Wednesday, June 30, 2010

The Pet Gets the Cash. The Story of Fisker.

Obama gives $528,700,000 to one of his pets, Fisker Automotive.
The taxpayer-backed half-billion dollars (funded no doubt by the People's Republic of China) "invested" in this Obama venture capital (aka Obama Capital) startup, will help Fisker build the ultra-luxury $89,000 Fisker Karma, which is to be built in Finland, and its next generation model, perhaps called the "Obama".  This separates President Obama from Chancellor Adolph Hitler who financed the building of a "people's car" which became Volkswagon.  Obama's Fisker is not made for the unwashed masses, but for the rich, obviously, at nearly $90,000 base price.  It has been described as "the eco-friendly love child of a Jaguar and a Ferrari."  It is built in Finland; at least the Volks was built in Hitler's country, Germany.

Biden gets his hometown's former G. M. plant reopened.
U. S.-owned company General Motors closed a plant in Vice President Joseph R. "Joe" Biden, Junior's hometown of Wilmington, Delaware, in July 2009 during its bankruptcy. Now Obama's pet "venture capital" deal, Finland-based Fisker Automotive plans to build hybrid electric cars in that very same Biden plant! Soon, good old Joe is scheduled to visit the plant, near his hometown, Wilmington to brag of this ultra-earmark..

OK, Obama gives Fisker a half of a billion dollars to reopen a plant in Biden's hometown to build a luxury car most Americans cannot afford..  So far so good.  G.M. gets around $18,000,000 for the 3.2 million square feet manufacturing facility.  $5.625 a square foot.  (Cost to build, probably $50 a square foot.)

Fisker Plug-In Plant Will Be Union, UAW 'Essential' Says Company (

Fisker Automotive plans to welcome the United Auto Workers Union with open arms if its deal to acquire a former GM plant in Delaware goes through as planned.

While most private sector automobile companies try to avoid unions, especially in new plants, a Fisker spokesman told Green Car Advisor that Fisker is "looking to establish a mutually beneficial partnership with the UAW" as it opens its first U.S. assembly plant.  The new plug-in hybrid "rich family sedan" is expected to startup  production in late 2012, with a presently-anticipated price of $48,000.

The plant expects to employ as many as 2,000 at full capacity, a cost of $264,350 per job "saved or created".

Friday, June 25, 2010

Bribery Gains America Nothing

Sales of new homes plunged in May, 2010,after the Obama tax credits to buy new homes expired.  My response, "Well, duh".  One of myriad stupidities, Obama gave taxpayer money away so people could buy new homes.  They did!  Proves people can be bribed.  But end the bribe and: no purchases.  Off 33% from the month before to a record low -- A RECORD LOW -- seasonally-adjusted RATE of 300,000.  And Mr. Obama just what did we, the United States taxpayers, get for this?  Not much of anything at all except we owe China a few hundred million dollars more.  And consumers buy things they don't necessarily want to buy but Obama wants them to.  This is the genesis of the entire financial meltdown: government and politicians wanting something accomplished that is opposite to what the free market can do.

It is idiocy thinking as Obama and his possee of socialist-leaning lemmings do, that bribing consumers to consume can do anything for the economy.  A one- or two-month shot in the arm followed by nothing.  It is simply ignorant and stupid.  As is our president.

Thursday, June 24, 2010

The Tide Has Turned

The Tide Has Turned.  It looks as though much of the Left-leaning media, many late-night Left-leaning "comedians", and, most importantly, the Left-cpntrolled Congress is turning against President Obama and his uber-radical attempt to change the American Society into some utopian-socialist absurdity.  (As with Stalin  and Hitler, it would, of course have had Obama in absolute charge, micro-managing every element of society.)  The inexperience and far-left ideology of Barack Obama (the nation's first American Idol-- The President) which I outlined in this blog July 8, 2008, entitled  "2008 Presidential Election" is becoming abundantly clear to most rationally-thinking Americans.  These same Americans are turning back the tide, tossing out not only incumbant Democrats, but useless Republicans with no goal other than keeping their cushy jobs.

