and death. This, ladies and gentlemen, is the result of governmental industrial policy. President Barack Obama decides between life or death for the largest American companies.
The Obama administration pushed an "alliance" AKA give-away of much of Chrysler to Fiat SpA. In the mad rush, Chrysler executives were dissuaded by the government from getting key due diligence materials describing the fiscal health of Fiat and information about its true willingness to share required technical information. No matter, Obama seemed to say, we simply know this deal is good. For someone, how about the union and a foreign company. Fiat can walk if the deal isn't closed by June 15, hurting the United Auto Workers union. Why would Fiat walk? It gets for nothing an initial 35% stake potentially rising to 50%. And make no doubt. The Unites States Treasury, not Chrysler, in the form of former UAW boss, Ron Bloom, is managing the transaction and Chrysler's figurehead, Robert Nardelli defers to him.
June 1, 2009: General Motors is renamed ObamaUAW Motors, except the UAW didn't want common stock, it got preferred stock paying about $600 million a year and few economic changes to its contract, but can't strike until 2015. And its unfunded pension funds covering roughly a half million former workers and dependents is underfunded by around $13 billion, which ultimately could become the obligation of the U. S. Government. New car warranties, an uncertain amount of money, are already guaranteed by the U. S. "We" the U. S. taxpayer -- and, of course those citizens who don't pay taxes -- will own 60% for around $50 billion; The United Auto Workers Union get 18% for nothing; the Canadian government 12% (for $9.5 billion); former bondholders, 10% for $27 billion; common stockholders zero, nada, nothing. Essentially the Obama administration doled out ownership of once the world's largest company according to favoritism and political strength. The Obama administration will have GM and Chrysler to prove its green agenda is sound by making the car companies manufacture "little green cars" in UAW-manned domestic plants. No imports will be allowed, courtesy of Congressional meddling. And as for micro-managing and meddling the CEO will have two multi-headed bosses: the Obama administration, including personnel of the departments of energy, labor, treasury as well as the nearly 400 members of Congress and a few thousand of its staff. Stay tuned for the biggest spin in history. "The success of Barack Obama as chairman of the chairman of General Motors, and, well, Chrysler a little bit."
THE QUESTION OF THE DAY: CAN GM SURVIVE? THE ANSWER IS ABSOLUTELY, AS LONG AS OBAMA IS PRESIDENT AND WILL THROW BILLIONS OF DOLLARS ANNUALLY TO DO SO.
May 26, 2009: The United Auto Workers told union officials that it has agreed to a deal with General Motors that will lead to the union owning 17.5% of the company once it restructures as part of GM’s obligation to fund future retiree health-care obligations; GM will place $10 billion of assets into a Voluntary Employee Beneficiary Association, or VEBA, on Jan. 1, 2010. The UAW will also receive a new note, payable in cash, for $2.5 billion. That note will be paid out in three installments taking place in 2013, 2015, and 2017. The UAW told their president that it didn't trust the future prospects of GM, so it wanted more security. Notes and cash, less stock. And he responded, "yessir, yessir, whatever you say.' And the United States taxpayer via its government will own
May 23, 2009. One step on the road to wherever, General Motors revised its agreement with the United Auto Workers. Huge burden for the union. No raises. What! Yes, can it be believed, the company is facing extinction...[well, it asked for $2.6 billion more and Obama gave it $4 billion, so much for...extinction, with the President of the United States propping it up with taxpayers' money...anyway back to the UAW's "suffering"]. No raises. While the country's non-governmental citizens are losing their jobs left and right, the UAW workers won't get raises. That's no concession that's a slap in the face to ALL AMERICANS. Or at least the 93% who aren't unionized (private sector). And no pension increases, oh, the employees might have to pay a little more for their healthcare. There are job losses, though, maybe 20,000 a third. And no strikes until 2015. I guess you can't strike a non-existent company. Finally, the UAW will own much of the playing field: 39% of GM. And yes, the chief "negotiator" for the government is a former union boss!
May 21, 2001. President Obama once again bails out GMACLLC with a $7 billion "down payment" on top of Treasury's $5 billion, I guess, pre-down-payment in December 2008. And another $7 billion "payment" could end up with the U. S. Government owning GMAC (as well as GM) within a few months. And with its (job-killing) dictate of new fuel economy standards of 35.5 miles per gallon by 2016, is it anyone's doubt that GMAC and the government will continue to burn dollars in the gas tanks of United States-manufactured automobiles that few citizens want. We will have lost our freedom to buy what we want.
This blog began months ago with the following:
"Child don't you do that...Or I'll...I'll...I warn you...I'll...I warn you...Time out!...I mean it...Oh, well...I'm sorry...Oh, OK do what you want, have fun!" Threaten, threaten, but don't follow up.
Or: "In for a penny, in for a pound".
Or: "If you're gonna play the game, boy, ya gotta learn to play it right.You got to know when to hold 'em, know when to fold 'em,Know when to walk away and know when to run.You never count your money when you're sittin' at the table.There'll be time enough for countin' when the dealin's done.
Or was President Bush smart by a half to put in some dough to GM and stick Obama with the it? Well, no, he's not that cunning or smart.
Basically I knew Obama does not have the grit to say "enough" once government got entwined in the auto business. He is not a strong, self-confident personality. We are in and it will not stop...with car companies, suppliers, financiers, warranty-guarantees, ONE HUNDRED MILLION DOLLARS here we come. Fictitious quote of Obama: "Who cares, it's only the stupid taxpayer's money. And we need to get it to the UAW."
Updated news April 30, 2009. A new offer by holders of about 20% of the $27 billion unsecured GM debt outstanding asks for a 51% ownership of the company, the same valuation being offered the United Auto Workers union by the U. S. Treasury. This would leave 41% in UAW hands and 1% to present equity owners. The $15.4 billion debt to the U. S. Treasury would remain. It seems obvious the Obama Administration wants to own GM in conjunction with the UAW...its proposal would give 39% (and $10 billion cash) to the union and leave 51% to the government for $7.7 billion in debt forgiveness. The remaining 10% would go to bondholders for their $27 billion. Do the math. It's a monumental theft of bondholders' money and rights.
Yes, President Obama today (March 31, 2009) took control of General Motors by firing its CEO, the hapless fall-guy, Rick Wagoner (who leaves apparently with only $21 million comp), to "prove" he's tough. And he, Obama, once again threatened bankruptcy for GM and Chrysler, but this time he really, really means it. The first time GM was loaned $17.4 billion and the government really meant to get tough. But no money this time unless GM could get GM bondholder approval to cut the debt, the United Auto Workets to agree to alter contracts and draft a recovery plan or something on paper...well, "just kidding about that": the two "requirements" were waived and the paper deemed not worthy enough. But today he's really, really going to get tough! Oh, today he also guaranteed new-car warranties, and made provisions for the government to quickly purchase a bunch of cars and to perform some weird scheme to buy back old, gas-guzzling cars and give a tax break for new car purchases. And buyers can deduct, excise, state and local sales taxes they pay to buy new cars. That's Obama Tough. As for Chrysler, which only got $4 billion in December, the government gives it 30 days and $6 billion if Fiat buys some of it...While Fiat wanted up to 55%, Obama, being tough, would only allow 20% to show them forineers (Chrysler and Fiat negotiated 35%, but that doesn't count, it's what Obama demands); and the government will give it working capital until then. But a serioius threat is to the poor holders of the auto companies' debt. GM has $29 billion unsecured and Chrysler, $8 billion, secured. Obama means it this time that it must be slashed. He also toughly stated that the companies couldn't depend on "unending" (my emphasis) taxpayer loans, but what is the meaning of "unending"?
Have no doubt, the Obama Administration, Congress and Labor Union Bosses ("Government") know better how to run companies. Just look at California, Amtrak and the U. S. Postal Service. (Not to mention TARP.) It's simple, design cars Congress wants: small, low-powered with high MPG, or pedal; and maybe always black because that's cheaper, (and diverse). And all the same. It worked for Henry Ford. But, of course, he made cars for the consuming public, who bought. Congress has mandated cars that the public doesn't want: small, low-powered with high MPG. Congress can mandate that the public buy, and it will pay for, the cars. Keep those union bosses in power at all costs. Newly anointed-by-Obama CEO, Frederick "Fritz" Henderson immediately played down the need for an entirely new labor contract!
Speaking of which there is a rule passed in Congress' 1975 fuel economy law (1975 Energy Policy and Conservation Act Public Law 94-163) nicknamed the "two fleets rule" which I have read but fell asleep at the circumvention, circumloquation and maze-ness of it.
(Fleet fuel economy is calculated using a harmonic mean, not a simple arithmetic mean (average). The harmonic mean is the reciprocal of the average of the reciprocals of the fuel economies of the vehicles in the fleet. For a fleet composed of four different kinds of vehicles A, B, C, and D, produced in numbers nA, nB, nC, nD with fuel economies fA, fB, fC, fD the CAFE would be:
For example, a fleet of 4 vehicles getting 15, 13, 17, and 100 mpg has a CAFE of slightly less than 19 mpg:
While the arithmetic mean fuel economy of the fleet is 36.25 mpg:
[the formula is too funny to reproduce]
One feature of the above law is that these these cheap-small-dangerous cars must only be made in domestic UAW plants, which guarantees losses on each car. But the Obama Administration will make it up on volume. But no matter what, the UAW will retain its monopoly, even if it has to cut retirees off and drop new hires' wages a penny or two. Keep those dues flowing, Mr. President from 140,000 UAW workers the Democrats need it to keep in office. I don't know what part of their wages (which are double the non-union and successful "foreign" U. S. manufacturers in the South, Nissan, Honda and their ilk) go to Democrats, but it's sizeable.
Poor Ford Motor Co.; it will be penalized for being successful and not taking the government's money. Ford -- all by itself -- is achieving some success in paring down the monopoly-UAW's huge wage and retiree healthcare costs and some of its lenders' debt. Ford now will have to compete not only with domestic and domestic/foreign and foreign manufactures, it'll have to compete with the U. S. Government. This scenario continues the democrats' punishment of the smaller numbers of successful companies and people for rewarding the greater number of voters who are not successful.
And today, April 15, 2009, in a Wall Street Journal article, "U.S. May Take Stake in GM To Pay Off Loans" (http://online.wsj.com/article/SB123972054506117179.html), the government cannot find private investors for a "revamped" -- split-apart, or Good guy-Bad guy -- General Motors to which the U. S. Government has loaned $13.4 billion. The recourse, of course, trade worthless debt for even more worthless "equity" in laughably "stripped down" company hoping, against hope, that the United Autoworkers (owner of the Democratic Party) will accept some concessions and some bond holders who are owed some $29 billion, including over $5 billion to individual "widows and orphans" who bought the security of GM bonds.
Today, Friday, April 17, 2009, Obama presses GM to rid the GMC truck brand which started up in 1912. Wall Street Journal (http://online.wsj.com/article/SB123989177238225323.html). GM also might shutter Pontiac and sell Hummer, Saturn and Saab. While GM is rushing to meet Obama's "deadline" of June 1 to transform itself, the United Auto Workers put its GM negotiations on hold while it concentrates on talking to Chrysler. Extraordinary how someone who's never run anything is remaking one of the largest corporations in the world in 60 days. (Around the World in 180 Days has nothing on the Obama Administration!) And apparently CEO Fritz is mentioned a need for more cash.
And an update, Thursday, April 23, 2009. "GM Plants to take Extended Break page B1. (http://online.wsj.com/article/SB124041946006244177.html) GM plants are planned to be idle two months this summer, but the United Auto Workers will still get paid, as the Obama Treasury Department is finalizing another $5 billion in aid (aka "loans") to it. While the unions skate, Treasury is trying to get GM lenders to throw away $28 billion in their loans to GM in exchange for, yes, GM STOCK. Hey, guys, what a great deal! And GM will not make the required $1 billion debt service payment due June 1. And on to Chrysler, "Banks Get New Offer for Debt in Chrysler" page B1 (http://online.wsj.com/article/SB124044878863646087.html). The bid by Treasury is 22% back of $6.9 billion SECURED debt and 5% equity in the new Chrysler. The ask by lenders is 65% and 40% plus a board seat. The lenders, led by U.S. subsidiaries, Citigroup and J. P. Morgan Chase, essentially are negotiating with their owners, or soon-to-be owners, us the U. S. Taxpayers represented by our Treasury Department. A tangled web we weave. At the same time, Treasury is offering United Auto Workers 28% of the $10.6 billion it's owed for retiree healthcare costs plus some stake (steak?) in the restructured Chrysler.
Tuesday, April 28, 2009.
General Motors, controlled by the Obama Administration, offers the United States of America, represented by the Obama Adminstration a majority stake. We the taxpayers "invest" another $11.6 billion on top of the $15.4 billion already in, $27 billion total, and get "at least half" ownership. (GM's market capitalization is $1.3 billion.) The United Autoworkers Union would get 39% of GM in exchange for $10.2 billion owed the UAW by GM (half of the obligation), And for at least 90% of the $27 billion in unsecured debt, bondholders would get 10%. GM would slash U. S. dealers to 3605 down 42% by 2011 and kill Pontiac. What a deal for Obama Administration which owes its election to unions! Guaranteed support in 2010 and 2012.
Chrysler would give the UAW 55% of its stock plus notes for $4.6 billion owed for retiree health funding, Fiat SpA up to 35% (for some small car production, creating 4,000 new union jobs, use of Fiat engines and some cash) and for exchange of $6.9 billion of secured debt, present holders would get a 10% interest in Chrysler. The UAW would give up cost-of-living increases, put limits on overtime pay (payble only after 40 hours a week), and lose Easter Monday in 2010 and 2011! Seems the union gives little and gets immensely.
At issue on another front: Chrysler and GM dealerships -- now about 10,000 owe "flooring' of around $25 billion which could be called in the event of any bankruptcy. There are 1.1 million unsold cars in dealer inventories. Only 660,000 were sold the first quarter of 2009.
In the meantime, bills to provide government-funded discounts of $1,500 to $5,500 for people to trade in old cars for new ones. Congress feels it is desperately needed to lift slumping car sales. "Cash-for-Clunkers". This is an interesting contradiction to the probably increase in new car prices from Obama's MPH mandate of in excess of $2,300 ("only" $1,300 projected by the White House and upwards of $3,778 and $5,877 for light trucks, according to Sierra Research for the National Highway Traffic Safety Administration). And apparently Obama's 35 MPH will settle at 28 after adjustment by Environmental Protection Agency! But in order to meet Obama's mileage restrictions, cars will have to be lighter. And lighter cars kill. The only statistics available indicates that in 1993 between 1,300 and 2,600 more people were killed in collisions of the then-lighter cars than the heavier ones of 1976. But these deaths will reduce Obama's cost of healthcare "reform".
And there is a tax credit subsidy possibly available to retired auto workers, those very same people who will be paid out of any auto company bailout or bankruptcy filing. It was just made more generous by Congress to cover 80% of an eligible retiree's healthcare cost, up from the recent 65% and made it easier to capture.
But today, April 30, 2009, Chrysler might declare bankruptcy, with the secured debt holders resisting huge and oppressive government pressure.
Obama's Mantra: Fail, to Win.
The Obama Administration is afraid American consumers won't buy its electric cars (duh!) so he's bribing companies to make them, no matter if anyone wants them. The method is as complicated as the federal tax code and Medicare regulations (150,000+ pages). (Government does NOT want its citizens to understand its laws.) But essentially the arbitrary new emissions standards can be gamed by producing electric cars which don't count as emitting carbon because Obama says so. (That nearly half of the electricity in America comes from dirty carbon-emitting coal, and another 22% from fuel oil and natural gas doesn't count according to President Obama, who apparently can't count.) This will bring a glut of electric cars: more than a dozen car makers are rushing to take advantage of Obama's bribes. Including Al Gore, politician extraordinaire taking financial advantage of the "green politics" he helped create and popularize. He has backed one. And Mr. Gore is reported to be reaching a billion dollars of net worth in "green" politics. Back to the electric cars: oversupply with low demand, will bring...yes, more government purchases and tax credits, rebates anything to prove Obama was not wrong. Obama is wrong.
The following article ("Politicians Butt In at Bailed-Out GM" Wall Street Journal, October 29, 2009, front page[http://online.wsj.com/article/SB125677552001414699.html#articleTabs=article]) explains why government should butt out of the private sector. In additon he is "lending" $8.5 billion for car makers to retool plants and "innovate" green stuff. President Obama and I'd guess well ober 75% of Congress do not understand, have not experienced and dislike the private sector/free enterprise/and capitalism. Please read, and cry for America.
Jerry Flint, Forbes columnist on cars (November 2, 2009 page 38) writes that America will lose in trying to build "midget cars", being we're a country of tall and large people. (3.8 million of us are 300 pounds or more and 400,000 over 400 pounds.) Japan has always been a better builder of small cars, and India and China are looking at our markets. Obama's obsession with tiny, "green" cars is ludicrous and dangerous. Peer group popularity is for what he's searching while killing jobs and America. Goodbye Michigan, Indiana, Ohio, Iowa and Missouri. And for what? Global warming isn't. And cars are 25% of the greenhouse gas emissions, less than power plants, but so what anyway? Build big cars for Americans and win. Prosperity, jobs, wealth and an increased standard of living. All seemingly anathema to President Obama. Sad for America.
GM plans to dip into another $2,500,000,000 to reinvest in bankrupt Delphi Automotive LLP. GM's market share crept up by it spending $4,000 to bribe customers to buy cars. Looks good President Obama. GMAC -- financier to GM and Italy's Fiat subsidiary Chrysler -- borrowed another $2,900,000,000 in debt guaranteed by the U. S. and in addition has its hands out to Obama for an obscene $2,800,000,000 to $5,600,000,000 more directly from the government in equity, which won't be paid back. Its in hock to us (the taxpayers of the U. S. government) $12,500,000,000 already and lost $3,900,000,00. Nice investment to protect your unions, Obama. And at the same time Ford Motor Co. is close to selling Volvo to China's Geely Holding Group Co. creating another fierce competitor to GM and, for that matter, Ford itself.
Fisker Automotive Inc. will use government funds, "loans" it likely won't be able to pay back as a start-up, to purchase a closed General Motors plant in Wilmington, Delaware, just coincidently Vice President Joe Biden's home state -- it pays to know a Democrat. The half-a-billion taxpayer dollars is planned to reopen a 62 (sixty-two) year old plant to make a "plug-in electric" car. If opened successfully it could employ 1,500 employees. The United Auto Workers has been closely involved in the talks. Huh? If all the $528,000,000 is spend for those 1,500 jobs that's $352,000,000 per job. Ditto start-upTesla Motor's $465,000,000 Quite a coup for ObamaEconomics...well I am pretty sure much of it will end up in the coffers of the Democratic Party and United Auto Workers, one way or antother. Competition by who you know and your ideology! And it'll ONLY be a couple billion dollars write-offs of taxpayer money. Or three. Or four, all depending on 1) when Obama admits the mistake or 2) when he is out of office.
I have written posts about Chinese automobile makers. It's difficult to place them in this post or in the "China eats the United States for Lunch" post. Mostly it'll go there, but first, China is overtaking the United States of America as the world's biggest car maker, and is expanding from there. While General Motors -- once the largest auto manufacturer in the country which was the world's biggest car maker, the U. S., of course. With weak leadership afraid of its union bosses and lousy products, the U. S. has committed automobile industry suicide. Next up? The upcoming suicide of the United States of America itself!
But wait. Cash for Clunkers was such a success that car and light truck sales for September for the United States' two major industrial holdings, General Motors and Chrysler, absolutely bombed. GM off 45% (to a 20.9% market share down markedly from 29.3% a year earlier) to 155,679 and Chrysler off 42% to 62,197 (40% of which went to rental car companies)! The U. S. total sales were off 23%. Non-U.S. Ford only dropped 5% to 114,241 vehicles (with a market share of 15.3% up from 13.5% a year earlier) and Toyota, off 13%. Some people think Cash for Clunkers only stole sales from September, and possibly October, at a cost to U. S. taxpayers of $3,000,000,000 and the wanton destruction of 700,000 operable vehicles that poor people could have purchased and driven. President Obama get us out of the auto business and the "stimulus" industry, you don't know what you are doing.
And intelligent private market businessman Roger Penske said "no? to buying GM's Saturn brand, which now will be wound down "quickly". The Saturn born in 1985 as an innovative approach to auto making with the United Auto Workers union bosses and General Motors executives on the same page. Workers were 'technicians' and were paid 80% of UAW with the rest from a sharing of Saturn's profits. Key decisions were shared by an exec and union boss. Vision, passion and collaboration courtesy of the UAW's GM guy, Donald Ephlin. There were broad dealer market areas and 'no haggle' prices. Even now-green VP Al Gore touted the concept. But it was not to be. Union bosses feared collaboration would spread, and make them useless, so then-ew UAM militant, Stephen Yokich underminesd it. And its GM-executive-promoter, CEO, Roger Smith retired in 1989. Saturns were boring, underfunded and 'joined' the GM family in 2003 woth its dysfunctional relations with the UAW. When Obama finally killed it, Roger Penske thought he could re-innovate, but no., once again it was not to be. And not to be are collaborative relations of industry and its union bosses, who exist to create conflict.
So much for GM's brilliant new management, and super-CEO, Barack Obama.. Seven weeks ago amid pomp and circumstance, GM announced it was going to sell its cars on eBay. Today the last day of September, it's a bust and being discontinued.
U. S. Government- and union-owned General Motors is trying to sell its Opel unit to Magna International. But here is the matter with central control and planning. The deal with magna seems to be unwinding because the Spanish government, the German government, the English government, the Belgium government...all don't care a whit about the financial success of Opel, they are only interested in getting reelected for which they need their union bosses. So these governments only really care about holding onto union jobs. Opel has factories in each of these countries. A deal might not get done, shackling GM with the huge Opel losses. Stay tuned!
This is a series of comments about President Obama's takeover of GM and Chrysler for the primary benefit of his major supporters, labor union bosses. And other auto-industry stuff.
More Washington DC manufacturing. For the three-wheeled Aptera 2e, Aptera Motors Inc.,Vista, CA, like everyone else, wants some government money. Only $75,000,000 though from the Energy Department, but Congress then (2007) said three wheelers don't qualify. So what to do? Get the Democrat Congress to change the rules. Especially when Aptera's investors are long-time and large contributors to the Democratic Party; in 2008 just a few accounted for $1,000,000. So obviously it's not the free-market vetting start-ups, it's money for re-election. (Tesla Motors another California start-up along with Ford and Nissan has already received $8,000,000,000 in "loans" from Democrats with taxpayer money.)
I don't know whether this should go into some post about central command and control of government or the end of the free enterprise system, or here. So here it is.
Fisker Automotive will be lent -- and how does a start-up repay? -- $528,000,000 to develop two plug-in electric cars including Karma a $87,900 sports car certainly targeted toward Obama's middle class sweet spot. The money will go toward engineering since the car will be manufactured in Finland, but with bribes to buy Karma, it will ONLY cost $80,000. The Obama People's Car.
Update as of September 15, Chrysler's sales in September are expected to fall 30% year to year, double the decline for the U. S. in general. Yes, Mr. President, you put in cash for a clunker and gave it to an Italian. Good move.
So the future of the American taxpayers' investments in the auto industry it would seem is based on President Obama's decision to "go green" and that even given U. S.-made cars' much higher price, perceived lower quality, and mediocre technology and what is shaping up to be fierce competition not only to sell cars but to get U. S. government largesse, GM and Chrysler, among other auto-realted companies, must sell many, many more cars. In a market which so far has not bought a lot of "green cars" why will Americans suddenly want small, slow and difficult cars? I doubt they will. And a really funny irony is that the new green Obamamobiles run not on electricity -- electricity is a middle-man -- but on coal (48.5% of U. S. electricity production), natural-carbon gas (21.3%) and petroleum (1.1%), and nuclear (19.6). Other than hydroelectric (6%), so-called alternative energy accounts for 3% of U. S. electricity production. So exactly what's green Mr. President?
Even though Chrysler is planning to produce the Fiat 500 in Mexico (so far) thus opposing the United Auto Workers Union (so far) Obama will not do the same to trial lawyers, major supporters of the Democratic Party. Chrysler will allow and finance future tort lawsuits against it even though they could have been legally abrogated in bankruptcy court. A major financial victory for trial lawyers and the Democratic Party. Not so great for the U. S. however, or for the UAW for that matter.
So American Axle & Manufacturing Holdings Inc. has reached agreement to get $210,000,000 from GM whose dough comes from the U. S. Government, its major owner; well actually not the government, from taxpayers, well not actually from taxpayers, from lenders like China. Is this like a Ponzi scheme?
Buick the upper-end brand for old folks from GM is jumping into the crowd. It will stake some of its future on a...Duh!...hybrid, thanks to its owner, the U. S. Government and the Democrats. Buick will apply for a $500,000,000 loan (and who will pay it back?) from the $25,000,000,000 program to fund production of more fuel-efficient cars. And GM's battery supplier will apply for another $400,000,000 (and who will pay it back?) Just a cautionary question from a businessman. If all car companies take the U. S. government's money and build millions of (so-far unproven) hybrid's just who will buy all of them. The industry will be flooded with these cars, which are also unproven in the marketplace. That's one of the great things about having one czar run the czars: he makes the decisions, the messy market doesn't. And if it all fails? Mr. Obama'll retire a very rich man.
August 17: Chrysler made an announcement that it is planning to produce its Fiat 500 subcompact in Mexico. Take that, Obama. Take that, UAW. I am betting that the decision will be changed and the car will be made in America by the UAW, owner of 55% of Chrysler to the U. S. Government's 8%.
Trade restrictions caused the Great Depression, among the three major causes. With the U. S. government owning most of GM and some of Chrysler is there any doubt that policies will favor those "investments"? And thus will come counterbalancing restrictions by other countries possibly Japan, South Korea, Germany, India, China? I guess the only thing that would weigh against that is the humiliating fiasco of Obama's Cash for Clunkers that sold 1) Toyota Corolla 2) Honda Civic 3) Toyota Camry 4) finally an American brand, Ford Focus FWD 5) Hyundai Elantra 6) Nissan Versa 7) Toyota Prius 8) Honda Accord 9) Honda Fit and finally number 10) another American brand, Ford Escape FWD. Where were the U.S.-owned brands, GM and Chrysler?
GM's new strategy in part driven by AT&T's former chairman, now Obama's pick (actually Rahm Immanuel's pick as he recently did a deal with Whittaker) for chairman of GM is to culitvate a "green image". Sure to sell a lot of cars in the United States where horsepower can be compared to the size of a man, so to speak. That Chevvy Volt with a range of 40 miles should certainly be a big seller. I can hear the former Corvette owner saying, "Dude, I can get 40 miles to one charging and go from zero to, hmmm,35, Dude." Even with the government's $7,500 bribe it'll be markedly more expensive at $40,000 than Toyota's Prius at $22,000. GM's chief executive Henderson is on the Fritz. And Obama and his czars must be back on cocaine.
Today (August 25, 2009) GM reconsiders selling its Opel and Vauxhall -- a strategic reversal. GM prexy Fritzy Henderson thinks maybe he'll put together a $4.3 billion financing at the direction of the Obama Board of Directors, and maybe will keep the company which has lost money since 2000. The former near-sale to Canadian Magna International and a Russian-state-controlled bank, OAO Sberbank and OAO Gaz car company with the support of the German Government. (Much of Opel's parts are made in Germany by highly espensive union plants.)
But a couple days later, GM is pummeled by Germany politicians and union leaders for its turnabout. "What are they thinking", Germany must think, a broke GM would need $4,300,000,000 to try to turn around Opel (money it doesn't have and that its superCEO, Barack Obama, stated it wouldn't get) and which might not EVEN count $2,100,000,000 the German government made to Opel to keep it breathing during this sale process. STAY TUNED!
Managed like Katrina, but praised by the liberal media for causing more cars to be sold because it was conceived and (mis-)managed by Obama, Cash for Clunkers ("CARS") will terminate over this weekend. If Bush would have run it, it would have been a highly-publicized fiasco when neither car wreckers(owners)nor auto dealers were getting paid by the government bureaucracy, but not now. Complaints aside, the fact that cars were crushed and new Japanese and Korean cars, and a few Americans, were ordered but not paid for, it was deemed a smooth success. Yeah, sure. And, of course, auto sales will fall off a cliff soon because of its end.
Here in Seattle, the federal government is throwing around "millions of dollars" (according to the Seattle TImes, August 6, 2009, page B 1) to equip streets and homes with charging stations for the electric cars of the future. 2, 550 stations for an unknown amount of cash spread "around the Seattle metropolitan area, including the eastside". And what's great it'll only take four to six hours to charge at home, shorter for the fifty "fast commercial chargers" which will charge a fee.
They will be established by Ecotality, parent of Electric Transportation Engineering Corporation (eTec). eTec is Caymen Islands-registered penny stock traded in the "pink sheets" typically inhabited by speculative, money-losing and many times ethically-challenged companies. The Company recorded a net loss for the quarter ended June 30, 2009 of $3,600,845 million, compared to a $909,602 net loss for the quarter ended June 30, 2008. ECOtality recorded a loss per share of $.02 for the period ended June 30, 2009, compared to the loss per share of $.01 for the same period in 2008. For the quarter ended June 30, 2009, ECOtality achieved revenue of $1,747,085 compared to revenue of $2,936,150 for the quarter ended June 30, 2008. August 19, 2009: it closed at 24 cents per 206,900,000 shares with a high of 46 cents and a low of 2 (two) cents and is traded on the so-called "pink sheets' And looking at the "management" team and one sees a group of what seems like hustlers, who obviously know someone in government. I have seen similar companies tout their stock prices, and unload when the time is right. I am not accusing eTec or its management team of anything. Yet. More to come. Oh, here's a government connection:
Colin Read, Vice President of Corporate Development, ECOtality, with the responsibility of overseeing the marketing, public relations, strategic initiatives and business development. Read has significant experience in politics, public relations and traditional media. Before coming to ECOtality, Read was the Assistant Finance Director on a successful congressional campaign for an Arizona Democratic in the 2006 national mid-term election.
Ford Motor Co. is launching a "Smart" charging technology for recharging the planned electric cars that are upcoming in months or years ahead. This unproven technology is supposed to curtail recharging of these non-existing cars during high-cost peak grid-use times. There are over 3,000 different utility companies all of which will provide electricity differently. And, oh yes, wind and sun will provide some electricity too, somehow. Apparently Ford cars (GM has it too, it said) will communicate with utilities through some magic. GM's magic is OnStar, a wireless thing? Whatever. But you and I -- we -- are providing $5,900,000,000 to Ford from the Obama Department of Energy to retool some of its plants. And to make get this 5,000 - 10,000 electric cars in 2011. $5,900,000,000 divided by 10,000 is $90,000 per. I hope they simply give them to Congress and the Administration. This "Smart" technology seem pretty "Dumb". Not to mention expensive.
An article in today's Seattle Times (August 11, 2009, page A8) [http://seattletimes.nwsource.com/html/businesstechnology/2009635915_autoupstarts11.html] discusses entrepreneurs in the automotive manufacturing business. Enterpreneurs are the basis for the wealth of America and from little 41-employee Coda Automotive in Santa Monica to hugely successful Penske Group (shopping for cars to sell through the Saturn dealership network it agreed to acquire from GM) they are taking aim at innovation in the industry in order to gain wealth. Actually Chinese and Indian companies are looking here, too. But the Obama administration's insane support of union labor bosses in throwing taxpayer's money at Chrysler and GM will make success by non-government entities difficult but not impossible because competing against and bettering government "companies" which don't have monopolies is pretty easy. The $100,00,000,000 into GM and Chrysler might be deemed a monopoly by any rational person. But Obama is going after Microsoft and Yahoo, brilliant successful innovators, instead.
WASTE NOT, WANT NOT. NOT. (Not if it might a mean re-election cash giveaway.)
Obama crushes cars and gives away $3,000,000,000 of taxpayers' money (well, borrowed from China). His "Car Allowance Rebate System" ("CARS"), throws away billions of dollars worth of privately-owned, generally perfectly good and running automobiles to keep the union workers working. (Just some calculation: $3 billion divided by $4,500 equals 666,666 cars thrown away. If each is worth, say, $10,000 -- I'd guess a low figure -- that's $6.7 billion of assets thrown away. Thrown away. Disposed of. Torn up. Burned. (In a recession purposely destroying $6.7 billion is insanity.) And targets $2,400,000,000 to jump start votes in upcoming elections in the midwest (which is hidden as electric car manufacturing.) Venture capital? Nahhhhh. Democrats pick which companies -- 48 different ones -- to back. And the government would buy thousands of electric cars from GM, Chrysler and Ford. Toyota in the meantime is struggling to sell its highly-publicized Scion-brand "green" cars (sales crashed 58% so far in 2009). So take billions of taxpayers' dollars from them (money THEY could use to choose cars they want to buy), destroy thousands of used cars they could buy, offer electric cars they don't want to buy, and have the government buy those unwanted electric cars. Free-enterprise? With no wealth creation we will be bankrupt in 5 years. The wonderment of enterprise by power-mad people using others' wealth. ANGRY? YOU BETCHA.
Top ten destroyed cars: 1. Ford Explorer 2. Ford F150 Pickup 2WD 3. Jeep Grand Cherokee 4 WD 4. Jeep Cherokee 4 WD 5. Dodge Caravan/Grand Caravan 6. Chevrolet Blazer 4 WD 7. Ford Explorer 2 WD 8. Ford F150 Pickup 4 WD 9. Chevrolet C1500 Pickup 2 WD 10. Ford Windstar FWD Van.
Top Ten New Car Purchases: Cash for Clunkers 1. Toyota Corolla 2. Ford Focus FWD 3. Honda Civic 4. Toyota Prius 5. Toyota Camry 6. Ford Escape FWD 7. Hyndai Elantra 8. Dodge Caliber 9. Honda Fit 10. Chevrolet Cobalt. Americans want Japanese cars.
Oh, by the way, where will all these government employees charge their government-purchased and -owned electrics? No where. There is no infrastructure to do it. So certainly the government will put wires and plugs all over the place for billions more. But to do so will take huge and highly-dangerous 240-volt charging stations (Only 110-volt current is widely available in homes and offices). What are these royal idiots thinking?
"Cash for Clunkers" $1,000,000,000 blown in a week starting July 24. Good planning Obama. Katrina-like. So now go to Congress and get a couple more. What did it cost to write regulations? To keep dealers honest, I imagine. They need to exactly adhere to Obama's 136-page manual for dealers including how to kill the Clunkers engines with sodium silicate. 136 pages! But wait, the Environmental Protection Agency developed a list after reviewing 30,000 different car models of acceptable cars. But wait! It changed its mind and revised mileage ratings eighty-sixing 80 models and adding 50. This week. (At what cost?)Clearly, all this will cause more sales of new cars, but 1) will it simply steal from the future? 2) steal from the past, with new buyers having waited for it, after its announcement? 3) do anything for the future jobs and the economy? $1 billion down and $2 billion more apparently coming. The plan is expected to result in 250,000 new sales, or 110,00, or 40,000. No one knows and there'll be no way to prove anything other than $1,000,000,000 or $3,000,000,000 will be borrowed from China to pay for it. (I wonder if my children or grand-children will have to pay this back.)
Just read that our wise administration loves BMWs, Mercedes, and, I suppose, Indian Jaguar, not to mention Suzuki and other Japanese car companies that compete bitterly with Obama's own GM and Fiat/Chrysler. Heck these guys won't have to curb greenhouse emissions if they sell under 400,000 cars in the U. S. each year. What is this CEO of America thinking? Obviously he doesn't have a clue about competition and free enterprise. GM and the American taxpayer will be the big losers. And as for Obama's GM initial public offering next year? What a sad, sad laugh.
GM sales off 32% for the second quarter from the year before, in North America and off 15% globally. Keep up the good work, Mr. Obama.
Private-market Ford Motor Co., however without government largesse returned to profitability in the second quarter
As of July 23 the U. S. Government will be into its auto industry another $6.2 billion by taking on the retirement plans of 70,000 retired Delphi Corp. employees.
Conflict in management. Bob Lutz, car-guy at GM (and architect of its new hot-selling Camaro) said GM would keep its high-horsepower Pontiac G8 by turning it into a Chevvy. But finance guy and CEO Fritzy Henderson said no. It has too much horsepower and Obama wants slow cars with high gas mileage. None of this macho stuff for our urban president, even though the G8 sales are up 57% this year. But as it will continue to play out, sales prospects (which might bring those hated profits, have little to do with Obama's automobile agenda.
Politics as expected is rearing its non-profit head with GM's selection of a new plant to build its new compact car. The most selection criteria were 1) community impact and 2) carbon footprints. Michigan -- a key election state for Democrats next year -- was chosen over mainly non-union Tennessee and Wisconsin. Originally, of course, a business-like GM wanted to import the compact from China. NO WAY, said politicians who actually do run GM. It is expected that the U. S. build car will lose money upwards of $1,000 to $2,000 on each sale. Rep. Barney Frank (D-Mass.) is one of them guiding GM's plant closing strategy.
Chrysler appointed 5 new directors. A hedge fund manager, George F.J. Gosbee; Douglas Steenland former Northwest Airlines CEO; Scott Stuart, another hedge fund manager; Ronald L. Thompson, Chairman of Teachers Insurance and Annuity Association; and Stephen Wolf, chairman of R. R. Donnelley & Sons, Inc., a media company. Continuing Obama's course, none of these people have automobile industry experience and are supposed to put together a long-term plan to include small cars that Obama demands. Its sales were off 42% in June from a year ago. The government owns 8%, Fiat initially 20% and the United Auto Workers, represented by former Michigan governor James Blanchard, represents its 55% ownership. In all likelihood, Fiat will be running Chrysler as its CEO, Sergio Marchionne, is CEO of Chrysler also.
July 7, Fiat SpA which was given Chrysler for free by President Obama (and to the United Auto Workers Union also) is setting up a joint venture with Guangzhou Automobile Group to produce 140,000 cars and 220,000 engines in China when it gets running after May 2011. The total investment -- in money, unlike with Obama and Chrysler, will be about $559,00,000. Remember, China is General Motors largest market. So Obama's GM will be competing there not only with Chrysler, after its being given away by Obama, but possibly with itself in the form of Opel, which GM is selling.
Obama has had a new board of directors appointed to run GM. None seem to have automobile industry experience. Like his Auto Czar, Steven Rattner, they are major Democratic Party funders and fundraisers. (Actually Rattner resigned July 13, 2009. Leaving one to wonder if something about his hedge fund's, Quadrangle Group, fund raising might have been illegal.) Obama's GM Chairman, Edward E. Whitacre, Jr., turned AT&T into the largest U. S. wireless telecommunications company which is now being investigated by Obama's Department of Justice for antitrust. Oh, yes, Whitacre has zero auto industry experience.
STAY TUNED FOR THE LAW OF UNANTICIPATED CONSEQUENCES THAT THE OBAMA ADMINISTRATION AND ITS ADVISORS WITH NO AUTO EXPERIENCE WILL EXPERIENCE:
Chinese-government backed company wants to buy GM's affiliate Opel which has extensive sales in China to grab GM's technology as described in my post, "China Eats the U. S. For Lunch" below. If Obama allows it (GM wants the sale), his company, GM will compete in essence with itself in what is becoming the the largest market for autos and trucks in the world, China, against a Chinese-backed company. And Obama needs to continue to guarantee GM's survival to keep those United Autoworkers working. Dichotomy for a man who does not understand nor support business. China is on track for more than 11 million autos in 2009 up more than 15% while the U. S. market is expected to drop to well under 10 million, off over 30%. GM's China sales are up 38% for the first half of 2009, to over 800,000.
June 29, GM agrees to take on future unknown potentail liability claims from car-accident victims. Under the original bankruptcy plan these liabilities were to stay with the unwanted, virtually-valueless "Old GM". My guess is that the pressure of Democratic Party-co-owner the trial or tort lawyers wanting their cut of such future claims settlements, a portion of which flows into the bank accounts of Democrats, forced this "settlement" which also obligates the U. S. Government.
Interesting article, June 26 described GM's arm GMAC LLC curtailing financing for dealers of arch-competitor, Chrysler (given to Italy's Fiat -- a foreign company -- and the United Auto Workers with U. S. taxpayers' billions of dollars.) On the surface this seems somehow illegal or certainly immoral: using government money to hurt a competitor. But America you haven't seen anything yet. Also same date, GM announces plans to close a plant in Louisana -- possible 2012 presidental contender Bobby Jindal's state.
Old headline: "That's Obama Tough! Obama drives General Motors, unions get their wish"
Interesting car article in the Wall Street Journal, Wednesday, June 17, 2009 page D 3. ["Muscle Car's Test Drive Turns Heads" http://online.wsj.com/article/SB124518581645820381.html]. Apparently ObamaMotors' division General Motors' division Chevrolet ("Chevy") has a sellout. A sellout! In a car designed by Obama? Not quite. It's a 304 hp V-6 or 426 hp V-8 muscle car, the new Camaro. And it's outselling an Obama clone, the new Honda hybrid, the Insight, two-to- one. Meanwhile Chevy is killing another slow-selling Obama clone, the hybrid Malibu. But CEO Obama, you should stop the Camaro, and other fast-selling muscle cars, the Ford Mustang and Chrysler's 500 and Dodge Challenger before it's too late.
Fiat is coming back to the United States, courtesy of President Obama virtually giving Chrysler to it and the UAW free of charge. Its first entry here was a flop. Why? In the early '80's Fiat's quality reputation was so bad it was nicknamed, "Fix It Again, Tony" and couldn't sell enough cars to stay in the U. S. Hopefully President Obama will be on the line to check the quality of his cars.
But after giving Chrysler to a foreign company, note that Saab Automobile AB might be bought by an entrepreneurial boutique sports car company, Koenigsegg Automotive AB, from GM/Obama Motors for money. Christian von Koeniggsegg's company now makes very limited edition supersportscars for the supersportsrich. About $1,000,000,000 will be invested.
Auto bailout-management news in this continuing blog will be newest news on top.
Bad News for U. S. Auto Industry President Obama: Mitsubishi Motors Corp. expects only 2,ooo electric cars to be produced for 2010 (because of the high cost of its newly-launched i-MiEV, $46,500) and less than 20% of its production by 2020!
Here is an absolute outrage (June 5, 2009): General Motors, now "flush" with $30 billion of U. S. Government cash has agreed to invest some of it -- $2.5 billion, or 70% of the price -- to finance Tom Gores' Platinum Equity firm's buyout of bankrupt auto-parts company Delphi Corporation. WHAT? Obama is providing our cash for a highly-speculative investment, the rewards of which success will NOT accrue to the U.S. but to an individual. You can bet Mr. Gores or his friends and family have made significant campaign contributions to the Democratic Party in general and the Obama election specifically. I'll research this issue in the future. Update of June 11, U. S. Bankruptcy Judge Robert Drain blew off Obama's hand-picked winner of Delphi to sell the auto parts maker at an auction. At least one judge believes in the rule of law.
(And non-political-non-running-GM President Obama called the mayor of Detroit and reassured him that GM would stay there in the Renaissance Center. And more phone calls were made from the Administration or so sayeth the Detroit News.)
And there will a huge Obama expansion of Ethanol, proven to increase food prices by 10% - 15% and, according to the EPA's Office of Transportation and Air Quality, the new land (from slashing forests) to grow grain for Ethanol will increase greenhouse gases. In other words, Ethanol will bring an increase in greenhouses gases vs. simply using gasoline. And it only costs the taxpayers and consumers roughly $10 billion. But it buys the votes Congressmen want. That's what is important.
On the Web tonight (6/9/2009):
"EYES ON THE ROAD, by Joseph B. White
from The Wall Street Journal.
A new survey shows the economy has damped consumer interest in new auto features and gadgets, including hybrid technology and onboard navigation systems.
(http://online.wsj.com/article/SB124450736037596339.html?mod=djemroad)" But customers will certainly spend upwards of $2,500 more for Obama's Little Green Lemmingmobile that gets 27 Miles for Each Gallon consumed, that's certainly an attractive attraction, especially if the government pays the entire cost of the "car".
The Obama administration's less-favored auto company Ford Motor Company, because it didn't take his strings-attached monies, raised some 5-year money to finance customers. Price 8% interest. GMAC/Obama raised some money too, backed by us the U. S. Government. Price? under 2%. Competitive differential. Could be life and death. This, ladies and gentlemen, is the result of governmental industrial policy. President Barack Obama decides between life or death for the largest American companies.
The Obama administration pushed an "alliance" AKA give-away of much of Chrysler to Fiat SpA. In the mad rush, Chrysler executives were dissuaded by the government from getting key due diligence materials describing the fiscal health of Fiat and information about its true willingness to share required technical information. No matter, Obama seemed to say, we simply know this deal is good. For someone, how about the union and a foreign company. Fiat can walk if the deal isn't closed by June 15, hurting the United Auto Workers union. Why would Fiat walk? It gets for nothing an initial 35% stake potentially rising to 50%. And make no doubt. The Unites States Treasury, not Chrysler, in the form of former UAW boss, Ron Bloom, is managing the transaction and Chrysler's figurehead, Robert Nardelli defers to him.
June 1, 2009: General Motors is renamed ObamaUAW Motors, except the UAW didn't want common stock, it got preferred stock paying about $600 million a year and few economic changes to its contract, but can't strike until 2015. And its unfunded pension funds covering roughly a half million former workers and dependents is underfunded by around $13 billion, which ultimately could become the obligation of the U. S. Government. New car warranties, an uncertain amount of money, are already guaranteed by the U. S. "We" the U. S. taxpayer -- and, of course those citizens who don't pay taxes -- will own 60% for around $50 billion; The United Auto Workers Union get 18% for nothing; the Canadian government 12% (for $9.5 billion); former bondholders, 10% for $27 billion; common stockholders zero, nada, nothing. Essentially the Obama administration doled out ownership of once the world's largest company according to favoritism and political strength. The Obama administration will have GM and Chrysler to prove its green agenda is sound by making the car companies manufacture "little green cars" in UAW-manned domestic plants. No imports will be allowed, courtesy of Congressional meddling. And as for micro-managing and meddling the CEO will have two multi-headed bosses: the Obama administration, including personnel of the departments of energy, labor, treasury as well as the nearly 400 members of Congress and a few thousand of its staff. Stay tuned for the biggest spin in history. "The success of Barack Obama as chairman of the chairman of General Motors, and, well, Chrysler a little bit."
THE QUESTION OF THE DAY: CAN GM SURVIVE? THE ANSWER IS ABSOLUTELY, AS LONG AS OBAMA IS PRESIDENT AND WILL THROW BILLIONS OF DOLLARS ANNUALLY TO DO SO.
