Mar 31 2009
Obama Just Lost Union Support
When we look back on the administration of President Obama we will find a duplicitous man in everything he said. He will not be “hope and change” but the epitome of the two faced politician who says one thing and does another. His record so far is pretty damn stunning.
Candidate Obama railed against NSA-FISA rule changes implemented by President Bush in the wake of 9-11 to rally his liberal base. Yet, when the hour to stand up and be counted came Senator Obama flip-flopped and voted to make the changes permanent.
His biggest laugh line these days is his calls for responsible spending and living within ones means as he produces as much debt in 10 years as the nation has produced in its entire history, bringing our debt to 80% of our GDP (if not higher).
His fix to the banking mess is not to reward responsible behavior, as he campaigned on. It rewards cheating and greed. His lobbyist free administration is full of ‘one time’ lobbyists exceptions. His transparent administration has been anything but transparent. His promise to go line-by-line through the budget to remove pork was DOA when he handed his budget to the spend-drunken liberal Congress.
I mean it is probably more accurate to predict the man’s possible actions by looking at the opposite of any one of his promises and platitudes.
The world of automobile making – an industry this nation founded on planet Earth – was rocked yesterday as President Obama required extreme measures for Chrysler and General Motors to avoid bankruptcy. Even going so far as to put a banker (remember these greedy crooks?) at the top of GM. What this has actually done is ensured bankruptcy now that the failed federal government is now standing behind these US car brands.
Outside of the military, the government is not known for quality or cost effectiveness. In fact, I wrote about the result of such action a while back:
For those too young to remember the Soviet Union and its government run industries the one thing the USSR proved is how bureaucracies can destroy an industry. It takes bureaucracy so long to make changes (every decision is by committee and analyzed to death) that it doesn’t take long for the ‘government run industry’ to fall hopelessly behind the commercial competition.
The auto workers unions know what has happened here. They know that Obama and the Dems have given the kiss of death to GM (and maybe Chrysler).
Many assembly line autoworkers reacted with skepticism and anger Monday to the Obama administration’s tough tactics, which stoked long-simmering feelings that the people who put the country on wheels get treated differently than the wizards of Wall Street.
“It’s the age-old Wall Street vs. Main Street smackdown again,” said Brian Fredline, president of UAW Local 602 at a plant near Lansing. “You have all kinds of funding available to banks that are apparently too big to fail, but they’re also too big to be responsible.”
“But when it comes to auto manufacturing and middle-class jobs and people that don’t matter on Wall Street, there are certainly different standards that we have to meet — higher standards — than the financials. That is a double standard that exists and it’s unfair,” Fredline said.
The demand that Chrysler be sold to European car maker Fiat (not the best of the best in my book) is another sign that the rewards will be flowing out of this country to distant shores.
I don’t know too many people who will risk their hard earned money for very long on cars from companies that are heading for bankruptcy – or worse, will be government run experiments in politically correct social engineering.
But the bottom line as noted by the auto workers is 100% correct. Obama and his Wall Street buddies are sucking the treasury dry after they tanked this nation’s economy on risky investments. The auto workers – need to find work with the Italian managers at Fiat.
There’s your Hope and Change for you. Wait until we get another round of unemployment numbers and we face tax day this bleak year – then we should see a sea of change across this country.
This is one area where I think Obama so far is doing pretty well, just as I also think this is where Bush had his greatest failure, although for various reasons none of the political players on either side like to point that out. Republicans hate to say Bush failed here, Democrats hate to say that GM and Chrysler cannot be saved in their current forms – yet both statements are true.
Simple thesis: Chrysler and GM *HAVE* to go through bankruptcy- no ifs, ands, or buts. They have to, have to, have to go through bankruptcy. There are far too many players with far too many claims – in GM’s case, hundreds of billions of dollars of claims when you add in the contractual rights of the dealers, of which there are far too many. GM is currently losing $1 Billion per WEEK. This cannot be sustained under any plan – debtholders and stakeholders have to be liquidated for any type of viable organization to emerge.
The less said about Chrysler the better, but we might as well point out that even the sympathetic auto task force has concluded that there is no chance of Chrysler continuing as an independant company. And again, they have far too many liabilities for any other company to take them over. The Fiat deal only works if Fiat is guaranteed to be free and clear of all of these prior debts, which is why I think the Fiat alliance will fail. Parts of Chrysler will be useful after a liquidation, just as parts of a cow are useful after it’s been butchered. The analogy is appropriate.
How do we deal with these issues? Bankruptcy. That is where old debts are extinguished, ALL contracts are rewritten, and all stakeholders take a beating. Without that, these companies stay zombies that never, never, work. And our economy keeps pumping money into a black hole supporting massive failed enterprises.