Perhaps with the latest fiasco with the Afghanistan War generals, it is the last straw or perhaps a last straw.  We can hope for: 1) Obama's emasculation (assuming he was masculine in the first place); 2) Conservative -- real conservative -- capturing of the majority in one House, perhaps both, of the Congress and the rolling-back of the most deficit-inducing egregious Healthcare Takeover, stopping the continued left-wing political transformation/capture of the Supreme Court (which hopefully will start with rejecting Elena Kagan next week), the regulatory framework of this country and our formerly-free society; then 3) electioin of a conservative -- real conservative -- president in 2013 to finally bring this country back to the Rule of Law, respect for private property and adherence to the Constitution.  And Freedom once again.

It's been far too long!

Wednesday, June 23, 2010

"Arbitrary and Capricious"

Federal Judge Martin Feldman inadvertently summed up the the entire Obama Administration in his decision overturning the president's "arbitrary and capricious" six-month moratorium on deep-water oil drilling in the Gulf of Mexico.  Painting his sharp reprimand with detail he added, that even presidents couldn't impose an unjustified "edict"'; that the administration couldn't even define "deep water";  that it didn't mention any "irreparable harm" to justify such a sweeping moritorium; that it offered "no evidence" of a balance of environmental concerns with the immense scope of the moratorium's "irreparable harm" to jobs.  And finally, that the administration's claim that its so-called "safety report" was "peer reviewed" was a lie - "factually incorrect" plus it "abuses reason, common sense and the text at issue".  That there was no "probity" (defined as "absolute moral correctness" and "a very moral and honest way of behaving") in its decision.

In summary the Obama Administration was:

arbitrary and capricious
one-sidedly prejudiced

Now let's glide over the headlines and body of today's Wall Street Journal (Wednesday, June 23, 2010):

"Business Group Slams 'Hostile' Policies on Jobs" of the Obama Adminsitration. (page A4)

Director of Obama's Office of Management and Budget Office decides to resign after overseeing a 2009 Obama Budget deficit of $1,400,000,000,000 ($1.4 trillion) or 10% of U. S. GDP a number not seen since World War II.  Projections are for it to skyrocket to $11,000,000,000,000 ($11 trillion)over the next ten years.  I'd quit, too.  Peter Orszat helped ram through the "stimulus" (see next) and the healthcare industry takeover, which is looking like an additional major deficit producer. (page A4)

"States Face New Pinch as [ineffective] Stimulus Ebbs".  Of the $787,000,000,000 so-called "stimulus", $150,000,000,000 went to states to prevent union-member layoffs and provide temporary funding for federal government-mandated healthcare (primarily Medicaid) which runs out at the end of the year and the rest went for tax relief, grants (many to non-profits), contracts, and awards (none of which demonstrably created any  jobs).  Scott Pattison, executive officer of the National Association of State Budget Officers, said "Stimulus is going to run out and there isn't sufficient economic growth that's going to come in and make up for the loss of those funds".  The "stimulus" is an abject failure.  But state and local government (union) jobs have been protected, losing only 230,000 jobs against 8,000,000 gone in the private sector.  States want $24,000,000,000 more to balance their budgets on the backs of U. S. citizens at large.

"Obama Tangles With Insurance Executives Over Rates" (page A4).  President Obama warned health insurance executives not to raise rates "unreasonably" (an arbitrary and un-definable word).  Obama's new hugely-costly regulations which cover people without insurance, prohibit denial of care (which is highly-regulated by states already), stop lifetime caps and limit annual caps, force adults up to age 28 to be covered on their parents' plans vastly increase insurance companies' costs.  Finally it fixes profits ("price fixing") of health insurance companies at 15% to 20% of premiums (depending on type of insurance, which figure includes administrative costs), but, of course, the Health and Human Services Secretary can by law modify such regulations on a case-by-case arbitrariness (undermining, of course, the Rule of Law completely).

