What’s a Few Billion Between Friends?

First, there was the pork-laden $700 Billion for the banks.  Then there was the $800 Billion “Stimulus Bill” which was to help stymie the downward spiral of the economy (which President Obama declared pork & earmark free – it’s not).  House Democrats passed on Wednesday a spending bill for another $410 Billion (which has over 9,000 earmarks & pork), and President Obama is sending a $3.55 Trillion spending plan to Congress for approval which includes additional financial bailouts ($750 Billion) and a health-care plan ($634 Billion).  Last is a request by the Palestinian’s for aid to rebuild the Gaza Strip for $2.8 Billion, of which the United States is expected under the Obama administration to chip in “only” $900 Million.

And President Obama asked the American people last Tuesday to be responsible?  How can he ask the American people that when our elected leaders will not set the example for the rest of us to follow?  Who does he think he’s kidding?

Pfffttt!!

But then again, one just has to look back just a few years to understand how Congress can think they can put one over on the American people.

Not too long ago, a storm called Katrina roared through New Orleans.  Massive destruction ensued, and lives were lost unnecessarily.  President Bush was blamed for the government’s mishandling of the disaster, even though the mayor and the governor clearly fell down on the job for not getting people out of harm’s way.  But among the political backlash, a truth was conveniently swept under the radar.

People didn’t know how to take care of themselves.  They couldn’t think nor take responsibility for themselves, and instead relied on the government to save them.  And look what happened.

Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves. – Ronald Reagan

But that is exactly what has happened.  Government has taken upon itself to run people’s lives to the point that Uncle Sam is a benefactor, not a protector.

So now the government, led by Liberals, wants to tax and spend worse than what they accused the previous administration of, and with large amounts of pork besides.  No wonder that there is a movement for a modern day “tea party” in several cities around the country.  These buzzards believe that they will get away with it.

Send a tea bag with a polite note to your Congress-critters.  They’ll appreciate it.

Stealth Government

I didn’t watch President Obama’s speech last night, and I probably should have.  I was just too tired, and figured that I would look over the transcript at a later time.  Well, I haven’t exactly done that either…at least not completely…

But one of the items that popped out at me was his directive that a website be formed (www.recovery.gov) to provide the American people the “transparency, oversight, and accountability” to track where the money for the American Recovery and Reinvestment Act (ARRA) is going.  To which I say…

Good Luck.

Government now cannot track the billions of dollars that are spent on Social Security, Medicare & Medicaid, and other social services much less any other part of the government.  Cost overruns and outright fraud account for more mismanagement.  Yes, I know that President Obama has promised to “ferret out any and all cases of waste and fraud,” but so has every other President, to no avail.  And now we are to expect an accounting down to the penny of where the Redistribution of Future Taxpayer Dollars ARRA is being spent?  Please do not insult my intelligence!

Governments cannot operate under transparency.  If so, then why do so many committees that are trying to work out compromises meet behind closed doors, and the minutes not available for public review?  If so, then why did the ARRA (all 1000+ pages) not be published in time (48 hours was the promise) before the vote was taken?

Because that very same transparency would expose the vile corruption that takes place in our government.  The power-plays, the gamesmanship, the outright stupidity of our elected representatives would be exposed for all to see, and no amount of media whitewashing could cover it up.

So where is the oversight and accountability?  Government watching itself and holding itself to the highest standards?  Who determines the standards?  Sounds more like the fox watching the hen house for the farmer.

Which now brings me to a local instance of government trying fly completely under the radar…

The local government wanted to hold an election yesterday for the purpose of floating a $70 million bond for updating the schools.  The notice for the election went completely unnoticed by yours truly and his newspaper reading better half (wife) until the day of the election when one of my coworkers mentioned it.  There was only a couple of inches in that day’s paper, and it was buried in the back pages.  Of course, it would mean that our property taxes would go up (again!) to cover the bond for the next 30 years. I already have an ax to grind with the local educational system (that is a rant for another post), but this was about as underhanded as I could think.  Springing this on us at the last minute “for the kids” in a time of when houses are being foreclosed upon, people losing jobs all over the place, people leaving the state in droves, school enrollment is dropping, and government is wanting us to voluntarily raise our property taxes?  Come on!!  Where is the common sense?

And now we have a President who is arguably a great orator, promising to be all things to all people, and ready to jump over tall buildings to set things right for this country via government intervention.  Reminds me of the Ronald Reagan quote:

The most terrifying words in the English language are: I’m from the government and I’m here to help.

The government is here, and it’s wanting to “help.”  God help us all.

Chapter 10?

We have been hearing from many experts that bankruptcy is the only viable option for the automotive companies to emerge from their current troubles.  The costs for bankruptcy far exceed what the automotive companies are currently asking for, but there are some estimates out there that state either routes are a wash, costing up to $125 Billion.

So now there is an alternative to Chapter 11.  It’s called Chapter 10.  It isn’t legal yet, but Justin Hyde of the Detroit Free Press writes:

It’s not the kind of new chapter in the history of General Motors Corp. and Chrysler LLC that executives have in mind, but two bankruptcy experts unveiled a plan Thursday for a "Chapter 10" bankruptcy tailor-made for automakers.

