Barack Obama has made it clear you won’t get it from the President.

First off, as a refresher, there are leading economic indicators and there are lagging economic indicators.

The stock market is a leading economic indicator in that to the degree investors have the data and the visibility, the market tracks the forseable future, barring any unforseen events such as natural disasters, wars or terrorist attacks.

The 21 percent rally in the Standard & Poor’s 500 Index since Nov. 20 reflects speculation the worst of the recession is over, according to Biggs, managing partner at hedge fund Traxis Partners LLC, and Doll, chief investment officer for BlackRock Inc. Equities will probably keep rising, they said yesterday on Bloomberg Television.

“Sometime around the middle of the year there’s going to be pretty conclusive evidence that the economy has stabilized,” Biggs said. “That’s what the stock market is now looking forward and seeing, and that’s why I think that this rally carries further.”

Employment on the other hand, is a lagging indictor. Unemployment usually confirms what we already know, or at least suspect. The fact that we are hearing news of job losses is, at least from a macro standpoint, good news, as long as we are all resigned to the fact that we are in fact in a recession. Job losses usually mark the beginning of the end.

Context is everything. By no means is 7.2% unemployment severe in the context of past recessions. It’s been much higher in modern times, and around 5 1/2% of that is “built in” – represents the unemployable.

My advice is to reject media analysis of the economy, including – I mean especially – Barack Obama. His understanding of basic economics is impaired.

the president elect warned that failure to pass legislation enacting his proposals within the next few weeks risks letting the U.S. fall into a deeper and more prolonged recession.

…his understanding of politics and fear however is quite well developed, which makes him motivated. And dangerous.

Barack Obama has outlined his plans to create jobs in America via speeches during his inspiring campaign and his calming and reassuring tone as Occupier of the Office of the President Elect.

As economic conditions have evolved and Obama’s confidence in his magical powers has grown, he has revised his goals and ambitions for job creation over the past year.

In an effort to be a progressive source of economic guidance and as a public service, we have gathered and cataloged the President-Elect’s “Job” Creation Goals as outlined in his many and factual addresses to the nation.

Using the same mathematics and economic theory* employed by Obama’s advisers and cutting-edge spreadsheet technology, we have analyzed and extrapolated Barack Obama’s “job” creation predictions.

Here is a sampling of the data and its sources (emphasis mine-JR):

Feb 13, 2008 WASHINGTON – Democrat Barack Obama said Wednesday that as president he would spend $210 billion to create jobs in construction and environmental industries, as he tried to win over economically struggling voters.

Obama’s investment would be over 10 years as part of two programs. The larger is $150 billion to create 5 million so-called “green collar” jobs to develop more environmentally friendly energy sources.

December 24th, 2008 Dec. 24 (Bloomberg) — President-elect Barack Obama is still four weeks away from inauguration, and already the size of government is growing. His initial goal of creating 2.5 million new jobs has been upped to 3 million, rising in lockstep with a proposed economic stimulus package.

We know money buys influence. Now we find out it can buy jobs as well.

If only it were that simple.

Jan 10, 2008 Jan. 10 (Bloomberg) — President-elect Barack Obama said his two-year plan to boost the U.S. economy will generate up to 4 million jobs, higher than his previous estimates, the biggest portion of them in construction, manufacturing and retail.

Here is our analysis:

As you can see, by this time next year, Barack Obama will have predicted the unprecedented creation of over 32 Million Jobs by the end of 2011. This is cause for great rejoicing and a renewed confidence in our political system.

The surplus of new jobs will actually allow many workers to choose more than one, although experts predict an executive order will limit job selection to two per worker and three per household for American citizens and  three per worker and five per household for illegal aliens undocumented workers that can document a contribution to the Obama ’08 campaign.

We will revise our estimates as new data is made available to us via the media.

*Hopey Changey^©

Obama gave a speech yesterday. Word has it (I didn’t watch or listen) he discussed the economy in no uncertain terms.

Let me guess though, I’ll bet he used the words “crisis” numerous times; I’ll bet he furrowed his eyebrows real good like and probably had a real ominous look on his face too.

Were ya scared?

Did he make you think you need him to save you? …that this crisis is too severe for you to solve it on your own? Did he speak of sweeping, decisive, massive and immediate action being required on the part of the federal government? Did you need a hug? A big government hug?

These days it seems like it is our patriotic duty to consume more. And if we don’t choose to spend more money ourselves, the government will do it for us.

Obama is building his case: You need big government. You need guys like him; guys that are smarter than you cuz they read more books, went to better schools and have more letters after their name. Guys that aren’t afraid to take massive, decisive action; to write big checks with someone else’s money.

These problems, despite being undeniably caused by liberal policies in the first place, must be solved by the government. The government must “create” three million “jobs.” The government is the answer, no matter what the question, when you’re a liberal.

Liberals can’t do anything if it doesn’t justify government’s growth and influence in our lives.

But wait a minute. Isn’t it excessive spending that got us into this mess in the first place? Spending more now seems like drinking Scotch to cure a hangover.

But what if the right thing to do right now is nothing?

Here and there are some small signs that the economy is at least bottoming — a crucial stepping stone to meaningful recovery.

New orders, employment, backlogs, and exports all ticked higher than the previous month.

The November factory-orders report showed non-defense capex rising at a 3.9 percent annual pace, the first increase in four months and the best gain in 10 months. Computer orders surged 12.5 percent.

Commercial construction rose 0.7 percent annually in November, and is up 12.1 percent over the past three months.

And in the November personal-income report, real disposable income jumped 1 percent for the month and is up 7.1 percent at an annual rate over the past three months. Real consumer spending in that report rose 0.6 percent in November.

Additionally, the credit freeze continues to thaw. The three-month LIBOR rate is all the way back to 1.4 percent. And corporate bond rates continue to decline, a signal that private capital markets are starting to function again. The 30-year mortgage rate is holding around 5.3 percent.

