Everyday normal Republicans

Government Motors, Part Two

Is it OK to boycott the new Government Motors?

Gary Jason over at American Thinker presents a good case as to why we should boycott the new Chrysler and GM. From the article:

To start with the obvious, even though Obama denies that he will manage the companies, we have all learned by now that he has no problem doing the very thing he is denying. (In ordinary life this political artfulness is called lying). He fired one CEO, forced Chrysler to accept Fiat (WSJ.com 6/5/09), told GM that it cannot move its headquarters out of Detroit (WSJ.com 6/3/09), and may have ordered that whoever buys GM's European auto maker Opel must agree not to export cars to the U.S.. (WSJ.com 6/1/09) These decisions were made in secret with no Congressional oversight, by a man with no training or experience of any kind in business, never mind the auto business.

Yeah, a little scary.

But the negative consequences will spread well beyond the auto industry. By so conspicuously stiffing the bondholders in favor of his political supporters, Obama has made raising capital vastly more difficult. Every investor now knows that past bankruptcy law means nothing; if the President is paid enough by some special interest group, he will rip off the secured debt holders to satisfy his supporters. This will surely lower the demand for corporate bonds, leading to less capital for business expansion, hence fewer jobs.

So far, Ford seems to be the only American car manufacturer surviving. But for how long? How long before the UAW and the Obama administration makes a play for Ford? Or forces successful American-based foreign manufacturers like Honda and Toyota into the UAW fold.

Picture from here.

Picture from here.

Picture by Ronny Gordon.

Please say it ain't so

Difficult as it may be, it is wrong to automatically jump to conclusions when an airplane crashes. Remember the one that crashed over New York a short time after 9/11? We ALL thought it was another terrorist act initially, until it was determined that it was a structural problem with the tail piece. The Air France crash on Sunday is a horrible, horrible tragedy, and my thoughts and condolences go out to the victims and their families.

Airplanes are built by humans, and as such are not completely immune to mechanical failures. However, it is extremely rare that an airplane just falls out of the sky. But I guess it is not out of the realm of possibility. Again, not wanting to jump to conclusions, this could still be the result of a mechanical failure of some sort. We may never know, as the black box devices may be thousands of feet under the water. However, for an airplane to just disappear from radar and end up at the bottom of the Atlantic Ocean without even a peep from the pilots, something major had to happen, and happen very quickly.

And then we see something like this report. Reported on a Buenes Aires news site on May 27, 2009:

Bomb threat on Air France flight.
Posted on 27 May 2009 at 16:27
The airport safety delayed an Air France flight this evening before departring for Paris immediately after the company received a bomb threat over the phone at the airport of Ezeiza.

The Federal Police, along the Firemen’s direction and the Airport’s Safety proceeded to inspect the plane, that arrived this morning from the French city and, after a brief stop, it was preparing to return.

The routine procedure lasted approximately one hour and a half and, as sources of the airport reported all the passengers are ok and they were not evacuated.

So, on May 27, an Air France flight had a bomb scare phoned in to the airport in Argentina. The Paris-bound flight was delayed as the aircraft was searched and the passengers re-screened. And three days later, a Paris-bound Air France flight from Brazil ends up at the bottom of the ocean, with no warning or distress call from the pilots.

Coincidence? I certainly hope so.

Government Motors

I don't know about you, but I find it very disheartening to see what is going on here. For years, GM and Chrysler have built products that are inferior to the products built by Toyota, Honda, and Nissan. And their balance sheet shows it. Cars that are more durable, reliable, and fun to drive are the cars people will buy. If these cars happen to be from Toyota, Honda, and Nissan, then so be it. Companies that continue to produce inferior products will, and should be allowed to, fail. GM has been around for almost 100 years - plenty of time to get their act together, learn to adapt to an ever-changing marketplace, and build cars that people want to buy. They deserve to fail, file for bankruptcy protection, and let the American bankruptcy laws and courts do their thing. If an amicable deal between the creditors, bondholders, and management cannot be brokered, the company liquidates assets. The secured creditors are contractually-bound to be paid 100% either in cash or in troubled assets - this is why they are classified as "secured bondholders."General creditors fight over what is left.

