Trouble for the Auto Industry Bailout

Reports indicate that there is less confidence that the auto indusrty bailout will be passed. Many Republicans and some Democrats question whether the bailout bill will use taxpayer's dollars effectively. The Bloomberg article Democrats Back Off Prediction of Automaker Bailout Approval describes the latest version of the bill.

The Democratic proposal would let the president appoint a so-called car czar to oversee industry restructuring, and give taxpayers stock warrants equal to 20 percent of the loans. It would prohibit the automakers from paying dividends and owning or leasing corporate jets, and pay and bonuses would be limited.

This, however, does not address the inherent problems with these businesses. Preventing the "paying dividends and owning or leasing corporate jets, and pay and bonuses" addresses none of the major problems with these companies. A limit on excesses misses the basic fact that these are failed companies, who can't garner loans from anyone other than Congress. The only check or change that this bill implements is 'a car czar'; the powers of which Chairman Barney Frank tried to explain...

‘Head-Knocking’

Frank told reporters today the bill would give the car czar “a great deal of head-knocking ability” with “a lot of the powers that you would get in bankruptcy.”

The official would have the power to veto participating automakers’ plans to invest abroad, Frank said. Lawmakers want to ensure the companies don’t “take American taxpayer dollars and expand in other countries rather than here, or shut down a plant in America while expanding a plant elsewhere,” he said.

Because Bush and President-elect Barack Obama are unlikely to agree on a czar, Obama will likely replace Bush’s pick as soon as he takes office, Frank said. The Bush administration has said the official should come from the Commerce Department.

So this 'car czar' a likely member of the Commerce Department will be apparently appointed by President Bush then replaced by the future President Obama, and he shall be granted 'head knocking abilities'.

Chairman Frank went on to state that the auto industry will likely need to be granted more money in the future, something Speaker Pelosi has also stated. This does not instill confidence that this bailout will be anything but a waste of money.

A few basic questions for lawmakers...

How will this money fix the failed business policies of the auto industry?

How many bailouts and/or how much money will be paid to the automakers total?

What's wrong with bankruptcy?

What are the requirements for being granted a government bailout?

This is still not an rational solution. Ask your representatives not to support this bailout bill, and make them at least answer the basic question, 'how will this money fix the problems that the auto industry faces?'

Contact Your Senator

Contact Your Congressman

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Continued Problems with the Automaker Bailout

New Blogs

I started blogging this election cycle as a way to support Senator McCain for President. Now that race has ended, I'm interested in blogging at different sites for different purposes. I will continue my original site Broad Side of the Barn as a light hearted site with some useful resources, however, it is in serious need of updating. Blog topics typically will fall under the heading of internet or politics, but other topics will be addressed as well. Some of these sites are derivatives of ones set up during the election, many of them still need significant work. Here are the blogs I plan on posting to and developing at this time. Thank you for visiting.

Experimental Blogging	Trial and Error Site
States	Local Theme
Surround the Web	Random
Purple People Vote	The old version Purple People Vote
Divied Up	Random
Cracked Back	Random
Linked the Web	Random
Web Driven	Web Topics
U.S. Independent	Politics - Independent
Circle the Web	Random
Blog Gobbers	Fun / Random
Practical 1 Politics	Politics
More Pols	Politics
Independent Voters	Politics
Local Republican Races	Politics...only if contributors want it to continue
Indie-Site	Politics / Independent
McCain Blogger Resources	Internet? - Form? - Maybe?
Battleground States 08	Politics
Web Inquiry	Internet
Independent Voters	Politics / Independent
Who Do I Vote For?	Politics
Round Four	Random
Broad Side of the Barn Store	Internet / Sales - Affiliate Programs
Change Candidates	Politics
Scienceless	Tech and Science Interest
Fiscally Conservative Socially Moderate Independents	Politics / Independent
BroadSideoftheBa...	Humor Random
The Online Volunteer	Philanthropy
Blue Collar Voters	Politics
Independent Voter Resource	Politics / Independent
Rambling Web	Philanthropy
In New Hampshire	NH Local

Here are a variety of other sites of interest. The Maine Tool Room, Dr. Dog Health Care, Blogs for Victory, USA.gov, Network for Good, The Red Cross, The Smithsonian, Zannel, AARA News Service, Real Clear Politics, Joe Lieberman, Righty Blogs

No Bailout Guarantees

Yesterday's article Oppose the Auto Bailout was not intended to be anti-union or anti-auto company, it's simply the opinion of an old fashion cheapskate. If the government is going to spend taxpayer dollars they need to ensure that those funds are not being wasted. There has been little effort to explain why pumping money into failed businesses will fix that failed business model. Voters should contact their lawmakers and let them know they will hold them responsible if they give automakers billions of taxpayer dollars only to see those business collapse in the future.

Contact Your Senator

Contact Your Congressman

Similar sentiments we're expressed by Senator Mitch McConnell (R - KY).