At a recent conference in San Francisco, academic economists were very pessimistic, expecting recession to last through the whole year. But easy money and low retail gas prices may be a lot more stimulative than the academics think.

The stock market says we’re already over half way through the recession, it’s up almost twenty percent since it’s low point in November.

Americans are already saving more. Banks are amassing cash which they will lend as soon as their balance sheets improve.

Unemployment has a long way to go to match Reagan-era suffering let alone Great Depression levels. Reagan came into office with 7.6% unemployment, it rose to 9.7% then fell to 5.5% on his watch.

Riddle me this: How did he do that?  How big was Reagan’s government stimulus? (It’s a trick question).

Obama’s fear mongering is designed to set the stage for the hero to enter. The damsel in distress is you, he’s going to rescue you, and we all know what the hero gets to do to the damsel once he rescues her.

It’s not enough for Obama to be the first African American President of the United States.

Obama needs a legacy, and in the annals of history, the great liberals, the ones with fist-pounding speeches and legacies, all did the same thing. Increase government, create ever more massive government spending and debt, and screw the next generation (or two or three).

Obama’s 9/11 is the economy and he is going to take the only action a liberal knows.

The economy will improve. The free-enterprise system will come to the rescue like it always does. Capitalism will survive. It may have started already. Obama just wants the credit for it.

You see liberals have just one lever in front of them, and they’re always itching to pull it whenever we give them the chance. Obama wants to pull it so hard, it will be in the history books.

The most galling thing about the Bush Administration was it gave the Dems – the party of Tip O’Neill and Ted Kennedy and Barney Frank – the opportunity to try to claim to be the party of fiscal responsibility with a straight face.

I told myself down all those long years “if, heaven forfend, those chattering chipmunks get into power again, they’ll revert to their true colors.  Of course, it’ll bankrupt the country…”

Of course, I was right…

President-elect Barack Obama warned of dire and long-lasting consequences if Congress doesn’t pump unprecedented dollars into the national economy, making an urgent pitch Thursday for his mammoth spending proposal in his first speech since the election.”In short, a bad situation could become dramatically worse” if Washington doesn’t go far enough to address the spreading crisis, the Democrat said as fresh economic reports showed an outlook growing increasingly grim.

…but it’s probably not worth bragging about.

So, all you “Hope and Change” voters; if your kids ask you “why can’t I find a job, and why does a house cost me 15% interest” one of these years, have you started working on your response yet?

(And yes, I know Bush spent like a crack whore with a gold card.  I was warning Republicans of this in 2000.  And there’s nothing about “a bad spender” that justifies “a worse spender”, so just (to coin a phrase) move on).

Whether you are a conservative, liberal or independent, or can’t find it with both hands, I can’t imagine anyone outside Democrats in Congress thinking highly of this proposal, highlighted in the Most Viewed Story of 2008 on InvestmentNews.com.

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

Powerful? Maybe so. Smart?

Well now, we know they wouldn’t be Democrats if they were smart, would they.

And here’s proof:

the director of the Congressional Budget Office, Peter Orszag, testified that some $2 trillion in retirement savings has been lost over the past 15 months.

A poor, certainly intentional and patently alarmist choice of words. I can’t corroborate my suspicion, but I’m convinced Orszag is a prodigy of Al Gore.

The market drops, like it does from time to time, and this one was a big one, but certainly no precedent, and $2 Trillion is “lost“. Someone with Orszag’s book-learnin’ credentials should know the difference between a presumably temporary (and albeit severe) fluctuation in the market, and a permanent loss.

The sky is not falling. The market will recover from the cluster of liberal social engineering and corruption that caused this crisis; this despite the fact that those culpable are still at the helm or advising the Occupant of The Office of the President Elect.

Orszag is on a mission.

House Education and Labor Committee Chairman George Miller, D-Calif., and Rep. Jim McDermott, D-Wash., chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

Liberal Democrats have uncovered yet another avenue for government to invade our lives, confiscate our hard-earned dollars, and throw them down the same rat-hole that is the soon-to-be-insolvent Social Security Administration. It’s not the “nation’s 401k system.” It’s my 401k. It’s your 401k.

Under Ms. Ghilarducci’s plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5% of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3% a year, adjusted for inflation.

The reason prudent investors choose to diversify into equities and bear their inherent risk is that historically over time that risk has returned a premium over “safer” investments that may have less volatility but don’t keep pace with inflation and therefore lose purchasing power.

In the mean time, these dollars are invested back into our economy unlike the dollars that would be “invested” by the government on your behalf. Most likely they would be stolen by greedy liberals with a penchant for spending other peoples’ money.

“I want to stop the federal subsidy of 401(k)s,” Ms. Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.”

The colossal arrogance of Ms. Ghilarducci is beyond comprehension. Teresa, you ignorant slut. It’s not a subsidy. It’s our money.

401k’s will be a boon to federal coffers as most of the dollars invested in “the nations 401k system” will be taxed once distributed to the retiree. True to form, liberal democrats’ myopia prevents them from waiting that long. They want your money. They want it now.

401k’s have been a boon to future retirees and may be the sole source of retirement income for many hard-working and deserving Americans who will never ever come close to recovering their mandatory contributions to the mismanaged Social Security Administration.

Most people understand this simple concept.

Apparently Democrats don’t, or are counting on the fact that we’re too stupid to get it or too uninvolved to do anything about it.

As the bumper sticker says, “If you’re not outraged, you’re not paying attention.”

Despite Cerberus having billions in cash, Chrysler recently received $4 Billion from the US Treasury.

They’re grateful and they want you to know it.

So they embarked on a national “Thank You” ad campaign including full-page ads in the Wall Street Journal and USA Today, reportedly at a cost of around a quarter million dollars each.

