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The administration didn’t save the auto industry. The stronger case is that it damaged the auto industry along with several important institutions vital to capitalism’s proper functioning. However, it should be granted that President Obama’s commandeering of GM’s and Chrysler’s bankruptcy process saved jobs at those companies and elsewhere in their supply chains (and provided an opportunity to dole out spoils for politically favored interests). How many jobs were saved is impossible to determine because it’s not clear what would have happened to GM’s and Chrysler’s assets had a normal, non-political bankruptcy process been allowed to unfold.
Yes, jobs were saved for the time being in Michigan, Ohio, and a few other industrial states in the Midwest. That is what can be seen. And politicians are hardwired to tout the benefits—and only the benefits—of their policies.
But an informed citizenry should insist on a proper accounting of the costs of those policies, as well—not just the losses put on the taxpayers’ tab (right now taxpayers’ “investment” in GM is $27 billion, but the public’s 500 million shares of GM stock is worth only $10 billion), but the unseen costs.
Sure some jobs were preserved in some locations, but what about the less visible consequences and ripple effects? What isn’t so easily seen, but is every bit as important to assessing the auto interventions is the effects on the other auto companies and their workers (i.e., the majority of the U.S. auto industry). Will the public remember or know enough to attribute layoffs of American workers at Ford or Toyota or Kia during the next downturn in auto demand to the fact that a necessary reckoning on the supply side was precluded by the interventions of 2009?
The auto industry is plagued with overcapacity, which is a problem that demands a thinning of the herd. GM and Chrysler, through their own relatively poor decisions with respect to labor relations, product offerings, and quality management were failing by the market’s judgment and were the rightful candidates to be thinned. But that process was forestalled. In 2013, auto workers in Alabama, Tennessee, South Carolina, Indiana, and even Michigan and Ohio may lose their jobs because GM and Chrysler workers’ jobs were spared in 2009.
March 30, 2012 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, patriotism, Politics, Uncategorized | Tags: Apple, Barack Obama, Big Oil, CNBC, GM, Rick Santelli | Leave a comment
CNBC’s Rick Santelli: “If I broke my right arm, am I going to pick a fight with the neighbor? No. If I’m two months behind on my mortgage, am I going to go complain to the bank? Probably not. But let’s see, with gasoline approaching $5 a gallon, isn’t this just a supreme time to pick a war with the energy people that are bringing us what already seems to be in the market’s eyes in short supply? Just like picking fights with China when the world’s about ready to go into recession. There’s a time and a place for everything. And, by the way, all these profits Exxon’s making, the administration doesn’t like it. Well, what about Apple making a billion dollars a week, or Microsoft? I bet you if GM made a billion dollars a week, they wouldn’t mind. Come on!”
August 15, 2011 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, Politics, socialism, Uncategorized | Tags: Barack Obama, Ford Motor Co., GM, Pickup trucks, SUV's | 5 comments
The country’s automakers should ditch their focus on SUVs and trucks in favor of smaller, more fuel-efficient vehicles, President Obama said Monday.
“You can’t just make money on SUVs and trucks,” Obama said during a town hall forum in Cannon Falls, Minn. “There is a place for SUVs and trucks, but as gas prices keep on going up, you have got to understand the market. People are going to try to save money.”
NOTE: Obama has obviously never schlepped the kids to hockey, soccer, cheerleading and such!!
June 22, 2011 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, Health care reform, Politics, socialism, Uncategorized | Tags: bailouts, Barack Obama, General Motors, GM, pensions, Timothy Geithner | Leave a comment
New emails obtained by The Daily Caller contradict claims by the Obama administration that the Treasury Department would avoid “intervening in the day-to-day management” of General Motors post-auto bailout.
These messages reveal that Treasury officials were involved in decision-making that led to more than 20,000 non-union workers losing their pensions. (General Motors not eager to be political talking point in 2012)
Republican Reps. Dan Burton and Mike Turner say that during the GM bailout, Treasury Secretary Timothy Geithner decided to cut pensions for salaried non-union employees at Delphi, a GM spinoff, to expedite GM’s emergence from bankruptcy.