However, our government has deemed the American auto-industry "too big to fail". If GM and Chrysler fail, the ripple effect would devistate an already devistaed economy. Hundred of thousands of jobs will be lost. Think of all the tax revenue that represents. So in steps Mr. Hopey McChangy, forces Chyrsler into a goverment-brokered bankruptcy, creates a "New Chrysler", forces the secured bondholders of Old Chrysler to accept pennies on the dollar, while the New Chrysler stock is owned by Fiat, the UAW, and the United States Goverment. From David A. Skeel Jr., as posted on The American.

As the administration has pointed out in defense of its plan to commandeer the bankruptcy process, asset sales (known as 363 sales, based on the relevant provision) have become a common feature of Chapter 11 cases in the last 20 years. What makes the Chrysler plan unique, and makes it similar to the receiverships of the New Dealers’ era, is that it is not really a sale at all. It is a pretend sale and its main purpose is to eliminate the pesky creditors who might otherwise interfere with the government’s plans. It also seems to flout bankruptcy’s priority rules by giving Chrysler’s employees (who are general creditors) a big stake in New Chrysler while forcing senior lenders to take a major haircut. The usual rule is that senior creditors must be paid in full before lower priority creditors are entitled to anything.

A similar deal will most likely be implemented with GM, but since GM is much larger than Chrysler, the final outcome will probably differ. From the Associated Press, as posted on Yahoo News.

The company appeared closer than ever to filing for bankruptcy protection on Wednesday after its bondholders turned their backs on a federally ordered offer to swap their debt for GM stock. If GM does file, the governments of the United States and Canada could end up with as much as 70 percent of a reconstituted GM when the court dust settles_ with the biggest share by far held by the U.S. Treasury.

Did you catch that? 70%?? !! ?? Holy crap! Folks, it's no longer General Motors...it's Government Motors. With that much ownership of the new company, the US and Canadian governments will be able to make all corporate, board-level deciscions.

According to the Byron York, as posted on the Washington Examiner:

Obama knows the public doesn't want the government to run GM and Chrysler, which is why he has said hundreds of times that the government has "no interest" in running the automakers. But on Monday, at a White House event to hail the GM bankruptcy, he gave away the game when he said the feds will stay out of running GM "in all but the most fundamental corporate decisions."

It didn't take any parsing to realize that in Obama's vision, the government will let GM management handle the small stuff, but when something really, really matters, the new owner -- the United States government -- will do the deciding.

Combine the government's 70% ownership of New GM, and their 8% ownership of New Chrysler, and this should be recognized as nothing short of the nationalization of the American auto industry. Do we really want our government, using our yet-to-be-earned money, building our cars for us? Seizing publically-held corporations and nationalizing industries goes on in banana-republic, 3rd-world, communist/socialist states like Venezuela - not in America.

Question: When did "government of the people, by the people, and for the people" change to just "government of the people"?

Answer: January 20, 2009.

The Big Stick

***** UPDATE *****
The blog post mentioned below has since been removed from the Telegraph.co.uk website. Not all too surprising. I just wish I had cross-posted the whole thing.
***** UPDATE *****

Wow. Imagine seeing a OpEd piece in the country like this from the Daily Telegraph in the UK.

School's out! Suddenly it is playtime for all the naughtier elements in the more "reclusive" parts of the world who enjoy kicking Uncle Sam's butt but didn't much relish tangling with Dick Cheney and (what was that other guy's name?). This time Comrade Kim is really throwing his toys out of the playpen. He has even unilaterally revoked the 1953 armistice between the Korean War belligerents, which means, in case anybody is interested, that North and South Korea are once more at war.