Therefore, the only viable plan is one which pushes these companies into bankruptcy as quickly as possible. Obama appears to be doing that in a politically correct way, which is probably the only way it can be done. Why as quickly as possible? Thanks to Bush, (as I said, I hold this to be his greatest failure) we have already thrown away $17 billion dollars and 4 months that could have been spent fixing this problem for nothing. Absolutely nothing. Remember – Congress had turned down the automakers bailout when late in December, Bush said (with no congressional mandate) “Well, here’s $17 billion, y’all be good with that.” No plan, no guidelines, no hope of a successful outcome.
Well, strike that – there was one solitary successful outcome of this policy. GWB got to say “haha Obama, now it’s your problem and I won’t get the blame! Buh Bye!!!”
$17 billion, that’s all we got for our money – a fig leaf for GWB and Hank Paulson. People know I have generally supported GWB, but I hold this to be a failure of vision and will that was reprehensible. Obama’s team appear to be doing what they can to correct this failure.
Btw – Wagoner should have led the company into bankruptcy 18 months ago, when GM was still strong enough to come out with it’s core intact. That would have been how to deal with the bondholders, the unions, and the dealer base. He never accepted the necessity of this, not even at the bitter end of his career, and this above all else is why he had to be sacked.
Great post AJ, and WWS. It seems to me that what Obama is doing is protecting the unions from what a bankruptcy judge would no doubt do to their contracts. This is about votes, but the union rank and file feels persecuted anyway. How ironic.
Bankruptcy would also invalidate state franchise laws, enabling the makers to dispense with dealers, without having to pay them. Dealerships are largely non-union, so the Obama administration is not likely to give a hoot about them.
The union workers would be far better off to lose their contracts and retain their jobs with a more viable entity, as oppposed to where they are headed now.
Gettelfinger is the one who should be fired.
My understanding of what Bush did in December with a March 31st ending date, was to give Obama and team a chance to catch their breath before having to make any big decisions about the auto industry. The Auto industry was to come up with a plan to be presented to Obama March 31st. If the plan wasn’t a viable plan going forward, bankruptcy was the next step. This gave Obama 3 months to put a team in and make a decision. I know he has been busy doing other things, but why extend the time line another 60 days? Obama had people crawling all over the WH the day after the election. He knew the economy was going to be a primary issue. He knew credit was frozen, he asked for the rest of the $700 billion TARP so he could spend it, he knew the auto industry was in trouble, he knew that Bush was only a place holder from Nov 4th to Jan. 20th. I think, if for only symbolic reasons, Bush couldn’t let the auto industry collapse just as Obama stepped into the Oval Office.
Fiat will not buy Chrysler. Hussein will see to that. As a typical Marxist dictator, he wants to own/control all American business. So Hussein will turn down any buy-out/merger deal presented. Count on it.
Fiat will not buy Chrysler, because they have never offered to buy Chrysler. They have only offered to accept 35% of Chrysler in exchange for access to their engineering.
That’s a bad deal. The engineering access does nothing to fix Chrysler’s income problem this year or next – it is too late for this merger to work.
Oldpuppy, you have to realize that NO ONE IN THE WORLD, not even this government, wants Chrysler as it is! Chrysler, very literally, is worth much, much less than zero. Chrysler today is nothing but a giant black hole for cash, and it will suck in the cash of anything involved in it. If Fiat is stupid enough to take on this thing, sure, let ’em have it – but they won’t be. The Fiat deal is going to fail becaue it makes no sense. There are fragments of Chrysler that have value – but Chrysler, as an entity, is quite literally worthless.
Let me make this point clearly – if offered to you, would you buy Chrysler today for $1 Dollar? Guaranteed, you get the entire company, lock stock and barrel, $1 Dollar cash. Would you take that deal?
Suppose I tell you with that deal you have to pay out $1 billion in checks every month, and you will be personally responsible? And that the income you will get will be less than half of that, and is in fact dropping each month? Would you still take the deal?
Suppose I tell you that even in the best case scenario the money paid out is going to be greater than the money paid in for the next 30 years cumulative? That there is no chance of you ever getting your dollar back, and that in fact you will lose everything you own as it is sucked into the black hole you just attached yourself to?
If you won’t take that deal, why would anyone else, person, corporation, or government?
Well, the Obumbler’s approval rating went up yesterday … at +11 now (was at +8).
The overalls are:
So he only picked up one point in overall approval. The “strong” numbers are highly emotional and tend to vary widely. The underlying “overall” numbers are going to be less volatile and give a better indication of overall support.
Kathie – the auto industry should have had a plan ready on Jan 1, 2008. They should have had one ready every day of that year – they should have been the only thing they worked on.
The auto industry’s plan was always “don’t worry, the government will bail us out, so we don’t need a plan.”
Bush should not have enabled 3 more months of that – if he hadn’t, we would already be working on a recovery rather than just getting back to the same point we were at then. It would have been better for the country if Bush had forced the auto industry into bankruptcy when he had the chance.
Dragging the thing out – old chinese saying, when you have to cut off a dogs tail, it doesn’t hurt less if you cut it off one inch at a time.
