Category Archives: Economy

Bailout Dies, Sending The Right Message

Yea, for now. In the auto industry’s economic troubles, or rather, the Big 3’s economic troubles, opportunities abound. Resisting the knee-jerk reaction to ‘rescue’ the Big 3 by simply throwing good money after bad, it is time to turn the lemon into lemonade by showing the socialist world how free-market economies recover from setbacks without government intervention. The path toward regaining profitability is through procedures called a Chapter 11 bankruptcy. Companies that can successfully reorganize and restructure will rescue themselves and all the jobs that go with it. And to the survivors go the rewards. Rewards to consumers, auto workers, stockholders, and the companies themselves.

Proponents, including the outgoing and incoming Administrations, of the misnomer of a process called a bailout, are saying that a bailout is necessary in order to avoid a disorderly bankruptcy process. They say this with a straight face, as though a government takeover, a nationalization, auto Czar and all, of the auto industry, including new rules on what kind of cars they have to make, will be an orderly and fiscally responsible action. A responsible action is one that gives the Big 3 a chance to reorganize into a company that can make a profit again. The ‘bailout’ plan is nothing more than a nationalization of a failing business model with taxpayers footing the bill with no end in sight.

Today, the Senate did the right thing by sending the right message to the White House,the Big 3, and the UAW.

link:

Could Newspapers Be The Next Bailout?

That newspaper publishers are in tough times is nothing new. Circulation and advertising have been falling for a few years now. And when you consider what percentage of their advertising revenue depended on car dealers, they are seeing their difficulty being compounded.

A snapshot from today’s headlines should tell you how newspapers are going have to be creative, from a purely business standpoint, in order to survive.

The ill-advised bailouts we’ve already seen do not justify yet another one for this industry. Like automakers, this industry needs to change to meet the times as well. But not at taxpayers’ expense.

Some on the left are falling back to another FDR program, focusing on the writers that are finding themselves out in the job market. About 15,000 of them so far. So what kind of make-work program would this ‘Federal Writers Project’ look like you ask?

Right out of the Saul Alinsky and Bill Ayers handbook . . .

Today, there are many dislocated “old media” journalists from newspapers, radio, and television on the street–here I declare my personal interest, as one of them–who could provide a skilled pool to staff a new FWP. But since these journalists represent only a fraction of the larger displaced workforce, it is fair to ask what the public benefit would be of money spent.

This time, the FWP could begin by documenting the ground-level impact of the Great Recession; chronicling the transition to a green economy; or capturing the experiences of the thousands of immigrants who are changing the American complexion. Like the original FWP, the new version would focus in particular on those segments of society largely ignored by commercial and even public media. At the same time, the multimedia fruits of this research would be open-sourced to all media, as well as to academics. As an example, oral history as a discipline has made great strides in the past 70 years, and with the development of video techniques, the forum of the Internet could make these multi-media interviews widely available to schools and scholars, as well as to average Americans.

And how it might work? According to Mark I. Pinsky at The New Republic, it would, naturally, involve colleges and universities, liberals’ home away from home to manage the program.

Administering the new FWP as an individual grant program through community colleges and universities could minimize bureaucracy and overhead. In consultation with the Obama administration–perhaps through the National Endowment for the Humanities–and Congress, guidelines could be established and a small staff assembled in Washington to oversee the projects, in the form of grants, rather than hourly wages. Projects could be pitched locally to colleges, or suggested and posted by them, vetted preliminarily and then approved or rejected by the national staff.

If the Obama administration decided to include the newspaper publishing industry in some kind of bailout, wouldn’t that be a conflict of interest?

link: Write Now

UPDATE: 17:20, This morning Tribune Co. was reported to be considering Chapter 11. They have now filed for Chapter 11 bankruptcy.

Plan B For Automakers, Do Nothing

Executives from the Big 3 automakers are in Washington making their case for $34 billion dollars (up from $25 billion a week ago) to ‘bail’ them out.

Their plan amounts to things they should have done years ago, but still amount to nothing more than duct tape over a gaping hole in the hull of their ship. Not one of them mentioned bankruptcy or getting out from under their current union contracts. That’s where the hole is and that’s why any amount of money now is just duct tape. It will also be nationalizing an industry doomed to failure if it doesn’t cleanse itself of the unnecessary union overhead that a bankruptcy affords them. All for the express purpose of propping up a labor union. I’m sorry, I believe our economy comes before a labor union.