May 26, 2009: The United Auto Workers told union officials that it has agreed to a deal with General Motors that will lead to the union owning 17.5% of the company once it restructures as part of GM’s obligation to fund future retiree health-care obligations; GM will place $10 billion of assets into a Voluntary Employee Beneficiary Association, or VEBA, on Jan. 1, 2010. The UAW will also receive a new note, payable in cash, for $2.5 billion. That note will be paid out in three installments taking place in 2013, 2015, and 2017. The UAW told their president that it didn't trust the future prospects of GM, so it wanted more security. Notes and cash, less stock. And he responded, "yessir, yessir, whatever you say.' And the United States taxpayer via its government will own
May 23, 2009. One step on the road to wherever, General Motors revised its agreement with the United Auto Workers. Huge burden for the union. No raises. What! Yes, can it be believed, the company is facing extinction...[well, it asked for $2.6 billion more and Obama gave it $4 billion, so much for...extinction, with the President of the United States propping it up with taxpayers' money...anyway back to the UAW's "suffering"]. No raises. While the country's non-governmental citizens are losing their jobs left and right, the UAW workers won't get raises. That's no concession that's a slap in the face to ALL AMERICANS. Or at least the 93% who aren't unionized (private sector). And no pension increases, oh, the employees might have to pay a little more for their healthcare. There are job losses, though, maybe 20,000 a third. And no strikes until 2015. I guess you can't strike a non-existent company. Finally, the UAW will own much of the playing field: 39% of GM. And yes, the chief "negotiator" for the government is a former union boss!
May 21, 2001. President Obama once again bails out GMACLLC with a $7 billion "down payment" on top of Treasury's $5 billion, I guess, pre-down-payment in December 2008. And another $7 billion "payment" could end up with the U. S. Government owning GMAC (as well as GM) within a few months. And with its (job-killing) dictate of new fuel economy standards of 35.5 miles per gallon by 2016, is it anyone's doubt that GMAC and the government will continue to burn dollars in the gas tanks of United States-manufactured automobiles that few citizens want. We will have lost our freedom to buy what we want.
This blog began months ago with the following:
"Child don't you do that...Or I'll...I'll...I warn you...I'll...I warn you...Time out!...I mean it...Oh, well...I'm sorry...Oh, OK do what you want, have fun!" Threaten, threaten, but don't follow up.
Or: "In for a penny, in for a pound".
Or: "If you're gonna play the game, boy, ya gotta learn to play it right.You got to know when to hold 'em, know when to fold 'em,Know when to walk away and know when to run.You never count your money when you're sittin' at the table.There'll be time enough for countin' when the dealin's done.
Or was President Bush smart by a half to put in some dough to GM and stick Obama with the it? Well, no, he's not that cunning or smart.
Basically I knew Obama does not have the grit to say "enough" once government got entwined in the auto business. He is not a strong, self-confident personality. We are in and it will not stop...with car companies, suppliers, financiers, warranty-guarantees, ONE HUNDRED MILLION DOLLARS here we come. Fictitious quote of Obama: "Who cares, it's only the stupid taxpayer's money. And we need to get it to the UAW."
Updated news April 30, 2009. A new offer by holders of about 20% of the $27 billion unsecured GM debt outstanding asks for a 51% ownership of the company, the same valuation being offered the United Auto Workers union by the U. S. Treasury. This would leave 41% in UAW hands and 1% to present equity owners. The $15.4 billion debt to the U. S. Treasury would remain. It seems obvious the Obama Administration wants to own GM in conjunction with the UAW...its proposal would give 39% (and $10 billion cash) to the union and leave 51% to the government for $7.7 billion in debt forgiveness. The remaining 10% would go to bondholders for their $27 billion. Do the math. It's a monumental theft of bondholders' money and rights.
Yes, President Obama today (March 31, 2009) took control of General Motors by firing its CEO, the hapless fall-guy, Rick Wagoner (who leaves apparently with only $21 million comp), to "prove" he's tough. And he, Obama, once again threatened bankruptcy for GM and Chrysler, but this time he really, really means it. The first time GM was loaned $17.4 billion and the government really meant to get tough. But no money this time unless GM could get GM bondholder approval to cut the debt, the United Auto Workets to agree to alter contracts and draft a recovery plan or something on paper...well, "just kidding about that": the two "requirements" were waived and the paper deemed not worthy enough. But today he's really, really going to get tough! Oh, today he also guaranteed new-car warranties, and made provisions for the government to quickly purchase a bunch of cars and to perform some weird scheme to buy back old, gas-guzzling cars and give a tax break for new car purchases. And buyers can deduct, excise, state and local sales taxes they pay to buy new cars. That's Obama Tough. As for Chrysler, which only got $4 billion in December, the government gives it 30 days and $6 billion if Fiat buys some of it...While Fiat wanted up to 55%, Obama, being tough, would only allow 20% to show them forineers (Chrysler and Fiat negotiated 35%, but that doesn't count, it's what Obama demands); and the government will give it working capital until then. But a serioius threat is to the poor holders of the auto companies' debt. GM has $29 billion unsecured and Chrysler, $8 billion, secured. Obama means it this time that it must be slashed. He also toughly stated that the companies couldn't depend on "unending" (my emphasis) taxpayer loans, but what is the meaning of "unending"?
Have no doubt, the Obama Administration, Congress and Labor Union Bosses ("Government") know better how to run companies. Just look at California, Amtrak and the U. S. Postal Service. (Not to mention TARP.) It's simple, design cars Congress wants: small, low-powered with high MPG, or pedal; and maybe always black because that's cheaper, (and diverse). And all the same. It worked for Henry Ford. But, of course, he made cars for the consuming public, who bought. Congress has mandated cars that the public doesn't want: small, low-powered with high MPG. Congress can mandate that the public buy, and it will pay for, the cars. Keep those union bosses in power at all costs. Newly anointed-by-Obama CEO, Frederick "Fritz" Henderson immediately played down the need for an entirely new labor contract!
Speaking of which there is a rule passed in Congress' 1975 fuel economy law (1975 Energy Policy and Conservation Act Public Law 94-163) nicknamed the "two fleets rule" which I have read but fell asleep at the circumvention, circumloquation and maze-ness of it.
(Fleet fuel economy is calculated using a harmonic mean, not a simple arithmetic mean (average). The harmonic mean is the reciprocal of the average of the reciprocals of the fuel economies of the vehicles in the fleet. For a fleet composed of four different kinds of vehicles A, B, C, and D, produced in numbers nA, nB, nC, nD with fuel economies fA, fB, fC, fD the CAFE would be:
For example, a fleet of 4 vehicles getting 15, 13, 17, and 100 mpg has a CAFE of slightly less than 19 mpg:
While the arithmetic mean fuel economy of the fleet is 36.25 mpg:
[the formula is too funny to reproduce]
One feature of the above law is that these these cheap-small-dangerous cars must only be made in domestic UAW plants, which guarantees losses on each car. But the Obama Administration will make it up on volume. But no matter what, the UAW will retain its monopoly, even if it has to cut retirees off and drop new hires' wages a penny or two. Keep those dues flowing, Mr. President from 140,000 UAW workers the Democrats need it to keep in office. I don't know what part of their wages (which are double the non-union and successful "foreign" U. S. manufacturers in the South, Nissan, Honda and their ilk) go to Democrats, but it's sizeable.
Poor Ford Motor Co.; it will be penalized for being successful and not taking the government's money. Ford -- all by itself -- is achieving some success in paring down the monopoly-UAW's huge wage and retiree healthcare costs and some of its lenders' debt. Ford now will have to compete not only with domestic and domestic/foreign and foreign manufactures, it'll have to compete with the U. S. Government. This scenario continues the democrats' punishment of the smaller numbers of successful companies and people for rewarding the greater number of voters who are not successful.
And today, April 15, 2009, in a Wall Street Journal article, "U.S. May Take Stake in GM To Pay Off Loans" (http://online.wsj.com/article/SB123972054506117179.html), the government cannot find private investors for a "revamped" -- split-apart, or Good guy-Bad guy -- General Motors to which the U. S. Government has loaned $13.4 billion. The recourse, of course, trade worthless debt for even more worthless "equity" in laughably "stripped down" company hoping, against hope, that the United Autoworkers (owner of the Democratic Party) will accept some concessions and some bond holders who are owed some $29 billion, including over $5 billion to individual "widows and orphans" who bought the security of GM bonds.
Today, Friday, April 17, 2009, Obama presses GM to rid the GMC truck brand which started up in 1912. Wall Street Journal (http://online.wsj.com/article/SB123989177238225323.html). GM also might shutter Pontiac and sell Hummer, Saturn and Saab. While GM is rushing to meet Obama's "deadline" of June 1 to transform itself, the United Auto Workers put its GM negotiations on hold while it concentrates on talking to Chrysler. Extraordinary how someone who's never run anything is remaking one of the largest corporations in the world in 60 days. (Around the World in 180 Days has nothing on the Obama Administration!) And apparently CEO Fritz is mentioned a need for more cash.
And an update, Thursday, April 23, 2009. "GM Plants to take Extended Break page B1. (http://online.wsj.com/article/SB124041946006244177.html) GM plants are planned to be idle two months this summer, but the United Auto Workers will still get paid, as the Obama Treasury Department is finalizing another $5 billion in aid (aka "loans") to it. While the unions skate, Treasury is trying to get GM lenders to throw away $28 billion in their loans to GM in exchange for, yes, GM STOCK. Hey, guys, what a great deal! And GM will not make the required $1 billion debt service payment due June 1. And on to Chrysler, "Banks Get New Offer for Debt in Chrysler" page B1 (http://online.wsj.com/article/SB124044878863646087.html). The bid by Treasury is 22% back of $6.9 billion SECURED debt and 5% equity in the new Chrysler. The ask by lenders is 65% and 40% plus a board seat. The lenders, led by U.S. subsidiaries, Citigroup and J. P. Morgan Chase, essentially are negotiating with their owners, or soon-to-be owners, us the U. S. Taxpayers represented by our Treasury Department. A tangled web we weave. At the same time, Treasury is offering United Auto Workers 28% of the $10.6 billion it's owed for retiree healthcare costs plus some stake (steak?) in the restructured Chrysler.
Tuesday, April 28, 2009.
General Motors, controlled by the Obama Administration, offers the United States of America, represented by the Obama Adminstration a majority stake. We the taxpayers "invest" another $11.6 billion on top of the $15.4 billion already in, $27 billion total, and get "at least half" ownership. (GM's market capitalization is $1.3 billion.) The United Autoworkers Union would get 39% of GM in exchange for $10.2 billion owed the UAW by GM (half of the obligation), And for at least 90% of the $27 billion in unsecured debt, bondholders would get 10%. GM would slash U. S. dealers to 3605 down 42% by 2011 and kill Pontiac. What a deal for Obama Administration which owes its election to unions! Guaranteed support in 2010 and 2012.
Chrysler would give the UAW 55% of its stock plus notes for $4.6 billion owed for retiree health funding, Fiat SpA up to 35% (for some small car production, creating 4,000 new union jobs, use of Fiat engines and some cash) and for exchange of $6.9 billion of secured debt, present holders would get a 10% interest in Chrysler. The UAW would give up cost-of-living increases, put limits on overtime pay (payble only after 40 hours a week), and lose Easter Monday in 2010 and 2011! Seems the union gives little and gets immensely.
At issue on another front: Chrysler and GM dealerships -- now about 10,000 owe "flooring' of around $25 billion which could be called in the event of any bankruptcy. There are 1.1 million unsold cars in dealer inventories. Only 660,000 were sold the first quarter of 2009.
In the meantime, bills to provide government-funded discounts of $1,500 to $5,500 for people to trade in old cars for new ones. Congress feels it is desperately needed to lift slumping car sales. "Cash-for-Clunkers". This is an interesting contradiction to the probably increase in new car prices from Obama's MPH mandate of in excess of $2,300 ("only" $1,300 projected by the White House and upwards of $3,778 and $5,877 for light trucks, according to Sierra Research for the National Highway Traffic Safety Administration). And apparently Obama's 35 MPH will settle at 28 after adjustment by Environmental Protection Agency! But in order to meet Obama's mileage restrictions, cars will have to be lighter. And lighter cars kill. The only statistics available indicates that in 1993 between 1,300 and 2,600 more people were killed in collisions of the then-lighter cars than the heavier ones of 1976. But these deaths will reduce Obama's cost of healthcare "reform".
And there is a tax credit subsidy possibly available to retired auto workers, those very same people who will be paid out of any auto company bailout or bankruptcy filing. It was just made more generous by Congress to cover 80% of an eligible retiree's healthcare cost, up from the recent 65% and made it easier to capture.
But today, April 30, 2009, Chrysler might declare bankruptcy, with the secured debt holders resisting huge and oppressive government pressure.
Obama's Mantra: Fail, to Win.
NO-JOBS-OBAMA'S (NJO) INITIATIVES TO HURT BUSINESS AND FREE ENTERPRISE
Let not Obama leave alone any chance to kill jobs. Oysters. The Obama Food and Drug Administration plans to ban sales of raw oysters harvested from the Gulf of Mexico. Unless, unless they are pasteruized. Yum, the FDA will augment the delicious salt-water flavor with "mild heat, freezing temperatures, high pressure and low-dose gamma radiation. Oh, yes maybe 15 people die each year from oysters. This a $500,000,000 industry that Obama wants to either devastate or garner campaign contributions for not banning sales. No Jobs Obama is living up to his name.
And speaking of the FDA, it's looking for more money to inspect plants, set safety standards for fresh produce and additional regulation, including 350 more employees (of course) to increase the size of government during recessionary times. Get this: the Senate's Health, Education, Labor and Pensions ("HELP") Committee is in charge. HELP is right!
The Obama Justice Department will try to squelch jobs in the optical-drive industry by launching subpoenas for information from Hitachi Ltd., Toshiba Corp., and Sony Corp., with the Chief Economist of the Federal Trade Commission saying that the FTC is targeting the technology industry -- the only hotbed of innovation other than Obama, Congress and liberal judges -- to "assure economic innovation" and campaign contributions. The FTC also said it had been looking into Intel's marketing practices.
While Obama is stopping oil exploration, drilling and the building of nuclear powerplants in their tracks. The competition is moving in. Repsol YPF SA of Madrid, Spain, has invested deeply over the past decade into oil and gas exploration and is hitting paydirt, while U. S. companies are handcuffed by government domestically. Repsol made a huge new discovery in the Gulf of Mexice adding to its Shenzi field there. Last year it was involved in three of the five largest discoveries in the world. President Obama apparently wants to cripple the energy production in the United States. Why?
This one's great! Obama is doling out $2,300,000,000 to wind turbine producers to create jobs, including $500,000,000 to a dozen wind and solar farm projects. One a 36,000 acre West Texas developed by Shenyang Power Group...and if that sounds like a Chinese name, you are right. Its purchases will create 300 jobs in the United States and 2,500 jobs in China. China jobs with our money. Obama you are insanely stupid.
Understanding they don't want to compete honesty, the American Booksellers Association has asked the Departent of Justice to investigate a greast deal for comnsumer, but who cares about them? Wal-Mart, Amazon and Target have slashed prices on some upcomin best-sellers, so the ABA is begging for help from Washington DC to put especially union-despised Wal-Mart in its place. Political connection competition. One would naively think lower prices are good for consumers, who pay less. But not in Washington DC.
Daniel Tarullo, a Democratic lawyer was appointed by President Obama to come down with a firm hand on banks with his proposed new restrictive guidelines to be carried out by his 2,858-person army of regulators, covering virtually every segment of the financial services industry, probably including break times for executives. It is said Mr. Tarullo has a deep skepticism of banks, banking organizations and financial institutions. He's a micromanaging second-guessor who demands to make every little decision, thus neutering his staff. He's deeply into risk, business models and how the businesses should be managed. Mr. Tarullo taught banking law at Georgtown University and became fast idealogic friends of President Obama, neither with any real-world experience. Yes interesting how people with no real-world experience think they can manage better....
The Obama Federal Railroad Administration has proposed rules to mandate billions of dollars of new safety hardware costs on railroads to prevent collisions. The vast spending mandate -- near-term $2,000,000,000 increasing to between $7,000,000,00 and $24,000,000,000 in 20 years -- could lead to cutting passenger-train traffic. It might prevent accidents that killed 25 commuters in Los Angeles in 2008. Or might not. But it will kill jobs.
Then there are jobs then there are jobs. While the private sector sheds them like snake skin, the federal government is planning, according to the Partnership for Public Service, to add 273,000 -- a 41% increase -- during the rest of Obama's reign. Each job must be paid for either by a tax on the rest of the country's taxpayers or by borrowing from foreign governments or U. S. citizens. Government jobs do not create weatlth they destroy wealth.
Uncertainty, as this article from the Wall Street Journal, October 29, 2009, front page A 1 indicates kills jobs. [http://online.wsj.com/article/SB125659324579108943.html] "(U)ncertainty created by Washington's bid to reorganize a wide swath of the U. S. economy." 7.2 million jobs have been kiulled since August 2007's start to this recession.
The Obama administration is setting aside 200,000 square miles in Alaska and its coast as "critical habitat" for polar bears that restricts off-shore drilling for oil and gas, thus further diminishing in-country access to USA oil and gas reserves, putting the country further at risk and dependent on foreign sources of energy. And, of course, diminishes jobs in Alaska and the country as a whole.
Obama's Internal Revenue Service continues its revenge on the successful. IRS Commissioner Doug Shulman is targeting the very wealthy -- of course those typically-successful people who make the vast majority of the venture and new-business investments in the country -- by "better understanding the entire economic picture of the enterprise controlled by the wealthy individual. I am sure this very threat will create more job-killing uncertainty in investors.
New businesses in their first 90 days created 14% of all the hiring in the 15 years from 1993 to 2008. These new business starts tanked to 187,000 over the last year, the lowest since 1995. Jobs? The fewest at 794,000 since 1993. And the following posts outline the initiatives by President Obama to damage business and kill jobs.
The Obama Food and Drug Administration will start cracking down on cereal logos because his Commissioner Margaret Hamberg thinks some might be misleading. I don't imaging she'll crack down on hambergers. What little miniscule business corner isn't under attack by this anti-free-enterprise president? I guess he thinks jobs are created by Washington DC politicians and bureaucrats. That's what you learn from Harvard Law School and ACORN.
Obama's Interior Secretary Ken Salazar will investigate oil-shale leases in Colorado and Utah made by the Bush Administration.
Uncertainty incents companies to hold on to their money rather than invest it in creating, for example, new jobs. Obama advisors are examining the hugest of the huge uncertainties. Whether to make less financially attractive the ability of corporations to raise money through debt (which is tax-deductable) rather than equity (the sale of stock, which is not tax-deductable). Mr. President keep killing jobs, after all you have one. For now.
Private-family investment funds or so-called family offices, of which there might be 1,000 world-wide with assets over $100,000,000 (half of them over $1,000,000,000,000), have been placed in the target of Democrat lawmakers for regulation like hedge funds which raise money publicly. That should get them to reign in that horrible activity such as investing in venture capital and developing companies. But not to fear many have banded together to lobby, and in all likelihood, provide members of Congress with additional campaign contributions and the like. Hiring Jake Seher, a former top aide of Joe Biden and Thomas Quinn, top Democratic fundraiser and good bud of formerly-alive Senator Kennedy for $60,000 a month! Hmmm. But as one Democratic representative said, they'd have to obey some rules in order to continue to "play in OUR capital markets". "OUR" being my emphasis and my wondering if he thinks the capital markets are owned by...politicians ("our"), Democrats ("our") or who. Free enterprise? Hmmmm.
And once again the Obama administration is extending the dependence the United States will have on foreign oil. His Nuclear Regulatory Commission has rejected the modified design of a next-generation nuclear power station from Westinghouse Electric Co. (a Toshiba Corp. division). Seven U. S. utilities are seeking licenses to build 14 of them in five states. Obama's action may well delay planned completions around 2016. But, hey, who needs cheap, clean nuclear energy when we have bat-killing windmills (more on that later)? I may be a cynic but Obama's wholly-owned media service, NBC, is owned by the General Electric Company, a manufacturer of nuclear power stations for decades. Oh, just a coincidence.
And to further hurt businesses large and small and kill jobs, the Obama Labor Department is stepping up union-desired oversight of workplace-safety programs. Let's see, because of 12 workplace constuction-related deaths on the Las Vegas Strip for 2006 -- 4 a year, compared to 40,000 deaths a year from the common flu. And some union representatives weren't notified of fatality investigations and couldn't talk to investigators. A no-no with the Obama Occupational Safety and Health Administration, part of His labor Dept. It had better hire some more union-represented, Democratic-voting investigators. No doubt.
A proposed merger? "No way," says the Obama administration. "Free market" (an oxymoron in the U. S.) negotiations between Ticketmaster Entertainment Inc. and Live Nation Inc, are continuing, with no final decision, but the U. S. Justice Department is demanding changes to an agreement not made or they'll sue to block a merger only under discussion. "Big is Bad", says Obama, except of course for government which is run by omnipotent politicians trolling for campaign contributions. No doubt. And surprise, surprise competitors, politicians and "consumer advocates" whatever they really are have complained. Perhaps Barney Fife could have the combined entity make sub-prime loans to poor people who can't repay in order to have the merger approved. That always works!
The U. S. banking industry reeling from bad loans and income-killing regulations from the Obama administration and U. S. Congress is facing yet another Congressional attack. This time on fees banks charge merchants from so-called interchange fees set by Visa Inc. and MasterCard Inc. Accounting for $45,000,000,000. Banks have been weakened by government regulations and mandates, and are thought to be politically vulnerable, what with being in some cases forced to take Troubled Asset Recovery Program (TWERP or TARP). Obama is attmepting to run out all qualified banking managers by slashing executive pay on TARP-takers and "regulating" all other bank exec comp as well as slashing and changing contracts banks have made with consumers about credit cards. Is anyone wondering when the U. S.-Obama federal government will weaken all banks enough to simply take them all over and run them as public utilities? Soon.
Obama's Environmental "Protection" Agency is killing jobs and hurting the domestic refining of oil exacerbating the need to purchase oil from the Middle East and other foreign countries, by objecting to a federal air-permit application of BP PLC to expand its refinery in Whiting, Indiana for $3,800,000,000 (sounds like a lot of jobs). EPA felt BP doesn't know enough about the "best available techmology and lowest achievable emmissions rate" now, because months ago EPA did give it a permit. Obama's EPA knows more about technology, of course, than the hated and evil Bush administration. Obama's job-killing program to continue the U. S. dependence on foreign oil.
Mr. Obama, job openings in August were 2.4 million, down from 2.41 million in July (and off nearly 50% from August 2008!) and were at the lowest level since tracking began by the Labor Department in 2000. Job separations, quits, retires or laid-offs reached 4.27 million in August with hirings of only 4.01 million -- an historic low. And all you can do is hurt businesses, as this post proves. You are sinking the boat you had no hand in building: the prosperity of the United States of America.
Wall Street Journal, October 10 - 11, 2009, page B 1: "Democrats Weigh Tax On Financial Transactions". This possibly proposed new tax is "gathering support in high places", labor unions and Democrat legislators especially Rep. Barney Fife (oops, Frank) (D.,umb) especially as a way to finance a new stimulus. The article also mentions that the concept was slipped into Obama's "stimulus bill" unbeknowst to Congress and in all likelyhood, Obama, none of whom apparently even read it anyway. It was only $787,000,000,000! The insertion calls for requiring -- requiring -- the president to submit legislation that pays for any eventual financial shortfall in the Troubled Asset Relief Program (TWERP).
And while we're at it, let's go after IBM for running two Japanese companies out of the mainframe business. Fujitsu Ltd. and Hitachi Ltd. couldn't take the heat from IBM so they abandoned the business in 2001. Now mainframes are probably around 20-25% of IBM's revenue and double that percentage in operating profits. Interestingly 10% the server market, pioneered by micro computers and software, is in mainframes. A micro computer company, T3T Inc., of Tampa, uses Intel microprocessors and IBM's software for this market. When IBM refused to license its newest z/OS operating system software to T3T, it sued for antitrust, but the suit was dismissed in New York federal court because it "does not constitute anticompetitive conduct" So the Obama antitrust administration's Justice Department has, of course, step in over the courts and is launching an "inquiry". Let's take down to size the longest-lived technology company in America. At the very least pry some more lobbying money, attorneys fees and campaign contributions out of it.
The Obama Securities and Exchange Commission is investigating again, this time some accounting and disclosure issues for the nation's fifth largest seller (closed sales 2008) and builder/developer of homes. The industry in general is suffering from overbuilding, high inventories of unsold homes and foreclosures and, of course, the recession and job losses.
The Unites States' 1997 Foreign Corrupt Practices Act hasn't been used much since passage, but the Obama administration has charged a dozen individuals working for corporations with violations. This virtually unprecedented indictments instead of companies will diminish American companies' appetite for foreign business in part because of the uncertainty and in part because the statutes are confusing and unclear. And as such can be interpreted arbitrarily. One exec (founder of Dooney & Bourke) was charged not with doing but knowing his employees might possibly be making illicit payments. So much for the Rule of Law. (Please see "The End of the Rule of Law (Part Two)" below.)
Diminishing business is a keynote of President Barack Obama, as this post points out. Also other posts outline the same intiatives. Please see "Break Job-killing Union Monopolies and influence".
Montsanto Co. the largest agricultural seed company in the U. S. is targeted by the Obama Justice Department's vendetta against business. It is scrutinizing "competition" in the U. S. and looking perhaps to overturn an acquisition approved by the George Bush administration, that of Delta & Pine Land Co. in 2007. Seems big is bad, except when it comes to government. Yes, Montsanto must be a bad seed!
Consumer credit -- the fuel for consumer spending but also entrepreneurial and small business activity (small firms under 500 employees create two thirds of new jobs and is half the nation's work force) dropped almost 6% in August, 2009, the 7th month in a row, longest since 1991. Credit card lines alone have plunged some 25%. So what would No-Jobs-Obama (NJO) do? Cripple banks with more than fifty comprehensive rules. It's President Obama's upcoming Consumer Finance "Protection" Act. Consumer credit is off nearly $120,000,000,000 since July 2008, and lowering it more, of course, will protect consumers from their own base instincts to borrow. What? Oh, yes, if they can't have the freedom to borrow, they won't have to worry about the freedom to spend and repay as they wish. What? Yes, the president knows better how we should. Should what? Should do everything. And under Democrat Barney Fife (oops, Frank) Chairman of the House Financial Services committee, this proposed new Obama agency will have a Czar who could declare products and services unilaterially "unfair" or "abusive", and force litigation (rejoice trial lawyers) not the much cheaper arbitration. Czar'd collect fees and essentially dictate how financial institutions and banks do business.
And you want innovation in the pharmaceutical and medical device industry? You'll have to wait. Wait until President Barack Obama's anti-business Food and Drug Administration finishes undertaking (an appropriate word) a major review of device approvals under so called 510K, a program that has worked successfully for decades. Head of the program, Donna-Bea Tillman needs to "get a better lay of the land" and wants all reviews by her subordinates to pass by her. This in "furthering" of Obama's FDA head, Peggy Hamburg's "new direction" which seems to be both micro-managing and anti-business. And perhaps those delays will lead to massive new campaign contributions to the Democrats, but that's a bit cynical on my part. And Obama's mantra of "No New Jobs" continues.
No-Job -Obama's Environmental "Protection" Agency is proposing new rules to force private-sector power plant, factory and oil refining companies to spend vast sums of money for expensive new capabilities to cut carbon-dioxide emissions.
Energy companies which do "mountain top mining" for coal, which blasts hilltops of up to 800 feet, extracts coal, then rebuilds the hills, are now stopped dead by the Barack Obama No-Jobs Environmental "Protection" Agency. In a typical conflict between private enterprise and unelected, but politically powerful special "environmental" anti-business interests, Obama typically comes down on the side of No Jobs. In this case 79 permits are held up, with another 180 waiting, costing according to industry, thousands of jobs. But as a Wall Street Journal points out (Ovtober 8, 2009, page B 1)[online.wsj.com/article/SB10001424052748703298004574459363401191286.html] this move would shift coal production from low-voter Appalchian states to the important mid-west swing vote states of Illinois (hmmm which president is from here?), Indiana and Pennsylvania. Is that being cynical?
Want jobs, president Obama? Read a letter from Merrie Spaeth, Dallas, to the editor of the Wall Street Journal, September 29, 2009 (page A 24): "Businesses are not hiring because we have no idea what next year will be like." She laments confusion and lack of clarity about taxes and about tax-tinkering every year.
Something like 26% of consumers overspend their checking accounts (and 5% account for 68% of it according to an article in the Seattle Times, "Banks will try to offset lost fees, Spetember 243, 2009, page A 12) and, thus those irresponsible minority are saved once again from the evil banks. So Congress will dictate how the banks are to price and contract. Central control of our economy by Democrats. What will happen? Banks profits will drop (at a time the federal government wants them to loan money out) and banks will shift their business so as not to lose that revenue. Thus coinciding with the Democrats' core beliefs the responsible will bail out the irresponsible. Thank you Obama and Congress!
How best to diminish business? Cut and control compensation. And of course, I believe it's just payback time for those who have been more successful than President Obama and his handpicked Democrat regulators ( "jealosy"). And speaking of regulation, Obama wants Kenny Feinberg his pay (Don't call me) Czar to dictate compensation for those pesky bankers who caused the entire world-wide meltdown and recession because of poor comp practices. Checking rich bankers (including all financial companies at first, all other companies no doubt to come) will cut their tendency to be risky. But who particularly defines "risk"? Is being conservative and depending on the government-approved rating agency oligarchy being risky? What is safe comp for one job? $100,000? $535,535? (At least one Obama Energy Dept initiative is "creating" "hundreds of green jobs" for Solyndra Inc. in a planned solar-panel factory by "loaning" it $535,000,000. I wonder how will it repay the "loan" and that indicates a cost per job of $535,535 (for 999 jobs) to $2,675,000 (for 200) jobs depending on the definition of "hundreds".) $2,675,000 or simply $1,000,000? But was it comp or simply the government's allowing, no promoting, vast leverage with which the banks could operate? So, is Kenny going to sort out all of these issues and make the decisions, or will it be Obama, or his hand-picked Democrat elite? Stay tuned.
The Obama administration is trying for all-encompassing curbs -- rather dictates -- on compensation for financial institutions. The final proposal is a month or so away, but let the lobbying begin. Campaign coffers fill!
Obama's new crop of regulators are doing what they can to hold down the growth and progress of business. Yes, new rules on proposed business mergers will change how the new anti-business government regulates formerly free-enterprise mergers. Now, my guess: how the regulators like the companies and other empathetic stuff. Specific rules by which businesses can manage, not so much, but we'll see.
And yes, who better than to regulate business than a union boss guy? But new Obama "senior counselor for manufacturing ("Don't call me Czar"!) Ron Bloom said he "won't dictate how much a factory should produce or the types of products it should make..." Whew. Well except for whatever "green industries" might be. But Obama lost his "green jobs" (Don't call me) Czar, former White House environmental adviser Van Jones, who called himself a Communist, has left the building.
But in the face of competition from abroad and anti-business activity in Washington DC, a little article about Farouk Systems, Inc. in the Wall Street Journal (August 24, 2009, page B1, "Coming Home: Appliance Maker Drops China to Produce in Texas") brings a little hope. The company, an entrepreneural creation of Palestinian-born hairdresser, Farouk Shami, sells $1,000,000,000 of hair irons and other hand-held appliances. He is moving production out of China to improve quality and image and better control inventory. Mr. Obama, back off. Let the free market grow and prosper and create jobs without burdensome regulation and unionization....
Dang! I have been updating this post for six months, and on August 31, somehow I deleted it all. So I am starting anew. In summary this post will describe instances where President Obama and his administration do things that hurt businesses and thus either reduce some jobs that businesses have created or diminish the possibility of businesses growing and producing new jobs. Simple. It outlines the tension between the president's pronouncements of "creating or saving 750,000 jobs" from the $787,000,000,000 "stimulus" and protecting the very entities that financed his election, which generally are anti-business, such as labor unions, trial lawyers and environmental activists, among others.
Obama's Labor Secretary is proposing to increase pay and enhance "protections" of seasonal farm workers. And a national electronic job agency to help farmers find U. S. workers, and for employers to prove they're looking for U. S. workers. Central control and command of farms, maybe? As typical unions love this and the actual owners of the farm businesses and the actualy employers of workers are against. Obama tried another anti-farm move earlier this year but it was struck down (FDR-like) in feceral district court. Mr. President, get rid of that judge!
The Obama Securities and Exchange Commission will give its attorneys even more authority and power to speed up new investigations of corporations. The SEC's challenge to business has opened 10% more investigations, granted 118% more formal orders, filed 147% mnore temporary restraining orders and filed 30% more cases, but who's counting? This in an effort to gain or retain 750,000 jobs in 2009! Huh?
And speaking of the "stimulus" apparently "only" about $88,000,000,000 has been spend by the first week in September, most on aid to struggling states, and aid and social programs which certainly do not support business, the only creator of lasting jobs and wealth. The only portion that might remotely help is the laughably-low $8 (eight dollars) a week tax credit to workers. And of course the entire $88,000,000,000 has had to be borrowed. While this didn't diminish business, it clearly didn't create jobs: (September 3, 2009)WASHINGTON (AP) -- The unemployment rate rose to 9.7 percent in August, the highest since June 1983, as employers eliminated a net total of 216,000 jobs; since Mr. Obama and Mr. Biden took office, the economy has shed 3 million jobs.
September 1, 2009, Erick at RedState.com [Erick.Erickson@RedState.com]: "Barack Obama Sneaks Through "Union Only" Order Shutting 8 in 10 Construction Workers Out of Federal Projects. There has not been a lot of coverage of this. It happened back in July and is only now winding its way through the federal system. Barack Obama and his administration are about to significantly drive up the costs of federal building construction. This is an astonishing reach. The Office of Management and Budget has directed that any federal construction over $25 million benefit unions. The order would make all federal construction projects 10-20% more expensive by requiring all contractors to either use union workers or apply inefficient union apprenticeship and work rules to their employees. Contractors would also be required to make contributions to union pension funds and other union programs that non-union workers will never benefit from.
This will hugely drive up the cost of construction of federal buildings and line the pockets of unions without even having union workers involved in the projects. The Bureau of Labor Statistics shows that only 15.6% of private construction workers in America belong to unions. In other words, 8 out of 10 construction workers in America will be legally denied the right to work on federal building projects.
This is appalling."
Great news in the midst of a recession, right?
And speaking of the FDA, it's looking for more money to inspect plants, set safety standards for fresh produce and additional regulation, including 350 more employees (of course) to increase the size of government during recessionary times. Get this: the Senate's Health, Education, Labor and Pensions ("HELP") Committee is in charge. HELP is right!
The Obama Justice Department will try to squelch jobs in the optical-drive industry by launching subpoenas for information from Hitachi Ltd., Toshiba Corp., and Sony Corp., with the Chief Economist of the Federal Trade Commission saying that the FTC is targeting the technology industry -- the only hotbed of innovation other than Obama, Congress and liberal judges -- to "assure economic innovation" and campaign contributions. The FTC also said it had been looking into Intel's marketing practices.
While Obama is stopping oil exploration, drilling and the building of nuclear powerplants in their tracks. The competition is moving in. Repsol YPF SA of Madrid, Spain, has invested deeply over the past decade into oil and gas exploration and is hitting paydirt, while U. S. companies are handcuffed by government domestically. Repsol made a huge new discovery in the Gulf of Mexice adding to its Shenzi field there. Last year it was involved in three of the five largest discoveries in the world. President Obama apparently wants to cripple the energy production in the United States. Why?
This one's great! Obama is doling out $2,300,000,000 to wind turbine producers to create jobs, including $500,000,000 to a dozen wind and solar farm projects. One a 36,000 acre West Texas developed by Shenyang Power Group...and if that sounds like a Chinese name, you are right. Its purchases will create 300 jobs in the United States and 2,500 jobs in China. China jobs with our money. Obama you are insanely stupid.
Understanding they don't want to compete honesty, the American Booksellers Association has asked the Departent of Justice to investigate a greast deal for comnsumer, but who cares about them? Wal-Mart, Amazon and Target have slashed prices on some upcomin best-sellers, so the ABA is begging for help from Washington DC to put especially union-despised Wal-Mart in its place. Political connection competition. One would naively think lower prices are good for consumers, who pay less. But not in Washington DC.
Daniel Tarullo, a Democratic lawyer was appointed by President Obama to come down with a firm hand on banks with his proposed new restrictive guidelines to be carried out by his 2,858-person army of regulators, covering virtually every segment of the financial services industry, probably including break times for executives. It is said Mr. Tarullo has a deep skepticism of banks, banking organizations and financial institutions. He's a micromanaging second-guessor who demands to make every little decision, thus neutering his staff. He's deeply into risk, business models and how the businesses should be managed. Mr. Tarullo taught banking law at Georgtown University and became fast idealogic friends of President Obama, neither with any real-world experience. Yes interesting how people with no real-world experience think they can manage better....
The Obama Federal Railroad Administration has proposed rules to mandate billions of dollars of new safety hardware costs on railroads to prevent collisions. The vast spending mandate -- near-term $2,000,000,000 increasing to between $7,000,000,00 and $24,000,000,000 in 20 years -- could lead to cutting passenger-train traffic. It might prevent accidents that killed 25 commuters in Los Angeles in 2008. Or might not. But it will kill jobs.
Then there are jobs then there are jobs. While the private sector sheds them like snake skin, the federal government is planning, according to the Partnership for Public Service, to add 273,000 -- a 41% increase -- during the rest of Obama's reign. Each job must be paid for either by a tax on the rest of the country's taxpayers or by borrowing from foreign governments or U. S. citizens. Government jobs do not create weatlth they destroy wealth.
Uncertainty, as this article from the Wall Street Journal, October 29, 2009, front page A 1 indicates kills jobs. [http://online.wsj.com/article/SB125659324579108943.html] "(U)ncertainty created by Washington's bid to reorganize a wide swath of the U. S. economy." 7.2 million jobs have been kiulled since August 2007's start to this recession.
The Obama administration is setting aside 200,000 square miles in Alaska and its coast as "critical habitat" for polar bears that restricts off-shore drilling for oil and gas, thus further diminishing in-country access to USA oil and gas reserves, putting the country further at risk and dependent on foreign sources of energy. And, of course, diminishes jobs in Alaska and the country as a whole.
Obama's Internal Revenue Service continues its revenge on the successful. IRS Commissioner Doug Shulman is targeting the very wealthy -- of course those typically-successful people who make the vast majority of the venture and new-business investments in the country -- by "better understanding the entire economic picture of the enterprise controlled by the wealthy individual. I am sure this very threat will create more job-killing uncertainty in investors.
New businesses in their first 90 days created 14% of all the hiring in the 15 years from 1993 to 2008. These new business starts tanked to 187,000 over the last year, the lowest since 1995. Jobs? The fewest at 794,000 since 1993. And the following posts outline the initiatives by President Obama to damage business and kill jobs.
The Obama Food and Drug Administration will start cracking down on cereal logos because his Commissioner Margaret Hamberg thinks some might be misleading. I don't imaging she'll crack down on hambergers. What little miniscule business corner isn't under attack by this anti-free-enterprise president? I guess he thinks jobs are created by Washington DC politicians and bureaucrats. That's what you learn from Harvard Law School and ACORN.
Obama's Interior Secretary Ken Salazar will investigate oil-shale leases in Colorado and Utah made by the Bush Administration.
Uncertainty incents companies to hold on to their money rather than invest it in creating, for example, new jobs. Obama advisors are examining the hugest of the huge uncertainties. Whether to make less financially attractive the ability of corporations to raise money through debt (which is tax-deductable) rather than equity (the sale of stock, which is not tax-deductable). Mr. President keep killing jobs, after all you have one. For now.
Private-family investment funds or so-called family offices, of which there might be 1,000 world-wide with assets over $100,000,000 (half of them over $1,000,000,000,000), have been placed in the target of Democrat lawmakers for regulation like hedge funds which raise money publicly. That should get them to reign in that horrible activity such as investing in venture capital and developing companies. But not to fear many have banded together to lobby, and in all likelihood, provide members of Congress with additional campaign contributions and the like. Hiring Jake Seher, a former top aide of Joe Biden and Thomas Quinn, top Democratic fundraiser and good bud of formerly-alive Senator Kennedy for $60,000 a month! Hmmm. But as one Democratic representative said, they'd have to obey some rules in order to continue to "play in OUR capital markets". "OUR" being my emphasis and my wondering if he thinks the capital markets are owned by...politicians ("our"), Democrats ("our") or who. Free enterprise? Hmmmm.
And once again the Obama administration is extending the dependence the United States will have on foreign oil. His Nuclear Regulatory Commission has rejected the modified design of a next-generation nuclear power station from Westinghouse Electric Co. (a Toshiba Corp. division). Seven U. S. utilities are seeking licenses to build 14 of them in five states. Obama's action may well delay planned completions around 2016. But, hey, who needs cheap, clean nuclear energy when we have bat-killing windmills (more on that later)? I may be a cynic but Obama's wholly-owned media service, NBC, is owned by the General Electric Company, a manufacturer of nuclear power stations for decades. Oh, just a coincidence.
And to further hurt businesses large and small and kill jobs, the Obama Labor Department is stepping up union-desired oversight of workplace-safety programs. Let's see, because of 12 workplace constuction-related deaths on the Las Vegas Strip for 2006 -- 4 a year, compared to 40,000 deaths a year from the common flu. And some union representatives weren't notified of fatality investigations and couldn't talk to investigators. A no-no with the Obama Occupational Safety and Health Administration, part of His labor Dept. It had better hire some more union-represented, Democratic-voting investigators. No doubt.
A proposed merger? "No way," says the Obama administration. "Free market" (an oxymoron in the U. S.) negotiations between Ticketmaster Entertainment Inc. and Live Nation Inc, are continuing, with no final decision, but the U. S. Justice Department is demanding changes to an agreement not made or they'll sue to block a merger only under discussion. "Big is Bad", says Obama, except of course for government which is run by omnipotent politicians trolling for campaign contributions. No doubt. And surprise, surprise competitors, politicians and "consumer advocates" whatever they really are have complained. Perhaps Barney Fife could have the combined entity make sub-prime loans to poor people who can't repay in order to have the merger approved. That always works!
The U. S. banking industry reeling from bad loans and income-killing regulations from the Obama administration and U. S. Congress is facing yet another Congressional attack. This time on fees banks charge merchants from so-called interchange fees set by Visa Inc. and MasterCard Inc. Accounting for $45,000,000,000. Banks have been weakened by government regulations and mandates, and are thought to be politically vulnerable, what with being in some cases forced to take Troubled Asset Recovery Program (TWERP or TARP). Obama is attmepting to run out all qualified banking managers by slashing executive pay on TARP-takers and "regulating" all other bank exec comp as well as slashing and changing contracts banks have made with consumers about credit cards. Is anyone wondering when the U. S.-Obama federal government will weaken all banks enough to simply take them all over and run them as public utilities? Soon.
Obama's Environmental "Protection" Agency is killing jobs and hurting the domestic refining of oil exacerbating the need to purchase oil from the Middle East and other foreign countries, by objecting to a federal air-permit application of BP PLC to expand its refinery in Whiting, Indiana for $3,800,000,000 (sounds like a lot of jobs). EPA felt BP doesn't know enough about the "best available techmology and lowest achievable emmissions rate" now, because months ago EPA did give it a permit. Obama's EPA knows more about technology, of course, than the hated and evil Bush administration. Obama's job-killing program to continue the U. S. dependence on foreign oil.
Mr. Obama, job openings in August were 2.4 million, down from 2.41 million in July (and off nearly 50% from August 2008!) and were at the lowest level since tracking began by the Labor Department in 2000. Job separations, quits, retires or laid-offs reached 4.27 million in August with hirings of only 4.01 million -- an historic low. And all you can do is hurt businesses, as this post proves. You are sinking the boat you had no hand in building: the prosperity of the United States of America.
Wall Street Journal, October 10 - 11, 2009, page B 1: "Democrats Weigh Tax On Financial Transactions". This possibly proposed new tax is "gathering support in high places", labor unions and Democrat legislators especially Rep. Barney Fife (oops, Frank) (D.,umb) especially as a way to finance a new stimulus. The article also mentions that the concept was slipped into Obama's "stimulus bill" unbeknowst to Congress and in all likelyhood, Obama, none of whom apparently even read it anyway. It was only $787,000,000,000! The insertion calls for requiring -- requiring -- the president to submit legislation that pays for any eventual financial shortfall in the Troubled Asset Relief Program (TWERP).
And while we're at it, let's go after IBM for running two Japanese companies out of the mainframe business. Fujitsu Ltd. and Hitachi Ltd. couldn't take the heat from IBM so they abandoned the business in 2001. Now mainframes are probably around 20-25% of IBM's revenue and double that percentage in operating profits. Interestingly 10% the server market, pioneered by micro computers and software, is in mainframes. A micro computer company, T3T Inc., of Tampa, uses Intel microprocessors and IBM's software for this market. When IBM refused to license its newest z/OS operating system software to T3T, it sued for antitrust, but the suit was dismissed in New York federal court because it "does not constitute anticompetitive conduct" So the Obama antitrust administration's Justice Department has, of course, step in over the courts and is launching an "inquiry". Let's take down to size the longest-lived technology company in America. At the very least pry some more lobbying money, attorneys fees and campaign contributions out of it.
The Obama Securities and Exchange Commission is investigating again, this time some accounting and disclosure issues for the nation's fifth largest seller (closed sales 2008) and builder/developer of homes. The industry in general is suffering from overbuilding, high inventories of unsold homes and foreclosures and, of course, the recession and job losses.
The Unites States' 1997 Foreign Corrupt Practices Act hasn't been used much since passage, but the Obama administration has charged a dozen individuals working for corporations with violations. This virtually unprecedented indictments instead of companies will diminish American companies' appetite for foreign business in part because of the uncertainty and in part because the statutes are confusing and unclear. And as such can be interpreted arbitrarily. One exec (founder of Dooney & Bourke) was charged not with doing but knowing his employees might possibly be making illicit payments. So much for the Rule of Law. (Please see "The End of the Rule of Law (Part Two)" below.)
Diminishing business is a keynote of President Barack Obama, as this post points out. Also other posts outline the same intiatives. Please see "Break Job-killing Union Monopolies and influence".
Montsanto Co. the largest agricultural seed company in the U. S. is targeted by the Obama Justice Department's vendetta against business. It is scrutinizing "competition" in the U. S. and looking perhaps to overturn an acquisition approved by the George Bush administration, that of Delta & Pine Land Co. in 2007. Seems big is bad, except when it comes to government. Yes, Montsanto must be a bad seed!