But the greatest set of articles concern the upcoming G-20 (Group of worldwide twenty major industrial and developing countries) meeting.  "France's Lagarde Forecasts Austerity", "U. K. Unveils Severe 'Unavoidable Budget'", "Japan Lays Groundwork for Cutting Massive Public Debt" and "Bank Tax Gains Backers Before G-20" (all page A11), "Russia's Economic Czar Tackles Deficit, Bureaucracy" (page A13).  All these articles highlight the unavoidable need for countries to slash deficits.  Except America.  Obama tells other countries to slash and burn deficits AND to force their conumers to save less and spend more on imports (hopefully from America) WHILE the U. S. needs to continue its deficits and sell more of its imports.  DO AS I SAY NOT AS I DO.

As for the slashing and burning our deficit, Mr. Obama slyly slides it under the table with a "deficit commission" to report AFTER the upcoming mid-term elections while continuing to spend like a cocaine-addled maniac. "White House Backs Electric-Car Aid" (page B3).  Yes, Mr. President, toss out another $8,000,000,000 ($8 billion) to spend on his favorate subsidies to build electric plug facilities, car-batteries.  While the most efficient, low-cost, reliable transportation source, the internal-compustion engine, recipient of over a century of innovation and investment is disregarded along with other possibilities such as fuel cells.  This is in addition to $25,000,000,000 ($25 billion) given to help auto makers retool for electrics; $2,400,000,000 ($2.4 billion) for battery development and an unspecified number of billions of dollars for paying consumers $7,500 each to buy the unwanted vehicles.  (The same amount it a paid consumers a year ago to destroy old gas-powered cars.)

But is there a sliver of hope?  Mr. Obama's $24,000,000,000 ($24 billion) of desired further "aid" to states for another six months of unemployment payments was stripped out of a House bill and may be by Senators.  Hmmmm.  But it's only a sliver by Congresspeople hungrily doing anything the can -- even slow spending increases --  to keep their cushy jobs.

ARBITRARY AND CAPRICIOUS IS ABSOLUTELY OPPOSITE TO THE RULE OF LAW, where citizens can rely on laws passed by legislatures, not the offhanded arbitrary decisions by monarch-wannabes like Barack Obama and his far-left posse to buy votes, reward supporters, subsidize things they want. 

Thank you judge.

Friday, June 18, 2010

The Second Civil War

The Left will never give up. They are committed to winning at all costs to the country. The mere mention that they should or might is wrong...They are in it to the end...the end of America. The lackadaisacal attitude of some of those on the Right is alarming. Bush allowed the Left to make great strides, with the consent of the Republicans in Congress. Where did this get us? Creeping socialism turned into a gallop. Obama and the Democratic Congress have ripped up the Constitution and completely disregard the Rule of Law -- a basic foundation of our society. Bribery, extortion, propagandistic lies are all the basic foundatiuon of the Left. Every one of us rational, country-loving citizens must realize that we are in a Second Civil War -- a fight to the end. If they win -- and have no doubt they are -- it is the end, the end of the country we love.

For proof just check out the chaos of Katrina being replicated by the chaos of the BP oil spill.  While not admitting it, the Federal Government has micromanaged with regulations every bit of oil exploration, drilling and production.  The direct cause of the Spill is in the government not allowing easy drilling in easy places.  Prohibitions by environmental advocates, promoted by those to whom the money and votes of the environmentalists go -- Democrats aided and abetted by a lackadaisical , leaderless Republican Party (caring as with Democrats more about their keeping their cushy jobs than what's best for the country) are at fault.

But faults aside, the ineptitude and chaos of Katrina and the Spill is...bureaucracy.  Vast numbers of non-motivated, "tenured" government employees, advisors and consultants without leaders.  That brings the anarchistic chaos which is the description for most governments and even many private-sector bureaucracies.  Our government is unmanageable.  Especially with a clueless, inexperienced president.  But the oligarchy of the Left keeps adding voters (government employees, beneficiaries of government largesse, with tax money from a relative few and the insane Social Justice socialists.) 

If the interest rates of U. S. gtovernment debt increases anywhere close to where Jimmy Carter took them, this country is bankrupt.  For example 8% of the $15,000,000,000,000 declared U. S. Government debt is $1,200,000,000,000 each year, around 1/3 of all federal income tax reciepts.  One-Third. 