GM’s COO Fritz Henderson is only fooling himself when he says that there is no Plan B. Of course there is. In this case, when you have an operation that ‘can’t fund’ itself, bankruptcy is always an option.

“There isn’t a Plan B,” said GM Chief Operating Officer Fritz Henderson. “Absent support, frankly, the company just can’t fund its operations.”

These auto execs seem unwilling to cut the umbilical cord to the UAW. That leaves the only other option, doing nothing. Why? Because Nancy Pelosi will get them the money they want one way or the other, making the automakers’ appearance this week before congress the obligatory dog and pony show. Pelosi is out to protect and preserve the UAW, not the company that employs them, and these execs know it.

“I believe that an intervention will happen,” Pelosi said at a briefing in Washington. “Everybody is disadvantaged by bankruptcy, including our economy, so that’s not an option.”

Pelosi said Congress will either approve new loans for the auto industry or the Bush administration will provide funding through the $700 billion financial-markets rescue plan approved by Congress last month.

Unfortunately for us taxpayers, and fortunately for the UAW, they will get their (your) money. Don’t you just love it when free enterprise capitalism is interfered with by the government? What makes it worse in this case is that the motivation is only to help big labor, Democrats’ special interest group.

related links: Big Three survival bailout requests rise to $34B | Pelosi Says Bankruptcy by Automakers ‘Not an Option’

Mike Huckabee Comes To Pensacola Friday Nov 28

Former Arkansas Gov. and Presidential candidate Mike Huckabee will be coming to Pensacola Friday night. Huckabee is a supporter, a passionate supporter, of the Fair Tax. It will be for a book signing of his new book ‘Do the right thing.’

Even if you’re not interested in his book, but you support the Fair Tax, how about showing up (you know the media will be there) to thank Gov. Huckabee for making the Fair Tax part of his campaign platform as well as his continued support of it.

He will be at the Barnes & Noble on Airport Boulevard between 8-9pm. If you can’t make it, you can get the book here.

This will be his last stop of a five city trip on Friday.

link: fairtax.org

The Fair Tax, Economic Recovery

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

Do yourself a favor and get educated on The Fair Tax. The Fair Tax is the result of $22 million worth of research by credible economists from around the country whose task was to come up with another way to fund the operations of the country. The task was qualified to the extent that the result would be ‘revenue neutral.’ That is to say the system must be able to generate as much money as the government is currently generating with the current system through federal withholding and payroll taxes, self-employment taxes, alternative minimum tax, estate and gift tax, and capital gains tax, all of which would be replaced by the Fair Tax. And from that point as the economy grows, so grows the treasury. It is a pro-growth, as opposed to punitive growth, taxing system.

Consequences paramount to converting to the Fair Tax system are three-fold.

First, your individual take-home pay increases dramatically. Without the federal withholding and payroll taxes being deducted from your pay, you get all your pay in every paycheck. This alone is the biggest stimulus to your personal economy as well as our national economy. And it doesn’t put the nation further into debt in the process. Because the taxing revenue is generated by consumption, the tax base includes everyone who buys anything new, not just the working people in America. ‘Everyone’ includes citizens and non-citizens including illegals, foreign diplomats and tourists. And because it is a sales tax, the so-called underground economies are no longer exempt from contributing. Everyone will contribute to funding the government and our Social Security, Medicare and other entitlement programs.

Secondly, it takes the ‘tax hammer’ away from politicians who use it to control every aspect of our lives and business and industry in the United States. It transfers the power from Washington politicians directly back to you. It is this stripping of power from the political class that generates the most objection from the political class, and the most outrageous criticism and unfair demagoguery, of the Fair Tax. Under the Fair Tax, our politicians will be left with nothing to do except their job of governing and living within their means, just like you and I have to do. And since filing of your personal income taxes will cease, April 15th becomes just another day to enjoy life, liberty, and the pursuit of happiness.

While it is still fresh in your memory, take a look back at the presidential campaign and the amount of press and attention that was given to taxation by both candidates. Besides energy, the other topic was ‘my tax plan is better than your tax plan.’ And polarizing political tactics like class envy and class warfare became all too prominent. Absent tax laws to talk about, the voters would have learned more about the candidates and ‘the real issues.’

