Bold Colors Blog

Stickin’ it to the libs, one day at a time

Posts Tagged ‘Bailout’

Homeowners Hit the Lottery

Posted by Liberty on February 22, 2009

From The Motley Fool:

Homeowners Hit the Lottery

“Of all the government measures to right the economy, President Obama’s plan to aid homeowners seems like the most irresponsible to date.

Why? Not because it helps individuals rather than big banks. Given the choice, I’d much rather help average Joe nine-to-fivers than, say, Citigroup or Bank of America. Anyone would. No one doubts that losing your home is a personal tragedy. I have a heart, thank you very much.

Nonetheless, the proposal to spend $75 billion refinancing mortgages that wouldn’t otherwise be given the time of day is quite literally the epitome of subsidizing failure, without asking for anything in return.”

The author [Morgan Housel] points out the fact that the bank bailout money came with the stipulation that it eventually be paid back.  This mortgage plan does not carry the same requirement.  Housel also mentions that Obama claims the money will not go to speculators or house flippers.  The interesting point is, what really constitutes a speculator?

“What do you call people who bought houses that exploded in value in the previous few years with a ‘subprime and exotic loans with exploding terms?’  I’d call them speculators. What do you call people who bought homes without setting aside enough savings to cover an economic downturn? I’d call them speculators. What do you call people who bought homes that didn’t fit their income profile? By golly, I’d call them speculators.

No matter. We’ve been aiding Wall Street speculators for months now. But — and this is an important but — every dime of taxpayer money injected into failing banks, be it Goldman Sachs or Wells Fargo or AIG, is money demanded to be repaid to the best of their ability, and it came with equity warrants that offer taxpayers upside potential if and when markets recover.

This homeowner aid package has no such clause. Home prices fell after a period of undeniable gluttony (like they do in all markets) and now taxpayers are bailing out speculators (yes, I’m calling them that). Yet if home prices rise in the future (and they will), the bailed-out homeowner keeps the upside. Heads, they win, tails, you lose.”

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Posted in Arrogant politicians, Liberalism, Obama, Redistribution of wealth, Social engineering, Socialist economics, Stupid legislation | Tagged: , , , , , , , | Leave a Comment »

The crisis mentality may be our downfall…

Posted by Liberty on January 28, 2009

Senator Warns White House Will ‘Create Crisis’ and ‘Panic’ to Push Stimulus

Senator Jim DeMint, Republican from South Carolina spoke at the Heritage Foundation on January 27 about the Obama stimulus plan and the previous bailouts that have been forced through Congress.

“I’ve been around long enough to know whenever someone tells me I have to make a decision right now, my response is no,” DeMint said. “That clears it up right away and I think more and more the Bush administration and now this administration knows that they’re not going to get a quick reaction out of Congress unless they create crisis and widespread panic. And that’s going to be their M.O. to get Congress to act.”

I believe there’s a vote on the stimulus plan today…it may not be too late to give your legislator’s office in D.C. a call.

Posted in Conservatism, Future of the GOP, Main Stream Media, Obama, Redistribution of wealth, Socialist economics, Sticking to their guns, Stupid legislation | Tagged: , , , , | Leave a Comment »

One more reason to break up the UAW

Posted by Liberty on December 29, 2008

Autoworkers Union Keeps $6 Million Golf Course for Members at $33 Million Lakeside Retreat

“Even as the industry struggles with massive losses, the UAW brass continue to own and operate a $33 million lakeside retreat in Michigan, complete with a $6.4 million designer golf course. And it’s costing them millions each year.”

 

“But the Black Lake club and retreat, which are among the union’s biggest fixed assets, have lost $23 million in the past five years alone, a heavy albatross around the union’s neck as it tries to manage a multibillion-dollar pension plan crisis.”

And the UAW  is a heavy albatross around the auto companies’ necks.  And the bailout is a heavy albatross around the taxpayers’ necks.