From the Chrysler Blog:

• Mr. Nardelli,It takes a man with a whole lotta chutzpah to thank a person for investing in a company when they had zero voice in the matter. My elected representatives decided ‘no’.  The executive branch decided ‘yes’ through means that might be legal but frankly smell like rotten fish.You may certainly get my money this way, but you will never see a dime of my money voluntarily spent on any of your products.
  Brian Dunbar
  Neenah, Wisconsin
• Mr Nardelli, Fire your PR and advertising teams and execs immediately.  We the People did not want to see any more ads and money wasted on ads, be it from Chrysler, et al, or from your own pocket.  You should have put up a website thanking the people and just submitted it to various online news aggregators for free.  Once again, I am pained to see you are demonstrating a lack of common sense and fiscal responsibility.  We supported the bailout of the car companies, even in the face of the horrendously mismanaged and secretive bailout of banks, and you stlil throw money away in the name of your company.  Time to wake up. Sincerely, Matt and the rest of the Internet.
• Dear Mr. Nardelli and the “over one million people who depend on Chrysler” – You’ve got some nerve to thank us for our forced “investment” when we didn’t want it to happen in the first place.  Isn’t forced or coerced investment akin to robbery?  Taking one’s money against one’s will? Hmmm . . . . The very thought that MY money is going to go to some union lackey’s pockets just makes me queasy.  You should’ve filed for bankruptcy just like any other business in your position would have to.  And that would’ve given you the opportunity to unshackle yourselves from the ridiculous union contracts that you signed on to.  You’ve got two major issues to fix:  Unions and quality products.  If you’d listen to your customers and NOT the media and marketing types, you’d fix your product issues.  And the unions . . . sheesh, get out of that racket!  Notice the plants in the South where unions aren’t that prominent don’t have the same issues as the ones up North? Let’s see what happens when MY business tanks.  Will YOU throw cash at me?  I don’t think so. So, in conclusion – to hell with you and your company.  Any business that would go begging to the government for a handout has no shame, and deserves to fail. File for Bankruptcy, or crumble!
• I’m speechless.  And I’m saddened that a corporate management team is so inept at understanding public opinion.  Some advice:  issue a press release stating that you regret that you made a mistake using taxpayers’ money in this manner.

back-fire

[bak-fahy^uhr]

…to bring a result opposite to that which was planned or expected: The plot backfired.  

Barack Obama’s trillion-dollar economic and job creation stimulus is a Trojan Horse for his Grand Vision of Mass Transit and The Battle for the Planet.

Obama wants a large portion of the money spent on mass transit but exactly how does the expansion of infrastructure that requires permanent public subsidy to serve a small segment of society qualify as a stimulus? You could argue that highways are of the same ilk, but highways are used by everyone in the food chain whereas mass transit requires the majority to subsidize the minority that are it’s patrons.

The states that would be in receipt of these ill-borrowed billions have it right.

Dec. 24 (Bloomberg) — Missouri’s plan to spend $750 million in federal money on highways and nothing on mass transit in St. Louis doesn’t square with President-elect Barack Obama’s vision for a revolutionary re-engineering of the nation’s infrastructure.

Utah would pour 87 percent of the funds it may receive in a new economic stimulus bill into new road capacity. Arizona would spend $869 million of its $1.2 billion wish list on highways.

The argument is a labyrinth of cautionary tales.

Speaking of digging holes, Obama also wants to spend $60 billion to “provide financing to transportation infrastructure projects across the nation.” He says “these projects will create up to two million new direct and indirect jobs and stimulate approximately $35 billion per year in new economic activity.”

Fixing a bridge, widening a highway or building a light rail system may or may not make economic sense. But the fact that it involves paying people to operate jackhammers and pour concrete does not make it any more worthwhile. If creating jobs can justify transportation projects, why not fill the country with bridges to nowhere?

Consider:

• Government stimulus packages in and of themselves are dubious in their value when you consider the increase to the national debt, their evanescent nature and the precipitate inflation. If only they worked.
• Congress can’t and won’t spend this money without an agenda; without earmarks; without wasteful pork. “Why did you sting me?” said the turtle to the scorpion.
• Mass transit isn’t any better for the environment than cars are as our compatriot Bike Bubba has made serially and mathematically clear.

We all know what a Liberal means when they use the word “innovative.” It condescends whatever their over-educated “elite” brains deem shall be the object of increased government spending. It’s how socialism became “progressive.”

In proposing a stimulus plan that could total as much as $1 trillion, Obama has promised a new federal infrastructure program that would dwarf President Dwight Eisenhower’s interstate highway system that began in 1956. Obama told reporters at a Dec. 7 news conference that his effort would go beyond “roads and bridges” and fund more innovative projects.

I wonder if anyone has considered that the value of our national interstate system was not the temporary and transient jobs it created but rather the stimulus it created for the economy via efficiencies and freedoms it afforded capitalism and the consumer?

We are fast realizing that Obama isn’t any more innovative than any of his liberal predecessors in the White House. His ideas are warmed-over versions of Eisenhower’s and FDR’s and differ only in scale. What glory after all could be gathered to the bosom of the motherland by a project “half as big” as Eisenhower’s?

If, as widely expected, Barack Obama faces a recession when he takes office in January, many Americans will expect him to deliver on his promise to “create jobs.” They probably will be disappointed, because Obama seems to view job creation not only as something the government does with taxpayers’ money but as an end in itself. That’s a recipe for wasteful spending that will divert resources from more productive uses, and ultimately for higher unemployment than would otherwise occur.

Obama says he will “transform the challenge of global climate change into an opportunity to create 5 million new green jobs,” which he likens to the economic activity triggered by the personal computer. This rosy way of looking at global warming is a variation on the “broken window” fallacy dissected by the classical liberal economist Frederic Bastiat, according to which the loss caused by smashing a window is offset by the employment it gives the glazier.
Leaving aside the desirability of “energy independence” and the merits of Obama’s approach to reducing carbon dioxide emissions (which has the government, rather than the market, picking the most efficient methods), the fact that he lists “jobs that can’t be outsourced” as a distinct goal is troubling. Paying people to dig holes and fill them in again also creates “jobs that can’t be outsourced,” but that doesn’t mean it’s a smart investment or an appropriate use of taxpayers’ money.

