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The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for June 12th, 2011

Washington Post Glenn Kessler: President Obama’s phony accounting on the auto industry bailout

Posted by iusbvision on June 12, 2011

Note: This did not appear in the printed edition of the Washington Post, not does it appear on the paper’s main site. It is on their blog site. They can say that they reported it while making sure that most average people never see this story.

Washington Post Politics Blog:

 

“Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency.”

— President Obama, June 4, 2011

This post has been updated.

With some of the economic indicators looking a bit dicey, President Obama traveled to Ohio last week to tout what the administration considers a good-news story: the rescue of the domestic automobile industry. In fact, he also made it the subject of his weekly radio address.

We take no view on whether the administration’s efforts on behalf of the automobile industry were a good or bad thing; that’s a matter for the editorial pages and eventually the historians. But we are interested in the facts the president cited to make his case.

What we found is one of the most misleading collections of assertions we have seen in a short presidential speech. Virtually every claim by the president regarding the auto industry needs an asterisk, just like the fine print in that too-good-to-be-true car loan.

Let’s look at the claims in the order in which the president said them.

“Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency — and it repaid that money six years ahead of schedule.  And this week, we reached a deal to sell our remaining stake. That means soon, Chrysler will be 100 percent in private hands.”Wow, “every dime and more” sounds like such a bargain. Not only did Chrysler pay back the loan, with interest — but the company paid back even more than they owed. Isn’t America great or what?

Not so fast. The president snuck in the weasel words “during my presidency” in his statement. What does that mean?

According to the White House, Obama is counting only the $8.5 billion loan that he made to Chrysler, not the $4 billion that President George W. Bush extended in his last month in office. However, Obama was not a disinterested observer at the time. According to The Washington Post article on the Bush loan, the incoming president called Bush’s action a “necessary step . . . to help avoid a collapse of our auto industry that would have had devastating consequences for our economy and our workers.”

Under the administration’s math, the U.S. government will receive $11.2 billion back from Chrysler, far more than the $8.5 billion Obama extended.

Through this sleight-of-hand accounting, the White House can conveniently ignore Bush’s loan, but even the Treasury Department admits that U.S. taxpayers will not recoup about $1.3 billion of the entire $12.5 billion investment when all is said and done.

The White House justifies not counting the Bush money because, it says, that money was completely spent when Obama was making a tough political decision on whether to extend another loan. In other words, a decision to do nothing at the time would have resulted in the immediate loss of the $4 billion that Bush had extended.

This is chicanery. Under the president’s math, Chrysler paid back 100 percent of Obama’s loan and less than 70 percent of Bush’s loan. A more honest presentation would combine the two figures to say U.S. taxpayers got back 90 percent of what they invested. In fact, that is how the Treasury and other administration officials frequently portray it; it is just when Obama speaks that the numbers get so squishy.

The White House justifies saying that Chrysler will be in 100 percent “in private hands” because there will no longer be government ownership once Fiat completes its purchase of the U.S. stake. For the record, the United Auto Workers will own 46 percent of the company.

“All three American automakers are now adding shifts and creating jobs at the strongest rate since the 1990s.”The White House says the data to back this claim concerning the Big Three automakers is not public information. The official Bureau of Labor Statistics data refers to the entire auto industry — including foreign auto manufacturers, auto parts manufacturers, auto parts dealers and auto dealers. If you look at the data, the 113,200 jobs added between June 2009 and May 2011 amounts to about a 5 percent increase — from a rather low base.

UPDATE, 10:45 AM: Yen Chen, automotive business statistical analyst at the Center for Automotive Research, says CAR’s analysis of Big Three auto data shows this statistic is correct. The Detroit Three are expected to add 10,000 hourly and 5,000 salaried workers this year, from a base of 115,805 hourly workers and 56, 432 salaried workers. That’s an increase of about eight percent in each case. More than 16,000 hourly workers were added in 1991, but from a much higher base–440,000– and 10,000 were also added in 1995, when there were 433,000 hourly workers. Meanwhile, salaried workers have been on a steady decline since 1990 (when the big Three employed 157,000).

“GM plans to hire back all of the workers they had to lay off during the recession.”This is another impressive-sounding but misleading figure. In the five years since 2006, General Motors announced that it would reduce its workforce by nearly 68,000 hourly and salary workers, creating a much smaller company. Those are the figures that generated the headlines.