Posted in Liberalism, Union Thuggery | Tagged: , , , | Leave a Comment »

Brilliance on the auto bailout from Mark Steyn

Posted by Liberty on December 22, 2008

Can You Still See the USA in Your Chevrolet?

According to Mark, “Route 66 is looking ever more like a one-way dead-end street to Bailoutistan.”

And, he points out:

“General Motors, like the other two geezers of the Old Three, is a vast retirement home with a small loss-making auto subsidiary. The UAW is the AARP in an Edsel: It has three times as many retirees and widows as “workers” (I use the term loosely). GM has 96,000 employees but provides health benefits to a million people.”

I love Mark Steyn’s learned perspective and smart, satirical humor.  Great article!

Posted in Liberalism, Main Stream Media, Socialist economics, Union Thuggery | Tagged: , , , | Leave a Comment »

What the U.S. can learn from Japan’s failed experiment with “zombie businesses”

Posted by Liberty on December 22, 2008

Return of the Living Dead

“After Japan’s asset bubble burst in the late 1980s, their economy took a sharp downturn, prompting government officials to try bailing out banks and investing in infrastructure, much like the activity and proposals floating around America today. The results were terrible.

With the government propping up poor business models rather than allowing further job losses, firms wound up operating over the long-term without making a profit or adding any value to society. Their utter lack of vitality earned these perpetual money-leaching entities the moniker ‘zombie businesses.’ And unless American policymakers understand the failures of the Japanese response, we will suffer the same zombie fate.”

Check out this article in Reason Magazine today that foreshadows the consequences that we’re likely to face in return for passing out government bailouts like Halloween treats.  Ding dong, here’s $700 billion.  Japan has dealt with a similar economic crisis and they made significant errors that prolonged the problem.  We’re headed down that same road and I predict that Japan’s errors will be our errors.

“First mistake. The Bank of Japan tried to ease economic pains during their downturn through the 1990s by loaning large amounts of money to businesses. However, such attempts to recapitalize the market were counteracted by underlying management problems endemic to the dying firms.”

Check.

“Second mistake. With all those loans, the Japanese government was simply too integrated into the market to have adequate incentives to create the right policies. Daniel Okimoto, former director of the Asia-Pacific Research Center, points out that the interests of Japan’s economic bureaucracies, such as the Ministry of Finance, became interdependent with the banking industry.”

Check.

“Third mistake. The length of Japan’s asset deflation, recession, and liquidity struggles has been blamed largely on the lack of foresighted policies and political leadership. Politicians bent on retaining their power took action that sought to solve the present day concerns, such as infrastructure projects, without regard to their long-term effects. As a result, economic growth was not sustained.”

Check.

“Fourth mistake.Japan tried to climb out of its economic mess by raising taxes and cutting interest rates. Okimoto cites a series of policy mistakes in a report on Japan’s economic stagnation that includes a consumption tax hike, business taxes, and heavy-handed reliance on interest rate cuts that reduced investment incentives.”

Are you getting my drift here?

“Fifth mistake. With the Japanese government enabling lending to zombie businesses, taking cash away from productive ventures, and passing tax laws and other regulations that did not promote growth, the private sector was actively discouraged from investing.”

I encourage you to read the whole article–Anthony Randazzo has done his research.  Clearly our politicians have not.

Posted in Conservatism, Obama, Redistribution of wealth, Taxes | Tagged: , , , , , | 3 Comments »

Have I said lately how much I love Carpe Diem?

Posted by Liberty on December 20, 2008

I’ve linked Professor Mark Perry’s blog, Carpe Diem before…hmmm, trying to link and WordPress’ hyperlink function is not working right now.  [Normally, WordPress works great.  If you want to start a blog, I highly recommend WordPress.  And e-mail me the link.  I promise I’ll read, even if you’re a lib or a Husky fan]. 