Obama’s job fetish is apparent even when he talks about spontaneous economic activity. “Businesses should live up to their responsibilities to create American jobs,” he declared in his acceptance speech at the Democratic National Convention. In a free market, businesses exist because they provide goods or services that people value. A business that makes job creation its overriding goal will not be employing anyone for long.

The preclusion is that stimulus packages in the whole (pun intended), and especially those spent on social engineering projects or contrived global crises aren’t worth it.

All Hope^® for Change^® is lost.

The case for optimism…

if things came to a halt more quickly than ever before, they could also restart more quickly than ever before. This is not to say they will, only that the possibility is more than marginal. And there are signs things are not everywhere as bad as conventional wisdom suggests.

…consumers in many parts of the world are in relatively good shape.

People have also reacted swiftly to the current problems, paying down debt and paring back purchases out of prudence or necessity. That’s a short-term drag on economic activity, but it will leave consumer balance sheets in good shape going forward. Low energy prices and zero inflation will boost spending power.

As the credit system eases, historically low interest rates also augur debt refinancing and constructive access to credit for those with good histories and for small business creation in the year ahead. Entrepreneurs often thrive when the system is cracking.

In addition, corporations generally have very clean balance sheets with little debt and lots of cash, unlike the downturns in 2002 and in the 1980s.

…starts in Ashland, Ohio. Could it be? Could this be the mouth of the river? The first quark of the Big Bang?

ASHLAND, Ohio (CNN) — An Ohio bakery shut down in October is bustling again, with 60 eager employees who had expected a Christmas on the unemployment rolls.

But then Lance Inc., a Charlotte, North Carolina-based snack food company, purchased Archway at a bankruptcy auction. And last week 60 workers were asked to return immediately, with perhaps more coming back in the months ahead.

When it promised to reopen the bakery, Lance gave all 300 former Archway workers a $1,500 prepaid debit card.

When was the last time you heard anyone hiring? It has to start somewhere.

Merry Christmas, Ashland. Happy New Year America.

Sanden Totten at MPR’s “LoopHole” blog writes about the “phenomenon” of ‘Survival Panic’:

In the coming months, mental health experts expect a rise in theft, depression, drug use, anxiety and even violence as consumers confront a harsh new reality and must live within diminished means.”People start seeing their economic situation change, and it stimulates a sort of survival panic,” said Gaetano Vaccaro, deputy clinical director of Moonview Sanctuary, which treats patients for emotional and behavioral disorders. “When we are in a survival panic, we are prone to really extreme behaviors.”

The U.S. recession that took hold in December last year has threatened personal finances in many ways as home prices fall, investments sour, retirement funds shrink, access to credit diminishes and jobs evaporate.

A little background here.

My first job out of college paid a princely $3.35 an hour; by the time I got tubed at KSTP, I was making maybe $6 an hour. It was OK at the time – my bills were minuscule. My rent was $135 a month, no car payments, gas was cheap, no real serious other bills; if I sold an article or did a voice-over or production gig on the side, I was living pretty large for the month.

Then, of course, follow many lean years – exacerbated by what (if you’ve been following the last year or so of my endless “Twenty Years Ago Today” series) would probably have been diagnosed as clinical depression, if I’d been smart enough to see a doctor at the time. I worked in bars, and then more low-paying dead-end jobs in radio, and then some even worse temp jobs. The kids entered the picture around this time, which straitened things even more. I didn’t top $20K a year until 1994, after my youngest was about a year old, when I’d finally snuck into the world of IT, first as a technical writer and, from 1998 on, as a User Experience guy.

That wasn’t the end of it, of course; IT isn’t always much more secure or stable than radio. Companies fold; contracting jobs end without warning or, seemingly, reason. The 2001 recession left me out of work for five months, and doing subsistence contracting for five or six more in 2003.

I do fairly well these days, of course; it’ll be interesting to see if I can ride out a recession without another dislocation. Knock wood.

In short, I don’t know that I, personally, have “survival panic” over the economy, so much as an ongoing,lifelong “100 years’ war of survival”.  I guess I’ve gotten to age 46 without a whole lot of expectations about the material manifestations of “Success” in life.

Which, on the one hand, means my house isn’t getting into VH1 Cribs or Architectural Digest any time soon and, on the other, means I probably won’t be one of these any time soon…:

For those who need to abruptly curtail spending, that leaves a major void, said James Gottfurcht, clinical psychologist and president of “Psychology of Money Consultants,” which coaches clients on money issues.

“People that have been … identifying with and defining themselves by their material objects and expenditures are losing a definite piece of their identity and themselves,” he said. “They have to learn how to replace that.”

Now, don’t get me wrong; growing up as I did around all sorts of survivors of the Great Depression, I know that pathological frugality can be pretty debilitating, too.

Still – if this is the alternative…:

Beth Rosenberg, a New York freelance educator and self-professed bargain hunter, said she stopped shopping for herself after her husband lost his publishing job in June.

She is now buying her son toys from the popular movie Madagascar for $2 at McDonald’s, and is wearing clothes that have hung untouched in her closet for years.

She said it has been stressful to stick to an austere budget after she used to easily splurge on $100 boots. “I miss it,” she said of shopping.

…I don’t feel so bad.

Hopefully Bush’s late-administration Hooveresque socialist thrashings and Obama’s FDR-like delusions don’t stall the recovery so long that the pathology has to swerve from one pathology all the way to the other one.

I used to hate these bumper stickers.

Now I want one.

Visiting with business-owner and otherwise conservative clients these past few days, I have found a consistent level of puzzlement at best – ire more often – with President Bush’s move to override Congress, a GOP filibuster, and public opinion with his move this week to issue a bailout for GM and Chrysler in the waning days of his Presidency.

Why, Mr. President, Why?

To divide the GOP even further?