Also, look at this:
Financial Rescue Approaches GDP as U.S. Pledges $12.8 Trillion
The reason Obama’s approval numbers are still so high despite this information is because the majority of Americans don’t understand it. Obama’s government has spent an amount equal to the ENTIRE economy of the US. That means that if they confiscated every single dollar made by everyone and every company in the country, they could just pay for all these bailouts.
Put it another way. You have a friend who fell on hard luck. You work for a company that makes a million dollars a year. You promise your friend a million dollars this year even though your salary is only 100,000. Not only that, you have promised the company that you AND your future generations of offspring will pay that million dollars back if they lend you the million bucks to give to your friend.
But more importantly … where does the money come from that Obama is giving out in bailouts if there isn’t enough money in the entire economy? Hey has it printed. He manufactures the money out of thin air. Inflation is the result. Obama is making the same gamble Carter made. Borrow a million dollars now, and by the time it comes due, a million dollars is nothing, it is pocket change because you have inflated the economy.
Obama is going to make us all millionaires … but a phone call is going to cost $20.
Uh, oh. This is going to make some people angry:
Take bailout funds with certain conditions attached, then AFTER you take the funds, they change the conditions. I really don’t believe there are going to be too many companies willing to take bailout funds after this mess. You can not trust our government. I wonder why “backed by the full faith and credit of the United States” carries any weight when they can just change the rules of the game in mid stream.
Yup. And the word is starting to get out. Entertaining to see the speed and direction of spread.
The results should provide even more entertainment. Obama got a lot of support from the upper class. And is now proposing to hose a large chunk of his base. The very wealthiest people won’t suffer – but if I were a professional, I’d be looking at what my pay would be if I worked for the Civil Service. Because that is likely where my pay would be heading.
For those of you not employed by the Feds, just take your paycheck, cut 20% off the top, and forfeit all overtime pay above your normal pay rates.
I have the suspicion that this one will blow up in the Dem’s faces like an atomic bomb.
Mike M. Wishful thinking makes me go along with what you say, but that is all it is, wishful thinking. Every day I hear something new that the leftist Dems are doing and I think surely, they won’t get away with this, but they do. Today, Rep. Henry Waxman introduced a huge environmental bill and they are off and running. What is it going to take to wake up Americans?
Sorry, just looking for the “light at the end of the tunnel.”
I knew this was coming:
They have blown the treasury in bailouts to their banker friends who got them elected. No money left for defense.
“Due to increased taxation,
loss of revenue streams
and attempting to save energy,
the light at the end of the tunnel
will be shut off until further notice.”
WWS:
Kathie is right. The Bush administration loaned them enough operating capitol to keep the doors open until Obama had time to take control and decide whether to give them more. The idea was that they could spend that time coming up with the necessary concessions and a new business model or face possible bankruptcy at the end of March.
But firing the CEO was just not Obama’s job. And taking over the industry is not his job either.
There is no light at the end of the tunnel because the majority are sheep and will peacefully go to slaughter. They are a mediocre mind set, wanting something for nothing because life is just too damn hard. Those who have too much need to share with those who think that they work hard but don’t seem to have everything they want. Why should you go on two vacations, when I can only go on one? Why should someone drive a new car, when I can only afford second hand one? Why should some children go to Harvard and mine can only go to State College. As Margaret Thatcher sorta said, it will end when you run out of our money. But before that happens we will have a itty bitty military, skyrocketing energy bills and skyrocketing everything that moves, heats or cools, and medical care that Teddy Kennedy could not have survived.
Anyone feel sick yet?
Did anyone hear that Obama reversed our standing on the ICC, we are going to join. Now everyone will just fall in love with us all over again. Our military had better be careful!
And you know what? I live in Indiana and when Toyota came in here the state gave them land, tax breaks, roads etc. I am not defending the American auto companies, but a lot of the foreign companies get a lot of breaks too. States need and want the jobs.
And if Bush had just let them collapse back in December and tens of thousands of people had lost those jobs literally over night it would have been even worse. The management should have filed bankruptcy months and months ago, but if I remember correctly those plants were going to close in a matter of weeks if something was not done.
kathie:
Yeah, people will think that is a good idea until some Marine gets dragged off to the Hague. Hey, maybe they will send Obama to the Hague for killing civilians in Pakistan.
BTW, Nancy Pelosi wants people to get rid of their old cars. The Democratic Congress will provide people with vouchers of $3000 to buy new cars so that they can get rid of the old cars.
Of course there are people who do not have credit and don’t want to make a car payment. What could go wrong with bribing people to take government money to buy something they can not afford?
So now, if we borrow money from a bank for our businesses, the bank a.k.a. the government, is going to tell who we can hire, fire and how we can run our business?
How much taxes have GM, Chrysler, AIG, etc. paid over the years? Are they not just getting back THEIR OWN MONEY?
ivehadit, the problem is that the amount of money pouring out of Washington is just absolutely huge. It is a tsunami of cash. Nobody is really serious about where this is coming from or who is going to pay for it.
There was only one year in our history when government outlays were this large a portion of our economy and that was the peak year of World War II.
I wonder how long before Geithner burns out and quits.