Freedom and Liberty
I‘ve been following this story with numbed amazement at just how surreal it all is. No matter how many times I repeat this sentence in my head — The President of the United States has just fired the CEO of General Motors — I can’t quite convince myself that it’s true.
That’s not to say that I’m unsympathetic to the argument that the U.S. government, as lender, has every right to demand such a resignation if its going to be funding the company. Indeed, that’s a fairly common demand whenever a funding source enters the picture at dire times. And rightly so.
But let’s not forget that Obama is not the U.S. government. And, in reality, he’s not the lender. Congress holds that dubious distinction by being the keeper of the public purse. You’d think that Obama would have understood that and, y’know, at least told them about his plans for Rick Wagoner’s head. You’d be wrong, though [HT: Allahpundit]:
President Obama didn’t want any advice from Congress on the decision to ask GM CEO Rick Wagoner to resign, according to Carl Levin (D), Michigan’s senior senator.
“He didn’t ask us about it, he informed us,” Levin told reporters in a conference call Monday afternoon. “The president said he’d already decided.”
Levin said he and three other lawmakers were informed of the decision in a phone call Obama made from the Oval Office. Obama told the members of Congress that Wagoner needed to resign so that the administration could show the public it was making an effort at a fresh start with helping the auto industry, according to Levin.
I guess Congress isn’t about to argue with The One over this. Maybe they’re just upset that they didn’t think of it first. Nevertheless, is there any doubt that Obama has absolutely zero authority or power to make this decision?
Aside from the stupefying hubris driving Obama’s actions here, what real good is going to come of Wagoner’s ouster? He’ll walk away with about $20 Million in severance, and GM will still have around $6 Billion in legacy costs to deal with each year, on top of pay for its unionized workforce. And even if all those costs were brought into line, what exactly is the new (Obama picked?) CEO going to recover from the fact that GM is losing about $1 Billion per month? The sad answer is “probably nothing.” GM will proceed into bankruptcy, just like it should have from the start of all this mess, and it will take down several billion taxpayer dollars with it.
But all that pales in comparison to the precedent now set, without even a peep of objection from Congress, that the President of the United States considers it within his purview to fire the heads of companies when he sees fit. Lovely.
Did I miss some fine print in the election last year about voting for King of the United States?
I‘m still in rather stunned disbelief about the White House ousting GM’s CEO.
It’s not about how good a CEO he was or whether I agreed with his plan, his leadership style or his results. It’s about the White House going so far as to ask him to step aside. And, according to Obama’s own statement today, his “team” will “working closely with GM to produce a better business plan”.
Why, that sounds like something we’ve seen pass this way before and firmly rejected:
Italian Fascism often involved corporatism, a political system in which economy is collectively managed by employers, workers and state officials by formal mechanisms at national level.
Now I’m sure there are those out there who will argue that this is hardly a “formal mechanism”. But of course that’s simply not true. It is formal enough that a CEO is gone. Someone believes it is a mechanism of some formality for that to happen. And, if you think about it, it is just one more mechanism among many that have been put forward lately. Timothy Geithner’s plan to have the government take over financial institutions and hedge funds if the government deems them a threat to the economy’s well-being, for instance.
After all the caterwauling by the left about “unprecedented executive branch power expansion” during the Bush years, they’re rather quiet about these. The market, however, has cast it’s vote. Down about 300 at 4pm.
And this is all based in a false premise – something I’ve noticed that Obama uses quite effectively:
“We cannot, we must not, and we will not let our auto industry simply vanish,” President Obama said at the White House.
Anyone – who would expect the domestic auto industry to ‘simply vanish’ if the companies were left to go the traditional route of bankruptcy?
Since when does bankruptcy equal “vanish”? Delta airlines seems to have survived it quite well, thank you very much. Their bankruptcy or the bankruptcy of other domestic airlines hasn’t seen the domestic airline industry “vanish”. Why would anyone believe it would happen if GM or Chrysler went bankrupt?
And that said, what did he suggest in his speech today?
The administration says a “surgical” structured bankruptcy may be the only way forward for GM and Chrysler, and President Obama held out that prospect Monday.
“I know that when people even hear the word ‘bankruptcy,’ it can be a bit unsettling, so let me explain what I mean,” he said. “What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so they can get back on their feet and onto a path to success; a tool that we can use, even as workers are staying on the job building cars that are being sold.”
Seems like that is precisely what all of us were telling them to do before they started throwing bucketfuls of imaginary dollars at the two companies, wasn’t it? And you can call it “surgical”, “structured” or whatever you want in an attempt to spin this as something other than fairly ordinary bankruptcy procedures, but that’s what they’re talking about.