Third, but certainly not last, the change to the Fair Tax alone would bring back foreign-held capital, estimated at between $10 to $15 trillion, that economists predict will flow into the US economy with enactment of the FairTax. That is trillions of dollars of business that has fled this country because of its taxing system, the second highest in the world. As an added bonus, companies looking to do business in the United States that have not yet come here, would have the incentive to come here. The job creation and wealth creation associated with it will spur the economy more than any tax-and-spending Democrat or Republican in Washington could dream of.

related links:

Employee Free Choice Act Is Democrats' Quid Pro Quo

Among the first items on President-elect Obama’s agenda will be to pay back labor unions for their generous campaign contributions in the name of the Employee Free Choice Act. As if government is not already involved in all kinds of things of a socialist nature that it should not be involved in, but is, Democrats in Washington, if not by executive order itself by our new President, will resume the effort to boost labor union membership by enacting new legislation. Since when does boosting labor unions membership become a responsibility of the government? The easy answer to that is to follow the money. If you do that then you’ll know why the bill was sponsored solely by Democrats including Barack Obama.

The bill was mis-named on purpose. Had it been named correctly, it would have been named the Employee Forced Choice Act. The meat of the bill will remove the private ballot in union organizing and replace it with a public one. It is more than a little ironic that Democrats would have such contempt for a private ballot when every other kind of vote Americans participate in is a private one.

And be prepared also for the Left to attach this bill to their favorite political tact, class warfare. Last year, Sen. Hillary Clinton was speaking for this bill and said that it is for ‘the middle class’ because, she asserts, labor union members are middle class. Although Democrats purport to support ‘the working people,’ what they really support are labor unions.

Didn’t we just learn that small businesses create something like 80 percent of jobs in this country, and that most of these small business owners and their employees are ‘middle class?’ And that’s why Obama wants a ‘middle class’ tax cut while raising taxes on ‘the rich.’

Let’s examine Barack Obama’s economic theory. He wants to increase minimum wage to over $9/hr. He wants to increase taxes on small businesses with incomes higher than $120,000. He wants to enable labor unions to unionize small businesses. Does this sound like a pro-growth economic policy to you? It sounds like disaster that will only worsen our economic woes.

In 1983, 20 percent of workers in the U.S. were union workers. In 2007 that percentage was 12.1 percent, up .1 percent from 2006.

Much of last year’s growth came in the West. California’s rate of union membership rose one percentage point, to 16.7 percent, an increase of more than 200,000 members. Nevada showed an increase of 15,000 union members, reflecting the organization of casino and construction workers.

As you might expect, union membership in the Midwest decreased.

In the Midwest, manufacturing job losses reduced union membership. Michigan lost 23,000 union members. The largest decrease came in Illinois, where union rolls dropped 89,000. Ben Zipperer, research associate at the Center for Economic Policy Research, said the manufacturing sector — long the stronghold of U.S. unions — is being supplanted by the construction and private health-care fields, where union membership is growing.

The reason union membership has declined over the years is that employers have negated the need for them by paying more and offering benefits that employees want, without them having to pay dues to a union. This so-called Card Check legislation is a mistake for a number of reasons. Not the least of which is that it is not the government’s job to increase labor union membership. The other reason is the negative impact on business that come with unions in vastly increased overhead and payroll expense.

Look what labor unions do the the auto industry. Did you know that . . .

At a time when the average American company requires workers to pay more than $2,000 a year toward family health insurance premiums, the auto industry is among the 4% of employers that offer free family health coverage.

And these figures are from 2005, it is only worse now . . .

The cost of providing health care adds from $1,100 to $1,500 to the cost of each of the 4.65 million vehicles GM sold last year, according to various calculations. GM expects to spend at least $5.6 billion on health care this year, more than it spent on advertising last year.

Granted that it was the management of these automakers that agreed to such extravagant benefits, at the threat of a strike, but it doesn’t take a rocket scientist to see how labor unions can put not only the auto industry, but any industry at a competitive disadvantage, including small businesses that need all the help they can get. If unions go away, no one suffers. If small businesses go away, everyone suffers.

related links: Union Membership Up Slightly in 2007 | Obama renews promise on NAFTA, ‘card check’ | Employee Free Choice Act, Part Two

Obama Campaign’s Illusion On Coal Power Plants

The Obama campaign is responding to posts like this ‘How Obama Supports The Coal Industry‘ by dismissing it as ‘“right wing blogs” that “wildly edited to take it out of context.”’ They go further to say that Barack actually said the opposite of what he actually said. ?? OK, so they are lying and the dumb masses will accept it rather than check it out for themselves. Consider this, have you ever known anyone, let alone a presidential candidate, that needed so many people to explain what he says? Or rather, to explain away what he says? Their problem is simple. When he actually says what he means, his surrogates come out to say that no, that’s not what he means. The whole Obama campaign has been an illusion in so many ways. But I digress.