…exit the White House on a positive note (one that resonates only with other liberals)?

Use it or lose it? Did George Bush feel the need to spend his last dollar of political capital?

Conservatives are more pissed off with Bush than ever before.

Ford says “No Thanks.” Henry would be proud.

Cerberus, Chrysler’s privately-held owner says “You first”, Mr. and Mrs. Taxpayer.

Cerberus Capital Management…said Friday that it would put $2 billion from Chrysler Financial into the automaker’s operations after being granted a $4 billion government loan.

Cerberus…previously resisted making further investments in Chrysler, citing its obligations to its investors (who must not be taxpayers?-JR). But Friday, after the government announced emergency loans for Chrysler and General Motors, Cerberus relented.

“In connection with the loan to be provided by Treasury, Cerberus has agreed to utilize the first $2 billion of proceeds from Chrysler Financial to backstop the loan allocated to Chrysler automotive,” the firm said in statement.

As for General Motors, Chapter 11 is the best and inevitable option – the only way to force true restructuring of the nation’s largest automaker.

As for you George, Don’t let the door hitcha’.

There’s an apocryphal saying – it’s often incorrectly attributed to De Tocqueville – that goes “a free society can only survive until the people discover they can vote themselves largesse from the public treasury”. 

Apocryphal or not, it’s coming to vivid, horrifying life all around us.

We’ve bailed out the negligent financial industry and the smug, complacent auto industry and unions. 

Now?  Nick Loris writes that some even more-useless industries are at the trough; now, the Ethanol industry wants some taxpayer love.  Or should we say, more of it:

If you want a slippery slope example, you’re witnessing it. An auto bailout would set a disturbing precedent, resulting in even more private companies clamoring for government sponsorships. A number of companies today could make the case that their respective industry is vital for the economy and begin requesting billions of dollars in bailout subsidies. And if an ethanol bailout follows an auto bailout, who knows who will be next in line.

Ethanol has been receiving preferential treatment for thirty years and has proven to be unsuccessful. Even after decades of special tax breaks and subsidies, ethanol still provides only a small fraction of America’s energy needs. The government’s initial goal to kick start the ethanol business has morphed into the government trying to pick winners and losers among energy sources and has ultimately created a dependence mentality for the ethanol industry. It’s time to let ethanol stand on its own two feet or die.

And to make matters worse, ethanol isn’t doing any of the things it intended to do – ethanol literally is making matters worse.

Raising food prices, contributing to the global grain crunch, polluting more, depleting the aquifers, and begging for handouts?

If it were a bum, we’d put it in treatment.

Rick Wagoner, CEO and G.W. share the same fate as their careers wind down.

They are both on the wrong side of public opinion. Bush is also on the wrong side of the aisle.

Good for GM, Good for America?

The Washington Post reports that its poll finds 55% of Americans oppose the Detroit handout, while only 42% support it. Democrats have become the party of corporate welfare, with 52% supporting the bailout; majorities of Republicans (69%) and independents (57%) are opposed.

Most surprising finding: “Union households are no more apt than those without a union member to favor the plan, 44 percent compared with 42 percent.” The United Auto Workers wants government money so as to protect the work rules and artificially high emoluments that have helped make Detroit uncompetitive.

Wagoner argues that without a bailout, GM will have to go Chapter “Belly Up” and won’t survive it. At the same time Bush is circumventing a Republican filibuster and overwhelming public opinion to open up the TARP checkbook for the Big Three; two of which don’t need the money; one of which has resorted to begging.

We keep hearing the argument, originally put forward last month by Rick Wagoner, GM’s delightfully named CEO, that people won’t buy cars from companies that have filed bankruptcy, for fear that parts and service will become unavailable. Are consumers really so stupid that they would have more confidence in a company that goes on welfare to support an unsustainable business model than in one that is being restructured through bankruptcy court?

It turns out the Unions aren’t as pro-bailout and foreign competitors may be more pro-bailout than one would imagine.

One major problem is that Japanese carmakers in the United States share many of the same parts suppliers. If a Detroit automaker were to collapse, suppliers would likely follow, setting off a chain reaction that could wreak havoc for Japanese production in a vital market.

More broadly, the U.S. crisis could lead to huge job losses and further weaken consumer spending, especially for big-ticket items such as automobiles. Together, the three big American automakers employ 239,000 workers in the United States.

I have teetered back and forth on this issue. Not unlike the unfolding of the financial system crisis, the more time that elapses, urgency fades in favor of clarity, and the more prized clear-headed thinkers become.

Let GM file bankruptcy. Let Cerberus feed their child so we don’t have to. Let Ford Navigate the waters unfettered by bailout dollars and the restrictions they would entail.

Let capitalism do what capitalism does: make stronger companies.

I watched Leslie Stahl’s 60 Minutes interview of Barney Frank online and made a couple observations.

First of all, the media’s pronounced bias (or Leslie’s for that matter) manifested itself conspicuously, and it was even before the interview began.

Leslie Stahl’s lead in, emphasis mine:

“Barney Frank has been called the smartest guy in congress, which is lucky for us since he works on some of the thorniest issues around. The fourteen-term, sixty-eight year-old Harvard educated Democratic (she dips her head in approval) Congressman from Massachusetts is chairman of the house financial services committee, which means his portfolio includes banks, housing, and now the auto industry.”

Let’s be clear on one thing. Fourteen terms of Frank ‘n Beans has not been “lucky” for any of us.

Frank has purportedly spent his career becoming Congress’ de facto expert on America’s banking system and Wall Street only to oversee – nay, become complicit in – the biggest failure of both in modern times?

Lucky us!

Leslie Stahl asks Barney Frank about the unfairness of some people getting bailed out of their mortgages while others work two and three jobs to pay theirs. He justifies the program by asking is it unfair that one neighbor loses his job and gets unemployment while the one that doesn’t lose his job doesn’t? He justifies one policy with another as if they are the same thing. Two wrongs don’t make a right.