Anyhow, go to http://mjperry.blogspot.com/ because his blog today is incisive as usual.  He’s excerpted an article from the Wall Street Journal by Andrew B. Wilson on how the Conservative principles espoused by Margaret Thatcher helped to pull Great Britain out of economic difficulties in the 1980’s.  [Wow, isn’t that about the time that Ronald Reagan was helping America recover from our Jimmy Carter-induced economic difficulties through free-market capitalism?]  Here’s a brief quote from Mr. Wilson’s article:

“By sticking to her policies of lightened regulation, reduced trade barriers, privatization of a raft of publicly owned companies, reduced taxation, and the adoption of laws to prevent abuses of union power, Mrs. Thatcher achieved something few if any of today’s economists have begun to consider. She achieved a genuine, productivity-led recovery that transformed Britain from perennial basket case into the Europe’s most improved and vibrant economy.”

Naturally, I’m a little sad to think that this economic recovery will not be ours, at least not during the next four years.  The socialist blueprint has been drawn, and time and time again, the house has fallen.  Obama’s going to build his policies on the failed philosophy of socialism, a system counter to all that America was founded on.  It will fail us, too.  So, I guess I love Carpe Diem today for the information that Professor Perry disseminates, not for helping me feel optimistic.

He also has a post entitled “Ford’s State-of-the-Art Factory in Brazil: A Model for the Big 3’s Survival. But The UAW Hates It.”  In it, there are details about an innovative Ford factory in South America.  According to Professor Perry,

“It’s not just above-market UAW wages and benefits, along with overly generous lifetime pensions and health care coverage that have all contributed to pushing the Big Three to the brink of bankruptcy. It’s also the outdated work rules, multiple job classifications, and union inflexibility and resistance to greater efficiency that have crippled the Big Three (see the 22 pound, 2,215 page UAW-Ford contract here).
Isn’t it sad that U.S. automakers like Ford have to go 5,000 miles away to “the global sandbox” Brazil to try out new production methods, instead of introducing cutting-edge, state-of-the-art technology here in the U.S.? Even if GM and Chrysler reduce wages and benefits to competitive levels as part of the $17.4 billion bailout, they still might not survive in the long run if they are prevented by the UAW from introducing lean, flexible, state-of-the-art technology inside the U.S., like Ford has been able to introduce outside of the U.S.”
Sad.  American taxpayers are bailing out the Big Three while the UAW is still alive and well.  And, liberals have the nerve to bitch about out-sourcing.
 
 

 

Posted in Conservatism, Future of the GOP, Liberalism, Obama, Redistribution of wealth, Ronald Reagan, Union Thuggery | Tagged: , , , , , , | 3 Comments »

Angry UAW members lack the intellectual honesty to examine their own role in the Big Three’s plight

Posted by Liberty on December 13, 2008

Angry UAW members lash out at Southern senators

“Festering animosity between the United Auto Workers and Southern senators who torpedoed the auto industry bailout bill erupted into full-fledged name calling Friday as union officials accused the lawmakers of trying to break the union on behalf of foreign automakers.

The vitriol had been near the surface for weeks as senators from states that house the transplant automakers’ factories criticized the Detroit Three for management miscues and bloated UAW labor costs that lawmakers said make them uncompetitive.”

Senators Mitch McConnell, Richard Shelby and Bob Corker took a stand against the Big Three bailout and now find themselves in the cross-hairs of the union assassins.  These three Senators come from southern states [McConnell from Kentucky; Shelby from Alabama; Corker from Tennessee] that are home to auto manufacturing plants for the Big Three’s foreign-owned competitors and they are all Republicans.  Union hack  Ron Gettelfinger [UAW president] has misrepresented these Senators’ position on the bailout, seeing perhaps a non-existent conspiracy on behalf of the [profitable!] foreign automakers.

‘”They thought perhaps they could have a twofer here maybe: Pierce the heart of organized labor while representing the foreign brands,’ UAW President Ron Gettelfinger said at a Friday morning news conference in Detroit.”

I don’t think that was the aim of these Senators at all.  We’ve just grown so accustomed to politicians that don’t care at all about putting taxpayers on the hook for billions in debt that it’s odd when one of them actually puts the constituents first. 