To this subject, the Obama campaign added ‘“In the full interview Obama actually praises coal and says that the idea of eliminating coal is ‘an illusion,’” the campaign explained.’ They are word wizards for sure. In fact, Obama did praise coal (as a fossil fuel) as being responsible for about half of the electricity production in the country. He did not praise coal power plants that use it, and certainly not the building of more coal power generating plants. In fact, as far as coal power plants go, he wants to ‘take it off the table.’

Here are his words, not taken out of context.

What I have said is that for us to take coal off the table as an ideological matter, as opposed to saying if technology allows us to use coal in a clean way, we should pursue it.

That is a statement, ‘for us to take coal off the table.’ His position is to take coal power plants off the table. That was not a conditional statement to use coal power plants in a cleaner way. He intends to NOT use it. He intends for the ‘caps and trade system’ to penalize any company that wants to build a coal-fired power plant, and if they are stupid enough to try it and risk bankruptcy, through fines that he defines as a ‘huge sum’ that he says ‘will also generate billions of dollars that we can invest in solar, wind, biodiesel, and other alternative energy approaches.’

Where am I missing the part that says, like his campaign claims, that the idea of eliminating coal is an illusion?

But don’t take my word for it. Here is the entire transcript from the above video. Then have the courage to call a spade a spade and recognize that the only illusion here is the Obama campaign’s spin on Obama’s own words.

Barack Obama: I voted against the Clear Skies Bill. In fact, I was the deciding vote. Despite the fact that I’m a coal state. And that half my state thought that I had thoroughly betrayed them. Because I think clean air is critical and global warming is critical. But this notion of no coal, I think, is an illusion. Because the fact of the matter is is that right now we are getting a lot of our energy from coal. And China is building a coal-powered plant once a week. So what we have to do then is figure out how can we use coal without emitting greenhouse gases and carbon. And how can we sequester that carbon and capture it. If we can’t, then we’re gonna still be working on alternatives. But…let me sort of describe my overall policy. What I’ve said is that we would put a cap and trade policy in place that is as aggressive if not more aggressive than anyone out there. I was the first call for 100% auction on the cap and trade system. Which means that every unit of carbon or greenhouse gases that was emitted would be charged to the polluter. That will create a market in which whatever technologies are out there that are being presented, whatever power plants are being built, they would have to meet the rigors of that market. And the ratcheted down caps that are imposed every year. So if somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted. That will also generate billions of dollars that we can invest in solar, wind, biodiesel, and other alternative energy approaches. The only thing that I’ve said with respect to coal–I haven’t been some coal booster. What I have said is that for us to take coal off the table as a ideological matter, as opposed to saying if technology allows us to use coal in a clean way, we should pursue it. That I think is the right approach. The same with respect to nuclear. Right now, we don’t know how to store nuclear waste wisely and we don’t know how to deal with some of the safety issues that remain. And so it’s wildly expensive to pursue nuclear energy. But I tell you what, if we could figure out how to store it safely, then I think most of us would say that might be a pretty good deal. The point is, if we set rigorous standards for the allowable emissions, then we can allow the market to determine and technology and entrepreneurs to pursue, what the best approach is to take, as opposed to us saying at the outset, here are the winners that we’re picking and maybe we pick wrong and maybe we pick right.

related link:A ‘Dirty’ Fight

Got Energy? Then Pass The Hat

It is bad enough that the United States spends over $700 billion per year on oil resources from the Middle East and elsewhere, when we have enough resources of our own which could be developed right here in the United States, creating jobs all over the country in the process.

The confluence of two problems, energy dependency and the financial market meltdown, seem to have the world looking to the Middle East and Saudi Arabia for help. President Bush took a trip to Saudi Arabia with his hand out for more production and lower oil prices. Now British Prime Minister Gordon Brown goes there looking for money for the International Monetary Fund’s ‘bailout reserves.’

British Prime Minister Gordon Brown said Sunday he is confident that Saudi Arabia will contribute to the International Monetary Fund’s bailout reserves after he promised business leaders in the Gulf that they would have a say in any future new world economic order.