At a Wednesday hearing, the House Oversight Committee’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending started pushing the Treasury Department for answers on the effects of the bailout and on how much of a role the department played in picking winners and losers.
The key point of the Wednesday hearing was to show that the Obama administration advised GM on how to eliminate the Delphi workers’ pensions. The evidence suggests Geithner’s team played a significant role in that process, despite claims to the contrary.
June 1, 2009 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, Politics, socialism, Terrorism, Uncategorized | Tags: Big Three, GM, GM bondholders, Obama birth certificate, Pres. Barack Obama, UAW, US Automakers, US Bankruptcy Court | 12 comments
With the Chapter 11 filing for Bankruptcy Court protections, the government directed restructuring ( and skewing of the law) of General Motors has begun. That being said, we all now own 70% of the automaker!!
The story: http://news.yahoo.com/s/ap/us_automakers;_ylt=AlcMk95cIN96tPm57e2kN36s0NUE;_ylu=X3oDMTJlbWIwNHE3BGFzc2V0A2FwLzIwMDkwNjAxL3VzX2F1dG9tYWtlcnMEY3BvcwMyBHBvcwM3BHNlYwN5bl90b3Bfc3RvcnkEc2xrA2dlbmVyYWxtb3Rvcg–
Chrysler Dealership Franchises aren’t being closed: They are being “given” (at no cost) to others; Obama using Chrysler bankruptcy as a means of Redistributing the Wealth
May 19, 2009 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, Politics, socialism, Terrorism, Uncategorized | Tags: bankruptcy, Chrysler, General Motors, GM, Obama birth certificate, Pres. Barack Obama, wealth redistribution | 7 comments
The following letter/comment was emailed to me today, and it was taken from the Plains Radio website. It is by no means the only story that I have heard or read in the past week revealing the same scenario:
Letter from a Dodge dealer letter to the editor
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.
We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.
I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as “new,” nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately 0,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.
Our facility was recently totally renovated at Chrysler’s insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.
HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?
THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY
This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.
This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.
HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?
I beseech your help, and look forward to your reply. Thank you.
George C. Joseph
President & Owner
May 19, 2009 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, Politics, socialism, Terrorism, Uncategorized | Tags: Abraham Lincoln, AIG, bailouts, Chrysler, fistbumps, GM, Kenya, Larry Sinclair & Barack Obama: Coke Sex Lies &, Michelle Obama, Nancy Pelosi, Obama birth certificate, Obama Man, Pres. Barack Obama, Queen Elizabeth II | 1 comment
March 15, 2009 in Campaign 2008, Campaign 2010, Campaign 2012, Capitalism, Economy, Family values, Politics, socialism, Uncategorized | Tags: AIG, Eric Holder, Ford Motor, GM, Hillary Clinton, Larry Sinclair, Obama birth certificate, Pres. Barack Obama, TARP, Timothy Geithner | 3 comments
In just the first two months of the Presidency of Barack Hussein Obama, he has spent more than George W. Bush did on the Iraq War, the Katrina disaster, and the TARP bailout fiasco COMBINED !!
I’m Just Saying !!!
The stock market reacted positively on the announcement from President Bush that General Motors and Chrysler would receive nearly $14 Billion dollars in emergency loans, and a contingent plan for an additional $4 billion dollars in February.
While Ford Motor has said that they were not in need at this time, it is assumed that funds have been earmarked in the event that Ford has the need as well.
President Bush stated yesterday that after the bailout proposals failed in the Senate, it was incumbent on him to make sure that whatever was necessary to shore up the automotive industry at this time. Further, he feels an obligation to his successor to work through these issues as best as possible in order that the transition be smooth and “seamless”.
So, who’s next on the bailout list- the Madoff investors?