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Yearly Archives: 2008

Pay-to-Play, UAW Style

The UAW states its members have sacrificed enough, and urges taxpayer bailout money. But they’re not telling you it’s so they can keep a special UAW golf course.

Owned and operated by the United Auto Workers union, Black Lake is a public course that provides UAW members and retirees substantial discounts from the regular greens fees.

Auto workers pay UAW dues, which subsidizes golf facilities for UAW members. When the UAW asks for more money, they’re not really telling you it’s so they can keep their golf facility open.

Taxpayer money — to fund UAW golf courses. Is this what you had in mind when bailout talk began — funding a UAW golf facility?

While other (non UAW) workers have reductions in pay, layoffs and other problems, UAW leadership wants your taxpayer money to fund their golf course.

Hat tip: Money pit: The UAW’s gold-plated golf course

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UAW Sinks Auto Bailout – TARP Limited to Financial Institutions

The UAW torpedoed the auto bailout by refusing to make reasonable concessions and reduce labor costs (and having the chutzpah to ask taxpayers to subsidize their benefits). If the big three pay 40% more in labor costs than other auto companies, how will they *ever* become competitive again? They can’t.

The UAW *must* accept a package comparable with Toyota and Honda, or one of two things will happen:

  1. The big three go bankrupt – not reorganization, liquidation. Kaput. No more jobs.
  2. Taxpayers forever subsidize UAW workers with bailout 2.0, 3.0 and so on forever.

Naturally, the UAW favors option #2, but they may get #1 instead. They’re counting on President Bush to do what he said he wouldn’t do – bailout the auto companies. Where the money will come from is unknown, but it can’t be from the $700 billion TARP fund, as that fund is for financial institutions only – auto companies don’t quality for TARP funds (at least legally under the TARP law).

By refusing a congressional gift, the UAW may just disappear. At the least, they’re dooming car companies to never be competitive again as they slowly fade into oblivion.

Corker’s amendment demanded concessions from the UAW as tangible evidence that the industry was willing to make fundamental structural reforms before risking taxpayer money on loans to failing businesses. But the UAW refused to accept pay parity with non-union foreign automakers by the end of 2009. That pay scale — among the best hourly wages in America at $26-an-hour plus benefits, totaling $48-an-hour — was not good enough for the coddled union, who demanded that their current $73-an-hour contract package be paid until it expires in 2011.

Auto Bailout – More Taxpayer Money down the Black Hole

The best line so far about the government bailout for the auto industry – “Bringing Fannie and Freddie Style Accountability to the Auto Industry” by Newt Gingrich, who went on to say:

One of the reasons was House Financial Services Committee Chairman Barney Frank (D-Mass.). Frank fought tenaciously against the regulation that would have held Fannie and Freddie executives accountable and might have averted the financial crisis.

Now Chairman Frank wants to bring his particular style of crony capitalism to the auto industry.

On “Face the Nation” this Sunday, Chairman Frank announced that not only would he push for a taxpayer bailout of the Detroit Three during the special session of Congress this week, but he would also create a government oversight board for the three companies — in effect, a board of directors made up of predatory politicians.

I believe that it would be a mistake for the taxpayers to be forced to bail out Detroit. Companies at which union workers make $71 an hour in wages and benefits — compared to just $47 an hour at Toyota’s U.S. plants — are not going to be saved by a $25 billion government check.

So the people who brought you the Fannie/Freddie mess want to do for the auto industry what they did for the mortgage and banking industry. That guarantees bailout 2.0, 3.0, 4.0 and so on. Barney Frank not only can’t admit he failed spectacularly with Fannie and Freddie (saying they were fiscally sound right until they collapsed), he brazenly wants to do bring his failed Fannie/Freddie strategy to the auto industry. How many trillions will your failed oversight cost taxpayers, Mr. Frank?

But in January, there’s a new sheriff in town — Mr. hope-n-change rides in. Will Obama support actual change, or go along with the Democratic congress for more of the failed policies which got us into this mess in the first place? We hope Obama really does work for change, and tells Congress NO! That would take guts, and go against his own party, but we’ll quickly find out if we elected hope-n-change, or more-of-the-same. We’ve already had two years of Democratic-controlled policies, how well is that working out for you?

President-elect Obama won an historic victory two weeks ago on the promise of delivering change to the American people. Bailing out the Detroit auto dinosaurs is not change. It is crony capitalism in service of a failed status quo.

President-elect Obama should stand up to congressional Democrats and say “no” — “no” to saddling future generations of Americans with the bill for today’s crony capitalism.

That would be change we could believe in.

Crap Sandwich Bailout Bait and Switch

The classic bailout bait-and-switch. Remember how it was sold to the public (and Congress) with the idea to buy up troubled mortgage assets? Now, after the bill was signed, Secretary Paulson says he’s going to ignore what the bill said and spend the $700 billion however he wants.