The U. S. Economy is managed by a president who desperately hates business, thinking it the root of all evil.  He is systematically destroying free-enterprise business in America.  Destroying with tax increases, tight money, crippling regulations, frightening investigations and with BP, clear extortion of $20,000,000,000 to be given to his "friends" on the Left to "manage" and dole out to those they arbitrarily consider "needy".  Oversight?  Ha! Ha! Ha!  The joke's on us for allowing them to dictate and BP to cave in.  And, BP they won and like all extortionists, they'll be back, and back, and back until they have drained you and thrown you away.  And yes, some workers in the Gulf will get some, but I'll bet, windmill, solar "initiatives" -- invironmetnalist-friendly subsidies -- will get much.


Tuesday, June 1, 2010

Published Letter by your humble correspondant

LETTERS [Published in The Wall Street Journal] JUNE 1, 2010 [page A18]

The Bond Market Vigilantes Could Do Us Some Good Article

Comments [The article follows]

Nowhere in Mr. Blinder's article does he mention the concept of growth. His only methods of reining in cripplingly high interest rates are: spend more, export more (by currency devaluation) or spend less. All these together will not solve the problem. As is well known, but for political reasons not exercised in practice, you can't cut your way to prosperity. So what's left? What is the answer? Growth. Only by getting an economy bigger can it pay down debt, create jobs and finance social justice. A simple concept, but one resisted by liberals who don't at the core believe in the only path to that growth: successful businesses. Successful, growing businesses are the only way for an economy to grow. That growth can only come from activities anathema to liberals: lower taxes, reduce regulations, and downsize government. Add that to your arsenal, Mr. Blinder.

Theodore M. Wight

[The article]: Thursday, May 20, [The Wall Street Journal]


Remember the bond market vigilantes, that frightening band of financial marauders who once roamed the earth like a fearsome herd of Tyrannosaurus rex? They were so scary that in February 1993, as President Bill Clinton struggled to reduce the federal budget deficit, James Carville quipped that he wanted to be reincarnated as the bond market so he could intimidate everybody.

Well, they're baaack! Not in the United States, though. Here, the Treasury Department continues to borrow brobdingnagian sums of money at extremely low interest rates—about 3.5% for 10-year Treasurys and under 1% for two-years lately—even though everybody knows that the federal budget deficit is on an unsustainable path toward the stratosphere. (Could it be that not everybody knows?)

But the bond market vigilantes have landed in force in Europe. Their beachhead, of course, is Greece, which all but invited them in with—how shall we put it?—a certain lack of fiscal probity. The ensuing roller-coaster ride of ups and downs that have roiled stock, bond and currency markets around the world is apparently not over. As you read this, the markets may be either sinking or soaring on the latest news out of Europe.

Greece recently signed up for an International Monetary Fund program—the sort of treatment once reserved for supplicant developing countries. It also now has the European Central Bank (ECB) buying its bonds, access to the European Union's new €60 billion bailout fund, and potential access to bond guarantees via a €440 billion "special purpose vehicle" that euro-zone countries promise to cobble together if necessary. But all this has only partly calmed the Aegean waters.

Here's the problem: Bond market vigilantes can be a force for good or ill, often both at the same time. The bond market is certainly powerful, as Mr. Carville saw—but it's not always wise and it's rarely subtle. Once the vigilantes get riled up about, say, budget deficits, they can turn into an electronic mob that circles the globe faster than Hermes. Unfortunately, the basic economic message about deficit spending today requires some subtlety: Most countries need fiscal stimulus today but a large dose of deficit reduction in the long run.

To fight the 2008-2009 recession, many countries deliberately increased their spending and/or reduced taxes, thereby swelling their budget deficits. That was the right thing to do under the circumstances, because private spending was drying up and unemployment was on the rise. (Ask the oracle: John Maynard Keynes.) Or, more correctly, it was the right thing to do as long as the higher spending and lower taxes were temporary—as was typically, but not always, the case.