Obama is only talking about a sliver of workers — the 9,600 workers who were laid off in the fourth quarter of 2008. About 4,100 were sent home for a few weeks. Another 5,500 were put on indefinite leave, meaning there were no jobs at the time for them. All but 1,000 havereturned to work, and the rest should be back at work by year’s end, according to GM spokesman Greg A. Martin.

“In the year before I was President, this industry lost more than 400,000 jobs, and two great American companies, Chrysler and GM, stood on the brink of collapse. Now, we had a few options.  We could have done what a lot of folks in Washington thought we should do — nothing.”This is quite a straw man — that many people wanted to do nothing. It was never so black and white. The debate was over the right course to take in the bankruptcy process.

The Wall Street Journal published Monday an interesting conservative critique of the government’s intervention by David Skeel, a law professor at University of Pennsylvania. Skeel says that the revival of the auto industry “is a very encouraging development,” but “to claim that the car companies would have collapsed if the government hadn’t intervened in the way it did, and to suggest that the intervention came at very little cost, is a dangerous misreading of our recent history.”

To support the claim that “a lot of folks” wanted to do nothing, the White House referred us to statements by the House minority leader, John Boehner (R-Ohio), and Sens. Richard Shelby (R-Ala.) and Jon Kyl (R-Ariz.).

We do not read Boehner’s quote that way; in this 2009 comment, he is questioning the administration’s approach while saying, “The success of our automotive industry is critical.”Shelby and Kyl in 2008 were protesting the use of taxpayer funds by Bush to delay a bankruptcy filing; they preferred immediately putting the companies through the bankruptcy process.

It will be up to historians to decide what the best solution would have been for taxpayers and the auto industry. We can understand why the president wants to portray himself as making a lonely and tough decision. But the debate was not either/or, bur rather what was the best policy to bring the automakers back to financial health.

 

Posted in 2012, Chuck Norton, Lies, Obama and Congress Post Inaugration | Leave a Comment »

Pawlenty Attacks Romney Calling It “ObamneyCare”… But YouTube Never Forgets…

Posted by iusbvision on June 12, 2011

This is what is viral on the net today.

This is exactly the kind of thing that kills campaigns as the commercials just write themselves. Republicans need to understand and “get” YouTube.

Pawlenty against RomneyCare

Pawlenty for RomneyCare

Posted in 2012 Primary, Chuck Norton | Leave a Comment »

GM CEO: Gas Taxes Should be Raised by $1 a Gallon…

Posted by iusbvision on June 12, 2011

I will never buy another GM vehicle. I currently have three.

Via Heritage:

If General Motors CEO Dan Akerson had anything to say about it, you would be paying a dollar more a gallon for gas. Yes, with $4/gallon prices hitting consumers in a tough economy, Akerson told the Detroit News: “You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas.”

Akerson, 61, was appointed CEO of GM last fall, having previously served as an Obama-appointed member of the board. He has been critical of the Obama Administration on several issues, including fuel economy standards, but now has discovered something in common: a love of high gas prices. He, like President Obama and Energy Secretary Steven Chu, believes that higher gas prices will force taxpayers to buy more fuel-efficient (and usually more expensive) vehicles.

In 2008, Secretary Chu said: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” And it was President Obama who told CNBC in 2008 that he preferred a “gradual” increase in gas prices. Obama and Chu know that only when matched dollar-for-dollar will Americans choose alternative energy sources that are much more expensive today. Since the already heavily-subsidized alternative energy sources are not getting cheaper, the only solution is to make cheap energy more expensive.

Akerson, Chu and Obama are wrong to embrace high gas prices. Hitting lower-income Americans with a punitive gas tax while unemployment remains near ten percent is a bad idea, regardless of what behavior you are hoping to mandate.

Akerson’s comments came in the context of a larger conversation on energy policy. Akerson correctly stated that the government’s imposed fuel standards are taxing production, which will cost jobs and raise the purchase price of cars. But passing that burden directly to consumers at the gas pump isn’t the solution. The idea that the government must either increase taxes on businesses or struggling taxpayers is a false choice.