So, what is the response of the Messiah in the Oval Office? Really severe rhetoric, is the answer. The soundbite manufacturers have been burning the midnight oil and the auto-cue is going into meltdown. So is the confidence of Asian leaders. The word is out: the most powerful nation on earth has got itself a pussycat for a president and all the bad guys are queuing up to give him the finger.

The article even calls him President Pantywaste. This would be even more funnier if it weren't so sadly true. Do you think it's just a coincidence that North Korea has upped the ante with six long range missile tests and a nuclear detonation test, all within the past week or so? Do you think they would have dared try this while Bush/Cheney were running the show?

"Walk softly, but carry a big stick." This was a phrase coined by Teddy Roosevelt back in 1901. He attributed it then to an old West African proverb. What it means is to tread carefully, negotiate peacefully and diplomatically, but be ready to use force if necessary. True back in 1901, and even more true today. If there is no Big Stick, there is no negotiating, diplomacy, respect, or peace.

It was the American Big Stick that saved Europe, twice. It was fear of the American Big Stick that eventually ended the Cold War. All through the 1990's, Saddam Hussein felt the American Big Stick, along with a host of other Sticks. Right or wrong, intended or unintended, fear of the American Big Stick is what makes us the "world's policeman" by default.

On the flip side, we cannot bring out the Big Stick whenever we want, as the "walk softly" part is just as important. Diplomacy and negotiation must be given a chance to work. The Big Stick should be used only as a last resort, after all efforts to walk softly have failed. However, refusal to use the Big Stick has grave consequences, and should never be put away.

What happens when the American Big Stick is put away? The refusal to confront the Iranian hostage situation with a Big Stick led to US embassy employees and citizens being held hostage for 444 days. How a rag-tag group of college students could overwhelm US Marines guarding the embassy is puzzling. How President Carter could allow the situation to last past lunch hour the first day is mind-boggling. The Iranian captors, and the Iranian government, had absolutely no fear of Jimmy Carter's Big Stick. What they did fear, however, was Ronald Reagan's Big Stick. And they wanted no part of it.

President Obama's recent World Apology Tour and his constant criticism of American foreign policy has put the world on notice. The American Big Stick has been put away.

And, sadly, both friend and foe alike have taken notice.

Next stop...Galt's Gulch

Millionaires Go Missing - an OpEd piece posted on the Wall Street Journal.

I read this headline and almost peed myself in excitement. Could it be that Atlas has begun shrugging?

As the State of Maryland has discovered, raising taxes on the "super-rich" to fund bloated government budgets doesn't necessarily equate into more tax revenue for the state. From the article:

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

Sure, the recession and the Bear market has likely taken a toll on the number of millionaire tax returns this year. And while it's not too likely Galt's Gulch has opened for business, it is very likely many of them have simply moved to more tax-friendly states. Raise the tax rates high enough and the "super rich" simply vanish, proving that Trickle Up Poverty really does work.

Where do I sign up !!??!!

Posted over at American Thinker.

Quite possible the best.column.ever. A definite MUST read. Here's a few snippets to wet your whistle.

I wish I were a liberal

I wish I were a liberal, because then everyone would like me. My family would start talking to me again, and chances are, my ex-husband would want to renew the marriage vows he broke when I started spouting conservative opinions.

I'd like to be a liberal because it's ever so much easier to allow others to form my opinions for me instead of researching an issue myself. That always gets me in trouble, especially when the facts I discover diverge from the latest politically correct consensus.

I'd like to be a liberal because then I'd be rewarded for all my shortcomings and nothing would ever be my fault. I'd be an important cog in the wheel of social justice, and a cherished warrior in the current fight for equality.

I'd like to be a liberal because any guilt I would normally feel for what used to be considered deviant, irresponsible behavior may be assuaged by merely advocating the expenditure of other people's money on whatever the cause du jour is. Very cool. Especially since my stock portfolio has tanked.

Click over and read the rest. You know you want to...