The trick was to promulgate major short-run fiscal stimulus programs without spooking investors about the long-run fiscal outlook. And it worked—for a while. But now the bond market vigilantes have been awakened and are spoiling for a fight. I worry that they may force many European (and other) countries into premature fiscal contractions.

Sadly, it is already too late for Greece, where sizable tax hikes and expenditure cuts are coming to a land where gross domestic product has already declined for five consecutive quarters. It is hard to imagine how Greece can avoid a nasty slump. If we look for historical examples of countries that have lived through major fiscal retrenchments without recessions, we find three principal ways out. But two of these options—easing monetary policy and depreciating the currency to boost exports—are unavailable to euro-using Greece.

The third way is to ignite a bond market rally by convincing traders that you've got religion on fiscal responsibility—which is what happened here during the Clinton years. (Full disclosure: I was part of President Clinton's original economic team.) Could the Greeks have accomplished that by themselves? It looked unlikely without intervention from Mount Olympus, which is why the EU rode to the rescue.

The more important question now is whether the rest of Europe is under a similar threat. Greece accounts for less than 2% of European GDP, so a sharp recession there—if it's only there—should have only minor demand spillovers to other countries. But with most of the other 98% of Europe growing very slowly, large fiscal contractions are not exactly what the macroeconomic doctor ordered. (Ask the oracles: Herbert Hoover or former Prime Minister Ryutaro Hashimoto, the "Herbert Hoover of Japan.") The ECB seems unlikely to help by cutting interest rates further. But the value of the euro has fallen, which should give exports a boost.

From a long-run perspective, the bond market vigilantes have it right. Greece, Europe, the U.S. and other countries must take serious steps to get their budget deficits under better control. And the long-run budget problems of many nations are too large to be solved exclusively on either the tax side or the expenditure side.

The U.S. is a case in point. Under continuation of current policies, our budget deficit and national debt would soar to impossible heights. (Ask the oracle: the Congressional Budget Office.) The amount of deficit reduction needed to stop this incipient explosion is so large that no serious person should believe we can do it without both spending cuts and higher taxes.

But not yet, please. And therein lies the difficult-but-essential subtlety.

St. Augustine urged the Lord to make him chaste, but not yet. Now budget and finance ministers around the world, including our own Peter Orszag and Tim Geithner, must make an analogous plea to the bond market vigilantes—and back up their words with deeds. The problem is that the vigilantes are an impatient lot and Greece has set their clocks ticking faster.

What needs to be done varies enormously by country. Here in the U.S. Social Security reform, once considered the third rail of American politics, is now the low-hanging fruit of deficit reduction. Fixing Social Security's finances is easy, technically. And the timing is perfect because promising deficit reduction now but delivering it later is exactly the right thing to do. After all, no one wants to raise payroll taxes now or reduce retirement benefits without giving people many years of advance notice.

When the Greenspan Commission "fixed" Social Security's finances (for a while) in 1983, it delayed much of the pain for decades. Its proposals not only passed Congress in a flash but have raised barely a whimper of objection since.

Pulling off something like that today might be a good way for the U.S. to steer a middle course between the Scylla of the bond market's wrath and the Charybdis of premature belt tightening that damages the recovery. Hey, Odysseus managed it.

Mr. Blinder, a professor of economics and public affairs at Princeton University and vice chairman of the Promontory Interfinancial Network, is a former vice chairman of the Federal Reserve Board.

Further comment.  It is clear that the Democratic Deficit will never ebb.  The Party cannot get elected without the financial support of one of the main causes of the deficit(s): labor unions.  They buy the Democrats' elections in exhange for cushy jobs, with high pay, early retirement, and guaranteed work.  The Democratic Congress will never step out of its fat jobs, the rest of the country who get badly hurt by the selfishness of the union bosses need to elect Republicans, Tea Partiers, Libertarians.  Anything but Democrats looking out for their own interests ahead of those of the American Citizen.  We need to weed out all --  all politicians, bureaucrats and "activists" who are against the success and growth of businesses.