Jun
2
GM Bankruptcy: Mission Accomplished
Filed Under Economics | 6 Comments
General Motors declared bankruptcy.
Let that sink in a little bit.
Words that would be considered ludicrous a decade or so ago yesterday became a reality, as GM filed for chapter 11. Congratulations to all of my American readers, who share ownership in a 60% stake in the automaker:
Monday, U.S. President Barack Obama defended government intervention in GM as the auto maker enters Chapter 11 bankruptcy, saying the actions are part of a “viable, achievable plan that will give this iconic company a chance to rise again.”
Under the plan, the government would own 60% of the new GM, but Mr. Obama said auto executives “will call the shots and make the decisions about turning this company around.” He said the government would refrain from playing a management role in all but the most critical areas. “Our goal is to help GM get back on its feet…and get out quickly,” he said.
Obama also described the government ownership, and therefore control, of the company as “unwelcome.”
But is this recession-era takeover really “unwelcome”? Or is Obama just refusing to let a good crisis go to waste?
When looked at critically, the GM bankruptcy and government takeover accomplishes many goals that make up the Obama agenda:
- Being able to dictate priorities in auto manufacturing will allow Obama to enforce his CAFE standards and help keep the “green” lobby
- As Rush pointed out (via The Other McCain), the restructuring deal put together by the Obamunists will put through plenty of protectionist measures that will do great economic harm, but keep in line with Obama’s positions on trade. RSM states later, “The sharp rise in long-term bond rates is only “puzzling” to people who know less about market economics than I do, and I’m a liberal arts major. But the list of people who know less than me, however, unfortunately includes the man Obama insisted must be in charge of the Treasury.”
- How does the UAW taking disproportionate ownership in GM play to the Obama agenda? Hmmm: “We’re ready to play offense for organized labor. It’s time we had a president who didn’t choke saying the word ‘union.’ A president who strengthens our unions by letting them do what they do best: organize our workers,” - Barack Obama, April 2nd, 2008
I’m sure there could be nothing more musical to the collective ears of Toyota, Honda, and Nissan than the fact that their largest American competitor is being run by a labor union and the federal government. But for what its worth, Moonbattery has a good idea for the next GM ad.
Update: Thanks to The Other McCain for featuring this post in the “headlines” section on their right-hand sidebar. Readers: Welcome to Zoominac!
Feb
4
Cars for everyone!
Filed Under Economics | 3 Comments
Now it appears that Washington will be subsidizing new cars:
WASHINGTON - The Senate voted Tuesday to give a tax break to new car buyers, setting aside bipartisan concerns over the size of an economic stimulus bill with a price tag edging above $900 billion. The 71-26 vote came as President Barack Obama said he lies awake nights worrying about the economy and signaled he’ll try to knock out “buy American” provisions in the legislation to avoid a possible trade war.
Sen. Barbara Mikulski led the successful effort to allow many car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans.
She said the plan would aid the beleaguered automobile industry as well as create jobs at a time the economy is losing them at a rapid rate. “I believe we can help by getting the consumer into the showroom,” she said.
The provision was attached to the economic stimulus bill at the heart of Obama’s economic recovery plan and is subject to change or even elimination as the measure makes its way toward final passage.
But wasn’t it not that long ago that liberals were claiming that tax incentives for specific purchases were fueling unsustainable bubbles?
Couldn’t the mechanism that leftists claim helped fuel the housing bubble also do the same thing to automobiles? Not only that, the argument once again comes up as to what degree the federal government should be subsidizing organizations (GM, Ford, UAW) that have proven incapable of handling basic economics. One Republican voiced concerns:
Sen. Charles Grassley, R-Iowa, sought unsuccessfully to derail the proposal, saying it would only increase consumer debt in a time of recession and adding that there were other provisions in the legislation to help the auto industry.
What is so hard about this, folks? The cause of this problem was too much debt and spending by businesses, individuals, and government. So why do we insist on increasing debt and spending by businesses, individuals, and government?
Here’s another conundrum for the liberal logic behind such a proposal: If tax cuts will aid the economy by reducing the burden to purchasing a vehicle, couldn’t that same logic be applied to the economy at large? Couldn’t we reduce burdens on working, saving, producing, hiring, and investing by cutting income, payroll, estate and capital gains taxes across the board?
Also, I think it may be the less-than-adoration that President Obama is getting from the World Community that he so wants to be a part of that is “keeping him up at night”.
For some crazy reason, the EU is not taking kindly to Obama’s open detest for international trade. But I thought that this guy was supposed to bring the entire globe to one big rendition of Kumbaya?! And they said George Bush was the Herbert Hoover of our generation.
As Ed Morrissey points out, Obama is much closer to Hoover than Dubya ever was. For it was the disastrous Smoot-Hawley tariffs that made protectionism official national policy and initiated a global trade war that made a recession into the Great Depression. From the post:
Instead of working cooperatively, the major trading nations had to respond to American penalties with more penalties, and the Buy American provisions of the New Deal entrenched those divisions, making recovery impossible. The rest of the world — Europe, Asia, Latin America — would likely shut out the US and trade amongst themselves, and we would lose decades of work in building American economic strength abroad.
These actions by the President and Congress are only to give the appearance of action on our behalf. The real goals of the Democrat party are to use the recession as an excuse to consolidate power by the state and gain ground on causes they have been harping on for decades. To be honest, I am very, very worried about the next four years.