He’s been at the center of both the 700 billion dollar rescue for financial institutions, and the bailout attempt for the car companies that failed in the Senate.

As they say, the criminal always returns to the scene of the crime.

I learned from the interview that it’s not the only time he’s been at the center, or on the scene of a crime for that matter.

The lowest point of his life he says…when he found himself in a sex scandal. A male hooker that Frank had hired told reporters that he had run a prostitution ring out of the congressman’s apartment. An investigation concluded that Frank didn’t know anything about it but he was reprimanded and went to the floor of the house to apologize.

Never mind the fact that Barney Frank hired a hooker. He has a prostitution ring run right under his nose and escapes culpability on the basis of ignorance. Never mind the fact that he gets to keep his job. He is charged with overseeing our nation’s financial systems.

Only in a Liberal America.

Let it never be said that I ever wished ill on anyone (or at least anyone that didn’t have innocent blood on their hands).  While I believe Nick Coleman is a mediocre columnist (with flashes of brilliance, I hasten to add, when he puts away the Junior Studs Terkel kit and writes the stuff he does well – the slice of Twin Cities life stuff he actually can do), I’d rather have him at the Strib than out of work.  I’ll never wish for someone (especially someone with kids to take care of) to be out of work. 

Besides – while I’ve tired of fisking the guy, Coleman’s always been a reliable source of material.

But, according to Brauer, perhaps the gift of content that is Nick Coleman is about to stop giving:

According to a buyout memo released this afternoon and newsroom sources, Nick Coleman and Katherine Kersten will lose their columns, though they may be able to remain at the paper as reporters.

To put it mildly, that would be a stretch for Kersten, who has never held such a journalism job.

Brauer says that like it’s a bad thing.  Dave – you do  know that many of us live happy, productive lives without ever putting the “j” word on our resume, don’t you?

Expect a gigantic eruption from the right wing.

…as if “the right wing” didn’t expect the Strib’s management would chafe at the notion of dissent in the ranks.

…if the Senate denies The Big Three bailout.

Ford Bailout Money Unnecessary, Company Says

DEARBORN, Mich. — By shunning government loans, Ford Motor Co.’s top executives say they hope to buff up the automaker’s image and set it apart from its cash-starved Detroit competitors, General Motors Corp. and Chrysler LLC.

Why is Cerberus, one of the world’s richest private equity firms, begging for a bailout?

Buried on the business page of The New York Times Saturday were the details of Detroit’s biggest snow job yet–literally as well as figuratively. Turns out that Cerberus CEO John Snow, who spent three-and-a-half lackluster, and some might say lap-doggish, years as President Bush’s second Treasury secretary, is leading a who’s who of crony capitalists in a lobbying campaign for a taxpayer bailout to “salvage Cerberus’ investment in Chrysler.”

That’s right. Not to save the jobs of Chrysler employees or America’s disappearing manufacturing base, mind you, but to prevent “one of the world’s richest and most secretive private investment companies” from having to take a relatively modest financial hit and use some of its own capital to prop up the smallest of the major automakers.

As it turns out, this may end up being a GM-only bailout. Assuming Cerberus shows some integrity, and Ford isn’t willing to sell it’s soul to Congress for a handout, will the Senate be able to save one and not give something to the other two?

UPDATE: Auto Bailout Appears Dead in Senate as G.O.P. Resists

…so that we can load it up with the most useless projects we can devise…but we’ll call them “Infrastructure,” and taxpayers will look the other way.

From a couple posts ago…

“We understand that we’ve got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can’t worry short term about the deficit. We’ve got to make sure that the economic stimulus plan is large enough to get the economy moving,” he said.

Let’s dissect what Mr. Jimmy just said. We have to make sure to print and/or borrow so much money that the economy will have to get better?

Obama’s words rang out like a dog whistle for liberals everywhere.

And not surprisingly, the term “Infrastructure” gained a new, broader meaning.

On Monday, the U.S. Conference of Mayors went to Capitol Hill to ask for a handout, or as they put it: “We are reporting that in 427 cities of all sizes in all regions of the country, a total of 11,391 infrastructure projects (emphasis mine-JR) are ‘ready to go.’ These projects represent an infrastructure investment of $73,163,299,303 that would be capable of producing an estimated 847,641 jobs in 2009 and 2010.”

…it turns out $73 Billion is “capable” of producing 847,641 temporary jobs.

A wish list that is 11,391 projects strong! What vital infrastructure projects would cash-strapped taxpayers get for their $73 billion? Here’s a sampling:

– Hercules, Calif., wants $2.5 million in hard-earned taxpayer money for a “Waterfront Duck Pond Park,” and another $200,000 for a dog park.

– Euless, Texas, wants $15 million for the Midway Park Family Life Center, which, you’ll be glad to note, includes both a senior center and aquatic facility.

– Natchez, Miss., “needs” a new $9.5 million sports complex “which would allow our city to host major regional and national sports tournaments.”

– Henderson, Nev., is asking for $20 million to help “develop a 60 acre multi-use sports field complex.”

– Brigham City, Utah, wants $15 million for a sports park.

– Arlington, Texas, needs $4 million to expand its tennis center.

It’s a simple fact. Liberals can not be trusted with the nation’s checkbook. In a time of world financial crisis, their solution is to spend more taxpayer money on even more useless pork.

The government does have a role to play: stimulate the economy by creating incentives for growth, incentives that will be permanent, paid for by cutting government down to size. But liberals would entertain that notion. Liberals seek to justify and extend government largess, not reduce it to it’s rightful weight.

Instead of stimulating the economy, Barack Obama and his faithful liberal lunatics in Congress aspire to become the economy.

Since I was a boy I have had a fascination with cars. I made them with my Legos. We’d set four folding chairs in the yard and imagine we were on road trips. My neighborhood buddy and I sketched countless pictures of them. Always set in action, with smoking rear wheels, quarter panels repleat with flames and pipes and vents and the requisite jack job on the back with over sized rear wheels.