One of the primary reasons they’ve attempted to keep these companies out of bankruptcy court can be described in three letters: UAW.
Their problem isn’t just “old debts” which need to be cleared away. Instead it is what is euphemistically called “legacy costs” which would go as well. And those “legacy costs” include the gold plated benefits the UAW now enjoys and doesn’t want to give up.
Administration officials on Sunday made it clear that an expedited and heavily supervised bankruptcy reorganization was still very much a possibility for both companies. One official, speaking of GM, compared such a proceeding with a “quick rinse” that could rid the company of much of its debt and contractual obligations.
The thing to watch out for is whether or not this “quick rinse” in a “heavily supervised bankruptcy reorganization” included “contractual obligations” to unions. If not, it will be a “quick rinse” of taxpayer’s wallets.
Among challenges the administration faced leading up to this weekend’s decision, foremost were the efforts to draw steep concessions from the United Auto Workers union and from the bondholders.
Attempts to solidify deals with the UAW and bondholders were slowed by disagreements by both parties over how exactly the other party needed to budge. The UAW, for instance, insists it already made health-care concessions in 2005 and 2007, and argues that the bondholders have never been asked to concede anything.
“I don’t see how the UAW will do anything until they see what the bondholders will give up,” one person involved in the negotiations on behalf of the UAW said Sunday.
Progress? Apparently both GM and Chrysler have been negotiating with both the bondholders and the UAW. But there’s not much to report there:
Both GM and Chrysler are negotiating with the UAW to accept a range of cost-cutting measures, including greatly reduced work forces, lower wages and a revamped health-care fund for retirees.
GM and representatives for its bondholders remained in talks over the weekend about a deal that would force these investors to turn in at least two-thirds of the value of the debt they hold in exchange for equity and new debt.
This arrangement would force GM to issue significantly more stock than what is currently being traded in the market. In addition, the government is being asked to guarantee the new debt with federal default insurance in order to entice bondholders who otherwise wouldn’t be interested in participating in the swap.
If GM can’t eventually forge a deal with the ad hoc committee representing the bondholders, the company may be forced to issue a debt-for-equity swap without the blessing of some of its biggest and most influential unsecured investors. This would heighten the possibility of the company eventually needing to file for Chapter 11 bankruptcy protection.
Or said another way, they’ll end up doing what we said they should have done in December, less umpteen billions of taxpayer money poured down a rathole. Of course, had they reorganized under Chapter 11 as we all said they should, the Obama administration wouldn’t have been able to make this unprecedented power grab, would it?
Don’t buy or own any property in Mississippi, at least not while Republican Governor Haley Barbour is in the Governor’s mansion:
Mississippi Gov. Haley Barbour says he’s vetoing a bill that would limit the use of eminent domain because it would hurt the state’s ability to lure economic development projects.
The bill would’ve prevented the government from taking land for private projects. Barbour said Monday eminent domain was needed to lure projects such as the Nissan vehicle plant in Canton and the Toyota plant in north Mississippi.
And who is on the side of private property?
The bill was filed by Rep. Ed Blackmon, a Democrat from Canton. An attempt to override veto would have to start in the House, where Blackmon is head of the Judiciary A Committee.
Sen. Eric Powell, a Democrat from Corinth, said he voted for the bill and he doesn’t intend to change his vote.
Amazing. What in the hell happened to individual rights and small and less intrusive government among Republicans? And, at least in Mississippi, why are they ceding the fight to Democrats?
Is it any wonder the GOP is losing support at a dizzying rate? With “Republicans” like Barbour, the GOP doesn’t need any enemies.
If you ever had to put a picture next to the term “unprincipled political hack”, I think Arlen Specter’s would be a good choice. Read the following carefully. It’s not that Specter is against the union card check legislation itself (i.e. he accepts the premise that the right of a secret ballot should be denied American workers), he’s just is against it now. Of course many on the right are celebrating his decision, but in reality it’s a decision based in unprincipled and nonsensical reasoning (but, given the source, not at all surprising). He’s hedged the hell out of it. It’s his weasly way of placating those on the right who’re still mad at him about the “stimulus bill” vote by appearing to be against something they are against while really not being against it at all. Is your head spinning a little bit?
Senator Specter ended speculation on where he would come down on the Employee Free Choice Act by declaring, on the Senate floor, that he would oppose the legislation until the economy improves.