U.S. Senate Republican Leader Mitch McConnell made the following remarks on the Senate floor Tuesday regarding proposed auto legislation:

“The auto industry is vitally important to our nation’s economy and it is vitally important to my home state of Kentucky. This is not in dispute. The question before us is how to reverse the decline of some of these auto manufacturers after decades of complicity between management and labor.

“I understand congressional Democrats sent a revised proposal to the White House late last night. We will reserve our judgment until we see the latest text. But the proposal we saw yesterday afternoon fails to achieve our goal of securing the long-term viability of ailing auto companies.

“I want to support a bill that revives this industry. But I will not support a bill that revives the patient with taxpayer dollars yet doesn’t secure a commitment that the patient will change its ways so future help isn’t needed.

“To do so would be a betrayal of the millions of hardworking taxpayers who are not at fault for the troubles in the auto industry. And it would be unfair to the millions of Americans who depend on these companies.

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No Auto Bailout Part 2

No Auto Bailout

RedState.com has posted a couple pieces on opposing the government bailout of the auto industry. The first by Representative Michele Bachmann opposes not just the auto bailout, but the concept that Washington should be spending tax payer money to prop up failed businesses. The second article by Francis Cianfrocca discusses how contract renegotiations with the United Auto Workers union need to be included any proposed bailout as failure to so will result in the eventual failure of those companies with or without a bailout. Excerpts below.

One main reason the auto bailout is facing such opposition is that there has been no attempt to explain why pumping money into a failed business will fix that business. If these company continue on their current path this bailout will simply prolong the time before before failure, and will result in simply wasting a huge sum of tax payer dollars.

For those who oppose bailing out the auto industry, folllow the links below to contact your Senators and Congressmen to let them know that you do not support this bill, and that you will hold them responsible for wasting your money.

Contact Your Senator

Contact Your Congressman

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No More Bailouts by Rep. Michele Bachmann

Washington needs to stop handing out your money like its Monopoly money. Each dollar is hard-earned and the men and woman who worked so hard for it deserve more respect from their government than to be treated like an ATM. Our economy grew strong on the backs of Main Street; from the ideas and sheer sweat of innovators and entrepreneurs flush with the American spirit. Risk-taking is part of that adventure. But when government guarantees against failure, risk and reward becomes meaningless. Eventually, that will crush our economy- and that eventually may not be that far down the road.

The Critical Missing Piece in the Automaker Bailout by Francis Cianfrocca

There will be no significant cost-cutting or pain imposed on the UAW in the restructuring of the domestic auto industry, unless it happens right now, this week.

The UAW must agree to a labor-cost structure that, in Sen. Corker’s words, is no higher than that faced by foreign (“transplant”) automakers who assemble vehicles in the United States. The union must agree to very painful concessions on wages, healthcare, work rules, and retiree benefits.

Gettelfinger, playing to the galleries, has assured lawmakers that he will indeed be open to doing whatever he can to seal the deal. Among other things, he’s signaled willingness to end the so-called “job bank.” You know, that’s where an automaker closes a production facility that no longer makes sense, but continues to pay the workers full wages and benefits to play video games all day, for years into the future.

But what Gettelfinger has pointedly not said, is that he’s willing to re-negotiate the contract that the UAW currently has with the automakers. In short, he’s not preparing to compromise at all, or to ask his people to take any real pain.

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Oppose the Auto Bailout

McCain Kudlow Interview - Keep Taxes Low Help the Economy

Excerpt from An Interview with Senator McCain by Larry Kudlow

McCain: Well, I try to talk about them more often. A lot of the people that come, frankly, are people that are having trouble staying in their homes, keeping their jobs, etcetera. But I think it goes back to all this business of Sen. Obama’s view of “fairness.” When Charlie Gibson said, why would you want to raise capital-gains taxes when you know it will decrease revenue? And he said in “fairness.” And he told Joe the Plumber — Joe the Plumber got the message through better, what we’ve been trying to do this whole campaign. [Obama] wants to “spread the wealth around.” That takes from the investor class. That takes money from one group of Americans and gives it to another.

Now that signal has been very clear. And I think people ought to pay attention to it, because it’s been tried before in other countries, and policies of other left-liberal administrations. It doesn’t work, and it’s bad for America. We want to encourage the investor class, and that means capital-gains and dividend taxes are low.

Kudlow: You’ve just unveiled a new tax cut on capital gains. Can you tell us about that? Because in some sense, that’s probably the most important investor class tax.

McCain: It’s the most important in many respects, Larry, and we want it low and we want it lowered. Every time — there’s one tax that there’s no argument about, that every time it’s been lowered since Jack Kennedy, we have seen an increase in revenues. Now, why anybody would argue, as Sen. Obama does, that we need to raise it, even if it’s — of course, the amount needed to raise it is varied with whatever poll he’s taken — but the point is that we want to lower it and keep it low and encourage investment, especially now in America in these difficult times.

Kudlow: But senator, what is — the current law rate is 15 percent.

McCain: Yeah, yeah.

Kudlow: You’re taking the cap-gains rate down to what?