…and always decidedly American.

When I was a kid, imports were “Jap Crap.”

It didn’t matter that my Dad’s brand new company car, a then downsized 1981 Oldsmobile Cutlass Supreme was a gutless piece of crap with a V6 that was as smooth and as powerful as a coffee grinder and paint that came from the factory looking like it had already baked in the sun for a few years.

No one considered the Japanese playas yet.

My first car was a used 1973 Ford Pinto Squire Wagon, with yes, you guessed it, the woody decals and plastic “wood” trim down the flanks. $1,100; borrowed from the bank. What a piece of shit that car was…but it was mine all mine.

Lucky for me, girls didn’t seem to care if your car was cool. It was enough that you had one.

(more…)

Unless it’s my pork!

Barack Obama on “Meet the Press:”

“What we need to do is examine: What are the projects where we’re going to get the most bang for the buck? How are we going to make sure taxpayers are protected?

“You know, the days of just pork coming out of Congress as a strategy, those days are over.”

Yeah! All Pork will now emanate from the White House.

“We are not going to simply write a bunch of checks and let them be spent without some very clear criteria as to how this money is going to benefit the overall economy and put people back to work. We’re not going to be making decisions on projects simply based on politics and — and lobbying.”

You know, like I did when I was a Senator.

“It makes no sense for us to shovel more money into the problem if you have not seen an auto industry that is committed to restructuring — restructuring that, frankly, should have been done 10 years ago, 20 years ago, 30 years ago,” he told reporters.

“It makes no sense for us to shovel more money into the [economy] if you have not seen a [Federal Government] that is committed to restructuring — restructuring that, frankly, should have been done 10 years ago, 20 years ago, 30 years ago,” he [should have] told reporters.

Despite the nation’s massive debt, Obama said he won’t be focusing on building a balanced budget at the start of his administration.

…or the middle of his administration.

…or the end of his administration.

“We understand that we’ve got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can’t worry short term about the deficit. We’ve got to make sure that the economic stimulus plan is large enough to get the economy moving,” he said.

Let’s dissect what Mr. Jimmy just said. We have to make sure to print and/or borrow so much money that the economy will have to get better?

“But the overall thrust is going to be that 95 percent of working families are going to get a tax cut and the wealthiest Americans … are going to give up a little bit more,” Obama said.

Over 30% of Americans already have a zero federal income tax liability. Ah, there’s the problem, Mr. Oprahma sir.

You can’t do math.

They say you can tell a lot about a man by the company he keeps, or in this case, appoints. President-Elect Barack Obama may acknowledge his lack of executive or business experience but will he recruit to reinforce these deficits?

Not as of yet.

Where are the advocates for businesspeople and investors in President-elect Barack Obama’s incoming administration? So far, not one of his cabinet appointments, especially those dealing with the economy, has any significant business experience, and there is little to be seen on the résumés of the likely candidates for as-yet-unfilled positions.

Some might argue that the business background of key members of the Bush administration — from the president himself to Treasury Secretary Henry Paulson — did no good for the economy.

But going to the other extreme — totally ignoring experience in how the business world works — is unlikely to be good for the country as a whole or for investors. This is particularly true for the senior economic-policy team.

The Obama economic team so far is dominated by academics with no real-life experience, from his choices for Treasury secretary to chairman of the Council of Economic Advisers to secretary of commerce.

If the business community was overrepresented in the Bush administration, it looks to be underrepresented in the incoming Obama administration.

As they say, stupid is as stupid does. If Barack Obama is to be judged by his selections thus far, the economy and the business community that represents its only hope for recovery will soon be in the hands of a cadre of theorists and academicians that won’t have a clue about what to do with it.

Worse yet, and I fear more likely, is that Obama’s economic team may actually think they know what to.

Obama’s campaign monologue displayed a remarkable dearth of any understanding of basic economics and a veiled disdain for business and capitalism. Joe the Plumber made headlines for this very fact. Obama’s most recent appeal, to create the largest welfare program in the history of America under the guise of “investment” and “job creation” is a patent example of liberal lunacy and may be the undoing of what is left of America’s economy.

You can’t creat jobs by taking more money from taxpayers.

Obama will apparently not be governing as close to the center as the media had been reporting, as recently as this past week.

A liberal only has one lever to pull and Obama plans on pulling it with all his might.

Infect everyone else.

The unions are largely to blame for a crisis that it appears will cost taxpayers between $15 and $25 Billion but not for the reason you think.

Even if a deal for a $15-billion to $17-billion preliminary bailout comes together this weekend to keep carmakers afloat into 2009, they will continue to be dogged by their most significant competitive disadvantage: a high-priced, unionized workforce.

And yet there is nothing inherently unsustainable about employing a high-priced, unionized workforce. The crisis of Detroit’s wage bill is entirely relative. Specifically, their labor costs far exceed the low-cost, nonunion American workforce at the U.S.-based, foreign-owned plants of competitors Toyota, Honda, Nissan and Subaru.

If the UAW really is to blame at all, then, it is because of the union’s utter failure to unionize any of the transplants. What has the UAW been doing all these years? Isn’t it the responsibility of any good union to protect union employers from competitive labor disadvantages by organizing wall to wall, throughout the industry? How could it have left these transplants unorganized? As is now clear, when the UAW exposed the Big Three to insurmountable competitive disadvantages, it cut its own throat.

The UAW is to blame for the Big Three Crisis. Not because they sucked the Big Three dry. Because they didn’t suck everyone dry.

Foreign automotive manufacturing transplants here in America produce some of the highest quality cars in the world, subject to the same safety and emissions regulations as the Big Three, and historically with some of the most satisfied workers in the industry. Honda has and Toyota will soon export product from here.

They’ve proven it can be done profitably; in America with Americans, and without the UAW.

What is being posited here is not a foreign concept (no pun intended). Force successful automakers to drag the dead weight of the failed strategies of the Big Three.

