auto industry

Our Government Declares (Economic) War On Japan?

General Motors announced this week that anybody that owns a Toyota vehicle will receive a $1,000 “incentive” to trade said vehicle in for a GM product.

Editor’s Note:  Ford has since matched the $1000 offer.

“We decided to make this offer after receiving many e-mails and calls from our dealers, who have been approached by Toyota customers asking for help,” GM said in a statement. The offers will run through the end of February.

The supposed e-mails and calls mentioned are in relation to the recent widespread recall on many Toyota products due to a faulty gas pedal that has led to at least one death. Toyota is working feverishly to find a fix but has yet to do so which has stopped production and sales of their most popular models including the Camry and Corolla.(as of this writing, a fix has been announced)

If this were General Motors declaring “war” on Toyota at their most vulnerable I would say go for it. I’m all about free markets and the best product usually succeeds. Hence Toyota outsells most if not all GM car models. But that is not what is happening here.

General Motors is now majority-owned by the Federal Government and Barack Obama is essentially the C.E.O. To believe that GM “CEO” Edward Whitacre Jr. didn’t get a thumbs up from President Obama on this is far beyond naive, it borders on gullible.

New Year Predictions by the UL Staff

John Killian

National
* Barack Obama will realize that Congress is not ready to go along with his progressive agenda. Many Southern and rural Midwestern Democrats were elected as pro-life conservative Democrats. Hence, his Freedom of Choice Act (FOCA) will never see the light of day.
* With nervousness on the economy, Obama will not push for Nationalized Health Care. You will see some adding around the edges, but no major increases in federal programs. Obama’s advisers will warn him about the effect of more spending and especially, more taxes on our fragile economy.

Lessons from the Auto Bailout Controversy

This past week, the US Senate failed to concur with the House of Representatives in passing a bailout package for the nation’s large domestic automakers. This bailout had the support of the Democratic leadership in Congress as well as the Bush White House. Already, doomsayers are bemoaning this lack of financial infusion from an already depleted federal budget. However, I applaud this decision as a victory for principle over pragmatism. Hoping that conservatives will learn from this effort to continue enlarging government, consider some lessons from the bailout controversy.

Bailing Out the Auto Industry: A Perspective

Thursday evening I posted on my Facebook profile the speech that Congressman Ron Paul gave on the House floor, opposing the auto industry bailout (the so-called “bridge loan”), along with the following comment:

“This speech on the auto bailout speaks for itself. Congressman Paul really puts it all into perspective. Were that there were more in Congress like him.”

Get government out of the way: Ending subsidies and bailouts for crony industries will lower consumers’ costs

all the things

From dire warnings about imminent hyperinflation to the leftist dismissal of the risk of any inflation at all to Internet memes showing near-empty grocery carts now costing ONE BILLION dollars, the debate over rising prices won’t be settled anytime soon. Some prices have gone up, some have gone down, yet government measure of inflation hasn’t budged much in the last few years.

There has been a graph floating around for a few months now showing the difference in price increases and decreases for consumers over the last 10 years. It appeared first in an April New York Times story about how we define poverty. It then showed up on Twitter this morning with some annotations highlighting government’s role in those increases or decreases. Here’s a slightly better looking version:

prices

At the very least this shows a clear correlation between government subsidies and tax credits and consumer price increases.

College tuition is paid for largely by student loans, which were absorbed by the federal government in early 2010. State governments also provide funding for the schools themselves. Tuition has subsequently increased over 40% over the last 10 years, and in some places has doubled.

Lax youth enrollment could bring Obamacare bailout

Now that the Department of Health and Human Services (HHS) had shed some light on the low percentage young people who are selecting health plans through the Obamacare exchanges, worries of a taxpayer-funded bailout for the insurance industry have become more real.