“The problems of a recession make this a particularly bad time to enact Employee’s choice legislation,” he said. “Employers understandably complain that adding a burden would result in further job losses. If efforts are unsuccessful to give labor sufficient bargaining power through amendments to the [National Labor Relations Act] then I would be willing to reconsider Employees choice legislation when the economy returns to normalcy. I am announcing my decision now because I have consulted with a very large number of interested parties on both sides and I have made up my mind.”
So, per his statement, the premise is fully accepted as valid by Specter. But for reasons of political expediencey, he claims that the “burden” it would impose on businesses now would “result it further job losses” which makes it unacceptable at this time. But apparently when the economy returns to “normalcy” those “burdens” and “job losses” will then be considered acceptable, as will the denial of the secret ballot to workers.
Hey, he said it, not me. Ask him how the hell he explains the apparent contradictions or why he accepts the premise workers should be denied the secret ballot at some point in the future.
Talk about the government getting all up in someone’s business:
Things could get hairy in New Jersey this summer for women who sport revealing bikinis or a little bit less.
The painful Brazilian wax and its intimate derivatives are in danger of being stripped from salon and spa menus if a recent proposal to ban genital waxing is passed by the state’s Board of Cosmetology and Hairstyling.
New Jersey statutes allow waxing of the face, neck, arms, legs and abdomen, but officials say that genital waxing has always been illegal, although not spelled out.
Regardless, almost every salon in South Jersey, from Atlantic City casinos to suburban strip malls, has been breaking the law for years by ridding women, and some men, of their pubic hair for $50 to $60 a session.
Jeff Lamm, a spokesman for New Jersey’s Division of Consumer Affairs, said that the proposal would specifically ban genital waxing, and was prompted by complaints to the board from two women who were injured and hospitalized. One of them sued. Lamm said that the state only investigates infractions if consumers complain.
What happened to “keep your hands off my body”? If the government can dictate the size and shape of the drapes, what’s to stop it from taking over the whole
womb room? It’s not as if the rights of the unshorn are at risk here. In addition, there is a legitimate concern for where women will turn if they lose the right to freely control their bare necessities:
Cherry Hill salon owner Linda Orsuto said that women would “go ballistic” if the proposal passed. She said that some women would resort to waxing themselves, visiting unlicensed salons or traveling to other states, including Pennsylvania, in a quest to remain bare down there.
“The clients are going to freak,” said Orsuto, who owns 800 West Salon & Spa, on Route 70. “It’s a hot issue, and we’re going to have to do something.”
Now, I understand that some aficionados of adult entertainment from the 70′s might be excited about the return of a tufted tarts and piliferous punani. But that sort of hirsute protectionism treads dangerously upon our most cherished freedoms, and will potentially lead to messy entanglements from which we will find it hard to extricate ourselves (think “velcro”).
Accordingly, I stand firmly behind the women of New Jersey and fully support their rights to depilate as they see fit, with the advice and counsel of their salon professional. So say it loud, ladies, in all your glabrous glory: “We’re bare! Down there! And we’re proud!”
There are plenty of good writers around, but there are only a few who cause me to pause during reading and think “Oh, how I wish I could write like that.”
Mark Steyn is in that group. Just about anything he writes is worth reading, and he is the best in the business at being funny and thought-provoking at the same time.
Occasionally, though, he captures the essence of an issue in a way no other current writer can. His current article at National Review, “The Brokest Generation“, is in that category. Go read it yourself, and then pass it along to the folks who are going to be paying for the folly of the Obama years (and the somewhat-lesser follies of the administrations that preceeded him).
It’s true irony that the chanting, swaying kids in the creepy Obama videos will be the ones who pay the highest price for Obama’s fumbling foolishness. Per Mark:
As Lord Keynes observed, “In the long run we’re all dead.” Well, most of us will be. But not you youngsters, not for a while. So we’ve figured it out: You’re the ultimate credit market, and the rest of us are all pre-approved!
The Bailout and the TARP and the Stimulus and the Multi-Trillion Budget and TARP 2 and Stimulus 2 and TARP And Stimulus Meet Frankenstein and the Wolf Man are like the old Saturday-morning cliffhanger serials your grandpa used to enjoy. But now he doesn’t have to grab his walker and totter down to the Rialto, because he can just switch on the news and every week there’s his plucky little hero Big Government facing the same old crisis: Why, there’s yet another exciting spending bill with twelve zeroes on the end, but unfortunately there seems to be some question about whether they have the votes to pass it. Oh, no! And then, just as the fate of another gazillion dollars of pork and waste hangs in the balance, Arlen Specter or one of those lady-senators from Maine dashes to the cliff edge and gives a helping hand, and phew, this week’s spendapalooza sails through. But don’t worry, there’ll be another exciting episode of Trillion-Buck Rogers of the 21st Century next week!