Consumer credit -- the fuel for consumer spending but also entrepreneurial and small business activity (small firms under 500 employees create two thirds of new jobs and is half the nation's work force) dropped almost 6% in August, 2009, the 7th month in a row, longest since 1991. Credit card lines alone have plunged some 25%. So what would No-Jobs-Obama (NJO) do? Cripple banks with more than fifty comprehensive rules. It's President Obama's upcoming Consumer Finance "Protection" Act. Consumer credit is off nearly $120,000,000,000 since July 2008, and lowering it more, of course, will protect consumers from their own base instincts to borrow. What? Oh, yes, if they can't have the freedom to borrow, they won't have to worry about the freedom to spend and repay as they wish. What? Yes, the president knows better how we should. Should what? Should do everything. And under Democrat Barney Fife (oops, Frank) Chairman of the House Financial Services committee, this proposed new Obama agency will have a Czar who could declare products and services unilaterially "unfair" or "abusive", and force litigation (rejoice trial lawyers) not the much cheaper arbitration. Czar'd collect fees and essentially dictate how financial institutions and banks do business.
And you want innovation in the pharmaceutical and medical device industry? You'll have to wait. Wait until President Barack Obama's anti-business Food and Drug Administration finishes undertaking (an appropriate word) a major review of device approvals under so called 510K, a program that has worked successfully for decades. Head of the program, Donna-Bea Tillman needs to "get a better lay of the land" and wants all reviews by her subordinates to pass by her. This in "furthering" of Obama's FDA head, Peggy Hamburg's "new direction" which seems to be both micro-managing and anti-business. And perhaps those delays will lead to massive new campaign contributions to the Democrats, but that's a bit cynical on my part. And Obama's mantra of "No New Jobs" continues.
No-Job -Obama's Environmental "Protection" Agency is proposing new rules to force private-sector power plant, factory and oil refining companies to spend vast sums of money for expensive new capabilities to cut carbon-dioxide emissions.
Energy companies which do "mountain top mining" for coal, which blasts hilltops of up to 800 feet, extracts coal, then rebuilds the hills, are now stopped dead by the Barack Obama No-Jobs Environmental "Protection" Agency. In a typical conflict between private enterprise and unelected, but politically powerful special "environmental" anti-business interests, Obama typically comes down on the side of No Jobs. In this case 79 permits are held up, with another 180 waiting, costing according to industry, thousands of jobs. But as a Wall Street Journal points out (Ovtober 8, 2009, page B 1)[online.wsj.com/article/SB10001424052748703298004574459363401191286.html] this move would shift coal production from low-voter Appalchian states to the important mid-west swing vote states of Illinois (hmmm which president is from here?), Indiana and Pennsylvania. Is that being cynical?
Want jobs, president Obama? Read a letter from Merrie Spaeth, Dallas, to the editor of the Wall Street Journal, September 29, 2009 (page A 24): "Businesses are not hiring because we have no idea what next year will be like." She laments confusion and lack of clarity about taxes and about tax-tinkering every year.
Something like 26% of consumers overspend their checking accounts (and 5% account for 68% of it according to an article in the Seattle Times, "Banks will try to offset lost fees, Spetember 243, 2009, page A 12) and, thus those irresponsible minority are saved once again from the evil banks. So Congress will dictate how the banks are to price and contract. Central control of our economy by Democrats. What will happen? Banks profits will drop (at a time the federal government wants them to loan money out) and banks will shift their business so as not to lose that revenue. Thus coinciding with the Democrats' core beliefs the responsible will bail out the irresponsible. Thank you Obama and Congress!
How best to diminish business? Cut and control compensation. And of course, I believe it's just payback time for those who have been more successful than President Obama and his handpicked Democrat regulators ( "jealosy"). And speaking of regulation, Obama wants Kenny Feinberg his pay (Don't call me) Czar to dictate compensation for those pesky bankers who caused the entire world-wide meltdown and recession because of poor comp practices. Checking rich bankers (including all financial companies at first, all other companies no doubt to come) will cut their tendency to be risky. But who particularly defines "risk"? Is being conservative and depending on the government-approved rating agency oligarchy being risky? What is safe comp for one job? $100,000? $535,535? (At least one Obama Energy Dept initiative is "creating" "hundreds of green jobs" for Solyndra Inc. in a planned solar-panel factory by "loaning" it $535,000,000. I wonder how will it repay the "loan" and that indicates a cost per job of $535,535 (for 999 jobs) to $2,675,000 (for 200) jobs depending on the definition of "hundreds".) $2,675,000 or simply $1,000,000? But was it comp or simply the government's allowing, no promoting, vast leverage with which the banks could operate? So, is Kenny going to sort out all of these issues and make the decisions, or will it be Obama, or his hand-picked Democrat elite? Stay tuned.
The Obama administration is trying for all-encompassing curbs -- rather dictates -- on compensation for financial institutions. The final proposal is a month or so away, but let the lobbying begin. Campaign coffers fill!
Obama's new crop of regulators are doing what they can to hold down the growth and progress of business. Yes, new rules on proposed business mergers will change how the new anti-business government regulates formerly free-enterprise mergers. Now, my guess: how the regulators like the companies and other empathetic stuff. Specific rules by which businesses can manage, not so much, but we'll see.
And yes, who better than to regulate business than a union boss guy? But new Obama "senior counselor for manufacturing ("Don't call me Czar"!) Ron Bloom said he "won't dictate how much a factory should produce or the types of products it should make..." Whew. Well except for whatever "green industries" might be. But Obama lost his "green jobs" (Don't call me) Czar, former White House environmental adviser Van Jones, who called himself a Communist, has left the building.
But in the face of competition from abroad and anti-business activity in Washington DC, a little article about Farouk Systems, Inc. in the Wall Street Journal (August 24, 2009, page B1, "Coming Home: Appliance Maker Drops China to Produce in Texas") brings a little hope. The company, an entrepreneural creation of Palestinian-born hairdresser, Farouk Shami, sells $1,000,000,000 of hair irons and other hand-held appliances. He is moving production out of China to improve quality and image and better control inventory. Mr. Obama, back off. Let the free market grow and prosper and create jobs without burdensome regulation and unionization....
Dang! I have been updating this post for six months, and on August 31, somehow I deleted it all. So I am starting anew. In summary this post will describe instances where President Obama and his administration do things that hurt businesses and thus either reduce some jobs that businesses have created or diminish the possibility of businesses growing and producing new jobs. Simple. It outlines the tension between the president's pronouncements of "creating or saving 750,000 jobs" from the $787,000,000,000 "stimulus" and protecting the very entities that financed his election, which generally are anti-business, such as labor unions, trial lawyers and environmental activists, among others.
Obama's Labor Secretary is proposing to increase pay and enhance "protections" of seasonal farm workers. And a national electronic job agency to help farmers find U. S. workers, and for employers to prove they're looking for U. S. workers. Central control and command of farms, maybe? As typical unions love this and the actual owners of the farm businesses and the actualy employers of workers are against. Obama tried another anti-farm move earlier this year but it was struck down (FDR-like) in feceral district court. Mr. President, get rid of that judge!
The Obama Securities and Exchange Commission will give its attorneys even more authority and power to speed up new investigations of corporations. The SEC's challenge to business has opened 10% more investigations, granted 118% more formal orders, filed 147% mnore temporary restraining orders and filed 30% more cases, but who's counting? This in an effort to gain or retain 750,000 jobs in 2009! Huh?
And speaking of the "stimulus" apparently "only" about $88,000,000,000 has been spend by the first week in September, most on aid to struggling states, and aid and social programs which certainly do not support business, the only creator of lasting jobs and wealth. The only portion that might remotely help is the laughably-low $8 (eight dollars) a week tax credit to workers. And of course the entire $88,000,000,000 has had to be borrowed. While this didn't diminish business, it clearly didn't create jobs: (September 3, 2009)WASHINGTON (AP) -- The unemployment rate rose to 9.7 percent in August, the highest since June 1983, as employers eliminated a net total of 216,000 jobs; since Mr. Obama and Mr. Biden took office, the economy has shed 3 million jobs.
September 1, 2009, Erick at RedState.com [Erick.Erickson@RedState.com]: "Barack Obama Sneaks Through "Union Only" Order Shutting 8 in 10 Construction Workers Out of Federal Projects. There has not been a lot of coverage of this. It happened back in July and is only now winding its way through the federal system. Barack Obama and his administration are about to significantly drive up the costs of federal building construction. This is an astonishing reach. The Office of Management and Budget has directed that any federal construction over $25 million benefit unions. The order would make all federal construction projects 10-20% more expensive by requiring all contractors to either use union workers or apply inefficient union apprenticeship and work rules to their employees. Contractors would also be required to make contributions to union pension funds and other union programs that non-union workers will never benefit from.
This will hugely drive up the cost of construction of federal buildings and line the pockets of unions without even having union workers involved in the projects. The Bureau of Labor Statistics shows that only 15.6% of private construction workers in America belong to unions. In other words, 8 out of 10 construction workers in America will be legally denied the right to work on federal building projects.
This is appalling."
Great news in the midst of a recession, right?
ObamaCare: Medicare Gone Wild. Or anti-health "care"
Speaker Pelosi rammed narrowly through the U. S. House of Representatives the nearly-2,000 page document she calls healthcare reform. Please see my post "The End of the Rule of Law (Part two)" which outlines some of the complexity of her bill. The Speaker traded, excoriated, bribed, threatened her fellow Representatives in her quest to win. And she squeaked out a bill with one Republican bribed with higher Medicaid payments to his state of Louisana and a deal on abortion. The Senate is the next challenge. And a big one at that.
The Congressional Budget Office today (October 8, 2009) "scored" the latest iteration of whatever the Democrats are trying to push onto America in their takeover of the entire healthcare industry. Whatever they come up with will ultimately bankrupt this country, so pray for nothing important. And interestingly enought the Senate Finance Committee proposal will "cost" (courtesy of CBO before footnotes) $829,000,000,00 and cut the deficit by $81,000,000,000, in part by pushing some expense onto states, except of course the states of powerful Democrats: Nevada gets a five-year exemption; New York, Massachusetts and a bunch of other Democrat-controlled states get special treatment for unions; in corrupt and Democrat-controlled New Jersey, its pharmaceutical companies will get a $1,000,000,000 special tax credit; Democratic-controlled Massachusetts (again, courtesy of failed Democratic presidental candidate John "Heinz" Kerry) and Michigan get $5,000,000,000 in special union reinsurance
Latest news for senior citizens from the president who promised their healthcare will not change one iota, except for the $124,000,000 taken from Medicare Advantage which covers 25% of us, it will be killed. Except for $400,000,000 slashed from regular Medicare to pay for Medicaid and new tax subsidies to help others purchase health insurance mandated by Congress.
This political dispute is no longer about healthcare it's about egos and "political will". And it seems Rahm Emanual is losing, and it's been said he doesn't lose easily. Even after a full-court press of lobbying by Emanual's mouthpiece, President Obama, he's falling. Even Democrats are challenging him. From the left on the "necessary" government monoploy and on the right, from "Blue Dogs" not wanting a government takeover. Quandry. And their nemesis, Citizen Sarah Palin scored with the "Death Panels". But Emanual is not to be outdone. With focus groups and polling no doubt he'll rebrand "death panel" to be "Life Panels". Now isn't it better?
Senate Finance Committee Chairman Max Baucus, a Democrat, wants to tax young, healthy people who might not want to buy health insurance somewhere between $3,800 or $1,900 depending on where he is today on votes. Chairman Max' bill was endorsed by...him and only him. Now every Democrat in DC is scrambling to buy enough votes to have some bill passed, and start the absolute control of all healthcare in the U. S. by Democrats. "But don't call it a tax" said, President Obama in one of his myriad appearances on the left-wing media. A tax by another name is a "penalty" or "mandate" or "something" but not a tax.
Democrats want to pay for its new monopoly over healthcare by slashing Medicare payments by $500,000,000,000 while baby boomers turn 65 and increase Medicare enrollment by 30%.
Tennessee tried in 1994 an ambitious healthcare reform including universal coverage and public option. [Wall Street Journal, Monday, August 17, 2009, page A 2. http://online.wsj.com/article/SB125026043441032205.html] Result: It almost ate Tennessee for lunch, capturing one-third of its budget it was so costly. Initially set at $2,600,000,000 to cover poor people and those who were rejected by insurance companies, it hit $8,500,000,000 by 2004. People covered by their employers insurance went for TennCare instead, 1.4 million people leaving only 6% uncovered (because of an income cap). Tennessee started backtracking, cutting those covered and slashing reimbursement, driving many providers from the program. Initial "cost savings" to pay for it initially succeeded by reducing visits to emergency departments. But that didn't last, by 2005 TennCare threatened Tennessee's very solvency. It reduced participants and leveled out the losses, to $7,660,000,000 covering 1,280,000 people. Many not covered have CoverTN which pays basic medications and tests for $125 a month with a maximum of $25,000 a year. Diagnosis: Failure.
Why should we want to extend a failing U. S. Government program? Medicare is one. It is losing money. MEDPAC -- the Medicare Payment Advisory Commission -- reports that hospitals lose 5.9% for every dollar they receive treating Medicare patients (getting back only 94.1% of costs). Privately-managed health insurance companies treating non-Medicare patients SUBSIDIZE Medicare. Regardless, in the four years from January 2003 to December 2007, Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. The average annual growth was $2.8 trillion. According to the Medicare Trustees “intermediate assumptions,” $38 trillion (260% of current GDP) would have been needed at year-end 2008 to fund over the next 75 years projected shortfalls for Medicare hospital coverage and to meet the federal government’s statutory obligation to pay its share of other Medicare benefits, including prescription drug coverage. And at 2016 or 2017 -- 7 or 8 years -- at today's calculations the "trust fund" will run out. ZERO. So money will come from everyone's taxes to pay for the burgeoning numbers of seniors. And they don't die fast enough (only about 5% of them a year) to get off the roles. Hey government, great management. And let's see something live 42 million people are now covered by Medicare, around the number President Obama wants to add to his government-run, single-payer system. Go Obama!
If Obama really cared about reining in the out-of-control healthcare costs, he'd:
1) Allow a tax deduction for individuals' health insurance premiums so they can shop where they choose for a policy that fits each of them and take payments for health insurance from companies by stopping tax deductions for them. Freedom in capitalism.
2) Rein in trial lawyers who force expensive medical settlements for accidents by healthcare providers which a) finance their yachts and jets and b) drive up costs and c) force these providers to defend against frivolous law suits by ordering more tests, scans and diagnostics than would be otherwise necessary. Actual negligence should be handled by a special healthcare court system, much like that for bankruptcies, instead of expensive adversarial conflicts. A lot cheaper than buying yachts and jets, and facts would predominate, not a lawyer's ability to persuade.
3) Cut coverage mandates dictated by politicians which pander to a voting bloc lobbyist or grab campaign contributions and include: hair implants, chiropractic, speech therapy, podriaty, vision, massage, marriage counseling, substance abuse, infertility, erectile disfunction, and equality of mental with physical health. (In 1965 there were a small handful of these politician-directed mandated coverages, now there are upwards of 1,000.)
4) Allow cross state-border marketing of health insurance plans, with the consumer being allowed to choose.
5) Allow clinics to be established in retail locations, like Wal-Mart and encourage entrepreneurs to establish them and hospitals for specialties; yes, it might force some hospitals out of business, but in exchange for more efficiency and effectiveness.
There's a start Mr. President, to lowering the price of healthcare. There'll be more here coming.
www.whitehouse.gov/realitycheck ("reality check" being a segment on the O'Reilly Factor, television news' number one show), paid for by taxpayers is our president's attempt to bully his fellow citizens into accepting his left-wing attempt at taking over American healthcare. He is using his powerful seat to shut-up dissent and silence anyone disagreeing with him, saying he knows what's best for the American people who'll "be glad that we [meaning 'I'] acted to change an unstustainable system" that government created initially. Yessuh, yessuh, master you know best.
The United States of America spends $2,400,000,000,000 on healthcare, slightly more than the entire GDP of the United Kingdom (the world's sixth largest). Government mandated and managed Medicare has contributed greatly to this vast spending. So certainly covering another 25 or 50 million people under the same management will cut costs. What are you snorting this time, Barack?
Just an interesting factual tidbit. 5% of Medicare beneficiaries die each year and spending during the last year of each life accounts for 27.4% of all Medicare spending. (As of the latest comprehensive report in 2001.)
Not that it matters, since this has nothing to do with facts, only with the mad grasp for power, but France -- the epitomy of Obama's dream society -- is pushing back against out-of-control spending on its Assurance Maladie single-government payer health insurance. Adopting American techniques like co-pay and bringing in business managers to rationalize government workers' hours and cut jobs. No matter where Obama wants to take America isn't working in France. Costs there and in the UK are rising as in the U. S. "Obama-lite" former Republican governor Mitt Romney's experiment in universal coverage was supposed to cost $472,000,000 last year but hit $628,000,000! A failure. The only way to rein in healthcare costs is to rein in healthcare costs. Cosmetic surgery, dentistry and laser eye surgery all are free-market and not paid by most insurance. Result? Better technology and lower or the same prices over time. Proof only to rational not left-wing ideologic people. We should give the free market a try.
Just to put things in perspective, since President Obama asked gently to "overhaul" the healthcare industry in America, and turned over the natty, irrelevant details to Congress, lobbying has intensified to $133,000,000 in the second quarter alone.
From the party that wants to own your healthcare (WSJ, July 22, 2009, page A 6):[Democratic-controlled] New York City, State to Pay $540 Million in probe of Medicaid Charges, that they knowingly submitted false claims to Medicaid. This is the largest ever recovered settlement, and covered 1990 through 2001.
From the New York Times, June 12, 2009 page A 15, "Obama takes his health care case to the public", Obama said: "If the private insurance companies have to compete with a public option, it will keep them honest..." Thus Obama let slip out that he believes insurance companies are not honest. And later, he said, "We've got to admit that the free market has not worked perfectly when it comes to health care." Oh, yes like Medicare and Medicaid!
But if Congress and the president really had our best interests in mind, and weren't simply lusting for more power, they'd stop, look and analyze the results of Massachusetts' 2006 healthcare plan. See a Wall Street Journal article (July 11-12, 2009, page A 10) http://online.wsj.com/article/SB124726287099225209.html.
And it looks like Obama is cloning the first President Bush's "read my lips, no new taxes" by moderating the possibility of taxing healthcare benefits and setting up Congress, especially Republicans, to take the blame. (As in, "the Devil made me do it".) Obama in part beat McCain in the 2008 election by pledging, promising and guaranteeding that no one making under either $250,000 or sometimes $200,000 would have a penny of their taxes raised. (Unless they smoke.)
The headline Friday, June 19, 2009: Senator Edward Kennedy's healthcare bill specifically (section 3116) exempts members of Congress. Doesn't that and that alone tell you something? Oh, federal employees won't be in it either, same section.
Senator Ron Wyden, Democrat from Oregon has a better idea than either Senator Kennedy or President Obama who simply want to take over American healthcare, facts and markets notwithstanding. It is obvious they don't to hear any other sides. But read here:
http://online.wsj.com/article/SB124545885464333145.html. If you care about the upcoming healthcare clusterfxxk read this article carefully.
And Safeway has used a market-based approach to make its non-union employees more healthy and keep their healthcare costs flat. An important strategy that our politicians will not read. Don't bother the Democrats with facts...
http://online.wsj.com/article/SB124536722522229323.html and http://online.wsj.com/article/SB124476804026308603.html
Now to the rest of the story:
Stop smoking, save 475, 000 lives.
Lower blood pressure, save 395,000 lives.
Slim down, save 215,000 lives: 31% of us are clinically obese with a Body Mass Index over 30. 3.8 million Americans are over 300 pounds and 400,000 are over 400. The cost of diabetes alone is $200,000,000,000.
All together healthier living could save 1,250,000 lives a year. Cost? Not much, just a little self-discipline. This includes less alcohol (boo) and more fish (yea).
Universal health insurance might save 18,000 lives. And funny thing, Obama's doctor said that government, single-payer healthcare is his preferred choice, but the "scoring" by the Congressional Budget Office indicated that 16 million more people would be covered for sums between $1,000,000,000,000 and $1,500,000,000,000, leaving Obama some 29 PEOPLE million short of "universal".
Akrasia, the Greeks call it, weakness of will. But in America, our government would rather spend $1,200,000,000,000 to $1,500,00,000,00 instead of challenging voters to do something they might rather not do. Our country is self-indulgent thanks to our spineless politicians thirsting after cushy jobs afraid to tell people to "Knock it off." (Remember Medicare has $38,000,000,000,000 in unfunded liabilities! With increases in costs 34% HIGHER than the rest of healthcare snce 1970.)
Education not regulation, but some taxation (it worked beautifully on cigarettes, only sorry much of that dough went to buy trial lawyers their new jets) and pricing insurance on life styles, and rejiggering incentives. Today providers of healthcare get paid for doing things. If people paid their own healthcare costs, and prices were higher to smoke and be fat, many would stop and exercise. Pretty simple and cheap. But no, Obama and his Stepford Congress wouldn't get more power over other peoples' lives, so "no" to that simple, cheap solution. So let's go and spend $1,200,000,000,000 to $1,500,000,00,00 instead. And to pay for it, let's laugh off Obama's "savings", he must be back on cocaine to believe that. But he is asking for us -- taxpayers -- to believe in his no-detail savings plan, "Oh, sure, politician we believe you." His real answer, tax. Tax. Tax. Everything. Employer-sponsered health-care plans (no matter he destroyed Senator McCain for saying the same thing.) Non-profit hospitals which don't give away enough care. Alcohol. Limit Health Savings Accounts, or just eliminate them because rich people might get something. More tax on beer and wine. Sugary beverages, including pop, fruit juices, iced tea, sports drinks, flavored milk. Maybe not water.
But one way Democrats will save a little of that obscene expense is by...RATIONING healthcare based not on doctors' opinions but those of bureaucrats. These shamans of healthcare -- bureaucrats -- now will not pay for "virtual colonoscopies" computed tomography (CT) scans of the colon because of cost. Cancer death #2 in the U. S.! Cure rate: over 90% if diagnosed early; 8% -- certain death -- later on. My guess is that Congress will pass a law (after some pressure, and after some campaign contributions) to force Medicare to cover these potential life-saving scans. That is the preview of ObamaCare...healthcare by campaign contribution. Or: "Pay or Die." But it'll be up to bureaucrats thus breaking the sacred bond of doctor and patient dating from Hippocrates. Like all else Democrat, everyone is equal (except the political royalty) and so computers and bureaucrats can make the diagnosis and perform the therapy.
A couple of interesting articles from the Wall Street Journal:
http://online.wsj.com/article/SB123681586452302125.html, The Wall Street Journal, Thursday, March 12, 2009, page A15: "Obama's $80 Billion Exaggeration".
http://online.wsj.com/article/SB123682034697503187.html, The Wall Street Journal, Thursday, March 12, 2009, page B4,
But of course President Obama and Congress will not do anything that does not expand their power over others, does not prove capitalism and free-enterprise wrong, and does not attract campaign contributions. So what will ObamaCare do, for example, to doctors? "How ObamaCare Will Affect Your Doctor" (WSJ May 12, 2009, page A 17. http://online.wsj.com/article/SB124208383695408513.html). Now Medicare on average pays physicians 20% - 30% less than private plans because of its price and wage controls. When many more patients are covered, and companies will offload their workers like mad from private plans to the government, costs will be impacted by cutting doctors' pay another projected 15% - 20%, with lower-paid primary care physicians hurt most, at the same time they'll be required to purchase costly information systems. Remember that doctors are in the higher-income levels, so their taxes at the same time will be greatly increased. And their diagnostic and therapeutic time will be cut by paperwork. Obama, of course, sees his bureaucracy as better equipped with computer-driven expert systems being better able to diagnose and care in a cost-effective manner. But will it hire and employ physicians and other providers and have them join unions? This hasn't been discussed, but why not?
None of this makes sense.
But hey, how about this: Obama's pick for Health and Human Services secretary--Kansas Gov. Kathleen Sebelius used to work as the chief lobbyist for her state's trial lawyers association. Malpractice awards are $20,000,000,000 to $40,000,000,000 a year (laywers typically get 30% to 40% of it). But fear of lawsuits is where the cost of "defensive medicine" skyrockets: studies indicate $100,000,000,000 to $178,000,000,000 a year tops, $66,000,000,000 at a minimum.
Incentives of Medicare are to treat, to do things to get paid. Providers don't get paid if their patients are healthy and get healthier. This is the definition of perverse incentives.
But for the Democrats how is ObamaCare doing so far? Quite well, thank you very much. Drug makers have increased their favor-currying (lobbying) to $47.4 million the first quarter. Ditto, hospital organizations, insurance companies, doctors and labor unions.
Republicans have a better plan, but it won't get off the ground because it relies on the private sector. People become responsible for their care. They get money now given in tax credits to their employers. (Which by itself -- a third-party, detached payor -- increases useage and costs.) Republicans will mandate health insurance to be sold across state lines but leave it up to the private-sector companies to define coverages and premiums.
But Democrats see its 45-year Senator from Massachusetts, brain injured far left-winger Edward Kennedy as its key. While Kennedy can't make it into DC, his ethically-challenged friend Christopher Dodd (D., Conn.) will be his mouthpiece. Would the senator from Massachusetts like his obviously "extraordinary" care rationed because it's too expensive. NO! And a question is, exactly who is paying for his healthcare? Medicare?
But wait! There seem to be two roadblocks to a smooth transition to government healthcare. First, they have to figure out how to pay for it. Apparently rich people don't have enough money. And President Obama has promised...promised...("cross my heart hope to die...") that any plan won't increase the budget deficit. Well, dude, what about the $1,200,000,000 to $1,500,000,000 it'll cost? Second, whether they'll create a new public health-insurance plan to compete with private plans. Let's see now. Obama and most of the Democratic Congress believe the free-enterprise system doesn't work. Look at the U. S. Postal Service and Amtrak, for example. So this is a no-brainer for the anti-business morons running our country.
And one might ask, how's medicare doing? according to revised government estimates, not well. Its fund for hospital care will run out of money in 2017, (two years earlier than last year's estimate. [Social Security, too, will run out in 2037, four years earlier than last year's estimate!]
Our president's Council of Economic Advisors released a report, "The Economic case for Health Care Reform," June 1, 2009. It outlines five issues. 1) Federal deficits undermine this country's stability and healthcare must be "reformed" to cut deficits. Obama's plan is to borrow $1,200,000,000,00 to $1,500,00,000 to fund losses while government takes the healthcare industry over. Check the U. S. Post Office and Amtrak to see how government'll slash deficits by taking over arguably the largest industry in the world (perhaps next to government). 2) "Skyrocketing costs" are not, as it indicates, skyrocketing falling to a 6% increase in 2007 against 13%, for example, in 1980. It might be highlighted that costs started heading up fast when Medicare was passed. 3) Families are burdened by healthcare costs. Not as much as the Democrats want you to believe. Food and energy have decreased and housing has stayed flat as a percentage of households' incomes, indicating that healthcare is not increasing its burden and forcing families to give things up for healthcare. Americans can afford more healthcare spending because as a nation we are richer than others. 4) We should copy Europe. But no. Much of the increase in U. S. healthcare spending comes from innovation in high-tech equipment and medications. Almost all of which is financed by the U. S. in the U. S. Our diagnostics are better. As is our healthcare. We have little waiting for diagnosis and treatment, unlike Canada and Europe. We could go back to the 1980's and have 60% survival rates from heart attack instead of today's 90+% 5) CEA advises shrinking healthcare industry spending by 1.5% a year, thus creating higher unemployment and concomitant lost wealth and higher costs from the 1.4 million jobs in healthcare now. And cutting money going into the industry will shrink the number of providers thus guaranteeing long waits for healthcare and steadily increasing deaths. The untold story of ObamaCare!
And an aside, speaking of Canada. Need an MRI? Wait: one year. Then, surgery needed? More months wait. Need ER? Only half the patients are treated on a timely basis. Now the trends are: head to America for healthcare; or go to a private, non-governmental clinic, 50,000 in Vancouver BC and growing quickly. It's getting to be, the rich get good care.
An example of "rationing" NOW in the U.S. is Centers for Medicare and Medicaid Services (CMS) overseer of Medicare and Medicaid for the Dempartment of Health and Human Services, refusing to pay for virtual colonoscopies, a less-invasive procedure for colon cancer detection. And of making the rules for home oxygen therapy so complex that they seem to hope patients will give up and die. Only two quick examples. But the way CMS "cut" healthcare is to take away compensation for doctors, nurses and other providers. And you ain't seen nothing yet!
The Congressional Budget Office today (October 8, 2009) "scored" the latest iteration of whatever the Democrats are trying to push onto America in their takeover of the entire healthcare industry. Whatever they come up with will ultimately bankrupt this country, so pray for nothing important. And interestingly enought the Senate Finance Committee proposal will "cost" (courtesy of CBO before footnotes) $829,000,000,00 and cut the deficit by $81,000,000,000, in part by pushing some expense onto states, except of course the states of powerful Democrats: Nevada gets a five-year exemption; New York, Massachusetts and a bunch of other Democrat-controlled states get special treatment for unions; in corrupt and Democrat-controlled New Jersey, its pharmaceutical companies will get a $1,000,000,000 special tax credit; Democratic-controlled Massachusetts (again, courtesy of failed Democratic presidental candidate John "Heinz" Kerry) and Michigan get $5,000,000,000 in special union reinsurance
Latest news for senior citizens from the president who promised their healthcare will not change one iota, except for the $124,000,000 taken from Medicare Advantage which covers 25% of us, it will be killed. Except for $400,000,000 slashed from regular Medicare to pay for Medicaid and new tax subsidies to help others purchase health insurance mandated by Congress.
This political dispute is no longer about healthcare it's about egos and "political will". And it seems Rahm Emanual is losing, and it's been said he doesn't lose easily. Even after a full-court press of lobbying by Emanual's mouthpiece, President Obama, he's falling. Even Democrats are challenging him. From the left on the "necessary" government monoploy and on the right, from "Blue Dogs" not wanting a government takeover. Quandry. And their nemesis, Citizen Sarah Palin scored with the "Death Panels". But Emanual is not to be outdone. With focus groups and polling no doubt he'll rebrand "death panel" to be "Life Panels". Now isn't it better?
Senate Finance Committee Chairman Max Baucus, a Democrat, wants to tax young, healthy people who might not want to buy health insurance somewhere between $3,800 or $1,900 depending on where he is today on votes. Chairman Max' bill was endorsed by...him and only him. Now every Democrat in DC is scrambling to buy enough votes to have some bill passed, and start the absolute control of all healthcare in the U. S. by Democrats. "But don't call it a tax" said, President Obama in one of his myriad appearances on the left-wing media. A tax by another name is a "penalty" or "mandate" or "something" but not a tax.
Democrats want to pay for its new monopoly over healthcare by slashing Medicare payments by $500,000,000,000 while baby boomers turn 65 and increase Medicare enrollment by 30%.
Tennessee tried in 1994 an ambitious healthcare reform including universal coverage and public option. [Wall Street Journal, Monday, August 17, 2009, page A 2. http://online.wsj.com/article/SB125026043441032205.html] Result: It almost ate Tennessee for lunch, capturing one-third of its budget it was so costly. Initially set at $2,600,000,000 to cover poor people and those who were rejected by insurance companies, it hit $8,500,000,000 by 2004. People covered by their employers insurance went for TennCare instead, 1.4 million people leaving only 6% uncovered (because of an income cap). Tennessee started backtracking, cutting those covered and slashing reimbursement, driving many providers from the program. Initial "cost savings" to pay for it initially succeeded by reducing visits to emergency departments. But that didn't last, by 2005 TennCare threatened Tennessee's very solvency. It reduced participants and leveled out the losses, to $7,660,000,000 covering 1,280,000 people. Many not covered have CoverTN which pays basic medications and tests for $125 a month with a maximum of $25,000 a year. Diagnosis: Failure.
Why should we want to extend a failing U. S. Government program? Medicare is one. It is losing money. MEDPAC -- the Medicare Payment Advisory Commission -- reports that hospitals lose 5.9% for every dollar they receive treating Medicare patients (getting back only 94.1% of costs). Privately-managed health insurance companies treating non-Medicare patients SUBSIDIZE Medicare. Regardless, in the four years from January 2003 to December 2007, Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. The average annual growth was $2.8 trillion. According to the Medicare Trustees “intermediate assumptions,” $38 trillion (260% of current GDP) would have been needed at year-end 2008 to fund over the next 75 years projected shortfalls for Medicare hospital coverage and to meet the federal government’s statutory obligation to pay its share of other Medicare benefits, including prescription drug coverage. And at 2016 or 2017 -- 7 or 8 years -- at today's calculations the "trust fund" will run out. ZERO. So money will come from everyone's taxes to pay for the burgeoning numbers of seniors. And they don't die fast enough (only about 5% of them a year) to get off the roles. Hey government, great management. And let's see something live 42 million people are now covered by Medicare, around the number President Obama wants to add to his government-run, single-payer system. Go Obama!
If Obama really cared about reining in the out-of-control healthcare costs, he'd:
1) Allow a tax deduction for individuals' health insurance premiums so they can shop where they choose for a policy that fits each of them and take payments for health insurance from companies by stopping tax deductions for them. Freedom in capitalism.
2) Rein in trial lawyers who force expensive medical settlements for accidents by healthcare providers which a) finance their yachts and jets and b) drive up costs and c) force these providers to defend against frivolous law suits by ordering more tests, scans and diagnostics than would be otherwise necessary. Actual negligence should be handled by a special healthcare court system, much like that for bankruptcies, instead of expensive adversarial conflicts. A lot cheaper than buying yachts and jets, and facts would predominate, not a lawyer's ability to persuade.
3) Cut coverage mandates dictated by politicians which pander to a voting bloc lobbyist or grab campaign contributions and include: hair implants, chiropractic, speech therapy, podriaty, vision, massage, marriage counseling, substance abuse, infertility, erectile disfunction, and equality of mental with physical health. (In 1965 there were a small handful of these politician-directed mandated coverages, now there are upwards of 1,000.)
4) Allow cross state-border marketing of health insurance plans, with the consumer being allowed to choose.
5) Allow clinics to be established in retail locations, like Wal-Mart and encourage entrepreneurs to establish them and hospitals for specialties; yes, it might force some hospitals out of business, but in exchange for more efficiency and effectiveness.
There's a start Mr. President, to lowering the price of healthcare. There'll be more here coming.
www.whitehouse.gov/realitycheck ("reality check" being a segment on the O'Reilly Factor, television news' number one show), paid for by taxpayers is our president's attempt to bully his fellow citizens into accepting his left-wing attempt at taking over American healthcare. He is using his powerful seat to shut-up dissent and silence anyone disagreeing with him, saying he knows what's best for the American people who'll "be glad that we [meaning 'I'] acted to change an unstustainable system" that government created initially. Yessuh, yessuh, master you know best.
The United States of America spends $2,400,000,000,000 on healthcare, slightly more than the entire GDP of the United Kingdom (the world's sixth largest). Government mandated and managed Medicare has contributed greatly to this vast spending. So certainly covering another 25 or 50 million people under the same management will cut costs. What are you snorting this time, Barack?
Just an interesting factual tidbit. 5% of Medicare beneficiaries die each year and spending during the last year of each life accounts for 27.4% of all Medicare spending. (As of the latest comprehensive report in 2001.)
Not that it matters, since this has nothing to do with facts, only with the mad grasp for power, but France -- the epitomy of Obama's dream society -- is pushing back against out-of-control spending on its Assurance Maladie single-government payer health insurance. Adopting American techniques like co-pay and bringing in business managers to rationalize government workers' hours and cut jobs. No matter where Obama wants to take America isn't working in France. Costs there and in the UK are rising as in the U. S. "Obama-lite" former Republican governor Mitt Romney's experiment in universal coverage was supposed to cost $472,000,000 last year but hit $628,000,000! A failure. The only way to rein in healthcare costs is to rein in healthcare costs. Cosmetic surgery, dentistry and laser eye surgery all are free-market and not paid by most insurance. Result? Better technology and lower or the same prices over time. Proof only to rational not left-wing ideologic people. We should give the free market a try.
Just to put things in perspective, since President Obama asked gently to "overhaul" the healthcare industry in America, and turned over the natty, irrelevant details to Congress, lobbying has intensified to $133,000,000 in the second quarter alone.
From the party that wants to own your healthcare (WSJ, July 22, 2009, page A 6):[Democratic-controlled] New York City, State to Pay $540 Million in probe of Medicaid Charges, that they knowingly submitted false claims to Medicaid. This is the largest ever recovered settlement, and covered 1990 through 2001.
From the New York Times, June 12, 2009 page A 15, "Obama takes his health care case to the public", Obama said: "If the private insurance companies have to compete with a public option, it will keep them honest..." Thus Obama let slip out that he believes insurance companies are not honest. And later, he said, "We've got to admit that the free market has not worked perfectly when it comes to health care." Oh, yes like Medicare and Medicaid!
But if Congress and the president really had our best interests in mind, and weren't simply lusting for more power, they'd stop, look and analyze the results of Massachusetts' 2006 healthcare plan. See a Wall Street Journal article (July 11-12, 2009, page A 10) http://online.wsj.com/article/SB124726287099225209.html.
And it looks like Obama is cloning the first President Bush's "read my lips, no new taxes" by moderating the possibility of taxing healthcare benefits and setting up Congress, especially Republicans, to take the blame. (As in, "the Devil made me do it".) Obama in part beat McCain in the 2008 election by pledging, promising and guaranteeding that no one making under either $250,000 or sometimes $200,000 would have a penny of their taxes raised. (Unless they smoke.)
The headline Friday, June 19, 2009: Senator Edward Kennedy's healthcare bill specifically (section 3116) exempts members of Congress. Doesn't that and that alone tell you something? Oh, federal employees won't be in it either, same section.
Senator Ron Wyden, Democrat from Oregon has a better idea than either Senator Kennedy or President Obama who simply want to take over American healthcare, facts and markets notwithstanding. It is obvious they don't to hear any other sides. But read here:
http://online.wsj.com/article/SB124545885464333145.html. If you care about the upcoming healthcare clusterfxxk read this article carefully.
And Safeway has used a market-based approach to make its non-union employees more healthy and keep their healthcare costs flat. An important strategy that our politicians will not read. Don't bother the Democrats with facts...
http://online.wsj.com/article/SB124536722522229323.html and http://online.wsj.com/article/SB124476804026308603.html
Now to the rest of the story:
Stop smoking, save 475, 000 lives.
Lower blood pressure, save 395,000 lives.
Slim down, save 215,000 lives: 31% of us are clinically obese with a Body Mass Index over 30. 3.8 million Americans are over 300 pounds and 400,000 are over 400. The cost of diabetes alone is $200,000,000,000.
All together healthier living could save 1,250,000 lives a year. Cost? Not much, just a little self-discipline. This includes less alcohol (boo) and more fish (yea).
Universal health insurance might save 18,000 lives. And funny thing, Obama's doctor said that government, single-payer healthcare is his preferred choice, but the "scoring" by the Congressional Budget Office indicated that 16 million more people would be covered for sums between $1,000,000,000,000 and $1,500,000,000,000, leaving Obama some 29 PEOPLE million short of "universal".
Akrasia, the Greeks call it, weakness of will. But in America, our government would rather spend $1,200,000,000,000 to $1,500,00,000,00 instead of challenging voters to do something they might rather not do. Our country is self-indulgent thanks to our spineless politicians thirsting after cushy jobs afraid to tell people to "Knock it off." (Remember Medicare has $38,000,000,000,000 in unfunded liabilities! With increases in costs 34% HIGHER than the rest of healthcare snce 1970.)
Education not regulation, but some taxation (it worked beautifully on cigarettes, only sorry much of that dough went to buy trial lawyers their new jets) and pricing insurance on life styles, and rejiggering incentives. Today providers of healthcare get paid for doing things. If people paid their own healthcare costs, and prices were higher to smoke and be fat, many would stop and exercise. Pretty simple and cheap. But no, Obama and his Stepford Congress wouldn't get more power over other peoples' lives, so "no" to that simple, cheap solution. So let's go and spend $1,200,000,000,000 to $1,500,000,00,00 instead. And to pay for it, let's laugh off Obama's "savings", he must be back on cocaine to believe that. But he is asking for us -- taxpayers -- to believe in his no-detail savings plan, "Oh, sure, politician we believe you." His real answer, tax. Tax. Tax. Everything. Employer-sponsered health-care plans (no matter he destroyed Senator McCain for saying the same thing.) Non-profit hospitals which don't give away enough care. Alcohol. Limit Health Savings Accounts, or just eliminate them because rich people might get something. More tax on beer and wine. Sugary beverages, including pop, fruit juices, iced tea, sports drinks, flavored milk. Maybe not water.
But one way Democrats will save a little of that obscene expense is by...RATIONING healthcare based not on doctors' opinions but those of bureaucrats. These shamans of healthcare -- bureaucrats -- now will not pay for "virtual colonoscopies" computed tomography (CT) scans of the colon because of cost. Cancer death #2 in the U. S.! Cure rate: over 90% if diagnosed early; 8% -- certain death -- later on. My guess is that Congress will pass a law (after some pressure, and after some campaign contributions) to force Medicare to cover these potential life-saving scans. That is the preview of ObamaCare...healthcare by campaign contribution. Or: "Pay or Die." But it'll be up to bureaucrats thus breaking the sacred bond of doctor and patient dating from Hippocrates. Like all else Democrat, everyone is equal (except the political royalty) and so computers and bureaucrats can make the diagnosis and perform the therapy.
A couple of interesting articles from the Wall Street Journal:
http://online.wsj.com/article/SB123681586452302125.html, The Wall Street Journal, Thursday, March 12, 2009, page A15: "Obama's $80 Billion Exaggeration".
http://online.wsj.com/article/SB123682034697503187.html, The Wall Street Journal, Thursday, March 12, 2009, page B4,
But of course President Obama and Congress will not do anything that does not expand their power over others, does not prove capitalism and free-enterprise wrong, and does not attract campaign contributions. So what will ObamaCare do, for example, to doctors? "How ObamaCare Will Affect Your Doctor" (WSJ May 12, 2009, page A 17. http://online.wsj.com/article/SB124208383695408513.html). Now Medicare on average pays physicians 20% - 30% less than private plans because of its price and wage controls. When many more patients are covered, and companies will offload their workers like mad from private plans to the government, costs will be impacted by cutting doctors' pay another projected 15% - 20%, with lower-paid primary care physicians hurt most, at the same time they'll be required to purchase costly information systems. Remember that doctors are in the higher-income levels, so their taxes at the same time will be greatly increased. And their diagnostic and therapeutic time will be cut by paperwork. Obama, of course, sees his bureaucracy as better equipped with computer-driven expert systems being better able to diagnose and care in a cost-effective manner. But will it hire and employ physicians and other providers and have them join unions? This hasn't been discussed, but why not?
None of this makes sense.
But hey, how about this: Obama's pick for Health and Human Services secretary--Kansas Gov. Kathleen Sebelius used to work as the chief lobbyist for her state's trial lawyers association. Malpractice awards are $20,000,000,000 to $40,000,000,000 a year (laywers typically get 30% to 40% of it). But fear of lawsuits is where the cost of "defensive medicine" skyrockets: studies indicate $100,000,000,000 to $178,000,000,000 a year tops, $66,000,000,000 at a minimum.
Incentives of Medicare are to treat, to do things to get paid. Providers don't get paid if their patients are healthy and get healthier. This is the definition of perverse incentives.
But for the Democrats how is ObamaCare doing so far? Quite well, thank you very much. Drug makers have increased their favor-currying (lobbying) to $47.4 million the first quarter. Ditto, hospital organizations, insurance companies, doctors and labor unions.
Republicans have a better plan, but it won't get off the ground because it relies on the private sector. People become responsible for their care. They get money now given in tax credits to their employers. (Which by itself -- a third-party, detached payor -- increases useage and costs.) Republicans will mandate health insurance to be sold across state lines but leave it up to the private-sector companies to define coverages and premiums.
But Democrats see its 45-year Senator from Massachusetts, brain injured far left-winger Edward Kennedy as its key. While Kennedy can't make it into DC, his ethically-challenged friend Christopher Dodd (D., Conn.) will be his mouthpiece. Would the senator from Massachusetts like his obviously "extraordinary" care rationed because it's too expensive. NO! And a question is, exactly who is paying for his healthcare? Medicare?
But wait! There seem to be two roadblocks to a smooth transition to government healthcare. First, they have to figure out how to pay for it. Apparently rich people don't have enough money. And President Obama has promised...promised...("cross my heart hope to die...") that any plan won't increase the budget deficit. Well, dude, what about the $1,200,000,000 to $1,500,000,000 it'll cost? Second, whether they'll create a new public health-insurance plan to compete with private plans. Let's see now. Obama and most of the Democratic Congress believe the free-enterprise system doesn't work. Look at the U. S. Postal Service and Amtrak, for example. So this is a no-brainer for the anti-business morons running our country.
And one might ask, how's medicare doing? according to revised government estimates, not well. Its fund for hospital care will run out of money in 2017, (two years earlier than last year's estimate. [Social Security, too, will run out in 2037, four years earlier than last year's estimate!]
Our president's Council of Economic Advisors released a report, "The Economic case for Health Care Reform," June 1, 2009. It outlines five issues. 1) Federal deficits undermine this country's stability and healthcare must be "reformed" to cut deficits. Obama's plan is to borrow $1,200,000,000,00 to $1,500,00,000 to fund losses while government takes the healthcare industry over. Check the U. S. Post Office and Amtrak to see how government'll slash deficits by taking over arguably the largest industry in the world (perhaps next to government). 2) "Skyrocketing costs" are not, as it indicates, skyrocketing falling to a 6% increase in 2007 against 13%, for example, in 1980. It might be highlighted that costs started heading up fast when Medicare was passed. 3) Families are burdened by healthcare costs. Not as much as the Democrats want you to believe. Food and energy have decreased and housing has stayed flat as a percentage of households' incomes, indicating that healthcare is not increasing its burden and forcing families to give things up for healthcare. Americans can afford more healthcare spending because as a nation we are richer than others. 4) We should copy Europe. But no. Much of the increase in U. S. healthcare spending comes from innovation in high-tech equipment and medications. Almost all of which is financed by the U. S. in the U. S. Our diagnostics are better. As is our healthcare. We have little waiting for diagnosis and treatment, unlike Canada and Europe. We could go back to the 1980's and have 60% survival rates from heart attack instead of today's 90+% 5) CEA advises shrinking healthcare industry spending by 1.5% a year, thus creating higher unemployment and concomitant lost wealth and higher costs from the 1.4 million jobs in healthcare now. And cutting money going into the industry will shrink the number of providers thus guaranteeing long waits for healthcare and steadily increasing deaths. The untold story of ObamaCare!
And an aside, speaking of Canada. Need an MRI? Wait: one year. Then, surgery needed? More months wait. Need ER? Only half the patients are treated on a timely basis. Now the trends are: head to America for healthcare; or go to a private, non-governmental clinic, 50,000 in Vancouver BC and growing quickly. It's getting to be, the rich get good care.