This is just one problem with the bailout — it gives the Treasury Secretary unlimited power to spend $700 billion of our money any way he wants with no accountability whatsoever (can you say Freddie meltdown 2.0?). Should we thus be surprised when he decides to ignore the bill’s intentions?

This bailout disaster will end up with more corruption, payoffs, and back-room deals making the Fannie/Freddie meltdown look like childs play. And Team RePO (Reid/Pelosi/Obama) wants more bailout? Grab your walllet.

Treasury Secretary Henry Paulson said Wednesday that original plan to purchase distressed mortgage assets from Wall Street firms is not the best use of the $700 billion financial rescue package, and officials will now focus on direct capital injections into the struggling financial firms.

This comes after Paulson said buying troubled assets — the plan originally advertised to the public — would take too much time in a financial crisis that continues to test the patience of investors, government and the public.

So Paulson decides a handout (oops, “direct capital injection”) is best, and doesn’t even want to buy any assets. It’s pure handouts, and completely contradictory to what the public and Congress was told. Is it any wonder more companies and states are lining up at the federal trough for this pork-fest?

Neither party wants to investigate the financial meltdown they caused. Democrats look to take advantage of their financial creation to pass more socialist programs, while Republicans don’t want to touch it as it might uncover their shady business ties. Both parties don’t want the public to know the truth — it’s Congress’ fault (for the last two years Democratic controlled) for this mess. Simply put, Democrats forced banks to make home loans they knew would end up in default (via the Community Reinvestment Act), and Republicans saw a chance to make a buck by passing off the stinking festering pile of goo off to other (federal) banks so they could keep the profits.

The Crap Sandwich bailout — brought to you by the Democratic Congress overseeing Fannie Mae and Freddie Mac (and told you how financially sound they were right up until they collapsed) — and that worked out so well, let’s do bailout 2.0! How many trillions have already been spent by Democratic-controlled Congress without any results? And their solution — spend more!

Have no fear, citizens, Team RePO is on the job! (Hopefully, Obama won’t go along with Reid/Pelosi on more crappy bailout as he’s supposed to be for the little guy, but this remains to be seen)

Democrats to Eliminate 401k Retirement Accounts

This is so bizarre, reckless, and bad for regular people we can’t make this up if we wanted to:

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.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, 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.

“system of guaranteed retirement accounts to which all workers would be obliged to contribute. ”

Gee, that sounds like … wait for it … Social Security! And we all know how well that worked out — it’s bankrupt in 2017 and will require either massive tax increases, or massive cuts in benefits (or both). And just like the Fannie and Freddie collapse, the politicians tell us the system is fine and won’t be bankrupt (of course, what happens in 2017 when taxes taken in can’t pay benefits they don’t want to talk about) — and just like Fannie/Freddie all those same politicians will say “we never saw this coming…”, and it will be deja vu, all over again. How many trillions will the next bailout cost?

And those guys want to start a new retirement plan? We can see the ads now “The new Secure Community Retirement Wealth Distribution (SCReWeD for short) — brought to you by the same people who brought you subprime mortgages, Social Security insolvency, trillion dollar bailouts, and the Fannie and Freddie collapse”. Something tells us there won’t exactly be truth when they try and sell this mess to voters.

Whether this new scam (oops, plan) replaces social security (unlikely) or be a new tax on top of social security (probably) isn’t clear, but combine the House Democrats with a Senate majority and a friendly Obama administration signing any stinking pile of festering goo they send him, do you really want to find out? How high can your taxes go? How fast can your retirement be raided? (Gingrich was correct recently calling them “Team RePO” for Reid/Pelosi/Obama)

But it gets worse when you see how the plan actually works:

Under Ghilarducci’s [Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York] plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent 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 percent a year, adjusted for inflation.

So they kill your 401k, force you to pay a tax (oops, contribution) of 5% more of your salary to the government, and only offer investments in government IOU’s (oops, bonds) paying 3% per year (unless they change the rate later). Yeah, that’s a safe investment — I’ll take the stock market and it’s long-term returns, thank you very much — even with the current downturn.

“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.

She has been in contact with Miller and McDermott about her plan, and they are interested in pursuing it, she said.

Just like Obama told Joe the plumber he wanted to “spread the wealth around” (not exactly true, Obama didn’t mean spread the wealth around, but spread Joe’s wealth around), only this time not only raise your taxes and spread your income around, raid your retirement savings and spread that around as well. More specifically, make sure everyone is beholden to the government for retirement, and remove choice. Aren’t the Democrats supposed to be pro-choice? Only if it involves abortion and throwing babies in the trash if they’re born alive (oops, “survived a medical procedure”).

When it comes to your retirement, no choice allowed, and instead of making your own decisions you’ll only get what the government chooses you should get — and they can change it anytime they like, as often as they wish, as you don’t really own anything, just a bag of IOU’s.