This is a connection we need to be making over and over again: when the mountain of federal debt finally collapses of its own weight, the younger generation will be hurt the worst. Most of the people who fomented the crisis will have long since passed on, or be comfortable in their retirement because of the assets they were able to accrue at taxpayer and lobbyist expense. They will have gotten what they wanted: time in the sun, running things, letting others pay them obeisance, getting respect they don’t really deserve. Either they are too stupid to realize what they are doing to the next couple of generations, or they are too mendacious to care. The sooner the younger generations learn the con job that has been perpetrated on them, the better.
Last night’s episode of 20/20 was one of the best I’ve ever seen. John Stossel took on several topics, such as taxpayer-funded bailouts, transportation, medicinal marijuana, universal pre-kindergarten and immigration. Many of the segments are based on and include footage from The Drew Carey Project from Reason TV. Stossel also interviews Drew Carey in some of the segments.
The they are six videos (five below the cut). The first one deals with bailouts. Stossel talks to 18 economists about why the “stimulus” was a bad idea. He asks House Majority Leader Steny Hoyer if debt got us into this recession, then why is creating more debt going to get us out? One economist says that one dollar taken out of the economy is one less dollar to be spent in the private sector.
The second video deals with transportation, and actually starts off in Atlanta (my hometown), and is based on this video from Reason TV. It highlights private toll roads built in Orange County, California, Paris, Chicago and Indiana.
This segment is on medicinal marijuana and Charlie Lynch and is based on this Reason TV video. Lynch owned a medicinal marijuana dispensary in California, which is legal under state law. He was arrested by DEA agents for helping sick people and is now awaiting sentencing, up to a hundred years in jail.
This is the segment on universal pre-kindergarten, a promise made by Barack Obama during his campaign. It’s based in part on this Reason TV video.
Here’s the segment on immigration, which is based on a Reason TV video. Stossel shows how the gate is useless because illegal immigrants still manage to get around it, either by climbing over it or cutting holes in it. Stossel talks to both Duncan Hunter and his son, Duncan Hunter, Jr., about why it is necessary. The younger Hunter asks Stossel, “What is it worth to the American people to not have another 9/11?” Stossel says the fence wouldn’t have stopped 9/11 (the 9/11 hijackers came in the country legally). Hunter says, “It may stop the next 9/11.” Gotta love the fear mongering.
Here’s the final segment of the episode. It talks about how easy it is to make it in American if you live within your means and is based on this Reason TV video.
David Brooks had started down the road to Damascus when he was called back into the fold by Dear Leader. His Op-Ed in today’s NYT is the result.
Most of Brooks’ offering is a rather transparent attempt to shame congressional Republicans into supporting Pres. Obama’s agenda:
The Democratic response to the economic crisis has its problems, but let’s face it, the current Republican response is totally misguided. The House minority leader, John Boehner, has called for a federal spending freeze for the rest of the year. In other words, after a decade of profligacy, the Republicans have decided to demand a rigid fiscal straitjacket at the one moment in the past 70 years when it is completely inappropriate.
The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is “no.” They’ve apparently decided that it’s easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand.
There are myriad problems with Brooks’ line of reasoning, including many in just to two foregoing paragraphs (e.g. How much input did Republicans have into the recent legislation? By “adopted a posture” is he referring to “not having control of either the House or the Senate”?), but I wanted to focus in on a couple of points in particular.
After some platitudinous admonitions, Brooks launches into his prescription for Republicans to save capitalism:
Third, Republicans could offer the public a realistic appraisal of the health of capitalism. Global capitalism is an innovative force, they could argue, but we have been reminded of its shortcomings. When exogenous forces like the rise of China and a flood of easy money hit the global marketplace, they can throw the entire system of out of whack, leading to a cascade of imbalances: higher debt, a grossly enlarged financial sector and unsustainable bubbles.
I really don’t know what point Brooks thought he was making, but he failed miserably on any score. First of all, “exogenous forces” cannot be “weaknesses” and/or “shortcomings” with capitalism since, by definition, they come from outside that system. At best, examining such forces can be used to understand better ways of protecting capitalism from them. In the context of the entire Op-Ed piece, however, it appears that Brooks is pitching the tired line that capitalism must be reigned in so that people don’t get hurt. That’s like diagnosing the problem with house, finding termites, and then thinking of ways to protect the termites from the house.
Furthermore, Brooks cites a “flood of easy money” (which, of course, is caused by government) as an example of an exogenous force, and then lists the following “shortcomings” of capitalism: “higher debt, a grossly enlarged financial sector and unsustainable bubbles.” What do any of those things have to do with capitalism? If anything, these are once again a failure of government skewing incentives.