An example of "rationing" NOW in the U.S. is Centers for Medicare and Medicaid Services (CMS) overseer of Medicare and Medicaid for the Dempartment of Health and Human Services, refusing to pay for virtual colonoscopies, a less-invasive procedure for colon cancer detection. And of making the rules for home oxygen therapy so complex that they seem to hope patients will give up and die. Only two quick examples. But the way CMS "cut" healthcare is to take away compensation for doctors, nurses and other providers. And you ain't seen nothing yet!
The End of the Rule of Law (Part two)
Our government purposely creates complex, vague, unprincipled, arbitrary laws with overbroad interpretations. They cannot be understood by ordinary citizens. This goes against the Rule of Law underwhich this country was founded. We borrowed from England that a crime, for example, needs intent, but politicians and prosecutors attack individuals and make their own interpretation of "laws" to punish those they want to punish, and set free those they want. Intent is gone. Most citizens commit multiple infractions a day without even knowing. Two examples, for example, are the tax code and Medicare regulations. At any moment any prosecutor can charge virtually anyone with violations of either. And the 2,000 page healthcare takeover passed by Speaker Pelosi's U. S. House of Representatives would create (according to a blog I read.)
111 new Obamacare boards, bureaucracies, commissions, and programs created in H.R. 3962, Speaker Pelosi’s legislation for a government takeover of health care:
1. Retiree Reserve Trust Fund (Section 111(d), p. 61)
2. Grant program for wellness programs to small employers (Section 112, p. 62)
3. Grant program for State health access programs (Section 114, p. 72)
4. Program of administrative simplification (Section 115, p. 76)
5. Health Benefits Advisory Committee (Section 223, p. 111)
6. Health Choices Administration (Section 241, p. 131)
7. Qualified Health Benefits Plan Ombudsman (Section 244, p. 138)
8. Health Insurance Exchange (Section 201, p. 155)
9. Program for technical assistance to employees of small businesses buying Exchange coverage (Section 305(h), p. 191)
10. Mechanism for insurance risk pooling to be established by Health Choices Commissioner (Section 306(b), p. 194)
11. Health Insurance Exchange Trust Fund (Section 307, p. 195)
12. State-based Health Insurance Exchanges (Section 308, p. 197)
13. Grant program for health insurance cooperatives (Section 310, p. 206)
14. “Public Health Insurance Option†(Section 321, p. 211)
15. Ombudsman for “Public Health Insurance Option†(Section 321(d), p. 213)
16. Account for receipts and disbursements for “Public Health Insurance Option†(Section 322(b), p. 215)
17. Telehealth Advisory Committee (Section 1191 (b), p. 589)
18. Demonstration program providing reimbursement for “culturally and linguistically appropriate services†(Section 1222, p. 617)
19. Demonstration program for shared decision making using patient decision aids (Section 1236, p. 648)
20. Accountable Care Organization pilot program under Medicare (Section 1301, p. 653)
21. Independent patient-centered medical home pilot program under Medicare (Section 1302, p. 672)
22. Community-based medical home pilot program under Medicare (Section 1302(d), p. 681)
23. Independence at home demonstration program (Section 1312, p. 718)
24. Center for Comparative Effectiveness Research (Section 1401(a), p. 734)
25. Comparative Effectiveness Research Commission (Section 1401(a), p. 738)
26. Patient ombudsman for comparative effectiveness research (Section 1401(a), p. 753)
27. Quality assurance and performance improvement program for skilled nursing facilities (Section 1412(b)(1), p. 784)
28. Quality assurance and performance improvement program for nursing facilities (Section 1412 (b)(2), p. 786)
29. Special focus facility program for skilled nursing facilities (Section 1413(a)(3), p. 796)
30. Special focus facility program for nursing facilities (Section 1413(b)(3), p. 804)
31. National independent monitor pilot program for skilled nursing facilities and nursing facilities (Section 1422, p. 859)
32. Demonstration program for approved teaching health centers with respect to Medicare GME (Section 1502(d), p. 933)
33. Pilot program to develop anti-fraud compliance systems for Medicare providers (Section 1635, p. 978)
34. Special Inspector General for the Health Insurance Exchange (Section 1647, p. 1000)
35. Medical home pilot program under Medicaid (Section 1722, p. 1058)
36. Accountable Care Organization pilot program under Medicaid (Section 1730A, p. 1073)
37. Nursing facility supplemental payment program (Section 1745, p. 1106)
38. Demonstration program for Medicaid coverage to stabilize emergency medical conditions in institutions for mental diseases (Section 1787, p. 1149)
39. Comparative Effectiveness Research Trust Fund (Section 1802, p. 1162)
40. “Identifiable office or program†within CMS to “provide for improved coordination between Medicare and Medicaid in the case of dual eligibles†(Section 1905, p. 1191)
41. Center for Medicare and Medicaid Innovation (Section 1907, p. 1198)
42. Public Health Investment Fund (Section 2002, p. 1214)
43. Scholarships for service in health professional needs areas (Section 2211, p. 1224)
44. Program for training medical residents in community-based settings (Section 2214, p. 1236)
45. Grant program for training in dentistry programs (Section 2215, p. 1240)
46. Public Health Workforce Corps (Section 2231, p. 1253)
47. Public health workforce scholarship program (Section 2231, p. 1254)
48. Public health workforce loan forgiveness program (Section 2231, p. 1258)
49. Grant program for innovations in interdisciplinary care (Section 2252, p. 1272)
50. Advisory Committee on Health Workforce Evaluation and Assessment (Section 2261, p. 1275)
51. Prevention and Wellness Trust (Section 2301, p. 1286)
52. Clinical Prevention Stakeholders Board (Section 2301, p. 1295
53. Community Prevention Stakeholders Board (Section 2301, p. 1301)
54. Grant program for community prevention and wellness research (Section 2301, p. 1305)
55. Grant program for research and demonstration projects related to wellness incentives (Section 2301, p. 1305)
56. Grant program for community prevention and wellness services (Section 2301, p. 1308)
57. Grant program for public health infrastructure (Section 2301, p. 1313)
58. Center for Quality Improvement (Section 2401, p. 1322)
59. Assistant Secretary for Health Information (Section 2402, p. 1330)
60. Grant program to support the operation of school-based health clinics (Section 2511, p. 1352)
61. Grant program for nurse-managed health centers (Section 2512, p. 1361)
62. Grants for labor-management programs for nursing training (Section 2521, p. 1372)
63. Grant program for interdisciplinary mental and behavioral health training (Section 2522, p. 1382)
64. “No Child Left Unimmunized Against Influenza†demonstration grant program (Section 2524, p. 1391)
65. Healthy Teen Initiative grant program regarding teen pregnancy (Section 2526, p. 1398)
66. Grant program for interdisciplinary training, education, and services for individuals with autism (Section 2527(a), p. 1402)
67. University centers for excellence in developmental disabilities education (Section 2527(b), p. 1410)
68. Grant program to implement medication therapy management services (Section 2528, p. 1412)
69. Grant program to promote positive health behaviors in underserved communities (Section 2530, p. 1422)
70. Grant program for State alternative medical liability laws (Section 2531, p. 1431)
71. Grant program to develop infant mortality programs (Section 2532, p. 1433)
72. Grant program to prepare secondary school students for careers in health professions (Section 2533, p. 1437)
73. Grant program for community-based collaborative care (Section 2534, p. 1440)
74. Grant program for community-based overweight and obesity prevention (Section 2535, p. 1457)
75. Grant program for reducing the student-to-school nurse ratio in primary and secondary schools (Section 2536, p. 1462)
76. Demonstration project of grants to medical-legal partnerships (Section 2537, p. 1464)
77. Center for Emergency Care under the Assistant Secretary for Preparedness and Response (Section 2552, p. 1478)
78. Council for Emergency Care (Section 2552, p 1479)
79. Grant program to support demonstration programs that design and implement regionalized emergency care systems (Section 2553, p. 1480)
80. Grant program to assist veterans who wish to become emergency medical technicians upon discharge (Section 2554, p. 1487)
81. Interagency Pain Research Coordinating Committee (Section 2562, p. 1494)
82. National Medical Device Registry (Section 2571, p. 1501)
83. CLASS Independence Fund (Section 2581, p. 1597)
84. CLASS Independence Fund Board of Trustees (Section 2581, p. 1598)
85. CLASS Independence Advisory Council (Section 2581, p. 1602)
86. Health and Human Services Coordinating Committee on Women’s Health (Section 2588, p. 1610)
87. National Women’s Health Information Center (Section 2588, p. 1611)
88. Centers for Disease Control Office of Women’s Health (Section 2588, p. 1614)
89. Agency for Healthcare Research and Quality Office of Women’s Health and Gender-Based Research (Section 2588, p. 1617)
90. Health Resources and Services Administration Office of Women’s Health (Section 2588, p. 1618)
91. Food and Drug Administration Office of Women’s Health (Section 2588, p. 1621)
92. Personal Care Attendant Workforce Advisory Panel (Section 2589(a)(2), p. 1624)
93. Grant program for national health workforce online training (Section 2591, p. 1629)
94. Grant program to disseminate best practices on implementing health workforce investment programs (Section 2591, p. 1632)
95. Demonstration program for chronic shortages of health professionals (Section 3101, p. 1717)
96. Demonstration program for substance abuse counselor educational curricula (Section 3101, p. 1719)
97. Program of Indian community education on mental illness (Section 3101, p. 1722)
98. Intergovernmental Task Force on Indian environmental and nuclear hazards (Section 3101, p. 1754)
99. Office of Indian Men’s Health (Section 3101, p. 1765)
100.Indian Health facilities appropriation advisory board (Section 3101, p. 1774)
101.Indian Health facilities needs assessment workgroup (Section 3101, p. 1775)
102.Indian Health Service tribal facilities joint venture demonstration projects (Section 3101, p. 1809)
103.Urban youth treatment center demonstration project (Section 3101, p. 1873)
104.Grants to Urban Indian Organizations for diabetes prevention (Section 3101, p. 1874)
105.Grants to Urban Indian Organizations for health IT adoption (Section 3101, p. 1877)
106.Mental health technician training program (Section 3101, p. 1898)
107.Indian youth telemental health demonstration project (Section 3101, p. 1909)
108.Program for treatment of child sexual abuse victims and perpetrators (Section 3101, p. 1925)
109.Program for treatment of domestic violence and sexual abuse (Section 3101, p. 1927)
110.Native American Health and Wellness Foundation (Section 3103, p. 1966)
111.Committee for the Establishment of the Native American Health and Wellness Foundation (Section 3103, p. 1968)
I REST MY CASE!
According to an article in the Puget Sound Business Journal, October 23 - 39, 2009, page 3, the Rule of Law will be further undermined with Congress taking up and arbitrarily rewriting a 15-year-old transaction between Seattle's Sound Transit and First Hawaiian Bank in an arms length sale and leaseback deal. The bank in essence purchased a tax deduction for depreciation unavailable to Sound Transit. The guarantor of the transacion American International Group was bailed out by the government but a needed new guarantor couldn't be located. The "Close the SILO/LILO Loophole Act" by Congress will bail out the transaction went bad for Sound Transit, leaving this decades hated businesses, banks, out of luck and the investment. It was an obvious poor decision by the Board of Sound Transit. But Americans with relationships or other clout don't have to abide by contracts. Congress will abrogate the Rule of Law and any transaction it sees fit. Dangerous for Congress or any elected politician to have such arbitrary power. Dangerous for the Bank of Hawaii, you the reader and me, the writer.
The power of arbitrary government brought about the American Revolution. Well that power is back once again and being used to stop free speech that does not agree with the Obama Machine. Case in point: Health insurance company, Humana, Inc. which manages Medicare Advantage plans for Medicare sent out letters to its customers discussing the Democratic plan to slash $500,000,000,000 from Medicare thus threatening coverage for Senior Citizens. The Chairman of the Senate Finance Committee, Democrat Max Baucus, author of the wildly-unpopular health bill of the committee complained about the letter to the Centers for Medicare and Medicaid Services, the federal healthcare governing agency, calling it misleading and confusing. But with freedom of speech still in the Constitution, for now, isn't that permissable. No, said Chairman Max. Well tehn, what is abuse of power? Oh, yes, Democrats want to dismantle Medicare Advantage entirely because a quarter of Medicare users love it and signed up for it. (And a new study shows that Medicare Advantage customers in California save money by spending 30% fewer days in the hospital.) It's efficient and popular, so obviously the Democrats must crush it.
One of the basic underlying tenets in the founding of the United States of America was the absolute necessity to have "The Rule of Law" instead of the arbitrary laws made on the whim of tyrants. And with it the separation of powers among executive (the CEO), Congress (the Board of Directors) and the judicial system (courts) keep one entity from becoming too powerful.
A rational, free nation needs laws (and, of course, the power to enforce them) under which its citizens can operate. In order to be effective, laws must be somewhat immutable. Citizens must be able to rely on laws in order to plan their lives, both personal and business. The ease with which laws can be changed can create an environment in which neither business or citizens can rationally plan for the long-term. With this, their desire to invest or purchase goods is put on hold, thus terribly damaging an economy.
The certainty of our laws were based on the Constitution of the United States which elucidated certain rights that became the foundation for our Rule of Law.
These began to be eroded by liberal Supreme Court Justices during the reign of Earl Warren, according to conservatives. At that time, according to liberals, "rights" of U. S. citizens began to keep up with modern times. The truth is that around that time the hold of the Rule of Law on the Constitution began to become flexible, and according to the beliefs of the judges ruling, not the Constitution.
Much of this and more was discussed in my July 2008 blog post entitled "The End of the Rule of Law".
With the coronation of President Obama the so-called Rule of Law is being completely disregarded and dismantled.
The sellout of one of the two remaining "American" automobile companies to the United Auto Workers union was caused by the U. S. Treasury forcing secured creditors (Chrysler) to renounce their secured position to the assets of Chrysler, writing off $4.9 billion -- as of today, April 29, 2009 and receiving an approximate 10% ownership in the company. Fiat -- for no cash investment -- would receive 20% increasing up to a maximum of 35% depending on the technology it introduced into Chrysler and certain other unspecified requirements. The U. S. Treasury would receive approximately 10% ownership for its $4 billion already invested and $6 more billion to come. The United Auto Workers union would receive a 55% ownership and absolute control in exchange for little. (See my post of 3-31-09 "That's Obama Tough! Obama Controls General Motors" for details updated to yesterday.) The decision of the Obama Administration to force secured debt holders to write off the majority of its secured position (getting $2 billion cash for $6.8 billion of debt) (many of which, including J. P. Morgan Chase & Co. and Citigroup, Inc., have taken government funding in exchange for stock thus indicating a huge conflict of interest) which was guaranteed by bankruptcy and banking law and would have been first in line in a liquidation. Citigroup has received $50 billion plus a guarantee from losses on $301 billion of its assets.
So just to clarify. The U. S. Government which in essence controls J. P. Morgan Chase and Citigroup among hundreds of other financial and other institutions is forcing them to write off almost $5 billion of debt secured by assets of Chrysler. They might receive a 10% iinterest in the company. The United Auto Workers union, one of the key funders of the Obama presidential candidacy, receives a 55% interest in the company, will get payments from Chrysler to partially fund its retiree healthcare, and a note for the rest. Not much. Conflicts of interest and the absolute dismantling the Rule of Law because politicians in power think that's the right -- fair -- thing to do.
Conflicts of Interest:
Union Dues or cost effectiveness
CAFE or live people. (Corporate Average Fuel Economy kills people. 2,000 from 27.5 m.p.g. according to the National Research Council, with the next goal being 35)
Profits for research and development and growth or higher union compensation
Squeezing unions or getting re-elected
Repaying U. S. Treasury or investing in companies
Ethanol and "alternative fuels" or taxpayers' cash
Next up General Motors, mortgage loan modification, credit card rates, student loans,
Or...part of this posting will continue to discuss possibitities for changing or threatening to change laws in order to force campaign contributions to Congresspeople. And first up today: "Industries Push for Free Pollution Credits" Wall Street Journal, Monday, May 4, 2009, P A3(http://online.wsj.com/article/SB124138869928981331.html). It discusses "a growing number of industries are lobbying for free pollution permits in the face of Obama's proposed cap and trade law. While this will have little effect of what human-caused global warming is, it should reap huge amounts of campaign contributions for Democrats. Love of country or extortion?
111 new Obamacare boards, bureaucracies, commissions, and programs created in H.R. 3962, Speaker Pelosi’s legislation for a government takeover of health care:
1. Retiree Reserve Trust Fund (Section 111(d), p. 61)
2. Grant program for wellness programs to small employers (Section 112, p. 62)
3. Grant program for State health access programs (Section 114, p. 72)
4. Program of administrative simplification (Section 115, p. 76)
5. Health Benefits Advisory Committee (Section 223, p. 111)
6. Health Choices Administration (Section 241, p. 131)
7. Qualified Health Benefits Plan Ombudsman (Section 244, p. 138)
8. Health Insurance Exchange (Section 201, p. 155)
9. Program for technical assistance to employees of small businesses buying Exchange coverage (Section 305(h), p. 191)
10. Mechanism for insurance risk pooling to be established by Health Choices Commissioner (Section 306(b), p. 194)
11. Health Insurance Exchange Trust Fund (Section 307, p. 195)
12. State-based Health Insurance Exchanges (Section 308, p. 197)
13. Grant program for health insurance cooperatives (Section 310, p. 206)
14. “Public Health Insurance Option†(Section 321, p. 211)
15. Ombudsman for “Public Health Insurance Option†(Section 321(d), p. 213)
16. Account for receipts and disbursements for “Public Health Insurance Option†(Section 322(b), p. 215)
17. Telehealth Advisory Committee (Section 1191 (b), p. 589)
18. Demonstration program providing reimbursement for “culturally and linguistically appropriate services†(Section 1222, p. 617)
19. Demonstration program for shared decision making using patient decision aids (Section 1236, p. 648)
20. Accountable Care Organization pilot program under Medicare (Section 1301, p. 653)
21. Independent patient-centered medical home pilot program under Medicare (Section 1302, p. 672)
22. Community-based medical home pilot program under Medicare (Section 1302(d), p. 681)
23. Independence at home demonstration program (Section 1312, p. 718)
24. Center for Comparative Effectiveness Research (Section 1401(a), p. 734)
25. Comparative Effectiveness Research Commission (Section 1401(a), p. 738)
26. Patient ombudsman for comparative effectiveness research (Section 1401(a), p. 753)
27. Quality assurance and performance improvement program for skilled nursing facilities (Section 1412(b)(1), p. 784)
28. Quality assurance and performance improvement program for nursing facilities (Section 1412 (b)(2), p. 786)
29. Special focus facility program for skilled nursing facilities (Section 1413(a)(3), p. 796)
30. Special focus facility program for nursing facilities (Section 1413(b)(3), p. 804)
31. National independent monitor pilot program for skilled nursing facilities and nursing facilities (Section 1422, p. 859)
32. Demonstration program for approved teaching health centers with respect to Medicare GME (Section 1502(d), p. 933)
33. Pilot program to develop anti-fraud compliance systems for Medicare providers (Section 1635, p. 978)
34. Special Inspector General for the Health Insurance Exchange (Section 1647, p. 1000)
35. Medical home pilot program under Medicaid (Section 1722, p. 1058)
36. Accountable Care Organization pilot program under Medicaid (Section 1730A, p. 1073)
37. Nursing facility supplemental payment program (Section 1745, p. 1106)
38. Demonstration program for Medicaid coverage to stabilize emergency medical conditions in institutions for mental diseases (Section 1787, p. 1149)
39. Comparative Effectiveness Research Trust Fund (Section 1802, p. 1162)
40. “Identifiable office or program†within CMS to “provide for improved coordination between Medicare and Medicaid in the case of dual eligibles†(Section 1905, p. 1191)
41. Center for Medicare and Medicaid Innovation (Section 1907, p. 1198)
42. Public Health Investment Fund (Section 2002, p. 1214)
43. Scholarships for service in health professional needs areas (Section 2211, p. 1224)
44. Program for training medical residents in community-based settings (Section 2214, p. 1236)
45. Grant program for training in dentistry programs (Section 2215, p. 1240)
46. Public Health Workforce Corps (Section 2231, p. 1253)
47. Public health workforce scholarship program (Section 2231, p. 1254)
48. Public health workforce loan forgiveness program (Section 2231, p. 1258)
49. Grant program for innovations in interdisciplinary care (Section 2252, p. 1272)
50. Advisory Committee on Health Workforce Evaluation and Assessment (Section 2261, p. 1275)
51. Prevention and Wellness Trust (Section 2301, p. 1286)
52. Clinical Prevention Stakeholders Board (Section 2301, p. 1295
53. Community Prevention Stakeholders Board (Section 2301, p. 1301)
54. Grant program for community prevention and wellness research (Section 2301, p. 1305)
55. Grant program for research and demonstration projects related to wellness incentives (Section 2301, p. 1305)
56. Grant program for community prevention and wellness services (Section 2301, p. 1308)
57. Grant program for public health infrastructure (Section 2301, p. 1313)
58. Center for Quality Improvement (Section 2401, p. 1322)
59. Assistant Secretary for Health Information (Section 2402, p. 1330)
60. Grant program to support the operation of school-based health clinics (Section 2511, p. 1352)
61. Grant program for nurse-managed health centers (Section 2512, p. 1361)
62. Grants for labor-management programs for nursing training (Section 2521, p. 1372)
63. Grant program for interdisciplinary mental and behavioral health training (Section 2522, p. 1382)
64. “No Child Left Unimmunized Against Influenza†demonstration grant program (Section 2524, p. 1391)
65. Healthy Teen Initiative grant program regarding teen pregnancy (Section 2526, p. 1398)
66. Grant program for interdisciplinary training, education, and services for individuals with autism (Section 2527(a), p. 1402)
67. University centers for excellence in developmental disabilities education (Section 2527(b), p. 1410)
68. Grant program to implement medication therapy management services (Section 2528, p. 1412)
69. Grant program to promote positive health behaviors in underserved communities (Section 2530, p. 1422)
70. Grant program for State alternative medical liability laws (Section 2531, p. 1431)
71. Grant program to develop infant mortality programs (Section 2532, p. 1433)
72. Grant program to prepare secondary school students for careers in health professions (Section 2533, p. 1437)
73. Grant program for community-based collaborative care (Section 2534, p. 1440)
74. Grant program for community-based overweight and obesity prevention (Section 2535, p. 1457)
75. Grant program for reducing the student-to-school nurse ratio in primary and secondary schools (Section 2536, p. 1462)
76. Demonstration project of grants to medical-legal partnerships (Section 2537, p. 1464)
77. Center for Emergency Care under the Assistant Secretary for Preparedness and Response (Section 2552, p. 1478)
78. Council for Emergency Care (Section 2552, p 1479)
79. Grant program to support demonstration programs that design and implement regionalized emergency care systems (Section 2553, p. 1480)
80. Grant program to assist veterans who wish to become emergency medical technicians upon discharge (Section 2554, p. 1487)
81. Interagency Pain Research Coordinating Committee (Section 2562, p. 1494)
82. National Medical Device Registry (Section 2571, p. 1501)
83. CLASS Independence Fund (Section 2581, p. 1597)
84. CLASS Independence Fund Board of Trustees (Section 2581, p. 1598)
85. CLASS Independence Advisory Council (Section 2581, p. 1602)
86. Health and Human Services Coordinating Committee on Women’s Health (Section 2588, p. 1610)
87. National Women’s Health Information Center (Section 2588, p. 1611)
88. Centers for Disease Control Office of Women’s Health (Section 2588, p. 1614)
89. Agency for Healthcare Research and Quality Office of Women’s Health and Gender-Based Research (Section 2588, p. 1617)
90. Health Resources and Services Administration Office of Women’s Health (Section 2588, p. 1618)
91. Food and Drug Administration Office of Women’s Health (Section 2588, p. 1621)
92. Personal Care Attendant Workforce Advisory Panel (Section 2589(a)(2), p. 1624)
93. Grant program for national health workforce online training (Section 2591, p. 1629)
94. Grant program to disseminate best practices on implementing health workforce investment programs (Section 2591, p. 1632)
95. Demonstration program for chronic shortages of health professionals (Section 3101, p. 1717)
96. Demonstration program for substance abuse counselor educational curricula (Section 3101, p. 1719)
97. Program of Indian community education on mental illness (Section 3101, p. 1722)
98. Intergovernmental Task Force on Indian environmental and nuclear hazards (Section 3101, p. 1754)
99. Office of Indian Men’s Health (Section 3101, p. 1765)
100.Indian Health facilities appropriation advisory board (Section 3101, p. 1774)
101.Indian Health facilities needs assessment workgroup (Section 3101, p. 1775)
102.Indian Health Service tribal facilities joint venture demonstration projects (Section 3101, p. 1809)
103.Urban youth treatment center demonstration project (Section 3101, p. 1873)
104.Grants to Urban Indian Organizations for diabetes prevention (Section 3101, p. 1874)
105.Grants to Urban Indian Organizations for health IT adoption (Section 3101, p. 1877)
106.Mental health technician training program (Section 3101, p. 1898)
107.Indian youth telemental health demonstration project (Section 3101, p. 1909)
108.Program for treatment of child sexual abuse victims and perpetrators (Section 3101, p. 1925)
109.Program for treatment of domestic violence and sexual abuse (Section 3101, p. 1927)
110.Native American Health and Wellness Foundation (Section 3103, p. 1966)
111.Committee for the Establishment of the Native American Health and Wellness Foundation (Section 3103, p. 1968)
I REST MY CASE!
According to an article in the Puget Sound Business Journal, October 23 - 39, 2009, page 3, the Rule of Law will be further undermined with Congress taking up and arbitrarily rewriting a 15-year-old transaction between Seattle's Sound Transit and First Hawaiian Bank in an arms length sale and leaseback deal. The bank in essence purchased a tax deduction for depreciation unavailable to Sound Transit. The guarantor of the transacion American International Group was bailed out by the government but a needed new guarantor couldn't be located. The "Close the SILO/LILO Loophole Act" by Congress will bail out the transaction went bad for Sound Transit, leaving this decades hated businesses, banks, out of luck and the investment. It was an obvious poor decision by the Board of Sound Transit. But Americans with relationships or other clout don't have to abide by contracts. Congress will abrogate the Rule of Law and any transaction it sees fit. Dangerous for Congress or any elected politician to have such arbitrary power. Dangerous for the Bank of Hawaii, you the reader and me, the writer.
The power of arbitrary government brought about the American Revolution. Well that power is back once again and being used to stop free speech that does not agree with the Obama Machine. Case in point: Health insurance company, Humana, Inc. which manages Medicare Advantage plans for Medicare sent out letters to its customers discussing the Democratic plan to slash $500,000,000,000 from Medicare thus threatening coverage for Senior Citizens. The Chairman of the Senate Finance Committee, Democrat Max Baucus, author of the wildly-unpopular health bill of the committee complained about the letter to the Centers for Medicare and Medicaid Services, the federal healthcare governing agency, calling it misleading and confusing. But with freedom of speech still in the Constitution, for now, isn't that permissable. No, said Chairman Max. Well tehn, what is abuse of power? Oh, yes, Democrats want to dismantle Medicare Advantage entirely because a quarter of Medicare users love it and signed up for it. (And a new study shows that Medicare Advantage customers in California save money by spending 30% fewer days in the hospital.) It's efficient and popular, so obviously the Democrats must crush it.
One of the basic underlying tenets in the founding of the United States of America was the absolute necessity to have "The Rule of Law" instead of the arbitrary laws made on the whim of tyrants. And with it the separation of powers among executive (the CEO), Congress (the Board of Directors) and the judicial system (courts) keep one entity from becoming too powerful.
A rational, free nation needs laws (and, of course, the power to enforce them) under which its citizens can operate. In order to be effective, laws must be somewhat immutable. Citizens must be able to rely on laws in order to plan their lives, both personal and business. The ease with which laws can be changed can create an environment in which neither business or citizens can rationally plan for the long-term. With this, their desire to invest or purchase goods is put on hold, thus terribly damaging an economy.
The certainty of our laws were based on the Constitution of the United States which elucidated certain rights that became the foundation for our Rule of Law.
These began to be eroded by liberal Supreme Court Justices during the reign of Earl Warren, according to conservatives. At that time, according to liberals, "rights" of U. S. citizens began to keep up with modern times. The truth is that around that time the hold of the Rule of Law on the Constitution began to become flexible, and according to the beliefs of the judges ruling, not the Constitution.
Much of this and more was discussed in my July 2008 blog post entitled "The End of the Rule of Law".
With the coronation of President Obama the so-called Rule of Law is being completely disregarded and dismantled.
The sellout of one of the two remaining "American" automobile companies to the United Auto Workers union was caused by the U. S. Treasury forcing secured creditors (Chrysler) to renounce their secured position to the assets of Chrysler, writing off $4.9 billion -- as of today, April 29, 2009 and receiving an approximate 10% ownership in the company. Fiat -- for no cash investment -- would receive 20% increasing up to a maximum of 35% depending on the technology it introduced into Chrysler and certain other unspecified requirements. The U. S. Treasury would receive approximately 10% ownership for its $4 billion already invested and $6 more billion to come. The United Auto Workers union would receive a 55% ownership and absolute control in exchange for little. (See my post of 3-31-09 "That's Obama Tough! Obama Controls General Motors" for details updated to yesterday.) The decision of the Obama Administration to force secured debt holders to write off the majority of its secured position (getting $2 billion cash for $6.8 billion of debt) (many of which, including J. P. Morgan Chase & Co. and Citigroup, Inc., have taken government funding in exchange for stock thus indicating a huge conflict of interest) which was guaranteed by bankruptcy and banking law and would have been first in line in a liquidation. Citigroup has received $50 billion plus a guarantee from losses on $301 billion of its assets.
So just to clarify. The U. S. Government which in essence controls J. P. Morgan Chase and Citigroup among hundreds of other financial and other institutions is forcing them to write off almost $5 billion of debt secured by assets of Chrysler. They might receive a 10% iinterest in the company. The United Auto Workers union, one of the key funders of the Obama presidential candidacy, receives a 55% interest in the company, will get payments from Chrysler to partially fund its retiree healthcare, and a note for the rest. Not much. Conflicts of interest and the absolute dismantling the Rule of Law because politicians in power think that's the right -- fair -- thing to do.
Conflicts of Interest:
Union Dues or cost effectiveness
CAFE or live people. (Corporate Average Fuel Economy kills people. 2,000 from 27.5 m.p.g. according to the National Research Council, with the next goal being 35)
Profits for research and development and growth or higher union compensation
Squeezing unions or getting re-elected
Repaying U. S. Treasury or investing in companies
Ethanol and "alternative fuels" or taxpayers' cash
Next up General Motors, mortgage loan modification, credit card rates, student loans,
Or...part of this posting will continue to discuss possibitities for changing or threatening to change laws in order to force campaign contributions to Congresspeople. And first up today: "Industries Push for Free Pollution Credits" Wall Street Journal, Monday, May 4, 2009, P A3(http://online.wsj.com/article/SB124138869928981331.html). It discusses "a growing number of industries are lobbying for free pollution permits in the face of Obama's proposed cap and trade law. While this will have little effect of what human-caused global warming is, it should reap huge amounts of campaign contributions for Democrats. Love of country or extortion?
Break Job-killing Union Monopolies and Influence
Philadelphia PA, site of the last game of the World Series was threatened by a strike that day by the Transport Workers Union of America. But the union wisely waited...one day...then 5,000 workers struck subway, bus and trolley services. Typically, government caved, the Southeastern Pennsylvania Transportation Authority gave a 2.5% one year raise, then 3% a year for three years running. Government officials have everything to lose: THEIR jobs or elections. They care not if their jurisdictions face bankruptcy as California, New York, Illinois and New Jersey do primarily because of caving into public employees' union bosses. Where is Ronald Reagan and Calvin Coolidge, who faced down a Boston police strike while governor of Massachusetts who said there was no "right to strike against the public safety by anybody, anywhere, any time"? That was then when we had leaders and honor and backbone, now is now where the union bosses buy Democrats into their offices with the dues of their workers. And, yes, the workers get more tax money than ordinary people until the governments go bust.
There were two Northwest Airlines pilots who were doing something more important than landing in Minneapolis, so they continued on over Minneapolis 100 miles when they discovered their stupidity, turned around and landed safely in Minneapolis. The Federal Aviation Administration revoked their licenses. Their union, the Airline Pilots Association, is angry because the FAA didn't follow procedures. If this isn't proof that union leaders care less about anything but supporting their members, attracting more of them and grabbing their dues, I don't know what is. Laws to support unions, union bargaining, unionization should be changed to at least give the "public" from airline passengers to students to companies an equal chance to drop unions and union monopolies. But the Obama administration, elected by union dues spent by union bosses is trying to distort the laws further to make unionization easier and more crippling to our fragile economy.
Union members nationally vote for a Republican about one-third of the time, yet nearly 90% of union bosses support Democrats financially with union dues. When allowed to opt out of having their dues spend politically, nearly 90% of union members opted out of having that occur, preferring to keep the money to donate themselves as they wished.
President No-Jobs-Obama (NJO)'s Commerce Department launched potential further support for erecting economy- and jobs-killing trade barriers. It is investigating whether to impose more tariffs, this time on Chinese seamless steel pipes after dutying $2,700,000,000 of other Chinese pipe last month. The United Steel Workers union is pulling the strings.
General Motor's Saturn brand was born in 1985 as an innovative approach to auto making with the United Auto Workers union bosses and General Motors executives on the same page. Workers were 'technicians' and were paid 80% of UAW with the rest from a sharing of Saturn's profits. Key decisions were shared by an exec and union boss. Vision, passion and collaboration, courtesy of the UAW's GM guy, Donald Ephlin. There were broad dealer market areas and 'no haggle' prices. Even now-green VP Al Gore touted the factory and the concept. But it was not to be. Union bosses feared collaboration would spread, and make them useless, so then-new UAW militant, Stephen Yokich undermined it. And its GM-executive-promoter, CEO, Roger Smith retired in 1989. Saturns became boring, underfunded and 'joined' the GM family in 2003 with its dysfunctional relations with the UAW. When Obama finally killed it, Roger Penske thought he could re-innovate, but no, once again it was not to be. And not to be, are collaborative relations of industry and its union bosses. Not to be because those union bosses need that conflict they create to keep their easy jobs and cushy lifestyles. While it is not the union bosses alone who destroy corporations, the company executives have no backbones to face down strike threats, and what they might do to reputation, retirement and profitsharing, but it is the union bosses who start it all. UNIONS ARE OBSOLETE IN TODAY'S HIGH-TECHNOLOGY, COLLABORATIVE WORLD. AT 7% OF THE LABOR FORCE, WORKERS ARE SAYING THE SAME THING!
Another high-stakes labor conflict is percolating along. The Democrats and their owners, the labor unions, have loaded the National Mediation Board with new board member former flight-attendant union leader Linda Puchala. Will these Democrats allow new rules to make it easier for union bosses to unionize airlines and railroads? The AFL-CIO wants the dues, non-union Delta Air Lines which merged with failing but unionized Northwest Airlines, does not want a union. The Railway Labor Act of 1926 does not count non- votes as 'yes' since there's no vote. This essentially votes no, because a full majority of ALL employees, not just voters' votes, are needed to pass. A third of the combined work force comes from 95% unionized Northwest and two-thirds from only 15% unionized Delta. If the union can get out their union members to vote and Delta is hampered, presto all employees are shackled to the AFL-CIO. In the meantime the National Mediation Board is apparently holding up a vote that Delta might win. It'll all be moot when Obama takes over the airline industry anyway, then all employees will be Democrats, government employees and union members by law.
September 24 it was announced that union bosses WIN BIG AGAIN from Democrats. This time the air-traffic controllers won $700,000,000 from the Democratic federal government (taxpayers) Federal Aviation Agency over the next three years. This the union President Reagan busted.
A tiny article August 26 indicated that the Los Angeles Board of Education voted to adope a resolution that could turn 1/3 of its schools over to private operators. WHAT? Apparently proposals will be accepted from charter-school operators, local communities and the mayor's office to operate 50 new and 200 chronically underperforming public schools. BIG NEWS but not spread around the media, that I saw. I will look more. Is this the start of busting the union monopolies of schools? Doubtful, but worth looking into.
Just some union trivia. Both California and Illinois are virtually bankrupt. Why? In part because they paid back the Service Employees International Union (SEIU) a major funder of the Democratic Party. Disgraced Democratic Gov. Rod Blagojevich (Illinois) and former California governor Gray Davis reclassified state-reimbursed independent contractor -- not state-employed -- in-home healthcare and childcare workers as state employees thus forcing them to join the monopoly-SEIU and pay dues to union boss Andy Stern. Although there is no Obama healthcare bill yet, a number of versions of the various bills offerred up by Democrats have stealth methods by which unionization of healthcare providers and workers will be forced.
Corruption personified: labor union bosses use the dues of its captive members to spend on electing Democrats who vote to continue unionism and more dues for the union bosses to spend to elect Democrats.
So it's no surprise that President Obama and the Democrats pay off their funders, certainly, as GM's former union employees have discovered, to the detriment of the nation and employees. And it's no surprise that one of the major owners of the Democratic Party, the Service Employees International Union, will get major jobs in the Obama Administration. Craig Becker associate General Counsel at the SEIU was recently appointed to the National Labor Relations Board to increase union bosses' dues-paying members.
Now here's a good one. The government bureaucracy (National Transportation Safety Board) versus the national air-traffic safety union bosses over the August 8th crash of a sightseeing helicopter and a small plane over the Hudson River. The union wants no attribution of cause to fall on its members, no matter the facts, to the extent that the NTSB kicked its representatives off the fact gathering group. Stay tuned. Will the Obama administration or the Obama funders win?
June 30, 2009: To support the United Steelworkers Union, the U. S. International Trade Commission recommended to impose a punitive duty of 55% -- 55% -- on low-cost Chinese-made tires. This would sharply increase prices of tires to U. S. consumers to save some jobs of the 15,000 steelworkers in the tire industry. With Obama if unions oppose consumers, the unions win! Obama needs to make a decision for unions or U. S. consumers mid-September
And it's no surprise that Ron Bloom who got unions 55% ownership in United Airlines in the 1990's (which went bankrupt thereafter) is President Obama's Czar -- or Tsar -- depending on which Americanized Russian spelling is currently politically correct for the Automobile companies. And certainly, Mr. Bloom will cause GM to manufacture "little green Obama-Lemmingmobiles" which not many Americans will want to buy with their own money. But with taxpayers' money (other taxpayer) that's another story.
The Landrum-Griffin Act was passed (1959) to protect workers from union bosses' malfeasance which then was rampant. It helped. From 2001- 2008 the Labor Department's Office of Labor Management Standards (OLMS) won 929 convictions from 1,000 indictments of fraud of unions. This office is supported by Republicans and slashed by Democrats (40% by Clinton) who are financially supported by labor unions, fraud or not. Labor union membership has shrunk to merely 7.6% of the private labor force from 33% back in the '50's. (Democratic-supported government union membership monopolies are another matter.) And recent polls found that 81% of non-union-member workers want to remain non-union-members. And what about disclosure by union bosses of union-members dues? Bush administration toughened them with ("LM-30" form for disclosure of conflicts of interest.) The "transparent" (yes, it's transparently hugely pro-labor-boss) Obama administration has publicly announced that it won't enforce compliance, with this form thus hiding expenditures on behalf of and to the Democratic Party. The labor-union-bosses' client state. Democrat-Union Party.
Private unions have been on their way out for decades, not so public-employee unions. The public does not understand that for every dollar in wages, pensions, and easy working conditions for public-union memebers a dollar comes out of their pockets. Are they getting their money's worth? (The public, not the union members.) Yes, their earningw are 46% more than those who work for a living (non-governmental) and increased 3.1% last year vs. 1.9% in the private recessioined sector. Unemployement in the government 2.8% vs. over 9%. After killing GM and Chrysler, the entire airline industry, next will be government. Union monopolies are killing America.
In today's The Seattle Times another voice was added to the debate on legislation that would vastly expand the grip of labor on business, or, according to Democrats, would simply give employees free choice (by taking away their right to choose or not choose to unionize in secret ballot). ("Compromise offered on labor bill", The Seattle Times, Sunday, March 22, 2009, page News A5 http://seattletimes.nwsource.com/html/politics/2008901897_labor22.html )
In this article three CEOs, two from Washington State, Jim Sinegal and Howard Schultz, join John Mackey of Whole Foods Market, to offer a compromise under the banner of "because of the widespread perception in Democratic-dominated Washington that there is not a level playing field between labor and business" in unioinization. I submit that there is no such perception.That Democrats are continually elected by the union dues of union members as doled out by union bosses. Period. President Obama agreed in his book "The Audacity of Hope," "I owe those unions...When their leaders call, I do my best to call them back right away. I don't mind feeling obligated." The "level playing field" is simply soundbite smokescreen. These three CEOs -- at least two of which are Democrats -- have it wrong. Unfortunately there can be no compromise. Compromise in this issue will only give Democrats a edge into a continuing union demanded un-level playing field which they have succeeded in buying in government, where unions have many stanglehold monopolies, bringing increasingly higher taxes and arguably, lousy education.. California, New York, Illinois anyone? So don't compromise. Democrats do not compromise they win, whether in small steps or large.
Sadly, I wouldn’t doubt that union leaders are cheering for this country to fail…to be forced into some kind of "national bankruptcy" in order to completely discredit the free enterprise system and capitalism in general. Then they – some union and Democrat leaders, perhaps with some trial lawyers thrown in -- could take over the management of the corporations. Far fetched? Think about it.
But there is a better way - Maybe but probably not.
A better choice, perhaps off the wall or out of the box and new. The basic foundation of it is the truth that lasting jobs and wealth can only be created by successful businesses and to be successful, businesses must sell stuff and make profits in doing so. (Unlike popular perception, "profit" is not cash given out to executives and stockholders, but investments made in things like accounts receivable, new plants, training, research and development.) The United States is in competition not only with businesses in its own country, but those all over the world. If this isn't agreed as truths, stop reading. Now, to continue, there is no law against conservatives starting unions. But these unions wouldn’t stand off against their company's management and stockholders, no, they’d join with them and stand off against the brutal competition of other countries along with other companies in the United States. It is clear to me that the USA is in a competition for revenues with much of the rest of the world. The way to win it isn’t to shoot ourselves in the foot by striking, dictating wages, working conditions and methods, but in getting union members together WITH corporate management and coming up with ideas, processes and strategies which would make the business more SUCCESSFUL and then agree that a certain part, perhaps percentage, of the financial success would flow to the employees. Anti-business unions have killed the steel industry, airlines, and, certainly the auto companies. To have had employees contribute instead of demand might have saved them by making them more competitive.
It would be the U.S. against China. The U.S. vs. India. The U.S. as competitor in the game of business. To win brings more and better jobs and riches and an even better way of life. (And arguably, and depending on citizens' behavior, generally a richer nation can bring a better society.) It would be a rivalry to outshine the Superbowl, Rose Bowl and NBA Championships, not to mention the Sweet 16 (sad about the University of Washington, happy about Gonzaga!) Could most of America get their arms and beers around this, the Ultimate Competition? I think so. We have proved ourselves to be winners in business, however we pretty much invented the method of business and society that has won. Now, competition is all over. We are not only in competition for revenues, but employees, whether hourly workers or engineers and executives. In resources. In capital. We as a country need to refocus to compete. Attracting and unleashing the on-the-factory-floor experience and creative ideas or "labor" could begin a new paradigm of competitiveness in the United States. Our society has been able to unleash the creativity of entrepreneurs, next up the creativity of employees. Watch out world. I'll have a beer on that. But the employees, who have an important stake in each company must be at one with the mangers and owners. They fight competitors, not themselves.
Think of sports teams and relate. A business is made up of owners, as are sports teams; of managers hired by the owners, as are sports teams; and employees, which in sports terms are players and support workers. And in business, as in sports, there are the stars and the back-office workers. Both groups are "labor" but some are more important to the success of the business/team than others. Owners of businesses select managers. (Actually typically in huge businesses "owners" are institutions who own the corporate stock as third parties for those who, for example, buy mutual funds. Those buyers are the real owners. Some managers do well, some do not. Ultimately losing or non-performing managers are fired. As are members of "labor" whether quarterbacks or accountants. Typically winning businesses and teams perform better financially than losers. Owners do well or do not, depending on the success or failure of the underlying business or team. Simple.
Remember that there are many more numbers of people in "labor" while fewer "executives", so each "labor" member will receive far less of the "success pay" than each "executive".
But that won't happen. So let's get back to the government union monopoly. The Service Employees International Union (SEIU) spent $85,000,000 during Obama's campaign and that investment is paying off. For the union bosses, not for taxpayers or union members. Union officials have jobs in the administraion, or, as SEIU CEO, Andy Stern bragged, "SEIU is on the field, it's in the White House, it's in the administration." In getting those jobs for its bosses, the union had to borrow $115,000,000 from Troubled Asset RP recipient Bank of America, courtesy of Barack Obama. But part of the loan was for SEIU to buy its fancy headquarters building in Washington DC. And just how does this help its "rank and file" one might ask? But no one does. (SEIU bosses working directly, as opposed to indirectly when they worked for SEIU, for Obama now are Patrick Gaspard the White House politicl director, Craig Becker, to the National Lavor Relations Board (relations?) and Anna Vurger SEIU's #2 is on Obama's Economic Recovery Advisory Board.) The other major government-monopoly union, the American Federation of State, County and Municipal Employees, spent $63,000,000. The formerly-corrupt Teamsters spent $13,00,000 while the United Auto Workers scored spending $11,00,000 and getting Chrysler and General Motors.
There were two Northwest Airlines pilots who were doing something more important than landing in Minneapolis, so they continued on over Minneapolis 100 miles when they discovered their stupidity, turned around and landed safely in Minneapolis. The Federal Aviation Administration revoked their licenses. Their union, the Airline Pilots Association, is angry because the FAA didn't follow procedures. If this isn't proof that union leaders care less about anything but supporting their members, attracting more of them and grabbing their dues, I don't know what is. Laws to support unions, union bargaining, unionization should be changed to at least give the "public" from airline passengers to students to companies an equal chance to drop unions and union monopolies. But the Obama administration, elected by union dues spent by union bosses is trying to distort the laws further to make unionization easier and more crippling to our fragile economy.
Union members nationally vote for a Republican about one-third of the time, yet nearly 90% of union bosses support Democrats financially with union dues. When allowed to opt out of having their dues spend politically, nearly 90% of union members opted out of having that occur, preferring to keep the money to donate themselves as they wished.
President No-Jobs-Obama (NJO)'s Commerce Department launched potential further support for erecting economy- and jobs-killing trade barriers. It is investigating whether to impose more tariffs, this time on Chinese seamless steel pipes after dutying $2,700,000,000 of other Chinese pipe last month. The United Steel Workers union is pulling the strings.