While it’s just an idea, at least one prominent member of Congress, Rep. Barney Frank, D-Mass., has raised the possibility of changing federal law to allow automakers into bankruptcy while minimizing the damage to the rest of the economy.

"Chapter 11 for a ‘too big to fail’ company, such as a Big Three automaker, could be disastrous for the country," said George Kuney, a law professor at the University of Tennessee College of Law, and San Francisco bankruptcy attorney Michael St. James, in a paper for the American Bankruptcy Institute Journal.

Their so-called Chapter 10 plan would allow bankrupt automakers to keep paying suppliers for a regular flow of parts. Under current law, an automaker that filed for Chapter 11 would stop paying many bills for months or years, and suppliers have to compete with other creditors for repayment.

"By arbitrarily and unnecessarily putting all accounts payable on hold for months or years — a mandatory aspect of existing Chapter 11 law — the bankruptcy filing of one large company would likely result in cascading business failures among its vendors, and the vendors of its vendors," Kuney and St. James wrote.

Their proposal would keep regular payments to employees out of court while leaving other parts of the bankruptcy code unchanged, allowing the automakers to force new contracts with bondholders, dealers, suppliers and unions.

Of course, while the companies could survive, many people would lose their jobs, their homes, their livelihood.  An article in the New York Times has this to say:

After closing plants and shrinking their blue-collar work force, Detroit’s troubled Big Three are cutting white-collar jobs in their hometown at an unprecedented pace — more than 15,000 in the last year, with more to come.

White-collar workers who walk out of the headquarters of the auto companies face few prospects in the Michigan economy. And with G.M. and Chrysler surviving on federal loans, facing a deadline Tuesday to submit new and broader restructuring plans to the government, the outlook grows only more bleak.

The market for the skills of auto engineers or designers in the prime of their careers has evaporated, with no hope in sight for a turnaround. Moving to another city is hardly an option when there are so few buyers for the suburban homes that would have to be sold first.

G.M., Ford and Chrysler have eliminated a total of 120,000 manufacturing jobs in the last three years. And now the cuts are drastically thinning the ranks of white-collar professionals, turning the once-bustling office towers of the companies into half-empty monuments to better days.

G.M. delivered another blow last week when it said it would reduce its global salaried work force by 14 percent, or 10,000 workers this year. In the Detroit area, that could mean an additional 3,000 workers will be out of a job by May 1. G.M.’s next round of white-collar cuts will not include buyouts. Chrysler has not said whether it plans more cuts.

The Detroit area housing market, already deeply depressed, has plummeted since the buyouts. In January, the foreclosure rate increased 102 percent from the same month a year earlier in Oakland County, Mich., home to a huge number of G.M. and Chrysler employees.

The state’s unemployment rate was 10.6 percent in December and continues to climb. Job fairs routinely create mob scenes, drawing thousands of out-of-work employees of the Big Three and their suppliers.

The unemployment rate for white-collar occupations in Michigan was 5.4 percent in the fourth quarter of 2008, a full percentage point higher than the national average for those jobs, according to Department of Labor estimates.

Now before anyone out there thinks it cannot happen to them, think again.  I didn’t think there was going to be any problems, and in a matter of weeks, the bottom fell out, and I had to make some very difficult decisions (and the outcome is still pending).  It can happen to anyone in any industry.  If you do not think that this is the case, talk to people who have had plants close in the textile, steel, and machine tool industries.

And the government is going to help after letting all these other industries fall by the wayside.  Why am I not impressed nor hopeful?  Perhaps it’s because I know how government works, and the way committees are.  Both are like mating elephants – lots of noise and it takes two years for the results to show up.

Czar Out, Committee In

To further distance himself from the Bush Administration, President Obama announced that he is dropping the idea of a "Car Czar" to oversee the recovery (?) automotive industry.  Instead, he wants a committee to do the job.

Uh oh…  This doesn’t sound good…  Governmental committees make me think of that old joke of a mouse being designed by a government committee turning out to be an elephant.

The Committee will consist of representatives of the following:

  • Department of the Treasury
  • Department of Labor
  • Department of Transportation
  • Department of Commerce
  • Department of Energy
  • The National Economic Council
  • The White House Office of Energy
  • The White House Office of the Environment
  • The Council of Economic Advisors
  • The Environmental Protection Agency

The Committee will be overseen by Treasury Secretary Tim Geithner and White House Economic Advisor Lawrence Summers.  An additional person, a certain Ron Bloom (a corporate restructuring expert), was also named to the administration’s auto team as a senior adviser at Treasury.

Of course, this change of plan just happens before tomorrow’s review of the automotive industries’ plans to "viability."  The whole thing is making me wonder if the government really wants the companies to succeed.

Stop to think about it for a second:  GM and Chrysler don’t need to have everything nailed down for Tuesday’s progress reports, but the companies are expected to detail concessions along with plant closures, the potential elimination of brands and thousands of job cuts.  And what was the weekend’s passing of the Redistribution of Future Taxpayer Dollars Stimulus Package supposed to do?  It was to help people keep their jobs!!

We’re not only doomed, we’re hosed…