“I have altered our agreement, pray I don’t alter it further.” — Darth Vader

Even worse, Obama with a Democrat controlled Congress passes legislation at will like insane proposals like this — only which have a majority Democratic leadership and President behind them (Team RePO at work).

For more, just Google for “George Miller Jim McDermott 401k” for lots more; it really is as bad as it looks.

When Tax Cuts Aren’t Tax Cuts

How socialist income redistribution is disguised by political candidates for votes

One of the biggest challenges facing both John McCain and Barack Obama in their commitment to provide tax relief to working-class Americans is the simple fact that millions of them already pay no personal income taxes.

According to the most recent IRS statistics for 2006, some 45.6 million tax filers — one-third of all filers — have no tax liability after taking their credits and deductions. For good or ill, this is a dramatic 57 percent increase since 2000 in the number of Americans who pay no personal income taxes.

Tax Foundation estimates show that if all of the Obama tax provisions were enacted in 2009, the number of these “nonpayers” would rise by about 16 million, to 63 million overall. If all of the McCain tax proposals were enacted in 2009, the number of nonpayers would rise by about 15 million, to a total of 62 million overall.

Most tax credits can only reduce a taxpayer’s amount due to zero, but the EITC and the child tax credit were also made refundable, meaning that taxpayers are eligible to receive a check even if they have paid no income tax during the year. Those tax returns have become, in effect, a claim form for a subsidy delivered through the tax system rather than a direct payment from a traditional government program like welfare or farm supports.

Both the McCain and Obama plans would increase this number by expanding existing tax benefits or creating new ones. Senator McCain is proposing one expanded provision — the dependent exemption — and one new credit, a $5,000 refundable health care tax credit. The Obama plan contains seven new provisions, including a new “Making Work Pay Credit,” a “Universal Mortgage Credit,” and a plan to eliminate income taxes for seniors earning under $50,000.

About one-third of tax filers pay no income tax at all. So how can Obama claim to cut taxes for “95%”? He can’t (at least honestly). Not only does his plan increase the number of people who pay no tax at all from about 1/3 to almost 1/2, but additionally gives handouts to those who pay no taxes at all. That’s welfare under a different name. But you can’t put lipstick on the pig and change the pig — welfare disguised as tax cuts is still welfare.

Both McCain’s and Obama’s plans are socialist. If someone pays zero tax, it’s mathematically impossible to cut it — yet both candidates call their Robin Hood programs “tax cuts”.

McCain had it right earlier to criticize Obama’s plans — Obama calls them “tax cuts”, but any third grader knows better (McCain was correct, but the criticism applies to his plan as well). Obama’s plan is socialist income redistribution (take money from those who earned it and give it to others — “spread the wealth around”); it has to be disguised because if Obama is honest and calls his plan what it is (a giant expansion of welfare — even Clinton knew welfare was broken, and the country should “end welfare as we know it”, not expand a broken system which encourages people to live out of the public trough), it would be rejected as the giant welfare program it is.

Is it really good public policy to have half the country not support the government? How much should the “rich” pay? Do the rich pay their fair share? What happens when the majority of people pay no taxes, and in fact receive welfare payments from the Federal government?

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. [Quote attributed to several people, but commonly Sir Alex Fraser Tytler (1742-1813)]

If voters really want socialist programs and are willing to vote for them (knowing those policies will eventually cause the country to collapse — think of current mess with Fannie/Freddie multiplied hundreds of times), let’s at least be honest about it — instead of hiding the truth in attempts to fool people into supporting something they’d really be against if they knew the truth. (Corollary: Why do liberals fear being called liberals?)

At least if people have information they’ll know voting for these proposals guarantees a more serious financial meltdown later which makes current events look like child’s play — and we haven’t even begun to talk about Social security bankrupt and the ignoring of warnings about Social Security’s (and other entitlements) destructive impact on the economy of the future.

There is no free lunch — the bill for these handouts will come due, and no amount of “soak the rich” can possibly pay for it. Candidates are simply destroying the future (after they’re out of office) to buy votes today. We don’t completely blame Democrats — they don’t have the big spending reputation for nothing, after all — it’s the Republicans which continue to go along with the big-government, lets-try-a-free-lunch Democrats which guarantees we’ll have many more financial messes to deal with making the current trillion dollar bailout look like pocket change.

There is no free lunch, and promising one is dishonest.

Why European-Style Healthcare Doesn’t Work

Too many people (Obama included) want healthcare to be more like Europe — you know, where everyone gets healthcare for free. But peel the onion a bit and you’ll find tidbits like this (from the London Telegraph), and ask yourself, do you really want this? This is the future of Obama-care and other socialized solutions:

Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives.

Smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations, according to doctors, with most saying the health service cannot afford to provide free care to everyone.

Fertility treatment and “social” abortions are also on the list of procedures that many doctors say should not be funded by the state.

Oops. No abortions either. Nobody will be happy with a system like this. No abortion-on-demand, treatment rationing, and in the end more financial mess which will require another “bailout”.

There is no free lunch.