General Motor's Saturn brand was born in 1985 as an innovative approach to auto making with the United Auto Workers union bosses and General Motors executives on the same page. Workers were 'technicians' and were paid 80% of UAW with the rest from a sharing of Saturn's profits. Key decisions were shared by an exec and union boss. Vision, passion and collaboration, courtesy of the UAW's GM guy, Donald Ephlin. There were broad dealer market areas and 'no haggle' prices. Even now-green VP Al Gore touted the factory and the concept. But it was not to be. Union bosses feared collaboration would spread, and make them useless, so then-new UAW militant, Stephen Yokich undermined it. And its GM-executive-promoter, CEO, Roger Smith retired in 1989. Saturns became boring, underfunded and 'joined' the GM family in 2003 with its dysfunctional relations with the UAW. When Obama finally killed it, Roger Penske thought he could re-innovate, but no, once again it was not to be. And not to be, are collaborative relations of industry and its union bosses. Not to be because those union bosses need that conflict they create to keep their easy jobs and cushy lifestyles. While it is not the union bosses alone who destroy corporations, the company executives have no backbones to face down strike threats, and what they might do to reputation, retirement and profitsharing, but it is the union bosses who start it all. UNIONS ARE OBSOLETE IN TODAY'S HIGH-TECHNOLOGY, COLLABORATIVE WORLD. AT 7% OF THE LABOR FORCE, WORKERS ARE SAYING THE SAME THING!
Another high-stakes labor conflict is percolating along. The Democrats and their owners, the labor unions, have loaded the National Mediation Board with new board member former flight-attendant union leader Linda Puchala. Will these Democrats allow new rules to make it easier for union bosses to unionize airlines and railroads? The AFL-CIO wants the dues, non-union Delta Air Lines which merged with failing but unionized Northwest Airlines, does not want a union. The Railway Labor Act of 1926 does not count non- votes as 'yes' since there's no vote. This essentially votes no, because a full majority of ALL employees, not just voters' votes, are needed to pass. A third of the combined work force comes from 95% unionized Northwest and two-thirds from only 15% unionized Delta. If the union can get out their union members to vote and Delta is hampered, presto all employees are shackled to the AFL-CIO. In the meantime the National Mediation Board is apparently holding up a vote that Delta might win. It'll all be moot when Obama takes over the airline industry anyway, then all employees will be Democrats, government employees and union members by law.
September 24 it was announced that union bosses WIN BIG AGAIN from Democrats. This time the air-traffic controllers won $700,000,000 from the Democratic federal government (taxpayers) Federal Aviation Agency over the next three years. This the union President Reagan busted.
A tiny article August 26 indicated that the Los Angeles Board of Education voted to adope a resolution that could turn 1/3 of its schools over to private operators. WHAT? Apparently proposals will be accepted from charter-school operators, local communities and the mayor's office to operate 50 new and 200 chronically underperforming public schools. BIG NEWS but not spread around the media, that I saw. I will look more. Is this the start of busting the union monopolies of schools? Doubtful, but worth looking into.
Just some union trivia. Both California and Illinois are virtually bankrupt. Why? In part because they paid back the Service Employees International Union (SEIU) a major funder of the Democratic Party. Disgraced Democratic Gov. Rod Blagojevich (Illinois) and former California governor Gray Davis reclassified state-reimbursed independent contractor -- not state-employed -- in-home healthcare and childcare workers as state employees thus forcing them to join the monopoly-SEIU and pay dues to union boss Andy Stern. Although there is no Obama healthcare bill yet, a number of versions of the various bills offerred up by Democrats have stealth methods by which unionization of healthcare providers and workers will be forced.
Corruption personified: labor union bosses use the dues of its captive members to spend on electing Democrats who vote to continue unionism and more dues for the union bosses to spend to elect Democrats.
So it's no surprise that President Obama and the Democrats pay off their funders, certainly, as GM's former union employees have discovered, to the detriment of the nation and employees. And it's no surprise that one of the major owners of the Democratic Party, the Service Employees International Union, will get major jobs in the Obama Administration. Craig Becker associate General Counsel at the SEIU was recently appointed to the National Labor Relations Board to increase union bosses' dues-paying members.
Now here's a good one. The government bureaucracy (National Transportation Safety Board) versus the national air-traffic safety union bosses over the August 8th crash of a sightseeing helicopter and a small plane over the Hudson River. The union wants no attribution of cause to fall on its members, no matter the facts, to the extent that the NTSB kicked its representatives off the fact gathering group. Stay tuned. Will the Obama administration or the Obama funders win?
June 30, 2009: To support the United Steelworkers Union, the U. S. International Trade Commission recommended to impose a punitive duty of 55% -- 55% -- on low-cost Chinese-made tires. This would sharply increase prices of tires to U. S. consumers to save some jobs of the 15,000 steelworkers in the tire industry. With Obama if unions oppose consumers, the unions win! Obama needs to make a decision for unions or U. S. consumers mid-September
And it's no surprise that Ron Bloom who got unions 55% ownership in United Airlines in the 1990's (which went bankrupt thereafter) is President Obama's Czar -- or Tsar -- depending on which Americanized Russian spelling is currently politically correct for the Automobile companies. And certainly, Mr. Bloom will cause GM to manufacture "little green Obama-Lemmingmobiles" which not many Americans will want to buy with their own money. But with taxpayers' money (other taxpayer) that's another story.
The Landrum-Griffin Act was passed (1959) to protect workers from union bosses' malfeasance which then was rampant. It helped. From 2001- 2008 the Labor Department's Office of Labor Management Standards (OLMS) won 929 convictions from 1,000 indictments of fraud of unions. This office is supported by Republicans and slashed by Democrats (40% by Clinton) who are financially supported by labor unions, fraud or not. Labor union membership has shrunk to merely 7.6% of the private labor force from 33% back in the '50's. (Democratic-supported government union membership monopolies are another matter.) And recent polls found that 81% of non-union-member workers want to remain non-union-members. And what about disclosure by union bosses of union-members dues? Bush administration toughened them with ("LM-30" form for disclosure of conflicts of interest.) The "transparent" (yes, it's transparently hugely pro-labor-boss) Obama administration has publicly announced that it won't enforce compliance, with this form thus hiding expenditures on behalf of and to the Democratic Party. The labor-union-bosses' client state. Democrat-Union Party.
Private unions have been on their way out for decades, not so public-employee unions. The public does not understand that for every dollar in wages, pensions, and easy working conditions for public-union memebers a dollar comes out of their pockets. Are they getting their money's worth? (The public, not the union members.) Yes, their earningw are 46% more than those who work for a living (non-governmental) and increased 3.1% last year vs. 1.9% in the private recessioined sector. Unemployement in the government 2.8% vs. over 9%. After killing GM and Chrysler, the entire airline industry, next will be government. Union monopolies are killing America.
In today's The Seattle Times another voice was added to the debate on legislation that would vastly expand the grip of labor on business, or, according to Democrats, would simply give employees free choice (by taking away their right to choose or not choose to unionize in secret ballot). ("Compromise offered on labor bill", The Seattle Times, Sunday, March 22, 2009, page News A5 http://seattletimes.nwsource.com/html/politics/2008901897_labor22.html )
In this article three CEOs, two from Washington State, Jim Sinegal and Howard Schultz, join John Mackey of Whole Foods Market, to offer a compromise under the banner of "because of the widespread perception in Democratic-dominated Washington that there is not a level playing field between labor and business" in unioinization. I submit that there is no such perception.That Democrats are continually elected by the union dues of union members as doled out by union bosses. Period. President Obama agreed in his book "The Audacity of Hope," "I owe those unions...When their leaders call, I do my best to call them back right away. I don't mind feeling obligated." The "level playing field" is simply soundbite smokescreen. These three CEOs -- at least two of which are Democrats -- have it wrong. Unfortunately there can be no compromise. Compromise in this issue will only give Democrats a edge into a continuing union demanded un-level playing field which they have succeeded in buying in government, where unions have many stanglehold monopolies, bringing increasingly higher taxes and arguably, lousy education.. California, New York, Illinois anyone? So don't compromise. Democrats do not compromise they win, whether in small steps or large.
Sadly, I wouldn’t doubt that union leaders are cheering for this country to fail…to be forced into some kind of "national bankruptcy" in order to completely discredit the free enterprise system and capitalism in general. Then they – some union and Democrat leaders, perhaps with some trial lawyers thrown in -- could take over the management of the corporations. Far fetched? Think about it.
But there is a better way - Maybe but probably not.
A better choice, perhaps off the wall or out of the box and new. The basic foundation of it is the truth that lasting jobs and wealth can only be created by successful businesses and to be successful, businesses must sell stuff and make profits in doing so. (Unlike popular perception, "profit" is not cash given out to executives and stockholders, but investments made in things like accounts receivable, new plants, training, research and development.) The United States is in competition not only with businesses in its own country, but those all over the world. If this isn't agreed as truths, stop reading. Now, to continue, there is no law against conservatives starting unions. But these unions wouldn’t stand off against their company's management and stockholders, no, they’d join with them and stand off against the brutal competition of other countries along with other companies in the United States. It is clear to me that the USA is in a competition for revenues with much of the rest of the world. The way to win it isn’t to shoot ourselves in the foot by striking, dictating wages, working conditions and methods, but in getting union members together WITH corporate management and coming up with ideas, processes and strategies which would make the business more SUCCESSFUL and then agree that a certain part, perhaps percentage, of the financial success would flow to the employees. Anti-business unions have killed the steel industry, airlines, and, certainly the auto companies. To have had employees contribute instead of demand might have saved them by making them more competitive.
It would be the U.S. against China. The U.S. vs. India. The U.S. as competitor in the game of business. To win brings more and better jobs and riches and an even better way of life. (And arguably, and depending on citizens' behavior, generally a richer nation can bring a better society.) It would be a rivalry to outshine the Superbowl, Rose Bowl and NBA Championships, not to mention the Sweet 16 (sad about the University of Washington, happy about Gonzaga!) Could most of America get their arms and beers around this, the Ultimate Competition? I think so. We have proved ourselves to be winners in business, however we pretty much invented the method of business and society that has won. Now, competition is all over. We are not only in competition for revenues, but employees, whether hourly workers or engineers and executives. In resources. In capital. We as a country need to refocus to compete. Attracting and unleashing the on-the-factory-floor experience and creative ideas or "labor" could begin a new paradigm of competitiveness in the United States. Our society has been able to unleash the creativity of entrepreneurs, next up the creativity of employees. Watch out world. I'll have a beer on that. But the employees, who have an important stake in each company must be at one with the mangers and owners. They fight competitors, not themselves.
Think of sports teams and relate. A business is made up of owners, as are sports teams; of managers hired by the owners, as are sports teams; and employees, which in sports terms are players and support workers. And in business, as in sports, there are the stars and the back-office workers. Both groups are "labor" but some are more important to the success of the business/team than others. Owners of businesses select managers. (Actually typically in huge businesses "owners" are institutions who own the corporate stock as third parties for those who, for example, buy mutual funds. Those buyers are the real owners. Some managers do well, some do not. Ultimately losing or non-performing managers are fired. As are members of "labor" whether quarterbacks or accountants. Typically winning businesses and teams perform better financially than losers. Owners do well or do not, depending on the success or failure of the underlying business or team. Simple.
Remember that there are many more numbers of people in "labor" while fewer "executives", so each "labor" member will receive far less of the "success pay" than each "executive".
But that won't happen. So let's get back to the government union monopoly. The Service Employees International Union (SEIU) spent $85,000,000 during Obama's campaign and that investment is paying off. For the union bosses, not for taxpayers or union members. Union officials have jobs in the administraion, or, as SEIU CEO, Andy Stern bragged, "SEIU is on the field, it's in the White House, it's in the administration." In getting those jobs for its bosses, the union had to borrow $115,000,000 from Troubled Asset RP recipient Bank of America, courtesy of Barack Obama. But part of the loan was for SEIU to buy its fancy headquarters building in Washington DC. And just how does this help its "rank and file" one might ask? But no one does. (SEIU bosses working directly, as opposed to indirectly when they worked for SEIU, for Obama now are Patrick Gaspard the White House politicl director, Craig Becker, to the National Lavor Relations Board (relations?) and Anna Vurger SEIU's #2 is on Obama's Economic Recovery Advisory Board.) The other major government-monopoly union, the American Federation of State, County and Municipal Employees, spent $63,000,000. The formerly-corrupt Teamsters spent $13,00,000 while the United Auto Workers scored spending $11,00,000 and getting Chrysler and General Motors.
Friday, November 6, 2009
Wage, Price and Industrial Controls are here.
The Obama Compensation Czar sets wages for corporations in which the U. S. Government has stakes. The Federal Deposit Insurance Corporation is attempting to do the same for all banks. Other arms of the Obama administration are contemplating expanding these wage controls to other corporations. WAGE CONTROLS ARE HERE. Although still in its infancy, Obama cannot rein in his idealogy nor that of his handlers, wage controls will expand.
Banks have their prices controlled. Credit card issuers will have new regulations and restrictions on what they can charge and offer to their customers. These price controls come from new laws from the Democratic Congress that will go into effect February 2010. But since banks are re-pricing their offerings to their credit card customers ahead of February, Congress is attempting to immediately and absolutely control banks from putting their new pricing into effect. PRICE CONTROLS ARE HERE.
Private-sector companies used to offer student loans until the Democratic Congress felt their prices (interest rates) were too high. The 2008 "College Cost Reduction and Access Act" lowered interest rates on federally insured student loans of the "Federal Family Education Loan Program" accounting for 70% of such loans. Then they cut private lenders' yields. Private lenders suspended making these money-losing loans creating a Congressionally-invented "crisis" in student loans. Its solution? Enter the student loan business completely and completely undercutting the private sector. This will expose the U. S. taxpayer to billions and billions of bad student loans. We can thank, yes, George Miller, California, Daniel Akaka, Robert Casey, Tom Carper, Chris Dodd, Tim Johnson, Robert Menendez, Jon Tester, Democrats all. Who really needs the private sector anyway?
The U. S. Government has taken over General Motors, whose Obama-installed management is using taxpayer money both to purchase parts of bankrupt supplier, Delphi, but also, after turning down an offer to sell European subsidiaries Opel and Vauxhall, will use taxpayer money to "turn around" these historically-money-losing automobile companies. What makes Obama think his government-controlled management can do better than private-sector management under which GM achieved bankruptcy? Especially since the CEO of GM was the architect of the failed policies that sunk Opel.
Congress and Obama thought that private-market institutions, such as banks, were to blame for taking advantage of ignorant citizens who borrowed to buy houses they couldn't afford. (God knows it wasn't the government.) Eschewing the thought that the billions spent on education should have given "their" citizens some basic education in economics, borrowing, capitalism, they decided to solve the "problem" of sinking house prices. Solution? Jack up prices by giving Americans some money to buy houses. $8,000. Wow, very popular. And houses sold. But the unintended consequences based on ignorant Congressmen and president? Cheaters. Upwards of 100,000 supposed homebuyers didn't buy homes but filed for the money. Cost? Perhaps upwards of $639,000,000 from 93,000 cheaters, as of mid-October 2009. The program is set to expire November 30. Bets are it'll be expanded and extended. Hey, follow Obama's mantra. Extend failure and don't learn from the success of others.
INDUSTRIAL CONTROL IS HERE.
Wage and price controls never work. But an inexperienced far-left president with no understanding of business wouldn't know that.
The current financial crisis/recession began not with the strengthening of the Community Reinvestment Act in 1992, nor the easy money of the Federal Reserve System. It really began with the absurd notion that a few politicians could democratize everything in America to buy their reelections. Regulators were on the job, only they couldn't regulate Congress. Only Congress can regulate Congress. And therein lies the conceit that Congress can manage this country's economy and society.
From the Econ Review [http://www.econreview.com/events/wageprice1971b.htm]:
President Nixon Imposes Wage and Price Controls
August 15, 1971. In a move widely applauded by the public and a fair number of (but by no means all) economists, President Nixon imposed wage and price controls. The 90 day freeze was unprecedented in peacetime, but such drastic measures were thought necessary. Inflation had been raging, exceeding 6% briefly in 1970 and persisting above 4% in 1971. By the prevailing historical standards, such inflation rates were thought to be completely intolerable. The 90 day freeze turned into nearly 1,000 days of measures known as Phases One, Two, Three, and Four. The initial attempt to dampen inflation by calming inflationary expectations was a monumental failure. The wage and price controls were mostly dismantled by April, 1974. By that time, the U.S. inflation rate had reached double digits.
And from Business Week Magazine November 27, 2006:
“How Bill Clinton Helped Boost CEO Pay
A law he championed to curb compensation has backfired -- and pay packages have exploded
Bill Clinton had what he thought was a great idea to curb the soaring paychecks of the nation's executives. It was 1991, shortly after the launch of his Presidential campaign, and he had just read a best seller on corporate greed by compensation guru Graef Crystal. Clinton's brainstorm: Use the tax code to curb excessive pay. Companies at the time were allowed to deduct all compensation to top executives. Clinton wanted to permit companies to write off amounts over $1 million only if executives hit specified performance goals. He called Crystal for his thoughts. "Utterly stupid," the consultant says he told the future President.
Now, 13 years after Clinton's plan became law, the results are clear: It didn't work. Over the law's first decade, average compensation for chief executives at companies in Standard & Poor's 500-stock index soared from $3.7 million to $9.1 million, according to a 2005 Harvard Law School study. From the Internal Revenue Service to corporate boardrooms, Clinton's remedy has become the biggest inside joke in the long history of efforts to rein in executive pay.”
Clinton’s ill-fated “great idea” led directly to the use of stock options – unexpected consequences – bringing tens and hundreds of millions of dollars to corporate executives.
Banks have their prices controlled. Credit card issuers will have new regulations and restrictions on what they can charge and offer to their customers. These price controls come from new laws from the Democratic Congress that will go into effect February 2010. But since banks are re-pricing their offerings to their credit card customers ahead of February, Congress is attempting to immediately and absolutely control banks from putting their new pricing into effect. PRICE CONTROLS ARE HERE.
Private-sector companies used to offer student loans until the Democratic Congress felt their prices (interest rates) were too high. The 2008 "College Cost Reduction and Access Act" lowered interest rates on federally insured student loans of the "Federal Family Education Loan Program" accounting for 70% of such loans. Then they cut private lenders' yields. Private lenders suspended making these money-losing loans creating a Congressionally-invented "crisis" in student loans. Its solution? Enter the student loan business completely and completely undercutting the private sector. This will expose the U. S. taxpayer to billions and billions of bad student loans. We can thank, yes, George Miller, California, Daniel Akaka, Robert Casey, Tom Carper, Chris Dodd, Tim Johnson, Robert Menendez, Jon Tester, Democrats all. Who really needs the private sector anyway?
The U. S. Government has taken over General Motors, whose Obama-installed management is using taxpayer money both to purchase parts of bankrupt supplier, Delphi, but also, after turning down an offer to sell European subsidiaries Opel and Vauxhall, will use taxpayer money to "turn around" these historically-money-losing automobile companies. What makes Obama think his government-controlled management can do better than private-sector management under which GM achieved bankruptcy? Especially since the CEO of GM was the architect of the failed policies that sunk Opel.
Congress and Obama thought that private-market institutions, such as banks, were to blame for taking advantage of ignorant citizens who borrowed to buy houses they couldn't afford. (God knows it wasn't the government.) Eschewing the thought that the billions spent on education should have given "their" citizens some basic education in economics, borrowing, capitalism, they decided to solve the "problem" of sinking house prices. Solution? Jack up prices by giving Americans some money to buy houses. $8,000. Wow, very popular. And houses sold. But the unintended consequences based on ignorant Congressmen and president? Cheaters. Upwards of 100,000 supposed homebuyers didn't buy homes but filed for the money. Cost? Perhaps upwards of $639,000,000 from 93,000 cheaters, as of mid-October 2009. The program is set to expire November 30. Bets are it'll be expanded and extended. Hey, follow Obama's mantra. Extend failure and don't learn from the success of others.
INDUSTRIAL CONTROL IS HERE.
Wage and price controls never work. But an inexperienced far-left president with no understanding of business wouldn't know that.
The current financial crisis/recession began not with the strengthening of the Community Reinvestment Act in 1992, nor the easy money of the Federal Reserve System. It really began with the absurd notion that a few politicians could democratize everything in America to buy their reelections. Regulators were on the job, only they couldn't regulate Congress. Only Congress can regulate Congress. And therein lies the conceit that Congress can manage this country's economy and society.
From the Econ Review [http://www.econreview.com/events/wageprice1971b.htm]:
President Nixon Imposes Wage and Price Controls
August 15, 1971. In a move widely applauded by the public and a fair number of (but by no means all) economists, President Nixon imposed wage and price controls. The 90 day freeze was unprecedented in peacetime, but such drastic measures were thought necessary. Inflation had been raging, exceeding 6% briefly in 1970 and persisting above 4% in 1971. By the prevailing historical standards, such inflation rates were thought to be completely intolerable. The 90 day freeze turned into nearly 1,000 days of measures known as Phases One, Two, Three, and Four. The initial attempt to dampen inflation by calming inflationary expectations was a monumental failure. The wage and price controls were mostly dismantled by April, 1974. By that time, the U.S. inflation rate had reached double digits.
And from Business Week Magazine November 27, 2006:
“How Bill Clinton Helped Boost CEO Pay
A law he championed to curb compensation has backfired -- and pay packages have exploded
Bill Clinton had what he thought was a great idea to curb the soaring paychecks of the nation's executives. It was 1991, shortly after the launch of his Presidential campaign, and he had just read a best seller on corporate greed by compensation guru Graef Crystal. Clinton's brainstorm: Use the tax code to curb excessive pay. Companies at the time were allowed to deduct all compensation to top executives. Clinton wanted to permit companies to write off amounts over $1 million only if executives hit specified performance goals. He called Crystal for his thoughts. "Utterly stupid," the consultant says he told the future President.
Now, 13 years after Clinton's plan became law, the results are clear: It didn't work. Over the law's first decade, average compensation for chief executives at companies in Standard & Poor's 500-stock index soared from $3.7 million to $9.1 million, according to a 2005 Harvard Law School study. From the Internal Revenue Service to corporate boardrooms, Clinton's remedy has become the biggest inside joke in the long history of efforts to rein in executive pay.”
Clinton’s ill-fated “great idea” led directly to the use of stock options – unexpected consequences – bringing tens and hundreds of millions of dollars to corporate executives.
WHERE'S OUR LEADER?
Now that it is crystal clear the country does not want its freedom gobbled up by a fanatical power-grabbing government, the conservatives of America -- Republican, Democrat or independent -- need a leader. A real leader not the typical political panderer. No more Bushes, no more pretty faces with DJ voices and empty heads. A leader with a backbone standing up for America and its citizens as a whole, not individual affinity and special interest groups. Standing strong economically and internationally. I hope he or she emerges in the next six months to unify our message and send Congress packing.
Sunday, November 1, 2009
WHO BEST TO MAKE BUSINESS DECISIONS, THOSE WHO WANT PROFITS OR THOSE WHO WANT RE-ELECTION?
Now I will describe instances where no longer is the free-market the decider, but those in government, elected or not, who choose winners and losers in what used to be American Capitalism, based on the idealogicial philosophies, payments to, relationships of, a very few very powerful, politically-connected people. In free-enterprise capitalism, markets, millions of buyers and sellers, bring decisions, which over the course of a couple centuries have been right. Politicians who don't spend their own money have no personal financial risk, and, of course, often lack knowledge and experience in "business". America is the greatest nation in history based on the freedom of markets and free enterprise/capitalism. No longer. In power are those who want their opinions to be law. Decisions are no longer made in the marketplace but in Washington, District of Columbia.
TO WIT:
Liberals attack the free enterprise system for seeking profits. Well without them, there's no jobs, growth or wealth. For example here's how well the government does:
A new study offers sobering news for those who want the government to run America's healthcare system — the government-subsidized Amtrak rail service loses an average of $32 for each passenger it transports. The study by Subsidyscope, an arm of the Pew Charitable Trusts, found that 41 of Amtrak's 44 routes lost money last year. The biggest loser was the Sunset Limited between New Orleans and Los Angeles, which lost $462 per passenger. Even the popular Northeast Regional trains, which connect Washington, New York and Boston, lost $5 per passenger last year. According to the study, Amtrak will receive $2.7 billion in subsidies and stimulus dollars in 2009.
Mr. Czar Kenneth Feinberg, President Barack Obama's absolute ruler United States Czar of compensation is causing troubled and under-capitalized financial institution Citigroup Inc. to give up -- give away -- probably somewhere around a billion and a half of dollars. What, one might ask. Citigroup owns energy trader Phibro LLC, producer of $1,860,000,000 of earnings for Citi over the last only five years. Because Phibro's head trader (Andrew Hall) is contractually owed around $100,000,000 in bonus for 2009 (on top of an earned $98,900,000 last year) and Czar Feinberg thinks that would be embarassing to Citi...embarassing!...it is peddling the unit to Occidental Petroleum Corp. on the dirt cheap. Using those numbers, (from the Wall Street Journal, October 10 - 11, 2009, page B-1, "How Occidental Scored Citi Unit Cheaply") Phibro's average contribution to Citi is $372,000,000 a year. Taking some Citicorp general and administrative costs (10%) and income taxes (at, say, 35%) out would leave around $218,000,000. Assigning an 8 price earnings ratio (low) would indicate a back of the hand valuation of $1,744,0000,000. Oxy (as Occidental is popularly known) is apparently paying $250,000,000 which, under all these assumptions, hands to Oxy nearly $1.5 billion. Now, the United States of America owns 34% of Citigroup. The CEO of the owner, the United States of America, has charged his hand-picked absolute Czar to give away, yes, give away, to some corporation $510,000,000. Being cynical, 1) shouldn't the aforementioned United States of America file some derivitive law suit against its CEO and Czar? and 2) is Oxy and its executives, employees and/or related Political Action Committees, contributors to Democrats, the Democratic Party or Barack Obama or any of his affiliated organizations of affiliates or friends?
The Obama Administration mandated that financial companies which needed capital from the government undergo "management team reviews" as part of its overall "stress test". The Federal Dempost Insurance Corp. demanded that Citigroup's board use one of FDIC's recommended consulting firms (instead of one Citigroup wanted) and Egon Zehnder International was selected. Is this meddling? Micromanaging? The answers will have to come in the future. But this along with Obama's Pay Czar indicates a very troubling indicator for the future control, directly or indirectly, of busines by Obama.
And today (October 6, 2009) Obama's Pay (Don't Call Me) Czar, who works for nothing (and as the saying goes, you get what you pay for), will singlehandedly set the compensation for many of the nation's largest companies. And just how is he so perceptive that tens and hundreds of Compensation Committees can't see what he sees? Doesn't matter, he's the Czar. His unelected word is God's Word for those working for "privately-owned" corporations in America. And don't think Obama will stop at the seven companies the U. S. Government controls. Just wait for upcoming legislation. No one certainly remembers that back when perceptive Bill Clinton was president, the Democratic Congress capped the amount of compensation at $1,000,000 that corporations could write off their income taxes . Result? Corporations replaced cash compensation over $1,000,000 with non-qualified incentive stock options which grew in value in some cases to hundreds of millions of dollars -- the very compensation Czar Feinberg is trying to rein in as we speak! Go figure. Well one thing you don't read about is the very genesis of the incentive stock options -- a major unintended blunder by Democratic politicians attempting in the '90's to rein in compensation higher than their own. Illegal, of course! Jealosy has no bounds.
And through the backdoor, the Democratic Finance Committee voted Thursday, October 1, 2009, to limit healthcare insurance executives' compensation to...to...a lousy half-million dollars, half of what Clinton did twenty years ago. Do these imbeciles never learn? The reason given is that the insurance companies would be enriched through having so many more customers. And who wants profitable companies, anyway? They are so...so anti-government. The vote? 13 + Sen. Olympia Snowe, from Maine, against the Republicans' 8. While it isn't law and with the pushback on Obamacare won't likely to be, it indicates the extent of anti-business/anti-insurance comkpany/anti-capitalism on Capitol (as opposed to CapitAl) Hill. But the horror of it all is, the Democrats aren't trying to understand healthcare, or how to really "fix" its high costs, they are simply trying to lock-step get any healthcare bill passed so they can crow how "they" (Democrats, not Americans) won.
Since the Federal Reserve System couldn't find its way to the "bubble" outhouse and only promoted it rather rather than thoughtfully rein it in, President Obama wants it to have more power; and he wants to line up a guaranteed source of campaign financing of the Democratic Party by lablling some institutions "too big to fail" or government-sponsored entities (GSE, a term used to describe trillion-dollar-failures, Freddie Mac and Fannie Mae and Sallie Mae). Some institutions. Hmmm, perhaps those that have Democrats as CEOs and campaign contributions to Democrats in the hundreds of thousands of dollars? I wonder. But ceratinly have the president of the United States make the call, not markets of free buyers and sellers.
Everyone knows that U. S. banks are sinking with "toxic assets" which came from loans made to people who can;'t pay them back. Many were bundled into "securities", with specified attributes, such as safety of principal or high yields. Ever brilliant in free enterprise, Wall Street is remaking these bundled securities and styripping out the good -- and selling them -- and writing off the bad. The result is more equity and less risky balance sheets in the banking industry. And immediately Congress, the Members of which 1) originated the beginnings of these risky assets and 2) clearly don't understand them, is raising doubts. Either to stop the transactions because the private sector might be successful or to gather more campaign contributions. But on the other side, the U. S. /Obama Treasury Department as agreed to dump more money into doing the exact same thing. Go figure. Treasury will "invest" and I use that term loosely up to $2,250,000,000 if the Annointed private hedge funds will match it in the PPIP (Public-Private Investment Program)( government is nothing if not clever with initials). With (that evil) leverage, a total of $40,000,000,000 will be available to purchase toxic assets from the government's risk pool of $1,640,000,000,000 (trillion) in guaranteed mortgage-backed securities from Fan, Fred, FHA and well, you know, other initials. If allowed by Washington DC, the private security "revisions" could reach $30 to $90 million this year. I guess it depends.
Wind-turbine makers whine that free-markets aren't good enough for them. They need government-directed subisdies to continue their growth. "Stimulus" grants apparently kick-started the industry, in which General Electric, whose CEO is close to President Obama and whose National Broadcast Company acts as Obama's publicity headquarters, is the largest U. S. participant, with 43%. But recently orders were down for GE and its oligarchy of wind-turbine "competitors". Obama's anti-trusters, where are you? Various bills mandate that U. S. utilities, private or public, get 20% of their energy from "renewable" sources by 2020. Subject to change and campaign contributions.
Congresss and the Federal Communications Commission wants to regulate telephone, wireless phone and cable companies which have spent billions of dollars investing in broadband "pipes" through which voice and data flows. (AT&T alone $18,000,000,000 in 2008.) While there is no "abuse" the new Obama Democratic Chairman of the FCC wants it his way, not the marketplace's way. And Google's way. Google invested huge dollars into the Democrat coffers and has people in the Obama administration, including its chief lobbyist, Andrew McLaughlin, now deputy head of Obama's telecom policy. Google which hasn't spent a dime laying fiber-optics, wants to use it all free of charge. In fact, its highly-profitable business model depends on it. But its success is not now from the marketplace, but from Washington DC. It's misleadingly- called "Net Neutrality", by Google and Democrats, wherein they get control over the private interests that financed broadband and might be in a position to dictate what goes over it. Propaganda anyone?
In 2007 milk prices hit all-time highs, vastly enriching dairy farmers. As a logical, market-based result, they greatly expanded their herds. The market-based result of that? Lower prices, dropping 35% to $11.80 a hundredpound vs. $18.40 the year earlier. The result? The highly-powerful dairy farmers demand a industry probe of the two major purchasers of milk by the Obama Justice Department, aided and abetted by equally powerful Democrats, Chuck Schumer of New York and Russ Feingold of Wisconsin and "independent" (socialist) Bernie Sanders of Vermont. Whether or not the probe is launched or whtether or not is brings action, is immaterial. The marketplace is transcended by Washington DC and its powerful Democrats.
Whatever is "flash trading"? Dunno but it was invented by bankers and traders, so, according to Sen. Chuck Schumer of New York, it must be outlawed. And, so customers -- the free-market -- doesn't decide, Chuckie does. And what does he know about it all?
What about the ability of the U. S. government's financial people to brilliantly understand the status of markets and discover "systemic" risk and reduce it before it crushes the country? Let's hear it for Alan Greenspan, late of the Federal Reserve System, the single source of regulation of American monetary policy. He failed miserably, as did his successor, Ben Bernanke, as did government. In fact many believe (me included) that easy money from the Greenspan Fed, coupled with Democratic Congressmen, started the various "bubbles" led Fannie Mae and Freddie Mac into buying trillions of dollars of sub-prime, marginal and poorly documented consumer mortgage loans in the name of "affordable" housing. (Meaning votes.) Rather than adding to the thousands of pages of regulations and hiring thousands of hall monitors, perhaps Obama should consider getting rid of the centrally-controlled Federal Reserve System and Fan and Fred and Federal Housing Authority. Oh, sure that will happen! Democrats see each new government worker as a vote for their party.
Well, there are a few successful business decisions made by our government that I can find. (President Eisenhower's interstate highway system.) But failures? Obviously. The following will outline failures of government central decision-making, planning and operation (management?) of companies and organizations. Why do people think a few people can make the right decisions every time, when it has been shown that decisions made by "the markets" -- millions of consumers -- have been successful. This is at the very root of America's past success and the failure of the United Kingdom, France, Italy, Germany and on and on. It is in part becuse a bad decision by one or even a thousand consumers out of millions is miniscule in damage compared to one decision of a politican which negatively impacts millions of people.
Just to name a few government-run organizations, initiatives or endeavors: Amtrak, United States Postal Service, Medicare, Medicaid, Fannie Mae, Freddie Mac, Ginnie Mae, "Cash for Clunkers" and...Biofuels/Ethanol...and on and on as the following indicates:
Stop harping on this. Speaking of HARP (Obama's brilliant Home Affordable Refinance Program), Mr. Obama in March 2009 announced that HARP would help millions of borrowers (from evil mortgage companies). And, yes, like all government programs it has helped...but only 60,000 voters...through the end of July (that's materially less than "millions", for your information). Way to go Mr. Prexy! In a candid moment of honesty, an Obama representative, an assistant Treasury secretary, Michael Barr said, "It hasn't met our expectations." Well said, sir. A failure? Not at all because Mr. Obama simply made it more risky to taxpayers, if you can imagine; initially it was established for those whose home values were less than their loans up to 5% underwater, now if their home loans are up to 25% IN EXCESS of their home values they're eligible. These are Fannie Mae and Freddie Mac loans made to increase home ownership for voters too poor to afford homes. And Congress got this right, they could not afford them. The solution: change the terms to keep them in houses for, what? A month? Six months? Until after the next election? If they can't afford them, they can't afford them. Only Congress and the Obama administration with our taxpayer money will make everything OK. Change?
Another government give-away to those who got mortgages they couldn't afford, Obama's trial loan modification program also has been a bust. Only 12% of those eligible for the $75,000,000,000 program. 570,000 out of Obama's expected 4,000,000. However that is good news to people who think programs and bailouts to the stupid are stupid.
The "Cash for Clunkers" -- "CARS" -- program rushed through Congress and signed by President Obama threw out $3,000,000,000 to buyers of some new cars -- see below for a more complete description. The original program was $1,000,000,000 and it was gone in a couple weeks so of course the Democrats added a couple more billions of our money to it. Most important is less than 20% of buyers have been paid. The administration has moved 3,000 people to do the paper work and will add a couple thousand more next week. If this was a Republican initiative the left-leaning media would be screaming how inefficient government is. It is equally as true that the Democratic government bureaucracy can't handle a simple program like this; maybe folks it is government.
Which takes us to the FDR-era program, the Federal Housing Administration. The Democrats have Fannie Mae-, Freddie Mac- and subprime-mortgage-like eased the ability for less-than-capable people to get low or in some cases no-down payment loans, and recently for higher amounts. Hmmmm. Yes, it is a popular deal, with its market share skyrocketing to 23% of the U. S. mortgage market (up from less than 3% in 2006). Everyone, what do you think the outcome? 1) Congress doesn't want to learn from or admit its mistakes with Fannie and Freddie and 2) bad loans are skyrocketing, duh! FHA's loan reserve, adequate in 2007 is heading for the dangerzone: 2% of the $429,000,000,000 in loans it guaranteed. And yes, the U. S. taxpayer is on the hook. Democrats, 1) how stupid do you think us? 2) How stupid are you? (The answer, not stupid at all, it is these highly-risky endeavors that get them elected and re-elected, and that is Job One for politicians.)
The Federal Deposit Insurance Corp., was invented by the FDR administration to stop runs on banks in the 1930's. It started to work after a while. Back in the 1970's a it bank deposits when Congress upped the guarantee to $100,000 from $25,000 and the number of covered institutions exploded along with bad loans hurriedly (and sometimes illegally) made. The Resolution Trust Corp. was chartered to take over the assets of the 1,000 failed banks and work out these failures. It worked fairly well. Today, Congress in a typically political knee-jerk reaction to the "meltdown" last year upped guarantees to $250,000. The total deposits guaranteed by the FDIC exploded to upwards of $4,500,000,000,000. The $250,000 was to cease by the end of 2009, but, of course big government can't stop anything, so Congress extended to to 2013. Since last year, the FDIC's reserves have shrunk from $45,200,000,000 (before a special levy of $5,600,000,000 from banks) to about $10,400,000,000. All of the $4.5 trillion is guaranteed ultimately by the taxpayer to the federal government, initially with a $500,000,000,000 "line of credit" from Treasury. Stay tuned for more failures and the tapping of us, the taxpayers.
Add what will become the latest fiasco. Let's simply blame Wall Street right now. Morgan Stanley and Citigroup, Inc. have each invested $100,000,000 to finance windfarms this month, August 2009, TAKING ADVANTAGE of yet another cash spigot from Central Command Whirling Dervish Obama. Energy and Treasury together will rebate 30%of the cost of building a "renewable energy" plant with a check sent 60 days after application approval; don't know if this means they don't have to build it or not. Plus accelerated depreciation income tax deductions. Oh, there is no cap on the cash, no maximum. Applications of $10 billion by Wall Street are seen. General Obama Electric is on the scent, said its Energy Financial Services division managing director. A similar program led to the failure of Lehman and American International Group (AIG) last year. Stay tuned.
And what about A123? It is a central figure of Obama's central control of our economy. Like it or not, Washington DC is the center of everything in economic-America now. Venture capital can't keep up. (But what if Obama's decisions are wrong?) A123 is a winner! The Obama socialist-lottery winner is...A123. OK it makes or intends to make or wants to make a car battery, advanced to be sure. The Obama Energy Department isn't saying for sure which of the 100 contestents was prettiest enough to win part of $1,200,000,000; might be Johnson Controls-Saft Advanced Power Solutions LLC, Ener1 Inc. or Celgard LLC. But soon there will be a extravaganza media event with officials, and photogenic electric vehicles from GM, Ford and Chrysler (none of them foreign ones that really run.) Now get this: all these products that Obama wants them to make are readily available in Asia, but Obama doesn't want those. Chairman Obama knows that lithiun-ion battteries are preferred for autos, and that they won't turn into commodity products, they'll all be somewhat technologically different. Obama knows who the winners will be and those will most certainly bring a comppetitive advantage to his GM. These billions are to create jobs in the U. S. and SuperCEO Barack Obama's transformation of the U. S. auto industry to be more competitive and less, of course, polluting. (Except that electricity in America comes mostly from oil and carbon-based resources, but pay no mind no that.) And what if he's wrong aboiut the future?
And how about the humiliating fiasco of Obama's Cash for Clunkers that sold 1) Toyota Corolla 2) Honda Civic 3) Toyota Camry 4) finally an American brand, Ford Focus FWD 5) Hyundai Elantra 6) Nissan Versa 7) Toyota Prius 8) Honda Accord 9) Honda Fit and finally number 10) another American brand, Ford Escape FWD. Where were the U.S.-owned brands, GM and Chrysler? Seems a total of 684,380 cars were crushed and destroyed for I'd guess a value over $7,000,000,000,000. What a pitiful waste of assets. 679,000 were purchased. And looking to the future sales of American brands, all of the top ten given up for destruction were American brands. Hmmm.
How about Mae and Mac? After the $85,000,000,000 government takeover (with another $10,700,000,000 upcoming)necessitated by Congress changing laws to allow Fannie Mae and Freddie Mac to buy sub-prime mortgages, how are they doing? Well our -- the U. S. taxpayer -- exposure is a cool $5,400,000,000,000. A major decision facing the Obama administration and the Democratic-controlled Congress is whether to completely privatize them or keep them owned by the government. Partial private ownership (courtesy of LBJ who didn't like the growing liabilities on his balance sheet. Better to have a non-legal, but implicit, guarantee, which became explicit, but still off balance sheet last year) in part led to the meltdown fiasco, so that seems stupid. The major government intervention in home ownership has not been very successful, with homeownership increasing to 67.3% up only a pathetic 3.4% points over the last 20 years, at the above-mentioned cost and risk. But Congress loves Fannie and Freddie as do many members of the Obama administration, some of whom made millions of dollars as board members or executives. (Rahm Emanuel made $16 million, for example.) It will likely remain owned by the Obama administration and U. S. Congress as a moneypile.
Biofuels are a bust. Two-thirds of U. S. biodiesel production capacity now sits unused. The result of these decisions and legislation of around 275 (more or less) primarily Democrat Congressmen has so far created and killed 29,000 jobs $3,250,000,000 in wasted subsidies. And fraud. One of the most successful venture capitalists of all time, Vinod Khosla (formerly of Kleiner Perkins, arguably one of the two most successful venture capital investors of all time), got seduced by the religion of global warming and the truckloads of money flowing from Washington DC, and lost millions to an apparent lying founder of Cello Energy, Jack Boykin. Even smart people can get suckered, like Mr. Khosla, when they suspend belief and their common sense. The "profit motive", free markets and capitalism creates wealth. Governmetn destroys it. Biofuels are an expensive lesson that, of course, Congresspeople and the president of the United States will disregard. My guess billions more of my money and yours will be poured down the drain of biofuels, by the bad decisions of a few politicians. (REMEMBER ACID RAIN! After that religious panic, the U. S. government, then actually wanting to get to the truth through facts, completed in 1990 a ten-year $537,000,000 study with 700 scientists, the National Acid Precipitation Assessment Program, which found acidity in only 5% of lakes and 10% of streams and not coming from acid rain, but runoff from surrounding soils, none of which threatened humans. But hey Congress didn't care -- it didn't then nor now care about facts -- it mandated costly scrubbers on smokestacks.)
The problem is always that government companies are run simply for the benefit of the politicians. Their only goal: to get re-elected. Hard decisions? Make me laugh. Their want to please as many people as they can most of the time they can. Hard decisions? Not in their vocabulary. If they don't succeed they get more taxpayer money. Endlessly. That is the simple truth of why there aren't any successes in governments running companies, economies or societies. With the opposite, free enterprise/capitalism, individuals attempt to please enough people to make sales and a profit. It they can't, they simply go out of business. Simple. And highly successful. Not all companies are successful, but enough have been over history to have caused the United States of America to be the most successful economy with the highest standard of living of any country ever invented. And its success has spilled over to other countries, and has raised the personal standard of living for millions of individuals in foreign countries as well as the United States.
The other truth to remember is that politicians are humans, no better nor no worse than other humans. Nor less prone to the emotions of fear and greed, those which drive humans. In the 2007 "meltdown" politicians did no better than other humans, businesspeople or not, in foretelling the upcoming stock and financial markets crashes and recession and acting. No better. Many believe that many politicians including the chairman of the Federal Reserve Bank and myriad Congresspeople (many with their own greed agendas) were just as culpable as any banker or businessperson.
Medicare. MEDPAC -- the Medicare Payment Advisory Commission of Congress -- reports that hospitals lose 5.9% for every dollar they receive treating Medicare patients (getting only 94.1% of their costs). Privately-managed health insurance companies treating non-Medicare patients SUBSIDIZE Medicare. According to the Medicare Trustees' “intermediate assumptions,” $38 trillion (260% of current GDP) would have been needed at year-end 2008 to fund over the next 75 years projected shortfalls for Medicare hospital coverage and to meet the federal government’s statutory obligation to pay its share of other Medicare benefits, including prescription drug coverage. Regardless, in the four years from January 2003 to December 2007, Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. The average annual growth was $2.8 trillion, it can only be measurably worse by now. Hey government, great management! Let's do it to the entire healthcare industry. Why wait for the bankruptcy of the United States, let's hurry it up.
The Government National Mortgage Association ("Ginnie Mae") bundles, plops on a government guarantee and sells to investors...mortgages. With Fannie Mae and Freddie Mac together the three government companies guarantee almost 90% of the mortgages originated in the United States. By 2010 it is estimated that Ginnie Mae will be on the hook -- oops U. S. taxpayers will be on the hook -- for upwards of $1,000,000,000,000 (double 2007). Gin is a subprime mortgage bundler: low downpayment loans (as low as 2% down all-in), below average to poorly-rated borrowers; high loan limits (depending on state) of up to $725,000. All the ingredients for another government failure. And yes, it is failing, with a 7% default rate (double that of prudent lenders), and 30% delinquencies of more than 30 days, plus (according to HUD's Inspector General, June 18) lax practices and a 33 - 1 leverage, comparable to Bear Stearns (RIP). But wait! Congress feels sorry for people who are too irresponsible to pay their mortgages by offering the Home Affordable Modification Program (HAMP) and reducing mortgage principal by up to 30%. Yes, Senator, U. S. Taxpayers will pay for all this. $400,000,000,000 for Fannie and Freddie so far, and could be $50,00,000,000 to $60,000,000,000 for ginnie Mae. Let government run the world!
Amtrak: That’s no way to run a railroad, says the U.S. Congress’ Amtrak Working Group (AWG), in finding that mismanagement within Amtrak has led to a lack of confidence by the public and unpredictable funding from Congress. In November 2005, a two-year investigation by the Government Accountability Office (GAO) into Amtrak’s management and spending practices concluded “while Amtrak has recently reduced costs, revenues are declining faster than costs, leading to operating losses exceeding $1 billion annually. These losses are projected to grow by 40 percent within four years; no effective corporatewide cost containment strategy exists to address them.” Financial results for the first 6 months of 2009: Revenues of $1,165,00,00 LOSS of $913,000,000. Is this Obamarail?