“But lawmakers and their spokesmen said the criticism is off base. Jonathan Graffeo, Shelby’s spokesman on the Senate Banking Committee, said the senator has consistently opposed taxpayer-funded bailouts.

“He opposed the Chrysler bailout in 1979 when there were no foreign auto manufacturers in Alabama, and he opposed the recent $700 billion bailout of the banking industry,” Graffeo said.

“Bailouts generally don’t work, and this is a huge proposed bailout, and I fear it’s just the down payment on more to come next year,” Shelby said on the Senate floor Thursday night. “These companies are either already failed or failing, and that’s a shame. These aren’t the General Motors, Ford and Chrysler I knew.”

Corker said the alternative he tried to develop would have provided federal money in exchange for restructuring the companies’ debt and making the UAW more competitive in wages with workers at U.S. plants of Japanese competitors.

“Our members wanted to know that the UAW was willing to be competitive,” Corker said.”

That’s right, UAW.  When the question is raised as to why the Big Three can’t compete, look in the mirror.

Incidentally, Senators McConnell, Corker and Shelby, thank you.  We’re going to need to see a lot more of this kind of action in the next few years.  Thanks for showing a little backbone.

Posted in Future of the GOP, Union Thuggery | Tagged: , , , | 10 Comments »

Thank you, Mitch McConnell!

Posted by Liberty on December 12, 2008

Mitch McConnell: We can’t vote for the House’s auto bailout

From Hot Air:

“Somewhat lost in the recent debate over the auto industry is the fundamental difference between it and the financial rescue plan that Congress approved in October. While that plan was intended to rescue the entire economy, this one is intended to save a single industry. That plan was intended to help everyone — from small business owners to college students; and every lawmaker who voted for it acted on the belief that that is what it would do…

A lot of struggling Americans are asking where their bailout is. They wonder why one business would get support over another. When it comes to the auto industry, many Republicans in Congress have asked these same questions.

There are many principled reasons to oppose this bill. But the simplest one is also the best: “a government big enough to give us everything we want is a government big enough to take everything we have.” This is as true for individuals as it is for business. It’s the primary principle on which American industry, including the auto industry, was built. And even in turbulent moments like this — perhaps especially at moments like this — it’s a principle well worth defending.

Some argue that the effects of an auto industry collapse would be too acute and far-reaching for an already-struggling economy to bear. This is impossible to know. And even if we grant that these companies would fail without taxpayer help, we would still have to ask ourselves whether the proposal before us achieves the goal that everyone claims to embrace — namely, the long-term viability of ailing car companies — and, in my view, it does not.”

Posted in Future of the GOP | Tagged: , | 1 Comment »

Perspective on potential Big Three bailout plan from a former GM employee

Posted by Liberty on November 18, 2008

This is an interesting editorial from Lori Stillwagon Roman, president of RegularFolksUnited.com.  She worked her way through college at a Buick plant and moved on to other positions within GM through the course of her career.  She’s opposed to the Big Three bailout currently under consideration in Congress.  She makes the case that government interference and the expense and inefficiency of union labor have contributed to the crisis that the Big Three are in now.

Detroit Three–Thanks for the Memories

“First, I believe that sending the government to bail out the auto industry or an industry at this time is like sending an arsonist to put out a fire.  The government is partially to blame for the problem with the auto industry. 

The government created the credit crisis by forcing lenders to make bad loans and the resulting credit crunch made it difficult to sell cars.  Democrats in Congress (even some from Michigan) are responsible for blocking domestic oil production in the United States which has driven up gas prices and sent our wealth and potential American jobs to the ‘bad guys’. 

One would think that since the government created the crisis, they should fix it, right?  No.  They should STOP messing with the markets, not mess with them more!  They should let lenders make prudent loans and let energy producers produce energy and they should let the automakers get out of this mess without government help or interference. They should not send folks with gasoline to put out a fire.  Congress doesn’t just want to ‘bail out’ the Detroit Three, they want to add on their own restrictions to make Detroit ‘green.'”

Posted in Redistribution of wealth, Union Thuggery | Tagged: , , | 2 Comments »