McCain: First down to 10 percent, I would like to see it, and gradually even make it lower. Look, why should we tax people’s gains twice? Why should we tax them twice, okay? They make an investment, they should be able to get their returns on their investment. And capital gains is obviously — low capital-gains tax is probably the greatest incentive for investment that we have in America today. And so, look, I’ll be glad to listen to smart people like you, Larry, but the worst thing we can do is tell people we’re going to raise it, and that, obviously, would chill investment in America, right?

Promises of Redistribution and Spread the Wealth

David Harsanyi's article If It Redistributes Like a Duck... looks at Obama's plans to change the fundamental structure of the American economy by focusing tax codes on redistribution of wealth.

Obama is the first major presidential candidate in memory to assert that taxation's principal purpose should be redistribution.

The proposition that government should take one group's lawfully earned profits and hand them to another group -- not a collection of destitute or impaired Americans, mind you, but a still-vibrant middle class -- is the foundational premise of Obama's fiscal policy.

It was Joe Biden who said (not long ago, when he still was permitted to speak in public), "We want to take money and put it back in the pocket of middle-class people." The only entity that "takes" money from the middle class -- or any class for that matter -- is the Internal Revenue Service. Other than that, there is nothing to give back.

And who knew we needed such a drastic renovation of an economic philosophy we've adhered to these past 25 years (yes, counting Bill Clinton's comparatively fiscally conservative record)? Despite a recent downturn and with all the serious tribulations we face, Americans have just lived through perhaps the most prosperous and peaceful era human beings ever have enjoyed.

From 1982 until now, every arrow on nearly every economic growth chart -- every health care chart, every chart that matters -- points in one general direction, and that's up.

Obama, who, it seems, is running not only for president but also for national baby sitter/accountant/daddy/icon, ignores this success and claims he can "invest" (will that euphemism ever go away?) and disperse your money more efficiently, smartly and fairly than you can. How could any American accept the absurdity of that position?

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Promises of Redistribution and Spread the Wealth

Media's Bias At Unprecedented Levels

Diane West of Townhall.com writes in her article Media's O-Colored Glasses Blank Out Leftist Truth about a very disturbing element of this election cycle. The media has abandoned its responsibility to vet candidates, and have instead ignored a myriad of radical associates of Senator Obama's and dubbed them 'off limits' or 'dirty tricks'. The reality is that if an average person had the associations that Senator Obama has they would be classified as a security threat, and likely wouldn't even be able to attend events like the Democratic convention. It has been noted elsewhere that Senator Obama couldn't even be cleared to be his own Secret Service agent because of these associations. However, the media doesn't care, they are campaigning for their favorite candidate and these issues are dubbed off limits by the most biased media coverage in modern US history.

At the beginning of Obama's life, for example, there was "Frank," Obama's boyhood mentor who appears in his 1995 memoir "Dreams from My Father." Accuracy In Media's Cliff Kincaid has identified "Frank" as Frank Marshall Davis, a known Stalinist in a Soviet-sponsored communist network in Hawaii. But Obama obscures Frank's identity in his book, even, as Sean Hannity has reported, going so far as to drop passages about "Frank" from the more recent, recorded version of the book. Why? The media never asked.

Later in Obama's life there was Mike Klonsky, an unreconstructed Marxist and erstwhile leader of an honest-to-goodness Maoist splinter group in the United States. Klonsky, like his buddy, ex-Weatherman William Ayers, spreads Marxism through education "reform." As the National Review Online's Andrew C. McCarthy reported, Obama directed nearly 2 million foundation dollars to fund Klonsky's ideas in the 1990s. More recently, Klonsky wrote a "social justice education" blog on the official Obama campaign Web site -- at least until a blog named Global Labor and Politics pointed this fact out. Klonsky's musings were summarily scrubbed from the campaign Web site in June. Why? The media never asked.

And so it goes. The assorted radicals -- from ACORN to Ayers, from anti-white Jeremiah Wright to Saudi-adviser Khalid al-Mansour to former PLO associate Rashid Khalidi -- who have peopled Obama's ideological passage from rising leftist to post-ideological cipher, have been lost in the blur to a media focused solely on their own prize: Obama in the White House.

Such focus has created a drastically blinkered journalism, particularly in these final weeks. Take the fact that the supposedly "post-racial" Obama once funded Afrocentric, race-focused education programs supported by Jeremiah "G -- - D -- - America" Wright. That was a juicy blend of hypocrisy and extremism (dug up by Stanley Kurtz), but the media just averted their eyes.

Or how about good, ol' William "America Makes Me Want to Puke" Ayers, whose own relationship with Klonsky (the Maoist mentioned above) goes back to the days of the SDS (Students for a Democratic Society)? Obama worked closely with Ayers to fund radical programs (such as Klonsky's) in Chicago, endorsed Ayers' work, and launched his political career in Ayers' home. This is the ideological and literal bomb-thrower Obama brushed off as just "a guy in my neighborhood." But the media saw nothing to it -- not even a piece of Obama's questionable pattern of collaboration with a series of people best described as unregenerate leftists.

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Media's Bias At Unprecedented Levels