The United States Postal Service (USPS) is in financial disarray, with plummeting levels of mail being sent and heathcare costs for retirees increasing, according to a report released Thursday, August 6, 2009 by an investigative arm of Congress, the Government Accountability Office which placed the agency on its "high-risk list". This year USPS is expected to have a net loss of $7 billion, with total outstanding debt levels reaching $10.2 billion, and an expected $13.2 billion in debt by the close of fiscal year 2010. USPS posted a loss of $2.4 billion for the most recent quarter, which ended June 30. There are approximately 38,000 postal facilities throughout the country and the USPS employs more than 625,000 predominantly union career employees, who assist in the delivery of mail to nearly 150 million addresses. You can bet those union bosses won't let USPS cut anything.
And from the Puget Sound Business Journal, August 7 - 13, 2009, Page 9:
Oregon may get a share of bankrupt ethanol producer". The story describes Cascade Grain Products LLC which filed for Chaper 11 bankruptcy seven months after opening the "crown jewel of Oregon's...ethanol industry". Oregon loaned Cascade $20,000,000. The previous page, 7, wrote of EnerG2 getting a $21 million federal grant to develop a longer-lasting battery as part of the federal government choosing which companies and technologies into which to sink taxpayer dough. The grant is part of $2,400,000,000 thrown at batteries. This plant will be put in Oregon to make "high energy density nano-carbon for ultracapacitors". Whatever. Back in the free-enterprise days venture capital companies would choose which entrepreneurs to back and put up its own money. Now President Barack Obama and the Democratic Congress picks and chooses. I'd guess campaign contributions, "political correctness" and the so-called "green lobby" not potential had a lot to do with this decision.
As worrysome as the government RUNNING companies is the government micro-managing companies. For example, many in Congress think those who work for a living are paid too much. Executives (not rock stars, athletes or actors, of course) get paid too much and Congress is reining them in. The Securities and Exchange Commission (a useful product of Franklin Delano Roosevelt) is claiming that it can "claw back" (confiscate) some bonuses and stock sale proceeds when it wants, regardless if it possesses evidence of wrong-doing. It is suing Mr. Maynard Jenkins, former CEO of CSK Auto (parts) Corporation which had formerly settled with the SEC and restated financials for $4,000,000. Mr. Jenkens was not accused of any wrong-doing. Let's see the SEC voted 3 (Democrats perhaps?) to 2 (Republicans perhaps?) to sue. You decide: arbitrary or the Rule of Law?
In a completely unheralded development the ingenuity of the free market is demonstrated again. Credit Suisse Group cobbled together a $5,000,000,000 fund of toxic assets (bad bonds and mortgages) and granted it to 2,000 of its top bankers as a major part of its bonuses. Up 17% since January, it has satisfied the participants while helping Credit Suisse. A non-government-intervention that proves the merit of the free-enterprise system. Make incentives correct and success will follow. (Article, Wall Street Journal, Friday, August 7, 2009, "Bankers Win Big In Toxic Pay Plan".)
So the United States of America has a pay tzar or czar or dictator. Kenneth Feinberg singlehandedly is charged with setting the pay levels of executives of American companies who have taken government funds such as TARP. Well, one of Mr. Feinberg's subsidiaries, Citigroup Inc., of which the United States will soon own 34% has legally contracted to pay for performance Andrew J. Hall the sum of $100,000,000. This will test the power of the presidency to crush a single American citizen. Stay tuned. A couple days later, an article mentioned that the aforenamed pay dictator will attempt to force renegotiation of any paycheck he thinks doesn't fit into his idea of appropriate. No matter contracts, no matter free enterprise, no matter. As with a king with absolute power, Mr. Feinberg's word is law. Rule by arbitrariness. Hopefully Mr. Feinberg has empathy. He is the..."Special Master".
Soon the Democrats are set to introduce legislation to eliminate private lenders from the federal student loan program, leaving the government as sole provider.
Are consumers intelligent enough to agree to contracts? The answer, "No", is the basis behind a new credit-card law passed by Democrats which mandates how credit-card companies operate. Interesting, part of it forces parents to guarantee minors' credit cards, unless they have independent income to qualify. (Yet, the federal government does not force minors to have to ask parents for them to have abortions. Kids can kill their fetuses but not have a credit card. Go figure!) The law signed by President Obama May 22, prohibits rate hikes on existing balances, stops non-agreed upon over-limit fees, double-cycle billing and other contractual items previously agreed to by consumers and companies. It also allows lawsuits for disputes, overriding contracts signed by consumers which forces less costly arbitration, and enriches the trial lawyer supporters of the Democratic Party. It does this because Democrats consumers either are too lazy to read the contracts (much verbiage of which comes from government) or too dumb to understand them. The government will dictate terms in the future, with its proposed Consumer Financial Protection Agency Act of 2009, to make them whatever it thinks is best for the consumer. The Obama administration also doesn't like banks to charge customers money simply because they write checks when they don't have sufficient funds in the bank. Of course the government should stop those acts. Banks, like healthcare companies, should not charge their customers anything; and the act of making any profit should be shamed.
One near term unanticipated result is that the two major companies involved in settling through arbitration credit card disputes withdrew from that business. This is a clear victory for trial lawyers who make their living instigating the costly lawsuits that arbitration reduced. And a clear victory for President Obama and Democrats who are majorly financed by winnings of such trial lawyers.
And since in Obama's mind insurance companies are responsible for everything that's wrong in healthcare, let's tax'em. How about $100,000,000,000 to start? Will this keep them "honest" as he likes to describe what he's doing? Well yes, by putting them out of business so Obama can get on with his desired one-payer government healthcare.
Citigroup, Inc., shook up its senior executive group in early July 2009, bowing to President Obama's demands. Obama, CEO of the United States of America has no other executive experience than this 100+ days. But he's definitely calling the shots over the private sector as well as the government. Citi's CEO Vikram Pandit replaced new CFO Edward Kelly but there has been much movement in top management. Only time will tell if Obama is an effective overseer of the private sector.
Earlier, Obama appointed an auto Czar who appointed a new chairman, with no auto experience, who appointed a new products Czar, a thirty-year GM veteran, Bob Lutz. Maybe Lutz will get it right now. A new board of directors for GM is next, augmenting several non-auto former company CEOs.
TO WIT:
Liberals attack the free enterprise system for seeking profits. Well without them, there's no jobs, growth or wealth. For example here's how well the government does:
A new study offers sobering news for those who want the government to run America's healthcare system — the government-subsidized Amtrak rail service loses an average of $32 for each passenger it transports. The study by Subsidyscope, an arm of the Pew Charitable Trusts, found that 41 of Amtrak's 44 routes lost money last year. The biggest loser was the Sunset Limited between New Orleans and Los Angeles, which lost $462 per passenger. Even the popular Northeast Regional trains, which connect Washington, New York and Boston, lost $5 per passenger last year. According to the study, Amtrak will receive $2.7 billion in subsidies and stimulus dollars in 2009.
Mr. Czar Kenneth Feinberg, President Barack Obama's absolute ruler United States Czar of compensation is causing troubled and under-capitalized financial institution Citigroup Inc. to give up -- give away -- probably somewhere around a billion and a half of dollars. What, one might ask. Citigroup owns energy trader Phibro LLC, producer of $1,860,000,000 of earnings for Citi over the last only five years. Because Phibro's head trader (Andrew Hall) is contractually owed around $100,000,000 in bonus for 2009 (on top of an earned $98,900,000 last year) and Czar Feinberg thinks that would be embarassing to Citi...embarassing!...it is peddling the unit to Occidental Petroleum Corp. on the dirt cheap. Using those numbers, (from the Wall Street Journal, October 10 - 11, 2009, page B-1, "How Occidental Scored Citi Unit Cheaply") Phibro's average contribution to Citi is $372,000,000 a year. Taking some Citicorp general and administrative costs (10%) and income taxes (at, say, 35%) out would leave around $218,000,000. Assigning an 8 price earnings ratio (low) would indicate a back of the hand valuation of $1,744,0000,000. Oxy (as Occidental is popularly known) is apparently paying $250,000,000 which, under all these assumptions, hands to Oxy nearly $1.5 billion. Now, the United States of America owns 34% of Citigroup. The CEO of the owner, the United States of America, has charged his hand-picked absolute Czar to give away, yes, give away, to some corporation $510,000,000. Being cynical, 1) shouldn't the aforementioned United States of America file some derivitive law suit against its CEO and Czar? and 2) is Oxy and its executives, employees and/or related Political Action Committees, contributors to Democrats, the Democratic Party or Barack Obama or any of his affiliated organizations of affiliates or friends?
The Obama Administration mandated that financial companies which needed capital from the government undergo "management team reviews" as part of its overall "stress test". The Federal Dempost Insurance Corp. demanded that Citigroup's board use one of FDIC's recommended consulting firms (instead of one Citigroup wanted) and Egon Zehnder International was selected. Is this meddling? Micromanaging? The answers will have to come in the future. But this along with Obama's Pay Czar indicates a very troubling indicator for the future control, directly or indirectly, of busines by Obama.
And today (October 6, 2009) Obama's Pay (Don't Call Me) Czar, who works for nothing (and as the saying goes, you get what you pay for), will singlehandedly set the compensation for many of the nation's largest companies. And just how is he so perceptive that tens and hundreds of Compensation Committees can't see what he sees? Doesn't matter, he's the Czar. His unelected word is God's Word for those working for "privately-owned" corporations in America. And don't think Obama will stop at the seven companies the U. S. Government controls. Just wait for upcoming legislation. No one certainly remembers that back when perceptive Bill Clinton was president, the Democratic Congress capped the amount of compensation at $1,000,000 that corporations could write off their income taxes . Result? Corporations replaced cash compensation over $1,000,000 with non-qualified incentive stock options which grew in value in some cases to hundreds of millions of dollars -- the very compensation Czar Feinberg is trying to rein in as we speak! Go figure. Well one thing you don't read about is the very genesis of the incentive stock options -- a major unintended blunder by Democratic politicians attempting in the '90's to rein in compensation higher than their own. Illegal, of course! Jealosy has no bounds.
And through the backdoor, the Democratic Finance Committee voted Thursday, October 1, 2009, to limit healthcare insurance executives' compensation to...to...a lousy half-million dollars, half of what Clinton did twenty years ago. Do these imbeciles never learn? The reason given is that the insurance companies would be enriched through having so many more customers. And who wants profitable companies, anyway? They are so...so anti-government. The vote? 13 + Sen. Olympia Snowe, from Maine, against the Republicans' 8. While it isn't law and with the pushback on Obamacare won't likely to be, it indicates the extent of anti-business/anti-insurance comkpany/anti-capitalism on Capitol (as opposed to CapitAl) Hill. But the horror of it all is, the Democrats aren't trying to understand healthcare, or how to really "fix" its high costs, they are simply trying to lock-step get any healthcare bill passed so they can crow how "they" (Democrats, not Americans) won.
Since the Federal Reserve System couldn't find its way to the "bubble" outhouse and only promoted it rather rather than thoughtfully rein it in, President Obama wants it to have more power; and he wants to line up a guaranteed source of campaign financing of the Democratic Party by lablling some institutions "too big to fail" or government-sponsored entities (GSE, a term used to describe trillion-dollar-failures, Freddie Mac and Fannie Mae and Sallie Mae). Some institutions. Hmmm, perhaps those that have Democrats as CEOs and campaign contributions to Democrats in the hundreds of thousands of dollars? I wonder. But ceratinly have the president of the United States make the call, not markets of free buyers and sellers.
Everyone knows that U. S. banks are sinking with "toxic assets" which came from loans made to people who can;'t pay them back. Many were bundled into "securities", with specified attributes, such as safety of principal or high yields. Ever brilliant in free enterprise, Wall Street is remaking these bundled securities and styripping out the good -- and selling them -- and writing off the bad. The result is more equity and less risky balance sheets in the banking industry. And immediately Congress, the Members of which 1) originated the beginnings of these risky assets and 2) clearly don't understand them, is raising doubts. Either to stop the transactions because the private sector might be successful or to gather more campaign contributions. But on the other side, the U. S. /Obama Treasury Department as agreed to dump more money into doing the exact same thing. Go figure. Treasury will "invest" and I use that term loosely up to $2,250,000,000 if the Annointed private hedge funds will match it in the PPIP (Public-Private Investment Program)( government is nothing if not clever with initials). With (that evil) leverage, a total of $40,000,000,000 will be available to purchase toxic assets from the government's risk pool of $1,640,000,000,000 (trillion) in guaranteed mortgage-backed securities from Fan, Fred, FHA and well, you know, other initials. If allowed by Washington DC, the private security "revisions" could reach $30 to $90 million this year. I guess it depends.
Wind-turbine makers whine that free-markets aren't good enough for them. They need government-directed subisdies to continue their growth. "Stimulus" grants apparently kick-started the industry, in which General Electric, whose CEO is close to President Obama and whose National Broadcast Company acts as Obama's publicity headquarters, is the largest U. S. participant, with 43%. But recently orders were down for GE and its oligarchy of wind-turbine "competitors". Obama's anti-trusters, where are you? Various bills mandate that U. S. utilities, private or public, get 20% of their energy from "renewable" sources by 2020. Subject to change and campaign contributions.
Congresss and the Federal Communications Commission wants to regulate telephone, wireless phone and cable companies which have spent billions of dollars investing in broadband "pipes" through which voice and data flows. (AT&T alone $18,000,000,000 in 2008.) While there is no "abuse" the new Obama Democratic Chairman of the FCC wants it his way, not the marketplace's way. And Google's way. Google invested huge dollars into the Democrat coffers and has people in the Obama administration, including its chief lobbyist, Andrew McLaughlin, now deputy head of Obama's telecom policy. Google which hasn't spent a dime laying fiber-optics, wants to use it all free of charge. In fact, its highly-profitable business model depends on it. But its success is not now from the marketplace, but from Washington DC. It's misleadingly- called "Net Neutrality", by Google and Democrats, wherein they get control over the private interests that financed broadband and might be in a position to dictate what goes over it. Propaganda anyone?
In 2007 milk prices hit all-time highs, vastly enriching dairy farmers. As a logical, market-based result, they greatly expanded their herds. The market-based result of that? Lower prices, dropping 35% to $11.80 a hundredpound vs. $18.40 the year earlier. The result? The highly-powerful dairy farmers demand a industry probe of the two major purchasers of milk by the Obama Justice Department, aided and abetted by equally powerful Democrats, Chuck Schumer of New York and Russ Feingold of Wisconsin and "independent" (socialist) Bernie Sanders of Vermont. Whether or not the probe is launched or whtether or not is brings action, is immaterial. The marketplace is transcended by Washington DC and its powerful Democrats.
Whatever is "flash trading"? Dunno but it was invented by bankers and traders, so, according to Sen. Chuck Schumer of New York, it must be outlawed. And, so customers -- the free-market -- doesn't decide, Chuckie does. And what does he know about it all?
What about the ability of the U. S. government's financial people to brilliantly understand the status of markets and discover "systemic" risk and reduce it before it crushes the country? Let's hear it for Alan Greenspan, late of the Federal Reserve System, the single source of regulation of American monetary policy. He failed miserably, as did his successor, Ben Bernanke, as did government. In fact many believe (me included) that easy money from the Greenspan Fed, coupled with Democratic Congressmen, started the various "bubbles" led Fannie Mae and Freddie Mac into buying trillions of dollars of sub-prime, marginal and poorly documented consumer mortgage loans in the name of "affordable" housing. (Meaning votes.) Rather than adding to the thousands of pages of regulations and hiring thousands of hall monitors, perhaps Obama should consider getting rid of the centrally-controlled Federal Reserve System and Fan and Fred and Federal Housing Authority. Oh, sure that will happen! Democrats see each new government worker as a vote for their party.
Well, there are a few successful business decisions made by our government that I can find. (President Eisenhower's interstate highway system.) But failures? Obviously. The following will outline failures of government central decision-making, planning and operation (management?) of companies and organizations. Why do people think a few people can make the right decisions every time, when it has been shown that decisions made by "the markets" -- millions of consumers -- have been successful. This is at the very root of America's past success and the failure of the United Kingdom, France, Italy, Germany and on and on. It is in part becuse a bad decision by one or even a thousand consumers out of millions is miniscule in damage compared to one decision of a politican which negatively impacts millions of people.
Just to name a few government-run organizations, initiatives or endeavors: Amtrak, United States Postal Service, Medicare, Medicaid, Fannie Mae, Freddie Mac, Ginnie Mae, "Cash for Clunkers" and...Biofuels/Ethanol...and on and on as the following indicates:
Stop harping on this. Speaking of HARP (Obama's brilliant Home Affordable Refinance Program), Mr. Obama in March 2009 announced that HARP would help millions of borrowers (from evil mortgage companies). And, yes, like all government programs it has helped...but only 60,000 voters...through the end of July (that's materially less than "millions", for your information). Way to go Mr. Prexy! In a candid moment of honesty, an Obama representative, an assistant Treasury secretary, Michael Barr said, "It hasn't met our expectations." Well said, sir. A failure? Not at all because Mr. Obama simply made it more risky to taxpayers, if you can imagine; initially it was established for those whose home values were less than their loans up to 5% underwater, now if their home loans are up to 25% IN EXCESS of their home values they're eligible. These are Fannie Mae and Freddie Mac loans made to increase home ownership for voters too poor to afford homes. And Congress got this right, they could not afford them. The solution: change the terms to keep them in houses for, what? A month? Six months? Until after the next election? If they can't afford them, they can't afford them. Only Congress and the Obama administration with our taxpayer money will make everything OK. Change?
Another government give-away to those who got mortgages they couldn't afford, Obama's trial loan modification program also has been a bust. Only 12% of those eligible for the $75,000,000,000 program. 570,000 out of Obama's expected 4,000,000. However that is good news to people who think programs and bailouts to the stupid are stupid.
The "Cash for Clunkers" -- "CARS" -- program rushed through Congress and signed by President Obama threw out $3,000,000,000 to buyers of some new cars -- see below for a more complete description. The original program was $1,000,000,000 and it was gone in a couple weeks so of course the Democrats added a couple more billions of our money to it. Most important is less than 20% of buyers have been paid. The administration has moved 3,000 people to do the paper work and will add a couple thousand more next week. If this was a Republican initiative the left-leaning media would be screaming how inefficient government is. It is equally as true that the Democratic government bureaucracy can't handle a simple program like this; maybe folks it is government.
Which takes us to the FDR-era program, the Federal Housing Administration. The Democrats have Fannie Mae-, Freddie Mac- and subprime-mortgage-like eased the ability for less-than-capable people to get low or in some cases no-down payment loans, and recently for higher amounts. Hmmmm. Yes, it is a popular deal, with its market share skyrocketing to 23% of the U. S. mortgage market (up from less than 3% in 2006). Everyone, what do you think the outcome? 1) Congress doesn't want to learn from or admit its mistakes with Fannie and Freddie and 2) bad loans are skyrocketing, duh! FHA's loan reserve, adequate in 2007 is heading for the dangerzone: 2% of the $429,000,000,000 in loans it guaranteed. And yes, the U. S. taxpayer is on the hook. Democrats, 1) how stupid do you think us? 2) How stupid are you? (The answer, not stupid at all, it is these highly-risky endeavors that get them elected and re-elected, and that is Job One for politicians.)
The Federal Deposit Insurance Corp., was invented by the FDR administration to stop runs on banks in the 1930's. It started to work after a while. Back in the 1970's a it bank deposits when Congress upped the guarantee to $100,000 from $25,000 and the number of covered institutions exploded along with bad loans hurriedly (and sometimes illegally) made. The Resolution Trust Corp. was chartered to take over the assets of the 1,000 failed banks and work out these failures. It worked fairly well. Today, Congress in a typically political knee-jerk reaction to the "meltdown" last year upped guarantees to $250,000. The total deposits guaranteed by the FDIC exploded to upwards of $4,500,000,000,000. The $250,000 was to cease by the end of 2009, but, of course big government can't stop anything, so Congress extended to to 2013. Since last year, the FDIC's reserves have shrunk from $45,200,000,000 (before a special levy of $5,600,000,000 from banks) to about $10,400,000,000. All of the $4.5 trillion is guaranteed ultimately by the taxpayer to the federal government, initially with a $500,000,000,000 "line of credit" from Treasury. Stay tuned for more failures and the tapping of us, the taxpayers.
Add what will become the latest fiasco. Let's simply blame Wall Street right now. Morgan Stanley and Citigroup, Inc. have each invested $100,000,000 to finance windfarms this month, August 2009, TAKING ADVANTAGE of yet another cash spigot from Central Command Whirling Dervish Obama. Energy and Treasury together will rebate 30%of the cost of building a "renewable energy" plant with a check sent 60 days after application approval; don't know if this means they don't have to build it or not. Plus accelerated depreciation income tax deductions. Oh, there is no cap on the cash, no maximum. Applications of $10 billion by Wall Street are seen. General Obama Electric is on the scent, said its Energy Financial Services division managing director. A similar program led to the failure of Lehman and American International Group (AIG) last year. Stay tuned.
And what about A123? It is a central figure of Obama's central control of our economy. Like it or not, Washington DC is the center of everything in economic-America now. Venture capital can't keep up. (But what if Obama's decisions are wrong?) A123 is a winner! The Obama socialist-lottery winner is...A123. OK it makes or intends to make or wants to make a car battery, advanced to be sure. The Obama Energy Department isn't saying for sure which of the 100 contestents was prettiest enough to win part of $1,200,000,000; might be Johnson Controls-Saft Advanced Power Solutions LLC, Ener1 Inc. or Celgard LLC. But soon there will be a extravaganza media event with officials, and photogenic electric vehicles from GM, Ford and Chrysler (none of them foreign ones that really run.) Now get this: all these products that Obama wants them to make are readily available in Asia, but Obama doesn't want those. Chairman Obama knows that lithiun-ion battteries are preferred for autos, and that they won't turn into commodity products, they'll all be somewhat technologically different. Obama knows who the winners will be and those will most certainly bring a comppetitive advantage to his GM. These billions are to create jobs in the U. S. and SuperCEO Barack Obama's transformation of the U. S. auto industry to be more competitive and less, of course, polluting. (Except that electricity in America comes mostly from oil and carbon-based resources, but pay no mind no that.) And what if he's wrong aboiut the future?
And how about the humiliating fiasco of Obama's Cash for Clunkers that sold 1) Toyota Corolla 2) Honda Civic 3) Toyota Camry 4) finally an American brand, Ford Focus FWD 5) Hyundai Elantra 6) Nissan Versa 7) Toyota Prius 8) Honda Accord 9) Honda Fit and finally number 10) another American brand, Ford Escape FWD. Where were the U.S.-owned brands, GM and Chrysler? Seems a total of 684,380 cars were crushed and destroyed for I'd guess a value over $7,000,000,000,000. What a pitiful waste of assets. 679,000 were purchased. And looking to the future sales of American brands, all of the top ten given up for destruction were American brands. Hmmm.
How about Mae and Mac? After the $85,000,000,000 government takeover (with another $10,700,000,000 upcoming)necessitated by Congress changing laws to allow Fannie Mae and Freddie Mac to buy sub-prime mortgages, how are they doing? Well our -- the U. S. taxpayer -- exposure is a cool $5,400,000,000,000. A major decision facing the Obama administration and the Democratic-controlled Congress is whether to completely privatize them or keep them owned by the government. Partial private ownership (courtesy of LBJ who didn't like the growing liabilities on his balance sheet. Better to have a non-legal, but implicit, guarantee, which became explicit, but still off balance sheet last year) in part led to the meltdown fiasco, so that seems stupid. The major government intervention in home ownership has not been very successful, with homeownership increasing to 67.3% up only a pathetic 3.4% points over the last 20 years, at the above-mentioned cost and risk. But Congress loves Fannie and Freddie as do many members of the Obama administration, some of whom made millions of dollars as board members or executives. (Rahm Emanuel made $16 million, for example.) It will likely remain owned by the Obama administration and U. S. Congress as a moneypile.
Biofuels are a bust. Two-thirds of U. S. biodiesel production capacity now sits unused. The result of these decisions and legislation of around 275 (more or less) primarily Democrat Congressmen has so far created and killed 29,000 jobs $3,250,000,000 in wasted subsidies. And fraud. One of the most successful venture capitalists of all time, Vinod Khosla (formerly of Kleiner Perkins, arguably one of the two most successful venture capital investors of all time), got seduced by the religion of global warming and the truckloads of money flowing from Washington DC, and lost millions to an apparent lying founder of Cello Energy, Jack Boykin. Even smart people can get suckered, like Mr. Khosla, when they suspend belief and their common sense. The "profit motive", free markets and capitalism creates wealth. Governmetn destroys it. Biofuels are an expensive lesson that, of course, Congresspeople and the president of the United States will disregard. My guess billions more of my money and yours will be poured down the drain of biofuels, by the bad decisions of a few politicians. (REMEMBER ACID RAIN! After that religious panic, the U. S. government, then actually wanting to get to the truth through facts, completed in 1990 a ten-year $537,000,000 study with 700 scientists, the National Acid Precipitation Assessment Program, which found acidity in only 5% of lakes and 10% of streams and not coming from acid rain, but runoff from surrounding soils, none of which threatened humans. But hey Congress didn't care -- it didn't then nor now care about facts -- it mandated costly scrubbers on smokestacks.)
The problem is always that government companies are run simply for the benefit of the politicians. Their only goal: to get re-elected. Hard decisions? Make me laugh. Their want to please as many people as they can most of the time they can. Hard decisions? Not in their vocabulary. If they don't succeed they get more taxpayer money. Endlessly. That is the simple truth of why there aren't any successes in governments running companies, economies or societies. With the opposite, free enterprise/capitalism, individuals attempt to please enough people to make sales and a profit. It they can't, they simply go out of business. Simple. And highly successful. Not all companies are successful, but enough have been over history to have caused the United States of America to be the most successful economy with the highest standard of living of any country ever invented. And its success has spilled over to other countries, and has raised the personal standard of living for millions of individuals in foreign countries as well as the United States.
The other truth to remember is that politicians are humans, no better nor no worse than other humans. Nor less prone to the emotions of fear and greed, those which drive humans. In the 2007 "meltdown" politicians did no better than other humans, businesspeople or not, in foretelling the upcoming stock and financial markets crashes and recession and acting. No better. Many believe that many politicians including the chairman of the Federal Reserve Bank and myriad Congresspeople (many with their own greed agendas) were just as culpable as any banker or businessperson.
Medicare. MEDPAC -- the Medicare Payment Advisory Commission of Congress -- reports that hospitals lose 5.9% for every dollar they receive treating Medicare patients (getting only 94.1% of their costs). Privately-managed health insurance companies treating non-Medicare patients SUBSIDIZE Medicare. According to the Medicare Trustees' “intermediate assumptions,” $38 trillion (260% of current GDP) would have been needed at year-end 2008 to fund over the next 75 years projected shortfalls for Medicare hospital coverage and to meet the federal government’s statutory obligation to pay its share of other Medicare benefits, including prescription drug coverage. Regardless, in the four years from January 2003 to December 2007, Medicare trustees reported that the unfunded liabilities of Social Security and Medicare grew by a stunning $10.4 trillion. The average annual growth was $2.8 trillion, it can only be measurably worse by now. Hey government, great management! Let's do it to the entire healthcare industry. Why wait for the bankruptcy of the United States, let's hurry it up.
The Government National Mortgage Association ("Ginnie Mae") bundles, plops on a government guarantee and sells to investors...mortgages. With Fannie Mae and Freddie Mac together the three government companies guarantee almost 90% of the mortgages originated in the United States. By 2010 it is estimated that Ginnie Mae will be on the hook -- oops U. S. taxpayers will be on the hook -- for upwards of $1,000,000,000,000 (double 2007). Gin is a subprime mortgage bundler: low downpayment loans (as low as 2% down all-in), below average to poorly-rated borrowers; high loan limits (depending on state) of up to $725,000. All the ingredients for another government failure. And yes, it is failing, with a 7% default rate (double that of prudent lenders), and 30% delinquencies of more than 30 days, plus (according to HUD's Inspector General, June 18) lax practices and a 33 - 1 leverage, comparable to Bear Stearns (RIP). But wait! Congress feels sorry for people who are too irresponsible to pay their mortgages by offering the Home Affordable Modification Program (HAMP) and reducing mortgage principal by up to 30%. Yes, Senator, U. S. Taxpayers will pay for all this. $400,000,000,000 for Fannie and Freddie so far, and could be $50,00,000,000 to $60,000,000,000 for ginnie Mae. Let government run the world!
Amtrak: That’s no way to run a railroad, says the U.S. Congress’ Amtrak Working Group (AWG), in finding that mismanagement within Amtrak has led to a lack of confidence by the public and unpredictable funding from Congress. In November 2005, a two-year investigation by the Government Accountability Office (GAO) into Amtrak’s management and spending practices concluded “while Amtrak has recently reduced costs, revenues are declining faster than costs, leading to operating losses exceeding $1 billion annually. These losses are projected to grow by 40 percent within four years; no effective corporatewide cost containment strategy exists to address them.” Financial results for the first 6 months of 2009: Revenues of $1,165,00,00 LOSS of $913,000,000. Is this Obamarail?
The United States Postal Service (USPS) is in financial disarray, with plummeting levels of mail being sent and heathcare costs for retirees increasing, according to a report released Thursday, August 6, 2009 by an investigative arm of Congress, the Government Accountability Office which placed the agency on its "high-risk list". This year USPS is expected to have a net loss of $7 billion, with total outstanding debt levels reaching $10.2 billion, and an expected $13.2 billion in debt by the close of fiscal year 2010. USPS posted a loss of $2.4 billion for the most recent quarter, which ended June 30. There are approximately 38,000 postal facilities throughout the country and the USPS employs more than 625,000 predominantly union career employees, who assist in the delivery of mail to nearly 150 million addresses. You can bet those union bosses won't let USPS cut anything.
And from the Puget Sound Business Journal, August 7 - 13, 2009, Page 9:
Oregon may get a share of bankrupt ethanol producer". The story describes Cascade Grain Products LLC which filed for Chaper 11 bankruptcy seven months after opening the "crown jewel of Oregon's...ethanol industry". Oregon loaned Cascade $20,000,000. The previous page, 7, wrote of EnerG2 getting a $21 million federal grant to develop a longer-lasting battery as part of the federal government choosing which companies and technologies into which to sink taxpayer dough. The grant is part of $2,400,000,000 thrown at batteries. This plant will be put in Oregon to make "high energy density nano-carbon for ultracapacitors". Whatever. Back in the free-enterprise days venture capital companies would choose which entrepreneurs to back and put up its own money. Now President Barack Obama and the Democratic Congress picks and chooses. I'd guess campaign contributions, "political correctness" and the so-called "green lobby" not potential had a lot to do with this decision.
As worrysome as the government RUNNING companies is the government micro-managing companies. For example, many in Congress think those who work for a living are paid too much. Executives (not rock stars, athletes or actors, of course) get paid too much and Congress is reining them in. The Securities and Exchange Commission (a useful product of Franklin Delano Roosevelt) is claiming that it can "claw back" (confiscate) some bonuses and stock sale proceeds when it wants, regardless if it possesses evidence of wrong-doing. It is suing Mr. Maynard Jenkins, former CEO of CSK Auto (parts) Corporation which had formerly settled with the SEC and restated financials for $4,000,000. Mr. Jenkens was not accused of any wrong-doing. Let's see the SEC voted 3 (Democrats perhaps?) to 2 (Republicans perhaps?) to sue. You decide: arbitrary or the Rule of Law?
In a completely unheralded development the ingenuity of the free market is demonstrated again. Credit Suisse Group cobbled together a $5,000,000,000 fund of toxic assets (bad bonds and mortgages) and granted it to 2,000 of its top bankers as a major part of its bonuses. Up 17% since January, it has satisfied the participants while helping Credit Suisse. A non-government-intervention that proves the merit of the free-enterprise system. Make incentives correct and success will follow. (Article, Wall Street Journal, Friday, August 7, 2009, "Bankers Win Big In Toxic Pay Plan".)
So the United States of America has a pay tzar or czar or dictator. Kenneth Feinberg singlehandedly is charged with setting the pay levels of executives of American companies who have taken government funds such as TARP. Well, one of Mr. Feinberg's subsidiaries, Citigroup Inc., of which the United States will soon own 34% has legally contracted to pay for performance Andrew J. Hall the sum of $100,000,000. This will test the power of the presidency to crush a single American citizen. Stay tuned. A couple days later, an article mentioned that the aforenamed pay dictator will attempt to force renegotiation of any paycheck he thinks doesn't fit into his idea of appropriate. No matter contracts, no matter free enterprise, no matter. As with a king with absolute power, Mr. Feinberg's word is law. Rule by arbitrariness. Hopefully Mr. Feinberg has empathy. He is the..."Special Master".
Soon the Democrats are set to introduce legislation to eliminate private lenders from the federal student loan program, leaving the government as sole provider.
Are consumers intelligent enough to agree to contracts? The answer, "No", is the basis behind a new credit-card law passed by Democrats which mandates how credit-card companies operate. Interesting, part of it forces parents to guarantee minors' credit cards, unless they have independent income to qualify. (Yet, the federal government does not force minors to have to ask parents for them to have abortions. Kids can kill their fetuses but not have a credit card. Go figure!) The law signed by President Obama May 22, prohibits rate hikes on existing balances, stops non-agreed upon over-limit fees, double-cycle billing and other contractual items previously agreed to by consumers and companies. It also allows lawsuits for disputes, overriding contracts signed by consumers which forces less costly arbitration, and enriches the trial lawyer supporters of the Democratic Party. It does this because Democrats consumers either are too lazy to read the contracts (much verbiage of which comes from government) or too dumb to understand them. The government will dictate terms in the future, with its proposed Consumer Financial Protection Agency Act of 2009, to make them whatever it thinks is best for the consumer. The Obama administration also doesn't like banks to charge customers money simply because they write checks when they don't have sufficient funds in the bank. Of course the government should stop those acts. Banks, like healthcare companies, should not charge their customers anything; and the act of making any profit should be shamed.
One near term unanticipated result is that the two major companies involved in settling through arbitration credit card disputes withdrew from that business. This is a clear victory for trial lawyers who make their living instigating the costly lawsuits that arbitration reduced. And a clear victory for President Obama and Democrats who are majorly financed by winnings of such trial lawyers.
And since in Obama's mind insurance companies are responsible for everything that's wrong in healthcare, let's tax'em. How about $100,000,000,000 to start? Will this keep them "honest" as he likes to describe what he's doing? Well yes, by putting them out of business so Obama can get on with his desired one-payer government healthcare.
Citigroup, Inc., shook up its senior executive group in early July 2009, bowing to President Obama's demands. Obama, CEO of the United States of America has no other executive experience than this 100+ days. But he's definitely calling the shots over the private sector as well as the government. Citi's CEO Vikram Pandit replaced new CFO Edward Kelly but there has been much movement in top management. Only time will tell if Obama is an effective overseer of the private sector.
Earlier, Obama appointed an auto Czar who appointed a new chairman, with no auto experience, who appointed a new products Czar, a thirty-year GM veteran, Bob Lutz. Maybe Lutz will get it right now. A new board of directors for GM is next, augmenting several non-auto former company CEOs.
President Obama Knows What's Best for the U. S.
That title, "President Obama Knows What's Best for the U. S." is a joke. Mr. Obama has no clue. He needs a quick history lessson in capital, capital markets, free markets, capitalism, innovation, entrepreneurship, the creation of jobs and wealth and the danger of over- and misguided regulations on business: the only -- ONLY -- source of lasting jobs and wealth. The liberal-controlled U. S. education system teaches little of it, thus depriving Obama of valued knowledge. China gets it. While completely free markets are better than partial ones, there is no such thing as a true "free market" especially in countries. Smart regulations are preferred, not irrational, knee-jerk monstrosities such as the U. S.' Sarbanes-Oxley [The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted July 30, 2002)] which was borne from the Internet meltdown of 1999 and major illegal activities and bankruptcies of WorldCom and Enron, among others. Unaffectionately known to those impacted as "SOX", it piles on meaningless paperwork, forces engagements of lawyers, accountants and consultants and costs publicly-traded companies if not the $1.4 trillion of one pretty ridiculous study, but certainly hundreds of millions of dollars annually. History shows morality can't be regulated, and as evidence, five years after SOX passage and signing by Republican President George Bush, there comes a major recession based in part on accounting and valuation issues. But the law remains. China, on the other hand, maintains a strong hand on capital flows into its borders, including maximum amounts foreign investors, who must be qualified, can invest and strict holding periods to obviate rapid trading. It has been mentioned, but, of course, not by legislators and bureaucrats, that America's short-term focus on corporations' quarterly earnings achievement versus expectations leads to many problems, including making investments and performing activities with short payoffs instead of long-term benefits. But President Obama seems to get none of this. He actively encourages investigations of and crippling regulations on companies and unionization. Extortionist trial/tort lawyers also are given vast freedom (in exchange for huge campaign contributions to Democrats.) Also please see my post, "NO-JOBS-OBAMA'S (NJO) INITIATIVES TO HURT BUSINESS AND FREE ENTERPRISE".
When a country has concentrated power in its central government -- as the U. S. has done, the possibility of curtailed freedoms is high. Especially with respect to money. When it is gathered into one spot -- such as Washington DC, for example -- cronyism can take over and the deserving can go without while relationships with those in power essentially take the money. With a one-party president and Congress as we have now, those in power think they know best...or at least have the pursestrings. And the opening of those afore-mentioned strings comes from those individuals licensed or otherwise known to be "lobbyists". And what is so twisted about the following information from the Washington Times is that states' citizens send massive amounts of tax money to Washington DC and then those states and cities have to hire lobbyists to get the money back. And convince those in power that they (the states and cities whose citizens earned those taxes) know what to do with them. Huh? Yup, that's the truth.
Jim McElhatton writes October 8 in the Washington Times: "Hard-hit cities, states hire near-record lobbyists.
"Cities and states are spending near-record amounts to retain their expensive cadres of Washington lobbyists, even as the worst economic recession in a generation prompts layoffs, mounting deficits and falling property-tax revenues. States and localities are on track to spend a combined $83.1 million in taxpayer money this year on Washington lobbyists, the second straight recession year to top the previously unbroached $80 million barrier, according to the nonpartisan Center for Responsive Politics.
"For the first six months of 2009, the center reports, local governments spent almost $41.6 million on such lobbying. During the first half of 2009, Miami-Dade County spent $410,000 on Washington lobbyists at the same time it confronted a reported $444 million deficit. The Florida county is just one of 73 localities, states or territories to spend $100,000 or more on lobbyists so far this year to push their agendas in Washington, according to data from the watchdog group." By "push their agendas" is meant get their money back by convincing those who think they know what's best will let some go by taking more. Or something like that.(Copyright 2009 The Washington Times)
Yesterday's post was entitled: Hitler had his Volkswagen, President Barack Obama will have his Karma. Today it is: President Obama Knows What's Best for the United States of America. Subtitled: success by who you know, who you pay. Free enterprise will be gone under Barack Obama. He must be emasculated (in a political sense) or our country is doomed. His mad, power-driven desire to centrally-control our vast, complex, formerly-successful (but far from perfect) economy has turned where it always does with so-called government-managed industrial policy: success isn't measured in the marketplace, no, far from it. It is based on who you know (AL GORE), who you pay (DEMOCRATS), and what you believe ("PROGRESSIVISM"). The power has shifted from the marketplace to ONE MAN who by himself, with his czars and Congressional cronies, want to unilaterally make the decisions of to whom and where our taxpayer money goes and remake America, perhaps the world. President Obama Knows What's Best for the United States of America.
Yesterday's post: "Hitler had his Volkswagen, President Barack Obama will have his Karma. Obama will use $528,000,000 of taxpayer money to finance a California-based start-up. Fisker Automotive will get the money to engineer the "Karma" a $87,900 plug-in electric luxury sports car. Now: 1) Why are start-ups financed by government? 2) It is deemed a "loan", how will a start-up pay the money back to U. S. Taxpayers? 3) The car will be manufactured in Finland. (Will the United Autoworkers union have a subsidiary there?) 4) The very self-same U. S. taxpayer will be hit up to bribe themselves to buy the OKarma, "saving" the middle class $8,000 per OKarma with the government subsidies; 5) Where is the "empathy" for the millions who can't afford a $87,900 car? What is this man thinking? And how much did the early investors into Fisker, if any, contribute to the re-election campaigns of Democrats?" (End of post)
That was yesterday (September 24, 2009) today is today (September 25, 2009) and here is the answer:
AL GORE
[http://online.wsj.com/article/SB125383160812639013.html]
SEPTEMBER 25, 2009 Gore-Backed Car Firm Gets Large U.S. Loan
By JOSH MITCHELL and STEPHEN POWER
Printed in The Wall Street Journal, page B6
WASHINGTON -- A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla, like Fisker, is a California startup focusing on high-end hybrids, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
Fisker's Karma hybrid sports car, above, will initially cost about $89,000.
The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.
"This is not for average Americans," said Leslie Paige, a spokeswoman for Citizens Against Government Waste, an anti-tax group in Washington. "This is for people to put something in their driveway that is a conversation piece. It's status symbol thing."
DOE officials spent months working with Fisker on its application, touring its Irvine, Calif., and Pontiac, Mich., facilities and test-driving prototypes.
Matt Rogers, who oversees the department's loan programs as a senior adviser to Energy Secretary Steven Chu, said Fisker was awarded the loan after a "detailed technical review" that concluded the company could eventually deliver a highly fuel-efficient hybrid car to a mass audience. Fisker said most of its DOE loan will be used to finance U.S. production of a $40,000 family sedan that has yet to be designed.
"It's the ability to drive significant change in fuel economy across a large market segment" that swayed the department to approve the Fisker loan, Mr. Rogers said. "We got quite excited."
Henrik Fisker, who designed cars for BMW, Aston Martin and Tesla before starting his Fisker Automotive in 2007, said his goal is to build the first plug-in electric hybrids that won't sacrifice the luxury, performance and looks of traditional gas-powered luxury cars.
The Karma will target an exclusive audience -- Gore was one of the first to sign up for one. Mr. Fisker says all new technology starts out being expensive. He pointed to flat-screen televisions that once started at $25,000 but are now affordable to the mass market.
The four-door Karma, powered by a lithium-ion battery, will be able to run solely on electric power for 50 miles, and will achieve an average fuel economy of 100 mpg over the span of a year, the company says. Production is scheduled to start in December, with about 15,000 vehicles a year expected to hit the U.S. market starting next June.
Many of the 1,500 people who have made deposits on the Karma are former BMW and Mercedes owners who want an environmentally friendly car without sacrificing luxury, Mr. Fisker said.
He said he pitched the Karma to Mr. Gore at an event hosted by KPCB last year, and that the former vice president almost immediately submitted a down payment for the car.
Kalee Kreider, a spokeswoman for Mr. Gore, confirmed that the former vice president backs Fisker and purchased a Karma. "He believes that a global shift of the automobile fleet toward electric vehicles, accompanying a shift toward renewable-energy generation, represents an important part of a sensible strategy for solving the climate crisis," she said in a statement.
Fisker's top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm of which Gore is a partner. Employees of KPCB have donated more than $2.2 million to political campaigns, mostly for Democrats, including President Barack Obama and Hillary Clinton, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign contributions.
Officials at Kleiner Perkins didn't return requests for comment.
Asked whether Mr. Gore had any influence on Fisker's application, the DOE's Rogers said, "None at all."
"This is a very attractive, very across-party-lines kind of vehicle," Mr. Rogers said. "All of the detailed due diligence [was] done by independent review teams."
Other Fisker investors include Eco-Drive (Capital) Partners LLC, an investment consortium, and Qatar Investment Authority, a state-run investor based in Qatar.
Fisker's government loans will come from a $25 billion program established by Congress in 2007 to help auto makers invest in the technology to meet a new congressional mandate to improve fuel efficiency. In June, the DOE awarded the first $8 billion from the program to Ford Motor Co., Nissan Motor Co., and Tesla, which are all developing electric cars.
Some companies that have been turned down for loans from DOE say they did not get much feedback from the department about their applications. O. John Coletti, president of EcoMotors International of Troy, Mich., said his company applied for a $20 million loan from the agency last December, and last month got a one-page rejection letter from the loan program's director, Lachlan Seward. EcoMotors' lead investor is Vinod Khosla, himself a former Kleiner Perkins partner and a longtime campaign contributor to Republicans and Democrats alike.
"I don't have an issue with the winners … it's possible somebody has better ideas than us," Mr. Coletti said. At the same time, he said, "More feedback from DOE on a timely basis would be wonderful. When you're running a business you'd like to know whether you're going to be able to take advantage of this opportunity."
Mr. Coletti's company -- which makes diesel engines and is still waiting to hear from the Department on a separate loan application to help it build a manufacturing facility -- isn't without politically well-connected patrons, either. Its major investor is Vinod Khosla, himself a former Kleiner Perkins partner who has donated to campaigns.
Scott Redmond, CEO of XP Vehicles Inc., said he met with DOE officials twice in Washington after applying for a $40 million loan to develop a $15,000 to $25,000 hybrid, and that both times he was told his application looked good. Since receiving a rejection letter from DOE in August, Redmond said, he has been unable to get a full explanation as to why his request was turned down.
Mr. Rogers said he was not at liberty to discuss individual applications that had been turned down, but said the process has been handled fairly and objectively.
_____________________________________________________________________________________
So two "small" -- $20 million and $40 million -- requests were turned down. AL GORE got one-half a billion dollars. What's wrong with this picture? 1) two companies for $60,000,000 have twice the chance of success than one company. And with the $528,000,000 total doled out to AL GORE at $30,000,000 average 16 other companies could have been backed. Political cronyism aside, looks like Obama just wants to shovel our money out.
When a country has concentrated power in its central government -- as the U. S. has done, the possibility of curtailed freedoms is high. Especially with respect to money. When it is gathered into one spot -- such as Washington DC, for example -- cronyism can take over and the deserving can go without while relationships with those in power essentially take the money. With a one-party president and Congress as we have now, those in power think they know best...or at least have the pursestrings. And the opening of those afore-mentioned strings comes from those individuals licensed or otherwise known to be "lobbyists". And what is so twisted about the following information from the Washington Times is that states' citizens send massive amounts of tax money to Washington DC and then those states and cities have to hire lobbyists to get the money back. And convince those in power that they (the states and cities whose citizens earned those taxes) know what to do with them. Huh? Yup, that's the truth.
Jim McElhatton writes October 8 in the Washington Times: "Hard-hit cities, states hire near-record lobbyists.
"Cities and states are spending near-record amounts to retain their expensive cadres of Washington lobbyists, even as the worst economic recession in a generation prompts layoffs, mounting deficits and falling property-tax revenues. States and localities are on track to spend a combined $83.1 million in taxpayer money this year on Washington lobbyists, the second straight recession year to top the previously unbroached $80 million barrier, according to the nonpartisan Center for Responsive Politics.