Through the first three months of open enrollment, just 24% of Obamacare signups were from 18 to 34 year-olds, meaning that enrollees are older and, likely, sicker. The Obama Administration had anticipated that nearly 40% of enrollees would be in this age group, a necessity if the math behind the law is to work.

Insurers could react to the disproportionate risk pool by increasing premiums for plans available on the exchanges in 2015. But it could also mean that taxpayers will bear the costs of their losses this year, thanks to two provisions buried in Obamacare.

While it hasn’t received a lot of attention in the media, the “risk corridors” provision of Obamacare guarantees payments from the from the federal government to insurers for losses incurred. That could be a big problem for taxpayers if young people don’t enroll in droves in the final three months of the open enrollment period.

“This is an unlimited taxpayer liability that compensates insurers in the exchanges for medical costs in excess of 103 percent of the target costs for each plan,” wrote John R. Graham of the National Center for Policy Analysis in November. “For costs between 103 percent and 108 percent of target, taxpayers compensate the insurers half the excess loss.”

Study: Cash for Clunkers didn’t help the environment, cost $1.4 million per job

Cash for Clunkers

Remember “Cash for Clunkers”? This 2009 program allowed people to trade in older vehicles for a rebate of $3,500 or $4,500 so they could purchase a new, fuel-efficient car. The Obama Administration had hoped that it would stimulate the auto industry and, at the same time, help reduce emissions by taking gas guzzlers off the roads.

Chrysler didn’t pay back its bailout

Remember when President Barack Obama told the nation that Chrysler had paid back bailout financed through taxpayer money? Suprise! It’s not true, says FactCheck.org:

President Barack Obama visited a Chrysler plant in Toledo, Ohio, on June 3 to discuss the recent announcement that the Chrysler Group LLC repaid $5.1 billion in outstanding loans. That brought the total repayment, as of May 24, to $10.6 billion — about $1.9 billion less than the $12.5 billion the company borrowed under the Troubled Asset Relief Program, or TARP.

In his speech, the president said:

Obama, June 3: And today, I’m proud to announce the government has been completely repaid for the investments we made under my watch by Chrysler because of the outstanding work that you guys did. Because of you. Chrysler has repaid every dime and more of what it owes the American taxpayer from the investment we made during my watch. And by the way, you guys repaid it six years ahead of schedule.

Notice the president — sounding very much like a used-car salesman — used the phrases “during my watch” and “under my watch” when describing the TARP loans as being “completely repaid.” That’s because Chrysler received $4 billion on Jan. 2, 2009, (18 days before Obama took office) and $8.5 billion on April 30 (when Obama was president), according to this Government Accountability Office report (page 9) on TARP.
[…]
In its May 24 announcement touting Chrysler’s final repayment, Treasury acknowledged that it is “unlikely to fully recover” about $1.9 billion.

Mitt Romney’s House To Be Razed

This story puts a little bit of perspective onto how far Detroit, Michigan has degenerated over the last few decades:

Plagued by a glut of abandoned homes, Detroit is looking to demolish some 3,000 buildings by the end of September. Among them: Mitt Romney’s childhood home at 1860 Balmoral Drive, a 5,000 square foot house in an upscale neighborhood. According to the Wall Street Journal, the house’s demolition is a symbolic part of a new push to deal with Detroit’s longtime blight issues—the city hosts roughly 90,000 abandoned or vacant homes and residential lots by one nonprofit’s count.

Detroit was once a city that attracted the very well to do and created new classes of the well to do. Now it’s empty.

They Still Don’t Get It!

I suppose that credit should be due to Senate Republicans who made the difference in defeating the Auto Bailout. I also believe that President Bush’s brazen act of shifting money to the automakers is shameful operation.

But then Senate Republicans release a letter pleading with President Bush not to usurp the decision of Congress on the automakers bailout.

So far, so good.

But then these Senate Republicans gave their reason for opposing the bailout as the refusal of the United Auto Workers to agree to a cut in wages.

These folks still don’t get it!


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