Mr. Obama calls it “spreading the wealth.”

I call it Socialism.

…Just nod if you can hear me. Is there anyone home?

Barack Obama is already deflecting…this is going to be a long four years for everyone if our fears of his emptysuitedness manifest themselves.

All Americans should hope that Obama grows some, and fast. What America needs now is not the rhetoric and campaign promises that landed Obama in the White House on the backs of millions of people that think he is going to save them from their rightful obligations.

Otherwise, the office of President will be of no more value to America than the mock, ego-driven farce that is the “Office of the President-Elect.”

Democrats are growing impatient with President-elect Barack Obama’s refusal to inject himself in the major economic crises confronting the country. Obama has sidestepped some policy questions by saying there is only one president at a time. But the dodge is wearing thin.

He’s going to have to be more assertive than he’s been,” House Financial Services Committee Chairman Barney Frank, D-Mass., told consumer advocates Thursday.

Frank, who has been dealing with both the bailout of the financial industry and a proposed rescue of Detroit automakers, said Obama needs to play a more significant role on economic issues.

Could there be someone less qualified than Beans ‘n Frank to deal with this crisis? Yes. Barack Obama. At least Barney Frank knows how it happened on account of his personal culpability and corruption. Not only was he at ground zero, he lit the fuse.

Obama did stress that a significant component of the fund should be used to reduce the number of foreclosures. But he did not specify a particular remedy.

Not so fast, Mr. Jimmy. You might want to consider the effect of that on your soon-to-be-plummeting approval rating.

Many Americans are outraged that their money is being spent to rescue irresponsible mortgage borrowers. Still, that probably won’t stop government officials.

There are a lot of hard-working, responsible people out there, many of whom voted for you Mr. Oprah, who are dead set against bailing out those that took imprudent risk at the expense of those that saved and lived below their means.

Insert leadership here.

What America needs is a President that tells America the truth. Government can no longer cover your six if you make bad decisions. It can’t and it won’t. It’s the only intelligent thing Jesse Ventura ever said.

Based on some of BHO’s cabinet choices, I am guardedly optimistic that he in fact is weighing his options and that he truly wants to do what is best for America, within the limiting realm of his ideology; but the forces of opposition, Frank, Reid, Pelosi et al, are very strong.

And soon, may not even be on his team (which may be a good thing).

“That One” spent two years telling us “Yes We Can.” Now it’s time to tell us “No We Can’t.”

The French are so lame. Their stimulus package couldn’t even pay the postage on ours!

PARIS — France will spend $33 billion over the next two years to soften the blow of the global downturn and limit the effects of increasing unemployment, President Nicolas Sarkozy said Thursday.

You call that at Stimulus Package?! $33 Billion! Is that the best you can do?! Ours is like $700 Billion! Ha! Losers!

As long as we are “lowering” expectations for his disciples, here’s another Hopey-Changey campaign promise that needs to be broken.

Let’s be clear on how wealth and jobs are created because a politician that says “we (the government) will create jobs” is either unaware of how capitalism works, or is (once again) just plain lying to the American people in the interest of political gain. In the case of [the man formerly known as Obammy], I’d say it’s a little of both. “Jobs” are not “created” by the government.

Make no mistake, the government has many legitimate functions. Those functions are funded and employees are hired to implement and administer them. Those particular jobs however, are not yielding net economic benefit and as such should not be taken into account as it relates to economic benefit. Creating even more of them for their own sake is simple liberal lunacy.

The dollars to fund whatever program for whom these employees would work have to come from somewhere, and there is always an opportunity cost, short term and long term, for those dollars, usually borne in “real” jobs lost somewhere else.

Nowhere is it mentioned that these “green-collar jobs” would be terribly costly, and that the planned “investments” are really just subsidies. And, as we know, things that require subsidies aren’t competitive in the market, and thus aren’t profitable.

Spending money on projects where costs exceed benefits simply to “create jobs” is a bad idea. Taking capital from productive uses and redeploying it to politically popular but nonproductive uses lowers productivity by paying those with “green jobs” more than their output is worth. It’s not welfare, it’s “greenfare.”

The “Green” movement is big business, from Hybrid cars to new forms and uses of battery and lighting technology to specialized architectural disciplines. If Obama’s ideas are superterrific, why aren’t entrepreneurs lining up first?

Claims that such “investments” will create five million jobs are false. It’s likely more jobs will be killed than created due to higher costs and increased inefficiency of the U.S. economy. A recent report from the Center for Data Analysis at the Heritage Foundation found that limiting CO2 emissions under recent proposed legislation would destroy 900,000 net jobs.

Until Barack Obama starts getting behind proven strategies like tax and (especially) spending cuts to stimulate our economy, stagnation, job loss and a volatile stock market will rule; the cycle will continue to repeat itself. Government largess got us here; it won’t get us out of here.

The cause of our current financial system crisis, overarching government meddling and regulation, set in place by liberals, bolstered by the Clinton Administration and allowed to remain during the Bush Administration is not going away any time soon.

The Community Reinvestment Act is to blame for the financial crisis, but it so powerfully serves Democrats’ interests that they’ll do anything to protect it — including revising history.

But powerful Democrats in Washington want to protect the act — along with Fannie and Freddie — and spin the subprime scandal as the result of too little regulation, not too much.

“Repealing or weakening the CRA would be a mistake,” warns Senate Banking Committee Chairman Chris Dodd, D-Conn., who argues that the CRA should be strengthened.

Dodd, the top recipient of Fannie donations and himself a beneficiary of a sweetheart mortgage brokered by a subprime lender, recently invited one of Clinton’s top enforcers of the CRA to testify.

Read the whole article for the facts.

Liberal Democrats caused this crisis, Liberal Republicans allowed it to remain, and the American people rewarded them by voting in an ever larger number of liberal politicians without the tools or the wherewithal to bring us out of this crisis. As usual, those that are responsible, productive and truly conservative will pay the price, and ultimately come to the rescue of our economy.