"For the first six months of 2009, the center reports, local governments spent almost $41.6 million on such lobbying. During the first half of 2009, Miami-Dade County spent $410,000 on Washington lobbyists at the same time it confronted a reported $444 million deficit. The Florida county is just one of 73 localities, states or territories to spend $100,000 or more on lobbyists so far this year to push their agendas in Washington, according to data from the watchdog group." By "push their agendas" is meant get their money back by convincing those who think they know what's best will let some go by taking more. Or something like that.(Copyright 2009 The Washington Times)
Yesterday's post was entitled: Hitler had his Volkswagen, President Barack Obama will have his Karma. Today it is: President Obama Knows What's Best for the United States of America. Subtitled: success by who you know, who you pay. Free enterprise will be gone under Barack Obama. He must be emasculated (in a political sense) or our country is doomed. His mad, power-driven desire to centrally-control our vast, complex, formerly-successful (but far from perfect) economy has turned where it always does with so-called government-managed industrial policy: success isn't measured in the marketplace, no, far from it. It is based on who you know (AL GORE), who you pay (DEMOCRATS), and what you believe ("PROGRESSIVISM"). The power has shifted from the marketplace to ONE MAN who by himself, with his czars and Congressional cronies, want to unilaterally make the decisions of to whom and where our taxpayer money goes and remake America, perhaps the world. President Obama Knows What's Best for the United States of America.
Yesterday's post: "Hitler had his Volkswagen, President Barack Obama will have his Karma. Obama will use $528,000,000 of taxpayer money to finance a California-based start-up. Fisker Automotive will get the money to engineer the "Karma" a $87,900 plug-in electric luxury sports car. Now: 1) Why are start-ups financed by government? 2) It is deemed a "loan", how will a start-up pay the money back to U. S. Taxpayers? 3) The car will be manufactured in Finland. (Will the United Autoworkers union have a subsidiary there?) 4) The very self-same U. S. taxpayer will be hit up to bribe themselves to buy the OKarma, "saving" the middle class $8,000 per OKarma with the government subsidies; 5) Where is the "empathy" for the millions who can't afford a $87,900 car? What is this man thinking? And how much did the early investors into Fisker, if any, contribute to the re-election campaigns of Democrats?" (End of post)
That was yesterday (September 24, 2009) today is today (September 25, 2009) and here is the answer:
AL GORE
[http://online.wsj.com/article/SB125383160812639013.html]
SEPTEMBER 25, 2009 Gore-Backed Car Firm Gets Large U.S. Loan
By JOSH MITCHELL and STEPHEN POWER
Printed in The Wall Street Journal, page B6
WASHINGTON -- A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla, like Fisker, is a California startup focusing on high-end hybrids, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
Fisker's Karma hybrid sports car, above, will initially cost about $89,000.
The awards to Fisker and Tesla have prompted concern from companies that have had their bids for loans rejected, and criticism from groups that question why vehicles aimed at the wealthiest customers are getting loans subsidized by taxpayers.
"This is not for average Americans," said Leslie Paige, a spokeswoman for Citizens Against Government Waste, an anti-tax group in Washington. "This is for people to put something in their driveway that is a conversation piece. It's status symbol thing."
DOE officials spent months working with Fisker on its application, touring its Irvine, Calif., and Pontiac, Mich., facilities and test-driving prototypes.
Matt Rogers, who oversees the department's loan programs as a senior adviser to Energy Secretary Steven Chu, said Fisker was awarded the loan after a "detailed technical review" that concluded the company could eventually deliver a highly fuel-efficient hybrid car to a mass audience. Fisker said most of its DOE loan will be used to finance U.S. production of a $40,000 family sedan that has yet to be designed.
"It's the ability to drive significant change in fuel economy across a large market segment" that swayed the department to approve the Fisker loan, Mr. Rogers said. "We got quite excited."
Henrik Fisker, who designed cars for BMW, Aston Martin and Tesla before starting his Fisker Automotive in 2007, said his goal is to build the first plug-in electric hybrids that won't sacrifice the luxury, performance and looks of traditional gas-powered luxury cars.
The Karma will target an exclusive audience -- Gore was one of the first to sign up for one. Mr. Fisker says all new technology starts out being expensive. He pointed to flat-screen televisions that once started at $25,000 but are now affordable to the mass market.
The four-door Karma, powered by a lithium-ion battery, will be able to run solely on electric power for 50 miles, and will achieve an average fuel economy of 100 mpg over the span of a year, the company says. Production is scheduled to start in December, with about 15,000 vehicles a year expected to hit the U.S. market starting next June.
Many of the 1,500 people who have made deposits on the Karma are former BMW and Mercedes owners who want an environmentally friendly car without sacrificing luxury, Mr. Fisker said.
He said he pitched the Karma to Mr. Gore at an event hosted by KPCB last year, and that the former vice president almost immediately submitted a down payment for the car.
Kalee Kreider, a spokeswoman for Mr. Gore, confirmed that the former vice president backs Fisker and purchased a Karma. "He believes that a global shift of the automobile fleet toward electric vehicles, accompanying a shift toward renewable-energy generation, represents an important part of a sensible strategy for solving the climate crisis," she said in a statement.
Fisker's top investors include Kleiner Perkins Caufield & Byers, a veteran Silicon Valley venture-capital firm of which Gore is a partner. Employees of KPCB have donated more than $2.2 million to political campaigns, mostly for Democrats, including President Barack Obama and Hillary Clinton, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign contributions.
Officials at Kleiner Perkins didn't return requests for comment.
Asked whether Mr. Gore had any influence on Fisker's application, the DOE's Rogers said, "None at all."
"This is a very attractive, very across-party-lines kind of vehicle," Mr. Rogers said. "All of the detailed due diligence [was] done by independent review teams."
Other Fisker investors include Eco-Drive (Capital) Partners LLC, an investment consortium, and Qatar Investment Authority, a state-run investor based in Qatar.
Fisker's government loans will come from a $25 billion program established by Congress in 2007 to help auto makers invest in the technology to meet a new congressional mandate to improve fuel efficiency. In June, the DOE awarded the first $8 billion from the program to Ford Motor Co., Nissan Motor Co., and Tesla, which are all developing electric cars.
Some companies that have been turned down for loans from DOE say they did not get much feedback from the department about their applications. O. John Coletti, president of EcoMotors International of Troy, Mich., said his company applied for a $20 million loan from the agency last December, and last month got a one-page rejection letter from the loan program's director, Lachlan Seward. EcoMotors' lead investor is Vinod Khosla, himself a former Kleiner Perkins partner and a longtime campaign contributor to Republicans and Democrats alike.
"I don't have an issue with the winners … it's possible somebody has better ideas than us," Mr. Coletti said. At the same time, he said, "More feedback from DOE on a timely basis would be wonderful. When you're running a business you'd like to know whether you're going to be able to take advantage of this opportunity."
Mr. Coletti's company -- which makes diesel engines and is still waiting to hear from the Department on a separate loan application to help it build a manufacturing facility -- isn't without politically well-connected patrons, either. Its major investor is Vinod Khosla, himself a former Kleiner Perkins partner who has donated to campaigns.
Scott Redmond, CEO of XP Vehicles Inc., said he met with DOE officials twice in Washington after applying for a $40 million loan to develop a $15,000 to $25,000 hybrid, and that both times he was told his application looked good. Since receiving a rejection letter from DOE in August, Redmond said, he has been unable to get a full explanation as to why his request was turned down.
Mr. Rogers said he was not at liberty to discuss individual applications that had been turned down, but said the process has been handled fairly and objectively.
_____________________________________________________________________________________
So two "small" -- $20 million and $40 million -- requests were turned down. AL GORE got one-half a billion dollars. What's wrong with this picture? 1) two companies for $60,000,000 have twice the chance of success than one company. And with the $528,000,000 total doled out to AL GORE at $30,000,000 average 16 other companies could have been backed. Political cronyism aside, looks like Obama just wants to shovel our money out.
Friday, October 30, 2009
Conflicts and Crooks, Obama and Democrats
93,000 crooks or thereabouts have been created, according to Treasury Inspector General for Tax Administration, by Obama's idiotic, wrongheaded and typically-ignorant $8,000 federal first-time home buying tax credit or welfare payment. We've lost trillions of dollars in the government's U. S.-bankrupting dictates to Democratic Party-controlled Fannie Mae, Freddie Mac and Federal Housing Authority, so what's another $500,000,000? Citizens offered $8,000 simply to lie after Fannie and Freddie encouraged so-called "liar loans"? See how easy for the government to create criminals?. And it's nothing to Obama who will leave office in wealthy disgrace. That's the disgrace.
Raj Rajaratnam has donated millions of dollars to Sri Lanka Rebels, the brutal killers dubbed the "Tamil Tigers", and the U. S. Democratic Party, Hillary Clinton and President Barack Obama's successful campaign for U. S. President. Oh, yes, he's accused being at the center of the largest insider-trading case in decades, involving his Galleon Group and executives from IBM, Intel, McKinsey, and Intel.
Democrat Birmingham, AL, mayor Larry Langford is accused of accepting bribes of $235,000 for steering $7.1 million in bond business to a crony, which pushed Jefferson County to the brink of bankruptcy. Jury selection continues. OOps, update: October 29, 2009: CONVICTED!
Failed-Obama-nominee Gov. Bill Richardson, whose corrupt "play for pay" investigation got sidetracked, got it put on front burner when Saul Meyer, of Aldus Equity, Dallas, pled "guilty" to urging investments onto the New Mexico's Educational Retirement Board and its State Investment Council which enriched Democrat donors and supporters of the governor to the tune of some $22,000,000. He said he gave into intense political pressure.
Massachusetts, strongbed of corrupt Democrats. Five years ago Democrats changed Massachusetts law to rob the Republican governor, Mitt Romney, of the ability to appoint an interim senator. That was then, now is now. So with the death of Teddy Kennedy his senate seat is vacant and President Obama needs every vote he can get for his massive takeover of the American healthcare system. Presto! The law gets changed back so Democrat governor Deval Patrick can appoint a Democrat, party hack Paul Kirk, to vote Obama's way. Shame? Honor? None of each. Machiavellian Democrats know best.
And more: the Federal Democratic Food and Drug Administration approved an implantable knee device made by ReGen Biologics Inc's Menaflex because four Democrats from New Jersey, Senators Frank Lautenberg and Robert Menendez and Representatives Steve Rothman and Frank Pallone Jr. demanded it, clearly NOT in exchange for the $26,000 in campaign contributions ReGen made to them.
September 22, Hassan Nemanzee, close to Bill Clinton and finance chairman of the Democratic Senatorial Campaign Committe as well as a major donor to Democrats, was indicted for stealing upwards of $290,000,000 in part to donate to Democrats, from three major banks. Myriad Obama campaign entities will donate his contributions to charity. ACORN perhaps?
September 9: Former chief fund raiser for former Illinois governor, Rod Blagojevich, pleaded guilty to fraud in A roofing job at O'Hare Airport. 57 months, plus another 37 months on an unrelated tax case. What state is our president from?
Senator Charlie Rangel, Chairman of Color of the United States House Ways and Means Committee, is not a crook. Only he forgot or was too naive to know that he was "rich", or at least richer than he had earlier disclosed on his required 2007 financial disclosure form. We is worth up to $2,500,000 (high number) not the $500,00 (low number) he said. He forgot: he had a quarter to a half a million dollars in a savings account; vacant land in New Jersey; Yum Brands (KFC, Taco Bell and Pizza Hut's owner); PepsiCo. And $75,000 in income from a beachfront villa in tony Punta Cana, Dominican Republic. And poor Mr. Rangel is forced to live in rent-stabilized apartments in Manhattan. Four of them in ritzy Lenox Terrace.
It seems clear to me that Eric Holder, president Obama's Attorney General (since he certainly doesn't represent either most Americans or the Constitution), lets liberals go and goes after Republicans. Case in point. Last January the Justice Department filed a civil suit against the New York Black Panther Party and three of its black panthers, for violating LBJ's 1965 Voting Rights Act by scaring voters with weapons, racial comments and militaristic uniforms. The Panthers didn't respond and that should have been that. A conviction. But no. Even though six career attorneys in Justice recommended continuing to pursue it, an Obama-appointed Associate Attorney General, Thomas Perrelli, said no with no explanation. The Obama Justice Department lets Democrats, especially black ones, get a "get-out-of-jail-free" card, or rather simply a pass and with that there goes the Rule of Law. Even liberals were outraged, but not the left-leaning national media, well except the way-liberal Village Voice whose publisher said it was "the most blatent form of voter intimidation I've ever seen."
Now off to Dallas where five black Democrat defendants, including a black former Democratic mayor pro tem and his wife and city planning commissioner were charged by federal prosecuters of pressuring developers to award contracts to minority friends. But since they are all black, it must be racism and they have asked the U. S. Attorney General, Eric Holder, to review the case. Shall we vote on the outcome?
Hassan Nemazee, a major fundraiser for the Democratic Party with close ties to the Clintons, former president Bill and present Secretary of State Hillary (I guess we've lost the Rodham), is an alleged crook. He "borrowed" $74 million from Citigroup Inc. by faking documents He was once finance chairman of the Democratic Senatorial Campaign Committee, a national finance chairman for Mrs. Clinton's failed presidential campaign then fundraiser for successful candidate Barack Obama, our president.
While this is small potatoes, it does indicate a continuing fraud on America by Democratic-leaning trial lawyers. Hinds County, Mississippi, Circuit Judge Bobby DeLaughter will plead guilty to lying to an FBI agent investigating his giving unfair advantage to Democrat contributor and fund-raiser extraordinaire, Richard "Dickie" Scruggs, chief architect of the multi-billion tobacco settlements of the 1990s. Dickie and Bobby indeed. Bobby also faces conspiracy, obstruction and mail fraud.
(Typed the day before Teddy Kennedy died.) How hypocritical and blatantly disgusting: Nearly-dead, Harvard cheater and possible girl-killer, hopefully-soon-to-be-former Senator Edward F. ("Teddy") Kenndey has asked that the law of succession be changed again to get another Democrat to take his absent-for-a-year place in the Senate. Teddy asked in a letter for the Democratic-controlled Legislature to allow Governor Deval Patrick, duh, a Democrat, to select a temporary replacement for Teddy "should a vacancy occur". This would reverse a provision which replaced an identical former provision when a Republican was government whereby a special election needed to be held. Get that? Teddy didn't want a Republican to appoint a Senator, but of course a Democrat should be able to. The Rule of Law? There is no Rule of Law, because the Ends -- of Democrat Rule -- Justify the Means -- the means being shredding our Constitution, one of the very tenets on which this great country was founded. Empathy indeed.
August 21, 2009: a Democrat 12-year Secretary of State, Rebecca Vigil-Giron, of New Mexico was indicted in a scheme to steal federal election funds. She is alleged to have given money to a political consultant and two Democratic lobbyists. Some $3.7 million is unaccounted for and thought to be or have been placed in their personal accounts. The 50 counts against each include:
• Four counts of fraud over $20,000 or, in the alternative, embezzlement over $20,000
• 11 counts of money laundering over $100,000.
• Five counts of money laundering over $20,000.
• Eight counts of tax fraud.
• 13 counts of tax evasion.
• Four counts of making or permitting false public vouchers.
• One count of soliciting or receiving an illegal kickback.
• One count of offering or paying an illegal kickback.
• Two counts of tampering with evidence.
• One count of conspiracy.
This on the watch of important Democrat governor Bill Richardson, who himself is under federal investigation for allegedly engaging in yet another Democrat "pay for play" scam to steer state financings to campaign contributors. This same old same old in a Democrat-controlled state included these Democrats indicted or conviced: two state treasurers, the former leader of the state senate, a director of affordable housing and two utilities regulators. Oh, BUT WAIT! Today, August 27, 2009, according to the Associated Press, the investigation of Richardson, nominated to be Obama's Commerce Secretary before withdrawing because of the investigation, "was killed in Washington". No doubt because the Attorney General is busy investigating CIA agents who were protecting America and Americans. Have no doubt Richardson will join Obama's corrupt administration.
When you thought they couldn't get any more low, "Fraud by Trial Lawyers Taints Wave of Pesticide Lawsuits", Wall Street Journal, Front page, Wednesday, August 19, 2009: [http://online.wsj.com/article/SB125061508138340501.html]. U. S. trial lawyers, all significant, if not major, funders of the Democratic Party which won't rein them in in exchange for such contributions, have stooped even lower. They descended on impoverished peasants in Chinandego, Nicaragua, panting over money from a settlement of $2,100,000,000 by Dole Food Co. Thousands of former- or fraudulent pinapple plantation workers were signed up bu U. S. trial lawyers. The pesticide was used in the '60's and '70's until 1977 when it was noticed that the chemical DBCP (dibromochloropropane) caused sterility in some men. In 1979 the U. S. Environmental Protection Agency banned it. Dole legally used it until 1980. Long story short, California Superior Court Judet Victoria Chaney dismissed suits citing "clear and convincing evidence" of fraud "permeates and discredits all such cases. Although only one lawyer has been investigated so far, another lawyer who flew down to attempt to reap the illicit dollars in Nicaraguy was Walter J. Lack, Esq., of Erin Brockovich movie fame.
And down below a few paragraphs is the discussion of the mass arrests of primarily-Democratic politicians, operatives and hangers-on (and on Republican). Good work one might think; well, no, not from a Democratic administration. The top federal prosecutor faces an internal ethics investigation for answering a question about New Jersey corruption with "The few people that want to change it seem to get shouted down. So how long that cycle's going to continue I just don't know." Apparently he might have been talking about his former boss Republican Chris Christie's challenge to incumbent New Jersey governor Democratic Jon Corzine. Perhaps U. S. Attorney Ralph Marra is being "shouted down".
And down there in Birmingham, Alabama, its mayor, Larry Langford, a Democrat, was bribed by investment banker William Blount, former state Democratic Party chairman, who pleaded guilty to paying thousands of dollars to the mayor in return for getting some bond financing work. Pay for Play cost $230,000, Mr. Blount said.
August, 2009: Democrat governor Ed Rendell of Pennsylvania hired Bailey Perrin Camp & Bailey, attorneys at law, from Houston to prosecute Jansen Pharmaceuticals (subsidiary of Johnson & Johnson)manufacturer of antipsychotic drug Risperdal. I wonder how Governor Honest Ed selected the law firm way away in Texas (Houston)? Perhaps because law firm founder F. Kenneth Bailey was donating upwards of $90,000 to Honest's 2006 re-election campaign? Perhaps? Oh yes, that selfsame law firm has invested (bribed?) hundreds of thousands of dollars into the Democratic Attorneys General Association as well as countless individual attorneys general, who, if you don't know, make the decisions to farm out lawsuits. How do you say "Pay to Play"? The Pennsylvania Supreme Court will hear a legal challenge to these dirty activities.
United Brotherhood of Carpenters, Detroit Branch's, now-former executive secreatry-treasurer, Walter Mabry, was bribed to "invest" $77 million in a crooked "private equity" fund according to sources. Other "investors"? Millwrights Local 1102. International Operating Engineers Local 324. Michigan Teamsters Joint Council 43. Monies from the rank-and-files' pensions. Many of these are underfunded. Not so the bosses' pensions: Operating Engineers Washington DC bosses' pension fund is overfunded. And probably makes better investments. BUT hey, Obama thinks unions bosses disclose too much of this bitter information. His administration is cutting back disclosures demanded by the Bush Administration.."not be a good use of resources" to discover fraud by union bosses!
Democrat-appointed University oi Chicago trustees are under fire (two resigned so far) for dismissing the Rule of Law for their own AFFIRMATIVE ACTION initiatives. They created separate admissioins criteria for applicants sponsored by elected officials, big donors and themselves. Hundreds of them. "Less qualified." "From influential families." Chicago - Illinois - Democrats - Obama. Hmmmmmmm.
July 31, 2009: Judge Bobby DeLaughter, Hinds County Missdisssippi Circuit Court pleaded guilty to obstruction of justice, a federal charge, in giving unfair advantage to former huge Democratic contributor and trial attorney Richard "Dickie" Scruggs, in asbestos lawsuits.
This might be a stretch, but prime Obama-backer NBC and MSNBC's owner the General Electric Company settled with the Securities and Exchange Commission for civil fraud and other charges that GE misled investors in 2002 and 2003. Please see another post, "Governmnet Success in Running Companies" (today) and see that the SEC is "suing Mr. Maynard Jenkins, former CEO of CSK Auto (parts) Corporation which had formerly settled with the SEC and restated financials for $4,000,000. Mr. Jenkens was not accused of any wrong-doing. Let's see the SEC voted 3 (Democrats perhaps?) to 2 (Republicans perhaps?) to sue. You decide: arbitrary or the Rule of Law?" My question is, will the SEC sue the CEO of GO, Jeff Imholt? No because Imholt is a major backer of Obama and a member of his economic team. And GE is in hock to the U. S. government while it owns NBC, the primary mouthpiece of the Obama Administraion. I am certain the writers of the U. S. Constitution would have frowned on the conflict of interest with the government being in some control indirectly of the media.
(August 5, 2009) Former Louisiana Democratic Congressman William Jefferson was convicted for bribery schemes aimed at enriching him and his family.
A federal jury in Alexandria, Va., convicted him on 11 of 16 counts.
http://online.wsj.com/article/SB124950747812708973.html
Michael Froman left Citigroup in January to become a senior White House aide for national security and international economic affairs and has known President Obama from Harvard Law. Don't know about his basketball play. He left Citigroup's private infrastructure fund in a tatters, losing $126,000,000 in the $3,400,000,000 fund from a breakup fee on a Chicago deal that couldn't get funded. (Chicago, huh? Wonder who got that money?) He walked with $4,000,000 cash and a demand for $10,000,000 more.
While this thread consists of Democrats who are legally or morally challenged, the Obama Administration thinks private health insurer companies are dishonest, thus needing a "means and mechanismn to keep [them] honest." So while his fellow Democrats are feasting on the public trough, if some of it is from prisons, he accuses law-abiding insurance companies of dishonesty because, in essence, they make profits. And in President Omama's world, profits are only gotten illegally.
But on to New Jersey, the Chicago of the East. 44 people were charged July 24, including several mayors of New Jersey cities, rabbis, and one Republican. Yes, one out of 44, 2%, was a Republican, leaving 43 or 98% if them Democrats, so clearly this sweep of crooks was bi-partisan. Payoffs, bribes, money laundering and even human kidney sales. Mr. Dweeb oh, I mean Mr. Solomon Dwek was caught in 2006 with his hand in some crooked-cookie jar and ratted the rest of them out. Nice guy. He was a real estate developer, Syrian Jew and formerly, I guess, a philanthropist.
Timothy Geithner won confirmation as President Barack Obama's treasury secretary in spite of his possible criminal activities in not paying taxes. Unfortunately this reinforces the fact that Democrats are above the law. Because Obama said, "Tim's work must begin at once", everything illegal he did is OK. That is the moral picture of Obama's self-righteous, self-centered administration. Whatever you want, Mr. President...Throw Geithner into the pool with other possible tax cheats such as Charlie Rangel, moral liars such as Eliot Spitzer and former-Democratic almost-candidate John Edwards, conflict-of-interesters such as Barney Frank and Chris Dodd and out-and-out indicted crooks such as Rod-O Blag-O. A group of which to be proud. This as of January 2009.
But the real tragedy is the continued clueless weakness of Republicans. They are continuing their losing streak. America is the real loser.
I will be updating this regularly with news of Democrat vs Republican crooks (a term I use to describe those indicted, convicted, acting immorally or illegally all as defined by me).
DEMOCRAT CROOKS
Pick for Protocol Post Corrects Failure to File Taxes in 2 Years:
By ALISON LEIGH COWAN Published: June 18, 2009 (The New York Times) President Obama’s choice as chief of protocol for the State Department, a position that carries the status of an ambassadorship, did not file tax returns for 2005 and 2006.
The nominee, Capricia Penavic Marshall, has placed blame for the problem on the Postal Service and on miscommunication between her husband and their accountant. Ms. Marshall was social secretary in the Clinton White House. Tax issues have bedeviled several high-level Obama appointees and cost the administration at least two of its picks. The protocol chief customarily helps plan events for visiting leaders and helps oversee protocol matters for the president and vice president abroad.
Thursday, June 18, 2009: DETROIT Detroit City Councilwoman Monica Conyers, the wife of House Judiciary Committee Chairman John Conyers Jr., has been ensnared in a federal bribery investigation and is discussing a possible plea deal, The Washington Times has learned. Court papers say the council member accepted bribes from a consultant in connection with a City Council vote to approve a $1.2 billion sludge hauling contract. And on June 26 the good wife of this most important black Democrat (first elected in 1964) pleaded "GUILTY!" to conspiracy to commit bribery. Of course, Mr. Conyers was said to have not known. Of course. And she'll have some lame community work to pay off her sentence. Now this is the self-same Conyers who started an investigation of ACORN then like a hot potato dropped it, saying "the powers that be" waved him off. The only power to be I can think of is President Obama, and does this have any little thing to do with spouse crook Monica? (She resigned from the Detroit City Council and faces 5 years and $250,000.)
June 2009: Hmmm, while not a crook, it seems as if President Obama is protecting a friend and supporter of his, Kevin Johnson, a Democrat and mayor of Sacramento, CA, who plays basketball with our president and was a former NBA player. Obama did not follow Congress' own rules in firing Inspector General official Gerald Walpin. Walpin investigated, reported on and was fired personally by Obama: Johnson used to run a nonprofit academy St. Hope which improperly used AmeriCorps recruits to recruit students to his academy for politicking, to run and perform personal duties for Johnson, such as washing his car and driving him around, and doing bookkeeping for St. Hope. Johnson apparently settled for a small amount to run for mayor. And in another instance is the Teaching Fellows Program run by the Research Foundation of the City University of New York. Walpin's audit [www.cncsig.gov/AuditReports.html] uncovered myriad violations including duplicate awards of $16 million and costs of over $750,000. Walpin's directives were stonewalled by AmeriCorps' parent organization, the Corporation for National and Community Service (CNCS), which is now chaired by, as a payoff to, Democratic Alan Solomont for political fund raising. AmeriCorps now is $6 billion in a bill signed by Obama in April. Obama is a political animal, Mr. Walpin is unemployed for being a "government-employed whistle-blower" and blowing the whistle on Obama's cronies.
(In an irony, the First Lady Obama ran the AmeriCorps-funded nonprofit Public Allies in Chicago from 1993-1996 and served on its national board. It, too, was investigated by the Inspector General's office and violated basic rules including a lack of internal controls over education grants and living allowances given to people not being legal citizens or permanent residents.)
Walpin's office questioned duplicate educational awards of more
Rep. Peter Visclosky was subpoened related to federal investigations of defunct PMA Group and its clients. Visclosky, senior Democrat on House Appropriations Committee, received $1.36 million, Murtha $2.37 million and Rep. James Moran (D. Va.) nearly $1 million from PMA and its clients. In a complete coincidence, these and other Democrats inserted into spending bills specific earmarks to benefit PMA clients. In another coincidence, Democrats have successfully blocked Ethics Committee motions to investigate PMA.
6/9/09 Democrat from Chicago indicted (Isaac Carothers, chairman of Chicago City Council's police and fire committee) and pleads not guilty to taking $40,000, campaign money and sports tickets for fixing a zoning case. In Obama-Chicago this is hard to believe.
Trial Lawyer Extraordinaire Gene Cauley, who rose from obscurity to extort settlements worth tens of millions of dollars against a variety of corporations was named one of the top lawyers in 2005 by the National Law Journal! But lately he couldn't account for $9,300,000 of settlement money against Bisys Group Inc. The Democrat will plead guilty to two felonies, wire fraud and criminal contempt. Cauley is following in the footsteps of his mentor felon Bill Lerach, also a huge contributor to Democrats, who fronted the cash for Cauley to start his lawfirm. The judge might look for business-jet invoices for the money.
Every day: ACORN, a criminal enterprise? Monday May 2, 2009, the state of Nevada charged ACORN with fraud; the registrar of voters in Las Vegas said he believes 48% of the forms submitted by ACORN are fraudulent. The Deputy Election Commissioner in Philadelphia (a Democrat) complained of at least 1,500 fraudulent voter registrations last fall. Ditto, Matthew Porrer, St. Louis deputy elections director (also a Democrat). In my own Washington State ACORN was fined $25,000 for voter registration fraud in 2007. There have been and are on-going investigations in 14 other states. It finally got to Congress where New York Representative Gerald Nadler chairman of the House Subcommittee on the Constitution, Civil Rights and Civil Liberties was asked by Rep. (Michigan Democrat) John Conyers, Chairman of the House Judiciary Committee to hold hearings. But then he reneged, "Just joking" he didn't say, after changing his mind. (Did ACORN ask him to?) And get this the Chariman of the House Financial Services Committee, inimitable Barney Frank voted for an amendment to a mortgage bill to withhold from receipt of federal housing or legal assistance grants any entity indicted for boter fraud. Later he gutted it and said he, well, really hadn't read it. (Par for that course.) So ACORN can still apply for $2,000,000,000 in funds for doing stuff. And Obama's own Internal Revenue Service filed three tax liens for almost $1,000,000 against ACORN concerning employee withholdings. And last year ACORN's parent, Citizens Consulting Inc. was paid $832,000 by the Obama campaign which was incorrectly described as "staging, sound, lighting" but was actually for getting out the (Democrat) vote. ACORN and the Democrats want free and identification-less voting while Republicans typically would like only proven citizens to vote. Go figure. More on this crime syndicate (?) coming in all probability, but certainly not from its related party, the Democratic Congress.
June 5, 2009: Countrywide Financial Corp., former CEO and others were charged with fraud. Anthony Mozilla was an architect of Fannie Mae and Freddie Mac investing billions into "sub-prime" mortgages and he provided top Democrat Congressmen with sweetheart mortgages apparently as inducements (vehemently denied, duh!, by said Congress members) to pass laws allowing such activity, which quickly became one of Fan and Fred's largest activities.
May 20, 2009, Norman Hsu, former top fund raiser for the Democratic Party, was convicted of four counts of campaign-finance fraud in New York. To Mr. Hsu, Hillary Clinton said: "What am I going to do with you, Norman? You are working so hard for me...I've never seen anybody who has been more loyal and more effective..." And Mr. Loyal Hsu pled guilty to a Ponzi scheme last month swindling at least $20 million. Our Secretary of State is a great judge of character!+-
May 4, 2009, The chairman of the New York Federal Reserve Bank, Stephen Friedman, sat on the board of directors and had -- and increased -- a stock holding in Goldman Sachs Group, Inc. when it received speedy approval to convert to a bank holding company and receive $10 billion in capital for the Treasury Department. While Friedman argues no conflcit of interest (duh!) he WAS in violation of the rules which bar such stock holdings. Then, of course, he was given a waiver by the Treasury Secretary, Timothy Geithner. Before and after the waiver, Friedman purchased 52,600 shares (bringing his holdings to 98,600) which, as of today, show a profit of $2.7 million. At the urging of that self-same New York Fed, American International Group (AIG) was bailed out to the tune of $85 billion then and counting (fast) which allowed it to repay $8.1 billion owed to...yes...Goldman Sachs. At the time that repayment transaction was not disclosed.
May 4, 2009: President Barack Obama pledged that lobbyists wouldn't run his administration except when they will. (How do you spell hypocracy?) Recently former lobbyist, William Corr, former executive director of lobby organization "Campaign for Tobacco-free Kids" funded by pharmaceutical companies with a stake in curtailing smoking with the products Nicorette gum and NicoDerm patches, was nominated for #2 in Department of Health and Human Services. The biggest financial supporter of his organization is the Robert Wood Foundation, a large shareholder of Johnson & Johnson producer of those two smoking-cessation products.
4/22/09
Did President Obama's auto czar Steven Rattner's former firm Quadrangle Group "intentionally deceive" the city of New York's pension funds when it failed to disclose paying a finder's fee to now-indicted political advisor' Hank Morris for a New York Pensioin Funds' investment in Rattner's firm's hedge fund? The New York City's comptroller's office is conducting an investigation. The suspense continues.
4/22/09
Democratic Representative from California, Jane Harman, denied any wrongdoing when she was wiretapped having as she said, "casual conversations and kid[ding]around" with pro-Israel lobbyists about seeking leniency for two of them being investigated for espionage by trying to influence the Bush administration. And apparently she was trying to convince Queen Nancy Pelosi to put her on the House intelligence committee, whatever. Change as usual.
4/16/09 News Alert from The Wall Street Journal
Steven Rattner, leader of the auto task force, was one of the investment-firm executives involved with payments now under scrutiny in a state and federal probe into an alleged kickback scheme at New York state's pension fund.
http://online.wsj.com/article/SB123992516941227309.html#mod=djemalertNEWS
April Fools Day, 2009: "Cabinet pick has tax trouble" (Seattle Times page A4) Another Obama cabinet selection, this time Gov. Kathleen Sebelius, made "errors" on tax returns, this time for fudging charatable contributions, the sale of a home and business expenses. Only $8,000 and "unintentional".
"FBI investigates generous donor to Dicks, Murray" (Seattle Times, March 23, 2009, front page http://seattletimes.nwsource.com/html/politics/2008906547_pma23.html ). Seems the PMA Group, Arlington, VA, has donated hundreds of thousands of dollars to mostly Democratic members of the Appropriations Committees in exchange said politicians earmarked millions of dollars to PMA clients. These Democrats have killed any effort -- so widely advertized while they and President Obama were running for office -- to rein in such extortion. Hopefully the FBI -- under Obama's Justice Department -- will be allowed to really investigate and also hopefully it won't all be swept under the table by these dirty politicians donating "questionable donations" to charity.
And from another blog, March 30, 2009:
Criminal Inquiry Into Murtha Lobbyist Heats Up
Monday, March 30, 2009 2:28 PMBy: Rick Pedraza
The PMA Group, a lobbying firm that was raided in November as part of a federal criminal probe into embattled Rep. John Murtha, D-Penn., has closed up shop after reports that federal prosecutors recently raided the office and home of its top operative Paul Magliocchetti, the New York Times reports. Magliocchetti, who is under investigation for making campaign donations in the names of other people, reportedly directed tens of millions of dollars in contributions to lawmakers while steering hundreds of millions of dollars in earmarked contracts back to his clients at PMA. Murtha earmarked millions of dollars for the Electro-Optics Center at Penn State University, which then rerouted the money to clients of PMA Group, a military-oriented lobbying firm that has close ties with Murtha, Politico reports. Former PMA staff members familiar with the inquiry tell The Times that prosecutors are focusing on the possibility that Magliocchetti used straw campaign contributors to give large sums in coordination with PMA, whose offices were raided by the FBI in November.
The front, which allegedly funneled illegal donations to friendly lawmakers, carries a felony charge that could result in a minimum sentence of five years.
Prosecutors also are looking into whether violations of longstanding Congressional ethics rules occurred, which could lead to more serious bribery charges if linked to official acts by Murtha.
According to the Center for Responsive Politics, Murtha has collected $2.37 million in campaign contributions from PMA lobbyists, the Associated Press reports.
“All the combustibles are here for a very salacious set of allegations that could go far beyond his campaign finance problems,” Stanley Brand, a Washington criminal defense lawyer, tells The Times. Murtha, who is head of the House defense appropriations subcommittee, was involved nearly three decades ago in the Abscam corruption probe, a federal investigation that convicted several lawmakers of taking bribes in return for doing business with the government.
A spokesman for Murtha says the lawmaker had done nothing wrong and is not involved in the investigation. The FBI is continuing its investigation into whether Murtha earmarked special-interest spending provisions in return for campaign contributions. “We have not been contacted by any federal agency,” Murtha spokesman Matt Mazonkey tells Newsmax, “and no one is suggesting that Congressman Murtha has anything to do with this investigation.”
"Acting Director of OTS (Office of Thrift Supervision) Put on Leave Amid Probe (From the Wall Street Journal March 27, 2009 http://online.wsj.com/article/SB123812215116454401.html )
This was backdating a capital infusion into IndyMac Bankcorp a bank which arguably a letter by Senator Charles Schumer (Democrat) put into failure. This same bank is being bought by investor including Uber Democrat George Soros. Hmmmmmm.
It is reported (The Wall Street Journal, March 20, 2009, page A14, "Congress's Own Liechtenstein") that Democrat, Representative Pete Stark, from California has been claiming --illegally -- that he lives in Maryland to beat the punitive taxes in his home dacha, California. He, along with fellow Congressperson, Democrat from New York (another Soviet colony) Eliot Engel, has been told nada, you can't do that, Comrade Mr. Congressman.
From some blog today, March 19, 2009:
White House Calls Vivek Kundra's 1997 Theft Conviction 'Youthful Indiscretion'Eric Krangel, Silicon Valley Insider. Should a crime committed 12 years ago stick with you forever? That's the question being asked of America's CIO Vivek Kundra. Earlier this week, it surfaced Vivek pled guilty to a charge of misdemeanor theft (less than $300) back in 1997, when he was 22. Nick Shapiro, White House spokesman, weighs in: "Twenty years ago, Vivek committed a youthful indiscretion. He performed community service and we are satisfied that he fully resolved the matter." (1997 was twenty years ago?) There's also an ongoing FBI investigation into bribery and kickbacks at Vivek's old office. "Mr. Kundra has been informed that he is neither a subject nor a target of the investigation," the White House says. Still no word on just what it is Vivek stole.
3/12/2009 Chris Dodd, Chair Senate Banking Committee. Received two preferential-rate mortgages from Angelo R. Mozilo, founder of Countrywide Financial Corporation in 2003. In addition, he -- like President Obama -- entered into a real estate transaction, in Dodd's case a 10-acre estate on the island of Inishnee on Galway Bay off the Ireland Coast, County Galway, purchased with a shady "investor" who sold his share back to Dodd at a low-call price, thus increasing Dodd's net worth by potentially hundreds of thousands of dollars. Along with them was Edward Downe, Jr. a convicted insider trader for whom Dodd got then-president Clinton to grant a pardon. It is possible that Sen. Dodd lied on his Senatorial disclosure documents about this transaction.
From another blog, 2-29-09 Economic Crisis, The Audit — April 28, 2009 06:12 PM
Bronte Capital with a Major Scoop on Alleged Fraudster, By Ryan Chittum
John Hempton the excellent Aussie blogger who writes Bronte Capital appears to have a blockbuster of a scoop.
A Connecticut hedge fund called Ponta Negra Group, run by 27-year old Francesco Rusciano has been frozen by the SEC, which accused it of fraud. Hempton was all over this a few weeks ago, but had to take down his posts when Ponta Negra lawyers threatened to sue him. They’re back up now.
But the big news here is Hempton’s discovery that the allegedly fraudulent fund has some, um, oddly coincidental connections to Vice President Joe Biden’s son and brother, who run a firm called Paradigm Global. The firms are run out of the same floor at 650 Fifth Avenue in New York, share the same “marketer,” a guy named Jeffrey Schneider of Onyx Capital LLC, whose website is currently down, and the SEC filing gives a phone number for Ponta Negra that goes through Paradigm’s switchboard.
This wouldn’t be the first time the Bidens’ fund has intersected with an alleged fraudster. Two months ago it was discovered to be entangled with disgraced financier Allen Stanford in a $50 million fund co-branded Paradigm Stanford Fund and marketed by Stanford.
Mr. Schneider was involved in that joint venture, which the Bidens say they made without ever even meeting Mr. Stanford: A Paradigm marketer, Jeffrey Schneider, confirmed accounts provided by others that he brought in the Stanford business. Stanford would bring clients to the fund and Paradigm would manage it, according to Mr. LoPresti. Now, I suppose there could just be an amazing amount of coincidences here. Hempton is good on the “to-be-sure” stuff:
I was worried at first that Ponta Negra might be a legitimate fund headquartered in another cubicle on the 17th Floor of 650 Fifth Avenue. It turns out that there are several funds also HQ’d there. Paradigm it seems does all the signage on the floor – but once you get past the couple of Paradigm people on the front desk you find several doors behind which reside several hedge funds – a hedge fund hotel if you want. Most of the offices were empty mid-morning – which was very surprising. These funds are largely marketed by Paradigm. Still there could be a fund (Ponta Negra) independent of Paradigm on the 17th floor. There could be – they too would need to employ a Jeffrey Schneider as a marketing agent.
But let’s face it:
Ok – by this point you should at least be open to the possibility that the Vice President’s son and brother employ someone who uses the good Biden name and a stolen client list to market Ponzi schemes. There is no allegation here that the Bidens are involved. Just that their standard of due diligence is low. Very low. Now the Biden’s hedge fund hotel contains an assortment of other colourful funds. One of them is a SIPC registered broker dealer who also manages client money. This broker dealer does not list their auditor anywhere on their website. However they report startlingly good funds management results for 2006 and 2007 though they have surprisingly failed to update their website to include 2008 results. Their website boasts that their trades will be completed with zero commissions and transaction charges allowing them to focus exclusively on the investments that best meet the needs of the clients without the concern of transaction charges and hidden revenue sharing…
Here’s what Dow Jones says about Rusciano:
According to the complaint, Rusciano previously worked at UBS Securities before forming the Ponta Negra Group, but was later forced to resign after he allegedly misreported certain Brazilian bond transactions and non-deliverable forwards. He now also faces charges by the Federal Reserve that he engaged in illegal trading and banking practices and schemed to defraud UBS by trying to conceal major losses, the complaint said. After starting up his own company, the SEC further claims he never disclosed the Fed’s allegations against him or the reasons why he left UBS.
Not only did Hempton break the news on what he originally called a “Ponzi scheme” before having to take it down under legal threat, he’s put together this Biden family connection.
Just outstanding work.
It wouldn’t be the first time a fraud has been cracked by a blogger before the big media and regulators lumber around to it. Alex Dalmady broke the Stanford scandal, with a big push from Felix Salmon, then at Portfolio—and got disgracefully little credit by the media.
This is going to be a big story. I’ll be eyeballing the press closely to see how it handles attributing the news to the Bronte Capital blog.
(h/t Felix Salmon)
A fund of hedge funds managed by the brother and son of the Vice President of the United States, Joseph Robinette "Joe" Biden, Jr. , was marketed exclusively by disgraced and accused Texas "financier" (crook?) R. Allen Stanford. It is alleged by the Securities and Exchange Commission that he engaged in an $8 billion fraud. The fund, co-branded by Stanford Financial Group and the Bidens' Paradign Global Advisors LLC was Paradigm Stanford Capital Management Core Alternative Fund and had $50 million, including $2.7 million of Stanford cash for seed money. Little Biden son, Hunter, wanted to be a hedge fund operator like the big boys and apparently bought Paradigm with Uncle James -- Joe Biden's brother. Apparently Joe didn't want HuntHunt to be a lobbyist, which he was, when Daddy ran for President, which he laughingly did. Even John Edwards beat him. And with respect to its purchase the Bidens are suing some guy named Anthony Lotito Jr. who sounds like an Italian. Can't say it's illegal, but did those 104 investors ($49.8 million) want something from VP or Senator Honest Joe? Also can't say if HuntHunt or Uncle Jim knew anything about hedging or investing. The hugely successful asbestos litigation firm, SimmonsCooper invested put up $2,000,000 for Hunter and Uncle Jim after teaming with another Joe son, Beau Biden's firm in Wilmington, Del.In 2005, SimmonsCooper shifted its focus away from Madison County, Illinois, after Chief Judge Edward Ferguson transferred the mammoth asbestos docket from Circuit Judge Nicholas Byron to Circuit Judge Daniel Stack. The firm targeted Delaware because many businesses incorporate there and the firm's roster of defendants always includes Delaware corporations.No one at SimmonsCooper held a Delaware law license, so Beau Biden's firm filed the suits and SimmonsCooper identified itself as, "of counsel."Beau Biden dropped an asbestos defense client to accommodate SimmonsCooper.At the same time, Joe Biden resisted asbestos litigation reform in the Senate judiciary committee. HuntHunt and Uncle Jim reportedly bought Paradigm from a drug addict with a partner who specialized in providing ACCESS to public employee retirement funds for money managers and apparently had been engaged in touting a number of penny stock "investments". In addition there were rumors of "side deals", kickbacks and representation by a lawyer heading to prison for fraud. All this is too sick for me to continue. He is our vice (so to speak) president, anyone interested in this crap can Google it all.
And speaking of ..."Texas Businesman Sought for Influence in Corridors of Capitol. (The Wall Street Journal, Wednesday, February 18, 2009, page A13) and the next article down. "SEC Charges Financier Stanford With 'Massive' $8 Billion Fraud". Both are about Texas "businessman" R. Allen Stanford, of the Biden article above, and how 1) he stole and 2) contributed greatly to House Ways and Means Committee Chairman Charles Rangel (D. N.Y.), iand $250,000 to the Democratic Party, among other Democratic coffers. His main lobbiest is Ben Barnes, "influential Democratic lobbyist and fund-raiser, Men Barnnes to whom he paid $1,125,000 lobbying for Stanford Financial Group. Stanford is also fighting the IRS over $70,000,000 in back taxes and interest.
Is the NY Times (or Seattle Times, for that matter) railing about Democrat corruption yet?
REPUBLICAN
Ummm, none this year so far, oh wait some senator just announced that he had had an affair.
Raj Rajaratnam has donated millions of dollars to Sri Lanka Rebels, the brutal killers dubbed the "Tamil Tigers", and the U. S. Democratic Party, Hillary Clinton and President Barack Obama's successful campaign for U. S. President. Oh, yes, he's accused being at the center of the largest insider-trading case in decades, involving his Galleon Group and executives from IBM, Intel, McKinsey, and Intel.
Democrat Birmingham, AL, mayor Larry Langford is accused of accepting bribes of $235,000 for steering $7.1 million in bond business to a crony, which pushed Jefferson County to the brink of bankruptcy. Jury selection continues. OOps, update: October 29, 2009: CONVICTED!
Failed-Obama-nominee Gov. Bill Richardson, whose corrupt "play for pay" investigation got sidetracked, got it put on front burner when Saul Meyer, of Aldus Equity, Dallas, pled "guilty" to urging investments onto the New Mexico's Educational Retirement Board and its State Investment Council which enriched Democrat donors and supporters of the governor to the tune of some $22,000,000. He said he gave into intense political pressure.
Massachusetts, strongbed of corrupt Democrats. Five years ago Democrats changed Massachusetts law to rob the Republican governor, Mitt Romney, of the ability to appoint an interim senator. That was then, now is now. So with the death of Teddy Kennedy his senate seat is vacant and President Obama needs every vote he can get for his massive takeover of the American healthcare system. Presto! The law gets changed back so Democrat governor Deval Patrick can appoint a Democrat, party hack Paul Kirk, to vote Obama's way. Shame? Honor? None of each. Machiavellian Democrats know best.
And more: the Federal Democratic Food and Drug Administration approved an implantable knee device made by ReGen Biologics Inc's Menaflex because four Democrats from New Jersey, Senators Frank Lautenberg and Robert Menendez and Representatives Steve Rothman and Frank Pallone Jr. demanded it, clearly NOT in exchange for the $26,000 in campaign contributions ReGen made to them.