When you are the one in control of the oil spigot, with cash reserves that are as large as your oil reserves, it is not hard to imagine, nor is it surprising, to see this kind of attitude ‘from those that don’t like us very much.’

A senior British government source, speaking on condition of anonymity because he was not authorized to comment, said that during talks the Saudis had been concerned about becoming a “milk cow” to prop up “basket case” economies in other parts of the world.

Both the energy and economic ‘crises’ can be solved by restoring common sense to both. By using our own resources and by paying attention to sound business practices by not offering mortgages to people that have no ability to pay. Those people are called ‘renters.’ In the meantime, with help from Saudi Arabia or not, the world will have to pay the consequences of our bad decisions.

On Tuesday, Nov 4, Americans can choose which of the two candidates, which of two parties, have the answer to today’s problems. Or at least an inclination as to which way to proceed. The choice seems pretty clear to me. One party wants to cut oil dependency by a small percentage, the other party wants to eliminate it. One party wants to make home ownership a ‘right,’ and the other wants to enable every citizen to get their own home based on their own efforts.

Socialism is easy, the government makes decisions for us, and innovation and productivity are depressed. Freedom is hard, you have to make your own decisions, innovation, productivity and the rewards that come with it are unlimited.

related link: Brown expects Saudi financial help

Obama Attacking Joe And Middle Class Americans

Isn’t it amazing how the media is all over ‘Joe the plumber?’ Within 24 hours, we know all about this man’s personal and professional business. And for over two years now, the media is still not motivated to tell us about Barack Obama’s alliances with people that hate America, and his proclivity for supporting directions in education that promote socialism. Then there’s his working for and with ACORN, and so much more.

It is more than an little ironic that Obama and his willing accomplices in the media chose to attack this hard working middle class guy, a union member no less, that hopes to one day buy the plumbing business he currently works for. ‘Joe the plumber’ is of the kind of people that Democrats purport to champion. Working hard to get ahead and having some financial difficulty, as the media is so quick to point out, but trying to overcome the obstacles he faces. What has Obama’s hair standing up about ‘Joe’ is that Joe isn’t looking for the government to bail him out. He is wondering whether the government is going to put more obstacles in his way. This episode really shines the light on how disingenuous the Democrat platform is. Which is more about maintaining a middle-class and ‘poor’ than helping them rise above it.

The Democrat party of today is the class-warfare party, and Barack Obama’s reaction to Joe personifies it. Barack came out and said what his vision for America is. That the government should spread the wealth, which means taking from the haves to give to the have-nots. ‘A government that robs from Peter to pay Paul can always count on the support of Paul,’ George Bernard Shaw.

Convincing people how harmful this Democrat doctrine is to this country remains conservatives’ biggest challenge. The amount and scope of education necessary to accomplish that begins in our elementary schools and goes right up to the college level. It is not a coincidence that people like Obama and William Ayers want to start socialistic indoctrination in elementary school, and earlier.

New York Times link: McCain: Obama Turned Heat on Joe the Plumber

Mexico's Economy Depends On Illegals In U.S.

Oil revenues is Mexico’s largest single foreign revenue source for the Mexican government. The second largest foreign revenue source for Mexico is money mailed or wired back to Mexico from the United States by Mexicans living in the United States. They have a nice clinical name for it. They call it remittances. And by the looks of this video , the major part of it seems to be coming from illegal alien Mexicans living in the United States.

Mexicans living in the U.S. sent home 12 percent less money in August, the largest drop on record since the Bank of Mexico began tracking remittances 12 years ago. Many towns depend on these dollars for survival.

According to the report, ‘remittances’ have dropped from $2.2 billion last year to $1.9 billion this year. It is not clear whether that was for August only or if that was a year-to-date figure ending in August. Whichever, they ‘blame’ increased border security and increased deportations, in addition to a slowing economy in the United States for ‘their’ loss. They are saying there is no work available here anymore. Can you say ‘guest worker’ program?

Looks like Mexico is going to have to learn how to take care of its own people and from within its own borders for a change. The bad guy here is Mexico’s government, not the United States government.

Since there is no compulsion in Washington or in Mexico, for Mexico to reimburse the United States for subsidizing them via remittances, and for letting the illegals here suck on the American teet, the question is whether the current financial crisis is enough for legal taxpayers to stand up and say ‘No Mas.’

MSN video