In fact, when the government does its darnedest to make the cost of borrowing money historically low, people would be really stupid not to take advantage of that. We all know that rates fluctuate, and that the cost of money will be more expensive when they go back up. Logically therefore, it only makes sense to borrow when the Fed turns the money spigot on and then to find some sort of an asset to grow that money in. That, of course, is what leads to bubbles as everyone has barrels of money but not as many clear ideas of what makes a good investment. Instead of taking the time to really investigate what opportunities are available, and which ones fit a particular person’s portfolio, the herd mentality takes over and we all tend to keep up with the Jones and Smiths whether that means buying tulip bulbs or a run-down house we intend to flip.
The bottom line, however, is that these sorts of scenarios start with government intervention into the market place. In addition to turning on the money spigot, the federal government was also encouraging lenders to make high-risk loans, and for the Freddie Mac and Fannie Mae to buy them up, securitize them and sell them into the derivatives market. Again, that’s all fine and dandy (until it it all goes to hell), but it has nothing to do with “weaknesses” and “shortcomings” of capitalism, and everything to do with government sticking its big fat honker where it doesn’t belong.
If the free market party doesn’t offer the public an honest appraisal of capitalism’s weaknesses, the public will never trust it to address them.
The “free market party”? Who does he think he’s kidding here? The Republicans haven’t acted like a free market party since … well … it’s been so long I can’t remember.
Moreover, I simply can’t fathom how Brooks thinks a “free market party” would ever be able to reconcile itself to joining hands with Obama on his completely anti-capitalist agenda.
Power will inevitably slide over to those who believe this crisis is a repudiation of global capitalism as a whole.
Earth to Brooks: that’s already happened. Look who the president is for crying out loud, or take the time to read your own newspaper. Each and every day we hear about how the excesses of capitalism caused this crisis, and how the “libertarian” policies of Bush (HA!) have landed us in this awful spot. Capitalism didn’t get a trial, Mr. Brooks, it was rounded up, convicted and summarily shot as soon as the latest grand experiment in government do-goodism failed (again).
Heh … I love it when this sort of thing happens. Unfortunately it doesn’t happen often enough.
The saccharine conventions of showbusiness were thrown out of the window last week, when the Hollywood actress Maria Conchita Alonso was collared by paparazzi and asked if she was pleased about her former co-star Sean Penn’s recent Oscar victory.
“He’s an amazing actor. I can’t take that away from him,” she said of Penn, who worked with her on the 1988 cop film Colors. “It’s just that he has no clue at all what’s going on in Venezuela. He’s been praising Hugo Chavez, who is a dictator and a killer. He should shut up about what he doesn’t know.” Alonso, who was raised in Venezuela, was apparently upset by a glowing article that Penn had written for The Nation magazine about her homeland’s charismatic but increasingly dictatorial left-wing President.
Of course Penn’s not the only one from Hollywood in the thrall of Chavez:
Other Hollywood liberals face public criticism, most notably Oliver Stone, currently filming an adulatory authorised biopic of Mr Chavez. Stone could be joined in the pillory by Danny Glover, who was given $18m by Mr Chavez in 2006 to make a left-leaning film about Haiti’s 19th-century leader, Toussaint Louverture. Harry Belafonte sparked outrage two years ago when he appeared on a platform with Mr Chavez to call George Bush “the greatest terrorist in the world”.
The term “useful idiots” describes them well.
Thousands of patients with terminal cancer were dealt a blow last night after a decision was made to deny them life prolonging drugs.
The Government’s rationing body said two drugs for advanced breast cancer and a rare form of stomach cancer were too expensive for the NHS.
The National Institute for Health and Clinical Excellence is expected to confirm guidance in the next few weeks that will effectively ban their use.
Note the bold term. Government rationing body. Doesn’t matter what you want or need or are even willing to pay for, does it? Denied with no recourse except to get on an airplane, fly to the US and pay for it yourself … if you can afford all of that. And what if there were no US to fall back on?
When the government owns the problem, rationing will be the result. Take a look around you and tell me what you see going on economically. What do you suppose, then, will be the case if the same sort of system exists here? How can it be any different?
And a side note about unintended consequences. If you were the CEO of the drug company that developed these drugs, would such development be a priority in the future? Right now you have the relatively free market of the US to sell such products in. And as they’re used and studied, even better drugs will result. But if that market dries up because government is unwilling to pay the price for newly and expensively developed drugs, what’s the incentive for you and your company to do so?
[HT: Below The Beltway]