September 22, Hassan Nemanzee, close to Bill Clinton and finance chairman of the Democratic Senatorial Campaign Committe as well as a major donor to Democrats, was indicted for stealing upwards of $290,000,000 in part to donate to Democrats, from three major banks. Myriad Obama campaign entities will donate his contributions to charity. ACORN perhaps?
September 9: Former chief fund raiser for former Illinois governor, Rod Blagojevich, pleaded guilty to fraud in A roofing job at O'Hare Airport. 57 months, plus another 37 months on an unrelated tax case. What state is our president from?
Senator Charlie Rangel, Chairman of Color of the United States House Ways and Means Committee, is not a crook. Only he forgot or was too naive to know that he was "rich", or at least richer than he had earlier disclosed on his required 2007 financial disclosure form. We is worth up to $2,500,000 (high number) not the $500,00 (low number) he said. He forgot: he had a quarter to a half a million dollars in a savings account; vacant land in New Jersey; Yum Brands (KFC, Taco Bell and Pizza Hut's owner); PepsiCo. And $75,000 in income from a beachfront villa in tony Punta Cana, Dominican Republic. And poor Mr. Rangel is forced to live in rent-stabilized apartments in Manhattan. Four of them in ritzy Lenox Terrace.
It seems clear to me that Eric Holder, president Obama's Attorney General (since he certainly doesn't represent either most Americans or the Constitution), lets liberals go and goes after Republicans. Case in point. Last January the Justice Department filed a civil suit against the New York Black Panther Party and three of its black panthers, for violating LBJ's 1965 Voting Rights Act by scaring voters with weapons, racial comments and militaristic uniforms. The Panthers didn't respond and that should have been that. A conviction. But no. Even though six career attorneys in Justice recommended continuing to pursue it, an Obama-appointed Associate Attorney General, Thomas Perrelli, said no with no explanation. The Obama Justice Department lets Democrats, especially black ones, get a "get-out-of-jail-free" card, or rather simply a pass and with that there goes the Rule of Law. Even liberals were outraged, but not the left-leaning national media, well except the way-liberal Village Voice whose publisher said it was "the most blatent form of voter intimidation I've ever seen."
Now off to Dallas where five black Democrat defendants, including a black former Democratic mayor pro tem and his wife and city planning commissioner were charged by federal prosecuters of pressuring developers to award contracts to minority friends. But since they are all black, it must be racism and they have asked the U. S. Attorney General, Eric Holder, to review the case. Shall we vote on the outcome?
Hassan Nemazee, a major fundraiser for the Democratic Party with close ties to the Clintons, former president Bill and present Secretary of State Hillary (I guess we've lost the Rodham), is an alleged crook. He "borrowed" $74 million from Citigroup Inc. by faking documents He was once finance chairman of the Democratic Senatorial Campaign Committee, a national finance chairman for Mrs. Clinton's failed presidential campaign then fundraiser for successful candidate Barack Obama, our president.
While this is small potatoes, it does indicate a continuing fraud on America by Democratic-leaning trial lawyers. Hinds County, Mississippi, Circuit Judge Bobby DeLaughter will plead guilty to lying to an FBI agent investigating his giving unfair advantage to Democrat contributor and fund-raiser extraordinaire, Richard "Dickie" Scruggs, chief architect of the multi-billion tobacco settlements of the 1990s. Dickie and Bobby indeed. Bobby also faces conspiracy, obstruction and mail fraud.
(Typed the day before Teddy Kennedy died.) How hypocritical and blatantly disgusting: Nearly-dead, Harvard cheater and possible girl-killer, hopefully-soon-to-be-former Senator Edward F. ("Teddy") Kenndey has asked that the law of succession be changed again to get another Democrat to take his absent-for-a-year place in the Senate. Teddy asked in a letter for the Democratic-controlled Legislature to allow Governor Deval Patrick, duh, a Democrat, to select a temporary replacement for Teddy "should a vacancy occur". This would reverse a provision which replaced an identical former provision when a Republican was government whereby a special election needed to be held. Get that? Teddy didn't want a Republican to appoint a Senator, but of course a Democrat should be able to. The Rule of Law? There is no Rule of Law, because the Ends -- of Democrat Rule -- Justify the Means -- the means being shredding our Constitution, one of the very tenets on which this great country was founded. Empathy indeed.
August 21, 2009: a Democrat 12-year Secretary of State, Rebecca Vigil-Giron, of New Mexico was indicted in a scheme to steal federal election funds. She is alleged to have given money to a political consultant and two Democratic lobbyists. Some $3.7 million is unaccounted for and thought to be or have been placed in their personal accounts. The 50 counts against each include:
• Four counts of fraud over $20,000 or, in the alternative, embezzlement over $20,000
• 11 counts of money laundering over $100,000.
• Five counts of money laundering over $20,000.
• Eight counts of tax fraud.
• 13 counts of tax evasion.
• Four counts of making or permitting false public vouchers.
• One count of soliciting or receiving an illegal kickback.
• One count of offering or paying an illegal kickback.
• Two counts of tampering with evidence.
• One count of conspiracy.
This on the watch of important Democrat governor Bill Richardson, who himself is under federal investigation for allegedly engaging in yet another Democrat "pay for play" scam to steer state financings to campaign contributors. This same old same old in a Democrat-controlled state included these Democrats indicted or conviced: two state treasurers, the former leader of the state senate, a director of affordable housing and two utilities regulators. Oh, BUT WAIT! Today, August 27, 2009, according to the Associated Press, the investigation of Richardson, nominated to be Obama's Commerce Secretary before withdrawing because of the investigation, "was killed in Washington". No doubt because the Attorney General is busy investigating CIA agents who were protecting America and Americans. Have no doubt Richardson will join Obama's corrupt administration.
When you thought they couldn't get any more low, "Fraud by Trial Lawyers Taints Wave of Pesticide Lawsuits", Wall Street Journal, Front page, Wednesday, August 19, 2009: [http://online.wsj.com/article/SB125061508138340501.html]. U. S. trial lawyers, all significant, if not major, funders of the Democratic Party which won't rein them in in exchange for such contributions, have stooped even lower. They descended on impoverished peasants in Chinandego, Nicaragua, panting over money from a settlement of $2,100,000,000 by Dole Food Co. Thousands of former- or fraudulent pinapple plantation workers were signed up bu U. S. trial lawyers. The pesticide was used in the '60's and '70's until 1977 when it was noticed that the chemical DBCP (dibromochloropropane) caused sterility in some men. In 1979 the U. S. Environmental Protection Agency banned it. Dole legally used it until 1980. Long story short, California Superior Court Judet Victoria Chaney dismissed suits citing "clear and convincing evidence" of fraud "permeates and discredits all such cases. Although only one lawyer has been investigated so far, another lawyer who flew down to attempt to reap the illicit dollars in Nicaraguy was Walter J. Lack, Esq., of Erin Brockovich movie fame.
And down below a few paragraphs is the discussion of the mass arrests of primarily-Democratic politicians, operatives and hangers-on (and on Republican). Good work one might think; well, no, not from a Democratic administration. The top federal prosecutor faces an internal ethics investigation for answering a question about New Jersey corruption with "The few people that want to change it seem to get shouted down. So how long that cycle's going to continue I just don't know." Apparently he might have been talking about his former boss Republican Chris Christie's challenge to incumbent New Jersey governor Democratic Jon Corzine. Perhaps U. S. Attorney Ralph Marra is being "shouted down".
And down there in Birmingham, Alabama, its mayor, Larry Langford, a Democrat, was bribed by investment banker William Blount, former state Democratic Party chairman, who pleaded guilty to paying thousands of dollars to the mayor in return for getting some bond financing work. Pay for Play cost $230,000, Mr. Blount said.
August, 2009: Democrat governor Ed Rendell of Pennsylvania hired Bailey Perrin Camp & Bailey, attorneys at law, from Houston to prosecute Jansen Pharmaceuticals (subsidiary of Johnson & Johnson)manufacturer of antipsychotic drug Risperdal. I wonder how Governor Honest Ed selected the law firm way away in Texas (Houston)? Perhaps because law firm founder F. Kenneth Bailey was donating upwards of $90,000 to Honest's 2006 re-election campaign? Perhaps? Oh yes, that selfsame law firm has invested (bribed?) hundreds of thousands of dollars into the Democratic Attorneys General Association as well as countless individual attorneys general, who, if you don't know, make the decisions to farm out lawsuits. How do you say "Pay to Play"? The Pennsylvania Supreme Court will hear a legal challenge to these dirty activities.
United Brotherhood of Carpenters, Detroit Branch's, now-former executive secreatry-treasurer, Walter Mabry, was bribed to "invest" $77 million in a crooked "private equity" fund according to sources. Other "investors"? Millwrights Local 1102. International Operating Engineers Local 324. Michigan Teamsters Joint Council 43. Monies from the rank-and-files' pensions. Many of these are underfunded. Not so the bosses' pensions: Operating Engineers Washington DC bosses' pension fund is overfunded. And probably makes better investments. BUT hey, Obama thinks unions bosses disclose too much of this bitter information. His administration is cutting back disclosures demanded by the Bush Administration.."not be a good use of resources" to discover fraud by union bosses!
Democrat-appointed University oi Chicago trustees are under fire (two resigned so far) for dismissing the Rule of Law for their own AFFIRMATIVE ACTION initiatives. They created separate admissioins criteria for applicants sponsored by elected officials, big donors and themselves. Hundreds of them. "Less qualified." "From influential families." Chicago - Illinois - Democrats - Obama. Hmmmmmmm.
July 31, 2009: Judge Bobby DeLaughter, Hinds County Missdisssippi Circuit Court pleaded guilty to obstruction of justice, a federal charge, in giving unfair advantage to former huge Democratic contributor and trial attorney Richard "Dickie" Scruggs, in asbestos lawsuits.
This might be a stretch, but prime Obama-backer NBC and MSNBC's owner the General Electric Company settled with the Securities and Exchange Commission for civil fraud and other charges that GE misled investors in 2002 and 2003. Please see another post, "Governmnet Success in Running Companies" (today) and see that the SEC is "suing Mr. Maynard Jenkins, former CEO of CSK Auto (parts) Corporation which had formerly settled with the SEC and restated financials for $4,000,000. Mr. Jenkens was not accused of any wrong-doing. Let's see the SEC voted 3 (Democrats perhaps?) to 2 (Republicans perhaps?) to sue. You decide: arbitrary or the Rule of Law?" My question is, will the SEC sue the CEO of GO, Jeff Imholt? No because Imholt is a major backer of Obama and a member of his economic team. And GE is in hock to the U. S. government while it owns NBC, the primary mouthpiece of the Obama Administraion. I am certain the writers of the U. S. Constitution would have frowned on the conflict of interest with the government being in some control indirectly of the media.
(August 5, 2009) Former Louisiana Democratic Congressman William Jefferson was convicted for bribery schemes aimed at enriching him and his family.
A federal jury in Alexandria, Va., convicted him on 11 of 16 counts.
http://online.wsj.com/article/SB124950747812708973.html
Michael Froman left Citigroup in January to become a senior White House aide for national security and international economic affairs and has known President Obama from Harvard Law. Don't know about his basketball play. He left Citigroup's private infrastructure fund in a tatters, losing $126,000,000 in the $3,400,000,000 fund from a breakup fee on a Chicago deal that couldn't get funded. (Chicago, huh? Wonder who got that money?) He walked with $4,000,000 cash and a demand for $10,000,000 more.
While this thread consists of Democrats who are legally or morally challenged, the Obama Administration thinks private health insurer companies are dishonest, thus needing a "means and mechanismn to keep [them] honest." So while his fellow Democrats are feasting on the public trough, if some of it is from prisons, he accuses law-abiding insurance companies of dishonesty because, in essence, they make profits. And in President Omama's world, profits are only gotten illegally.
But on to New Jersey, the Chicago of the East. 44 people were charged July 24, including several mayors of New Jersey cities, rabbis, and one Republican. Yes, one out of 44, 2%, was a Republican, leaving 43 or 98% if them Democrats, so clearly this sweep of crooks was bi-partisan. Payoffs, bribes, money laundering and even human kidney sales. Mr. Dweeb oh, I mean Mr. Solomon Dwek was caught in 2006 with his hand in some crooked-cookie jar and ratted the rest of them out. Nice guy. He was a real estate developer, Syrian Jew and formerly, I guess, a philanthropist.
Timothy Geithner won confirmation as President Barack Obama's treasury secretary in spite of his possible criminal activities in not paying taxes. Unfortunately this reinforces the fact that Democrats are above the law. Because Obama said, "Tim's work must begin at once", everything illegal he did is OK. That is the moral picture of Obama's self-righteous, self-centered administration. Whatever you want, Mr. President...Throw Geithner into the pool with other possible tax cheats such as Charlie Rangel, moral liars such as Eliot Spitzer and former-Democratic almost-candidate John Edwards, conflict-of-interesters such as Barney Frank and Chris Dodd and out-and-out indicted crooks such as Rod-O Blag-O. A group of which to be proud. This as of January 2009.
But the real tragedy is the continued clueless weakness of Republicans. They are continuing their losing streak. America is the real loser.
I will be updating this regularly with news of Democrat vs Republican crooks (a term I use to describe those indicted, convicted, acting immorally or illegally all as defined by me).
DEMOCRAT CROOKS
Pick for Protocol Post Corrects Failure to File Taxes in 2 Years:
By ALISON LEIGH COWAN Published: June 18, 2009 (The New York Times) President Obama’s choice as chief of protocol for the State Department, a position that carries the status of an ambassadorship, did not file tax returns for 2005 and 2006.
The nominee, Capricia Penavic Marshall, has placed blame for the problem on the Postal Service and on miscommunication between her husband and their accountant. Ms. Marshall was social secretary in the Clinton White House. Tax issues have bedeviled several high-level Obama appointees and cost the administration at least two of its picks. The protocol chief customarily helps plan events for visiting leaders and helps oversee protocol matters for the president and vice president abroad.
Thursday, June 18, 2009: DETROIT Detroit City Councilwoman Monica Conyers, the wife of House Judiciary Committee Chairman John Conyers Jr., has been ensnared in a federal bribery investigation and is discussing a possible plea deal, The Washington Times has learned. Court papers say the council member accepted bribes from a consultant in connection with a City Council vote to approve a $1.2 billion sludge hauling contract. And on June 26 the good wife of this most important black Democrat (first elected in 1964) pleaded "GUILTY!" to conspiracy to commit bribery. Of course, Mr. Conyers was said to have not known. Of course. And she'll have some lame community work to pay off her sentence. Now this is the self-same Conyers who started an investigation of ACORN then like a hot potato dropped it, saying "the powers that be" waved him off. The only power to be I can think of is President Obama, and does this have any little thing to do with spouse crook Monica? (She resigned from the Detroit City Council and faces 5 years and $250,000.)
June 2009: Hmmm, while not a crook, it seems as if President Obama is protecting a friend and supporter of his, Kevin Johnson, a Democrat and mayor of Sacramento, CA, who plays basketball with our president and was a former NBA player. Obama did not follow Congress' own rules in firing Inspector General official Gerald Walpin. Walpin investigated, reported on and was fired personally by Obama: Johnson used to run a nonprofit academy St. Hope which improperly used AmeriCorps recruits to recruit students to his academy for politicking, to run and perform personal duties for Johnson, such as washing his car and driving him around, and doing bookkeeping for St. Hope. Johnson apparently settled for a small amount to run for mayor. And in another instance is the Teaching Fellows Program run by the Research Foundation of the City University of New York. Walpin's audit [www.cncsig.gov/AuditReports.html] uncovered myriad violations including duplicate awards of $16 million and costs of over $750,000. Walpin's directives were stonewalled by AmeriCorps' parent organization, the Corporation for National and Community Service (CNCS), which is now chaired by, as a payoff to, Democratic Alan Solomont for political fund raising. AmeriCorps now is $6 billion in a bill signed by Obama in April. Obama is a political animal, Mr. Walpin is unemployed for being a "government-employed whistle-blower" and blowing the whistle on Obama's cronies.
(In an irony, the First Lady Obama ran the AmeriCorps-funded nonprofit Public Allies in Chicago from 1993-1996 and served on its national board. It, too, was investigated by the Inspector General's office and violated basic rules including a lack of internal controls over education grants and living allowances given to people not being legal citizens or permanent residents.)
Walpin's office questioned duplicate educational awards of more
Rep. Peter Visclosky was subpoened related to federal investigations of defunct PMA Group and its clients. Visclosky, senior Democrat on House Appropriations Committee, received $1.36 million, Murtha $2.37 million and Rep. James Moran (D. Va.) nearly $1 million from PMA and its clients. In a complete coincidence, these and other Democrats inserted into spending bills specific earmarks to benefit PMA clients. In another coincidence, Democrats have successfully blocked Ethics Committee motions to investigate PMA.
6/9/09 Democrat from Chicago indicted (Isaac Carothers, chairman of Chicago City Council's police and fire committee) and pleads not guilty to taking $40,000, campaign money and sports tickets for fixing a zoning case. In Obama-Chicago this is hard to believe.
Trial Lawyer Extraordinaire Gene Cauley, who rose from obscurity to extort settlements worth tens of millions of dollars against a variety of corporations was named one of the top lawyers in 2005 by the National Law Journal! But lately he couldn't account for $9,300,000 of settlement money against Bisys Group Inc. The Democrat will plead guilty to two felonies, wire fraud and criminal contempt. Cauley is following in the footsteps of his mentor felon Bill Lerach, also a huge contributor to Democrats, who fronted the cash for Cauley to start his lawfirm. The judge might look for business-jet invoices for the money.
Every day: ACORN, a criminal enterprise? Monday May 2, 2009, the state of Nevada charged ACORN with fraud; the registrar of voters in Las Vegas said he believes 48% of the forms submitted by ACORN are fraudulent. The Deputy Election Commissioner in Philadelphia (a Democrat) complained of at least 1,500 fraudulent voter registrations last fall. Ditto, Matthew Porrer, St. Louis deputy elections director (also a Democrat). In my own Washington State ACORN was fined $25,000 for voter registration fraud in 2007. There have been and are on-going investigations in 14 other states. It finally got to Congress where New York Representative Gerald Nadler chairman of the House Subcommittee on the Constitution, Civil Rights and Civil Liberties was asked by Rep. (Michigan Democrat) John Conyers, Chairman of the House Judiciary Committee to hold hearings. But then he reneged, "Just joking" he didn't say, after changing his mind. (Did ACORN ask him to?) And get this the Chariman of the House Financial Services Committee, inimitable Barney Frank voted for an amendment to a mortgage bill to withhold from receipt of federal housing or legal assistance grants any entity indicted for boter fraud. Later he gutted it and said he, well, really hadn't read it. (Par for that course.) So ACORN can still apply for $2,000,000,000 in funds for doing stuff. And Obama's own Internal Revenue Service filed three tax liens for almost $1,000,000 against ACORN concerning employee withholdings. And last year ACORN's parent, Citizens Consulting Inc. was paid $832,000 by the Obama campaign which was incorrectly described as "staging, sound, lighting" but was actually for getting out the (Democrat) vote. ACORN and the Democrats want free and identification-less voting while Republicans typically would like only proven citizens to vote. Go figure. More on this crime syndicate (?) coming in all probability, but certainly not from its related party, the Democratic Congress.
June 5, 2009: Countrywide Financial Corp., former CEO and others were charged with fraud. Anthony Mozilla was an architect of Fannie Mae and Freddie Mac investing billions into "sub-prime" mortgages and he provided top Democrat Congressmen with sweetheart mortgages apparently as inducements (vehemently denied, duh!, by said Congress members) to pass laws allowing such activity, which quickly became one of Fan and Fred's largest activities.
May 20, 2009, Norman Hsu, former top fund raiser for the Democratic Party, was convicted of four counts of campaign-finance fraud in New York. To Mr. Hsu, Hillary Clinton said: "What am I going to do with you, Norman? You are working so hard for me...I've never seen anybody who has been more loyal and more effective..." And Mr. Loyal Hsu pled guilty to a Ponzi scheme last month swindling at least $20 million. Our Secretary of State is a great judge of character!+-
May 4, 2009, The chairman of the New York Federal Reserve Bank, Stephen Friedman, sat on the board of directors and had -- and increased -- a stock holding in Goldman Sachs Group, Inc. when it received speedy approval to convert to a bank holding company and receive $10 billion in capital for the Treasury Department. While Friedman argues no conflcit of interest (duh!) he WAS in violation of the rules which bar such stock holdings. Then, of course, he was given a waiver by the Treasury Secretary, Timothy Geithner. Before and after the waiver, Friedman purchased 52,600 shares (bringing his holdings to 98,600) which, as of today, show a profit of $2.7 million. At the urging of that self-same New York Fed, American International Group (AIG) was bailed out to the tune of $85 billion then and counting (fast) which allowed it to repay $8.1 billion owed to...yes...Goldman Sachs. At the time that repayment transaction was not disclosed.
May 4, 2009: President Barack Obama pledged that lobbyists wouldn't run his administration except when they will. (How do you spell hypocracy?) Recently former lobbyist, William Corr, former executive director of lobby organization "Campaign for Tobacco-free Kids" funded by pharmaceutical companies with a stake in curtailing smoking with the products Nicorette gum and NicoDerm patches, was nominated for #2 in Department of Health and Human Services. The biggest financial supporter of his organization is the Robert Wood Foundation, a large shareholder of Johnson & Johnson producer of those two smoking-cessation products.
4/22/09
Did President Obama's auto czar Steven Rattner's former firm Quadrangle Group "intentionally deceive" the city of New York's pension funds when it failed to disclose paying a finder's fee to now-indicted political advisor' Hank Morris for a New York Pensioin Funds' investment in Rattner's firm's hedge fund? The New York City's comptroller's office is conducting an investigation. The suspense continues.
4/22/09
Democratic Representative from California, Jane Harman, denied any wrongdoing when she was wiretapped having as she said, "casual conversations and kid[ding]around" with pro-Israel lobbyists about seeking leniency for two of them being investigated for espionage by trying to influence the Bush administration. And apparently she was trying to convince Queen Nancy Pelosi to put her on the House intelligence committee, whatever. Change as usual.
4/16/09 News Alert from The Wall Street Journal
Steven Rattner, leader of the auto task force, was one of the investment-firm executives involved with payments now under scrutiny in a state and federal probe into an alleged kickback scheme at New York state's pension fund.
http://online.wsj.com/article/SB123992516941227309.html#mod=djemalertNEWS
April Fools Day, 2009: "Cabinet pick has tax trouble" (Seattle Times page A4) Another Obama cabinet selection, this time Gov. Kathleen Sebelius, made "errors" on tax returns, this time for fudging charatable contributions, the sale of a home and business expenses. Only $8,000 and "unintentional".
"FBI investigates generous donor to Dicks, Murray" (Seattle Times, March 23, 2009, front page http://seattletimes.nwsource.com/html/politics/2008906547_pma23.html ). Seems the PMA Group, Arlington, VA, has donated hundreds of thousands of dollars to mostly Democratic members of the Appropriations Committees in exchange said politicians earmarked millions of dollars to PMA clients. These Democrats have killed any effort -- so widely advertized while they and President Obama were running for office -- to rein in such extortion. Hopefully the FBI -- under Obama's Justice Department -- will be allowed to really investigate and also hopefully it won't all be swept under the table by these dirty politicians donating "questionable donations" to charity.
And from another blog, March 30, 2009:
Criminal Inquiry Into Murtha Lobbyist Heats Up
Monday, March 30, 2009 2:28 PMBy: Rick Pedraza
The PMA Group, a lobbying firm that was raided in November as part of a federal criminal probe into embattled Rep. John Murtha, D-Penn., has closed up shop after reports that federal prosecutors recently raided the office and home of its top operative Paul Magliocchetti, the New York Times reports. Magliocchetti, who is under investigation for making campaign donations in the names of other people, reportedly directed tens of millions of dollars in contributions to lawmakers while steering hundreds of millions of dollars in earmarked contracts back to his clients at PMA. Murtha earmarked millions of dollars for the Electro-Optics Center at Penn State University, which then rerouted the money to clients of PMA Group, a military-oriented lobbying firm that has close ties with Murtha, Politico reports. Former PMA staff members familiar with the inquiry tell The Times that prosecutors are focusing on the possibility that Magliocchetti used straw campaign contributors to give large sums in coordination with PMA, whose offices were raided by the FBI in November.
The front, which allegedly funneled illegal donations to friendly lawmakers, carries a felony charge that could result in a minimum sentence of five years.
Prosecutors also are looking into whether violations of longstanding Congressional ethics rules occurred, which could lead to more serious bribery charges if linked to official acts by Murtha.
According to the Center for Responsive Politics, Murtha has collected $2.37 million in campaign contributions from PMA lobbyists, the Associated Press reports.
“All the combustibles are here for a very salacious set of allegations that could go far beyond his campaign finance problems,” Stanley Brand, a Washington criminal defense lawyer, tells The Times. Murtha, who is head of the House defense appropriations subcommittee, was involved nearly three decades ago in the Abscam corruption probe, a federal investigation that convicted several lawmakers of taking bribes in return for doing business with the government.
A spokesman for Murtha says the lawmaker had done nothing wrong and is not involved in the investigation. The FBI is continuing its investigation into whether Murtha earmarked special-interest spending provisions in return for campaign contributions. “We have not been contacted by any federal agency,” Murtha spokesman Matt Mazonkey tells Newsmax, “and no one is suggesting that Congressman Murtha has anything to do with this investigation.”
"Acting Director of OTS (Office of Thrift Supervision) Put on Leave Amid Probe (From the Wall Street Journal March 27, 2009 http://online.wsj.com/article/SB123812215116454401.html )
This was backdating a capital infusion into IndyMac Bankcorp a bank which arguably a letter by Senator Charles Schumer (Democrat) put into failure. This same bank is being bought by investor including Uber Democrat George Soros. Hmmmmmm.
It is reported (The Wall Street Journal, March 20, 2009, page A14, "Congress's Own Liechtenstein") that Democrat, Representative Pete Stark, from California has been claiming --illegally -- that he lives in Maryland to beat the punitive taxes in his home dacha, California. He, along with fellow Congressperson, Democrat from New York (another Soviet colony) Eliot Engel, has been told nada, you can't do that, Comrade Mr. Congressman.
From some blog today, March 19, 2009:
White House Calls Vivek Kundra's 1997 Theft Conviction 'Youthful Indiscretion'Eric Krangel, Silicon Valley Insider. Should a crime committed 12 years ago stick with you forever? That's the question being asked of America's CIO Vivek Kundra. Earlier this week, it surfaced Vivek pled guilty to a charge of misdemeanor theft (less than $300) back in 1997, when he was 22. Nick Shapiro, White House spokesman, weighs in: "Twenty years ago, Vivek committed a youthful indiscretion. He performed community service and we are satisfied that he fully resolved the matter." (1997 was twenty years ago?) There's also an ongoing FBI investigation into bribery and kickbacks at Vivek's old office. "Mr. Kundra has been informed that he is neither a subject nor a target of the investigation," the White House says. Still no word on just what it is Vivek stole.
3/12/2009 Chris Dodd, Chair Senate Banking Committee. Received two preferential-rate mortgages from Angelo R. Mozilo, founder of Countrywide Financial Corporation in 2003. In addition, he -- like President Obama -- entered into a real estate transaction, in Dodd's case a 10-acre estate on the island of Inishnee on Galway Bay off the Ireland Coast, County Galway, purchased with a shady "investor" who sold his share back to Dodd at a low-call price, thus increasing Dodd's net worth by potentially hundreds of thousands of dollars. Along with them was Edward Downe, Jr. a convicted insider trader for whom Dodd got then-president Clinton to grant a pardon. It is possible that Sen. Dodd lied on his Senatorial disclosure documents about this transaction.
From another blog, 2-29-09 Economic Crisis, The Audit — April 28, 2009 06:12 PM
Bronte Capital with a Major Scoop on Alleged Fraudster, By Ryan Chittum
John Hempton the excellent Aussie blogger who writes Bronte Capital appears to have a blockbuster of a scoop.
A Connecticut hedge fund called Ponta Negra Group, run by 27-year old Francesco Rusciano has been frozen by the SEC, which accused it of fraud. Hempton was all over this a few weeks ago, but had to take down his posts when Ponta Negra lawyers threatened to sue him. They’re back up now.
But the big news here is Hempton’s discovery that the allegedly fraudulent fund has some, um, oddly coincidental connections to Vice President Joe Biden’s son and brother, who run a firm called Paradigm Global. The firms are run out of the same floor at 650 Fifth Avenue in New York, share the same “marketer,” a guy named Jeffrey Schneider of Onyx Capital LLC, whose website is currently down, and the SEC filing gives a phone number for Ponta Negra that goes through Paradigm’s switchboard.
This wouldn’t be the first time the Bidens’ fund has intersected with an alleged fraudster. Two months ago it was discovered to be entangled with disgraced financier Allen Stanford in a $50 million fund co-branded Paradigm Stanford Fund and marketed by Stanford.
Mr. Schneider was involved in that joint venture, which the Bidens say they made without ever even meeting Mr. Stanford: A Paradigm marketer, Jeffrey Schneider, confirmed accounts provided by others that he brought in the Stanford business. Stanford would bring clients to the fund and Paradigm would manage it, according to Mr. LoPresti. Now, I suppose there could just be an amazing amount of coincidences here. Hempton is good on the “to-be-sure” stuff:
I was worried at first that Ponta Negra might be a legitimate fund headquartered in another cubicle on the 17th Floor of 650 Fifth Avenue. It turns out that there are several funds also HQ’d there. Paradigm it seems does all the signage on the floor – but once you get past the couple of Paradigm people on the front desk you find several doors behind which reside several hedge funds – a hedge fund hotel if you want. Most of the offices were empty mid-morning – which was very surprising. These funds are largely marketed by Paradigm. Still there could be a fund (Ponta Negra) independent of Paradigm on the 17th floor. There could be – they too would need to employ a Jeffrey Schneider as a marketing agent.
But let’s face it:
Ok – by this point you should at least be open to the possibility that the Vice President’s son and brother employ someone who uses the good Biden name and a stolen client list to market Ponzi schemes. There is no allegation here that the Bidens are involved. Just that their standard of due diligence is low. Very low. Now the Biden’s hedge fund hotel contains an assortment of other colourful funds. One of them is a SIPC registered broker dealer who also manages client money. This broker dealer does not list their auditor anywhere on their website. However they report startlingly good funds management results for 2006 and 2007 though they have surprisingly failed to update their website to include 2008 results. Their website boasts that their trades will be completed with zero commissions and transaction charges allowing them to focus exclusively on the investments that best meet the needs of the clients without the concern of transaction charges and hidden revenue sharing…
Here’s what Dow Jones says about Rusciano:
According to the complaint, Rusciano previously worked at UBS Securities before forming the Ponta Negra Group, but was later forced to resign after he allegedly misreported certain Brazilian bond transactions and non-deliverable forwards. He now also faces charges by the Federal Reserve that he engaged in illegal trading and banking practices and schemed to defraud UBS by trying to conceal major losses, the complaint said. After starting up his own company, the SEC further claims he never disclosed the Fed’s allegations against him or the reasons why he left UBS.
Not only did Hempton break the news on what he originally called a “Ponzi scheme” before having to take it down under legal threat, he’s put together this Biden family connection.
Just outstanding work.
It wouldn’t be the first time a fraud has been cracked by a blogger before the big media and regulators lumber around to it. Alex Dalmady broke the Stanford scandal, with a big push from Felix Salmon, then at Portfolio—and got disgracefully little credit by the media.
This is going to be a big story. I’ll be eyeballing the press closely to see how it handles attributing the news to the Bronte Capital blog.
(h/t Felix Salmon)
A fund of hedge funds managed by the brother and son of the Vice President of the United States, Joseph Robinette "Joe" Biden, Jr. , was marketed exclusively by disgraced and accused Texas "financier" (crook?) R. Allen Stanford. It is alleged by the Securities and Exchange Commission that he engaged in an $8 billion fraud. The fund, co-branded by Stanford Financial Group and the Bidens' Paradign Global Advisors LLC was Paradigm Stanford Capital Management Core Alternative Fund and had $50 million, including $2.7 million of Stanford cash for seed money. Little Biden son, Hunter, wanted to be a hedge fund operator like the big boys and apparently bought Paradigm with Uncle James -- Joe Biden's brother. Apparently Joe didn't want HuntHunt to be a lobbyist, which he was, when Daddy ran for President, which he laughingly did. Even John Edwards beat him. And with respect to its purchase the Bidens are suing some guy named Anthony Lotito Jr. who sounds like an Italian. Can't say it's illegal, but did those 104 investors ($49.8 million) want something from VP or Senator Honest Joe? Also can't say if HuntHunt or Uncle Jim knew anything about hedging or investing. The hugely successful asbestos litigation firm, SimmonsCooper invested put up $2,000,000 for Hunter and Uncle Jim after teaming with another Joe son, Beau Biden's firm in Wilmington, Del.In 2005, SimmonsCooper shifted its focus away from Madison County, Illinois, after Chief Judge Edward Ferguson transferred the mammoth asbestos docket from Circuit Judge Nicholas Byron to Circuit Judge Daniel Stack. The firm targeted Delaware because many businesses incorporate there and the firm's roster of defendants always includes Delaware corporations.No one at SimmonsCooper held a Delaware law license, so Beau Biden's firm filed the suits and SimmonsCooper identified itself as, "of counsel."Beau Biden dropped an asbestos defense client to accommodate SimmonsCooper.At the same time, Joe Biden resisted asbestos litigation reform in the Senate judiciary committee. HuntHunt and Uncle Jim reportedly bought Paradigm from a drug addict with a partner who specialized in providing ACCESS to public employee retirement funds for money managers and apparently had been engaged in touting a number of penny stock "investments". In addition there were rumors of "side deals", kickbacks and representation by a lawyer heading to prison for fraud. All this is too sick for me to continue. He is our vice (so to speak) president, anyone interested in this crap can Google it all.
And speaking of ..."Texas Businesman Sought for Influence in Corridors of Capitol. (The Wall Street Journal, Wednesday, February 18, 2009, page A13) and the next article down. "SEC Charges Financier Stanford With 'Massive' $8 Billion Fraud". Both are about Texas "businessman" R. Allen Stanford, of the Biden article above, and how 1) he stole and 2) contributed greatly to House Ways and Means Committee Chairman Charles Rangel (D. N.Y.), iand $250,000 to the Democratic Party, among other Democratic coffers. His main lobbiest is Ben Barnes, "influential Democratic lobbyist and fund-raiser, Men Barnnes to whom he paid $1,125,000 lobbying for Stanford Financial Group. Stanford is also fighting the IRS over $70,000,000 in back taxes and interest.
Is the NY Times (or Seattle Times, for that matter) railing about Democrat corruption yet?
REPUBLICAN
Ummm, none this year so far, oh wait some senator just announced that he had had an affair.
Wednesday, October 28, 2009
Obama WIns a Battle as a Teachers' Union Shows Flexibility
What has been described as a showdown or ideological battle between the Obama administration and his primary financier, the teachers unions, looks, according the Wall Street Journal (October 17-18, 2009 page A 1, "for the moment, a little less likely." One union, the 1,600 New Haven, CT, union voted 21 - 1, about a 1% turnout (the two major teachers unions have 3,600,000 members) for some contract changes bringing more flexibliity on work rules and teacher compensation. I would venture this is a meaninglessness at best misleading at worst headline, article and so-called "model". The unions members were paid a 3% raise for 4 years, nearly 13%, while inflation is running under 1/2 of 1%. While advertised as a breakthrough it simply to me looks like a bribe so Obama can log in a "win" and try to affirm his independence from the organizations that spent upwards of $300,000,000 to elect him. "Yes, I am tough, I stand up to unions." -- Obama could have meant, and clouded mens' mionds. But honest it is not.
Tuesday, October 27, 2009
Wage, Price and Business Controls are Here
Czar Feinberg sets compensation for a bunch of corporate executives. Wage controls. (And funny because it's supposed to rein in "dangerous risks" which are absolutely not defined by any stretch of any Rule of Law. They are capricious and arbitrary. Revenge for success?) Couple that with rules announced October 22, 2009 by Obama's Federal Reserve and Obama's Treasury Department that will limit and change pay packages at thousands of financial institutions and you get...Wage Controls.
The U. S. House of Representatives also on Thursday, October 22, 2009, voted to create a new federal agency to "police" -- control -- financial products offered to U. S. consumers, this courtesy of the Obama White House's initial draft. The new agency perhaps to be named ObamaControl Agency would have the power to investigate widely and punish brutally any company from one-man payday loan shops to the mighty (well once mighty, until the U. S. government brought it low) Bank of America and any other company it wants to get. Price and Business Controls. Excepting only the biggest campaign contributors and lobbyists such as auto-dealer-financiers.
The U. S. House of Representatives also on Thursday, October 22, 2009, voted to create a new federal agency to "police" -- control -- financial products offered to U. S. consumers, this courtesy of the Obama White House's initial draft. The new agency perhaps to be named ObamaControl Agency would have the power to investigate widely and punish brutally any company from one-man payday loan shops to the mighty (well once mighty, until the U. S. government brought it low) Bank of America and any other company it wants to get. Price and Business Controls. Excepting only the biggest campaign contributors and lobbyists such as auto-dealer-financiers.
Friday, October 23, 2009
American Idea by Walter E. WIlliams
A sadly accurate article below. I don't know if I can legally put Mr. Williams' article on this post, but here it is...a valuable column. The United States of America is the most humane, exceptional country ever invented, yet we are committing suicide. A self-inflicted Obama to the head. The left owns schools, the arts, the media...the propaganda arms. The only slip sliver of hope is a foreigner. Rupert Murdock of News Corp's Fox News and the Wall Street Journal. If that isn't irony I don't know what is. But people are listening, reading, viewing the truth. But listen, folks, with his numbers won't competition enter the conservative world? Maybe after all free enterprise will win out, because if you get people's minds, you can get their hearts. Or is it the other way around?
Wednesday, October 21, 2009
American Idea
by Walter E. Williams
Americans are harder workers, more philanthropic, individualistic, self-reliant, anti-government than people in most other countries. We’ve turned what was an 18th-century Third World nation into the freest and most prosperous nation in mankind’s entire history. Throughout our history, United States has been a magnet for immigrants around the world. What accounts for what some have called American exceptionalism?
We Americans, as human beings, are no different from any other people, including Germans, Russians, Chinese, Africans and other people who have produced tyrannical regimes such as those of Hitler, Stalin, Mao and Idi Amin. As such we are just as capable of committing acts of gross evil that have been a part of mankind throughout his history. We’ve not been a perfect nation but we’ve never approached the level of hideousness seen in other nations. That’s despite the fact that our population consists of people who have for centuries been trying to slaughter one another in their home countries, whether it’s between the French and Germans, English and Irish, Japanese and Chinese, or Palestinians and Jews, Igbos and the Hausa of Nigeria. Thrown into the American mosaic are religions that have been in conflict for centuries such as Catholic and Protestant, and Christian and Muslim. The question is: Why is the United States an exception and will it remain so?
At the heart of the American idea is the deep distrust and suspicion the founders of our nation had for government, distrust and suspicion not shared as much by today’s Americans. Some of the founders’ distrust is seen in our Constitution’s language such as Congress shall not: abridge, infringe, deny, disparage, violate and deny. If the founders did not believe Congress would abuse our God-given rights, they would not have provided those protections. After all, one would not expect to find a Bill of Rights in Heaven; it would be an affront to God. Other founder distrust for government is found in the Constitution’s separation of powers, checks and balances and the several anti-majoritarian provisions such as the Electoral College and the requirement that three-quarters of state legislatures ratify changes in the Constitution.
The three branches of our federal government are no longer bound by the Constitution as the framers envisioned and what is worse is American ignorance and acceptance of such rogue behavior. Look at the current debate over government involvement in health, business bailouts and stimulus packages. The debate centers around questions as whether such involvement is a good idea or a bad idea and whether one program is more costly than another. Those questions are entirely irrelevant to what should be debated, namely: Is such government involvement in our lives permissible under the U.S. Constitution?
That question is not part of the debate. The American people, along with our elected representatives, whether they’re Republicans or Democrats, care less about what is and what is not permissible under our Constitution. They think Congress has the right to do anything upon which they can secure a majority vote, whether they have the constitutional or moral authority to do so or not. What Congress does have is the brute force to enforce compliance with their unconstitutional acts. You say, "What do you mean, Williams?" Article I, Section 8 of the Constitution grants Congress the power to tax and spend for the enumerated activities therein. Every American is duty bound to pay his share. Congress has neither constitution nor moral authority to take the earnings of one American for the benefit of another American. What do you think will happen to you if don’t comply, say with Congress' demand that part of your earnings be taken to bail out a failing business? You’ll see all the brute force that you want to see and if you resist too much, death is not off the table.
We are losing what’s made our country great. Instead of moving toward greater liberty, we’re moving toward greater government control of our lives.
Wednesday, October 21, 2009
American Idea
by Walter E. Williams
Americans are harder workers, more philanthropic, individualistic, self-reliant, anti-government than people in most other countries. We’ve turned what was an 18th-century Third World nation into the freest and most prosperous nation in mankind’s entire history. Throughout our history, United States has been a magnet for immigrants around the world. What accounts for what some have called American exceptionalism?
We Americans, as human beings, are no different from any other people, including Germans, Russians, Chinese, Africans and other people who have produced tyrannical regimes such as those of Hitler, Stalin, Mao and Idi Amin. As such we are just as capable of committing acts of gross evil that have been a part of mankind throughout his history. We’ve not been a perfect nation but we’ve never approached the level of hideousness seen in other nations. That’s despite the fact that our population consists of people who have for centuries been trying to slaughter one another in their home countries, whether it’s between the French and Germans, English and Irish, Japanese and Chinese, or Palestinians and Jews, Igbos and the Hausa of Nigeria. Thrown into the American mosaic are religions that have been in conflict for centuries such as Catholic and Protestant, and Christian and Muslim. The question is: Why is the United States an exception and will it remain so?
At the heart of the American idea is the deep distrust and suspicion the founders of our nation had for government, distrust and suspicion not shared as much by today’s Americans. Some of the founders’ distrust is seen in our Constitution’s language such as Congress shall not: abridge, infringe, deny, disparage, violate and deny. If the founders did not believe Congress would abuse our God-given rights, they would not have provided those protections. After all, one would not expect to find a Bill of Rights in Heaven; it would be an affront to God. Other founder distrust for government is found in the Constitution’s separation of powers, checks and balances and the several anti-majoritarian provisions such as the Electoral College and the requirement that three-quarters of state legislatures ratify changes in the Constitution.
The three branches of our federal government are no longer bound by the Constitution as the framers envisioned and what is worse is American ignorance and acceptance of such rogue behavior. Look at the current debate over government involvement in health, business bailouts and stimulus packages. The debate centers around questions as whether such involvement is a good idea or a bad idea and whether one program is more costly than another. Those questions are entirely irrelevant to what should be debated, namely: Is such government involvement in our lives permissible under the U.S. Constitution?
That question is not part of the debate. The American people, along with our elected representatives, whether they’re Republicans or Democrats, care less about what is and what is not permissible under our Constitution. They think Congress has the right to do anything upon which they can secure a majority vote, whether they have the constitutional or moral authority to do so or not. What Congress does have is the brute force to enforce compliance with their unconstitutional acts. You say, "What do you mean, Williams?" Article I, Section 8 of the Constitution grants Congress the power to tax and spend for the enumerated activities therein. Every American is duty bound to pay his share. Congress has neither constitution nor moral authority to take the earnings of one American for the benefit of another American. What do you think will happen to you if don’t comply, say with Congress' demand that part of your earnings be taken to bail out a failing business? You’ll see all the brute force that you want to see and if you resist too much, death is not off the table.
We are losing what’s made our country great. Instead of moving toward greater liberty, we’re moving toward greater government control of our lives.
United States Being Eclipsed in Capital Raising.
The United States of America has become the greatest country in history in part because of its freedom. In the late 18th century, citizens freely gathered under a buttonwood tree at the foot of Wall Street to talk and trade securities and money. In 1792, they formalized their association with the "Buttonwood Agreement", the origin of the New York Stock Exchange. That little beginning created the first capital market of the U. S. and the foundations under which capital markets around the world were created. Those citizens, and later institutions, with excess money traded it for ownership interests in organizations and companies which wanted it. These investors thought they could garner better returns through investing.
The New York Stock Exchange was the predominant securities exchange in the world for decades, trading more than any other. And American companies -- and the country itself -- were the primary benefactors of the NYSE and other, smaller institutions of capital. But finance has evolved and America is being eclipsed by competition. This year so far, the largest initial public offerings (IPOs) of securities to raise capital belong to foreign companies. Banco Santander Brasil as of the first of October is the largest (raising $8 billion) and China State Construction Engineering Corp. is second at nearly $7-1/2 billion.
And as of October 9 they are: Banco Santander Brasil, Brazil $8,067.6; China State Construction Engineering, China $7,342.7; Visanet Brazil; China Metallurgical Constr. China; Verisk Analytics Inc, U.S.; Everbright Securities Co, China; SINOPHARM, China; Glorious Property Holdings Ltd, Hong Kong; China Zhongwang Holdings Ltd; China; National Hydro Electric Power, India .
Only one of the largest IPO was on the NYSE, one jointly with NYSE andthe Sao Paolo Stock Exchange and one through NASDAQ. The rest were from other country's exchanges with the most on the Hong Kong Exchange. Two-thirds of the IPOs in the United States were from Chinese companies. For more information about China, please see my post, "China Eats United States for Lunch".
The New York Stock Exchange was the predominant securities exchange in the world for decades, trading more than any other. And American companies -- and the country itself -- were the primary benefactors of the NYSE and other, smaller institutions of capital. But finance has evolved and America is being eclipsed by competition. This year so far, the largest initial public offerings (IPOs) of securities to raise capital belong to foreign companies. Banco Santander Brasil as of the first of October is the largest (raising $8 billion) and China State Construction Engineering Corp. is second at nearly $7-1/2 billion.
And as of October 9 they are: Banco Santander Brasil, Brazil $8,067.6; China State Construction Engineering, China $7,342.7; Visanet Brazil; China Metallurgical Constr. China; Verisk Analytics Inc, U.S.; Everbright Securities Co, China; SINOPHARM, China; Glorious Property Holdings Ltd, Hong Kong; China Zhongwang Holdings Ltd; China; National Hydro Electric Power, India .
Only one of the largest IPO was on the NYSE, one jointly with NYSE andthe Sao Paolo Stock Exchange and one through NASDAQ. The rest were from other country's exchanges with the most on the Hong Kong Exchange. Two-thirds of the IPOs in the United States were from Chinese companies. For more information about China, please see my post, "China Eats United States for Lunch".
Subscribe to:
Posts (Atom)