High gas prices alone won’t encourage consumers to buy the hugely unpopular Chevy Volt. The Volt isn’t selling because even after substantial tax credits that the government cannot afford, the additional cost in buying a not-ready-for-market Volt, plus the cost of electricity (which isn’t free) is far greater than any potential gas savings.

Posted in 2012 Primary, Chuck Norton, Corporatism, Energy & Taxes, Government Gone Wild | Leave a Comment »

A third of high school grads never studied the Constitution…

Posted by iusbvision on June 12, 2011

The best way to “fundamentally transform America” is to make sure new generations forget what it is all about.

Heritage:

A third of graduated and rising high school seniors – who will be voting in the 2012 elections – have never studied the U.S. Constitution.

A recent study by the National Assessment for Educational Progress reported that only 67% of all high school students have spent any time studying the nation’s founding document.  Every four years, the NAEP polls 10,000 students about their knowledge of – or even exposure to – the Constitution.  The percentage of knowledgeable students is continually decreasing and, since 2007, the numbers have fallen another five percentage points from 72%. Maybe this is obvious, but shouldn’t a responsible and informed citizenship be one of the goals of public education?

Without basic knowledge of this foundational document, these voters will be hard pressed to answer some of the most important political questions in 2012. The next election is going to depend on every voter’s understanding of constitutional authority. For instance, does Obamacare’s individual mandate fall under the commerce clause? Other recent questions – like which branches are involved in the decision to declare war – cannot be answered without a thorough understanding of the Constitution.

But a basic understanding of the Constitution is useful well beyond just the next election.  The Constitutionspells out both the powers and limitations of the federal government.  It seems that it could become rather difficult to secure the blessings of liberty without teaching the next generation how our government is designed to protect these liberties.

Posted in Campus Freedom, Indoctrination & Censorship, Chuck Norton, Culture War | Leave a Comment »

Dr. Walter Williams: Government Lies

Posted by iusbvision on June 12, 2011

Dr. Walter Williams

President Obama and congressional supporters estimate that his health care plan will cost between $50 and $65 billion a year. Such cost estimates are lies whether they come from a Democratic president and Congress, or a Republican president and Congress. You say, “Williams, you don’t show much trust in the White House and Congress.” Let’s check out their past dishonesty.

At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990. In 1990, Medicare topped $107 billion. That’s nine times Congress’ prediction. Today’s Medicare tab comes to $420 billion with no signs of leveling off. How much confidence can we have in any cost estimates by the White House or Congress?

Another part of the Medicare lie is found in Section 1801 of the 1965 Medicare Act that reads: “Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine, or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer, or employee, or any institution, agency or person providing health care services.” Ask your doctor or hospital whether this is true.

Lies and deception are by no means restricted to modern times. During the legislative debate prior to ratification of the 16th Amendment, President Howard Taft and congressional supporters said that only the rich would ever pay federal income taxes. In 1916, only one-half of 1 percent of income earners paid income taxes. Those earning $250,000 a year in today’s dollars paid 1 percent, and those earning $6 million in today’s dollars paid 7 percent. The lie that only the rich would ever pay income taxes was simply a lie to exploit the politics of envy and dupe Americans into ratifying the 16th Amendment.

The proposed tax increases that the White House and Congress are proposing will probably pass. According to the Washington, D.C.-based Tax Foundation, during 2006, roughly 43.4 million tax returns, representing 91 million individuals, had no federal tax liability. That’s out of a total of 136 million federal tax returns. Adding to this figure are 15 million households and individuals who file no tax return at all. Roughly 121 million Americans — or 41 percent of the U.S. population — are completely outside the federal income tax system. These people represent a natural constituency for big-spending politicians. Since they have no federal income tax obligation, what do they care about higher taxes or tax cuts?

Another big congressional lie is Social Security. Here’s what a 1936 government pamphlet on Social Security said: “After the first 3 years — that is to say, beginning in 1940 — you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year … beginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. … And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year.” Here’s Congress’s lying promise: “That is the most you will ever pay.” Let’s repeat that last sentence: “That is the most you will ever pay.” Compare that to today’s reality, including Medicare, which is 7.65 cents on each dollar that you earn up to nearly $107,000, which comes to $8,185.

The Social Security pamphlet closes with another lie: “Beginning November 24, 1936, the United States government will set up a Social Security account for you … The checks will come to you as a right.” First, there’s no Social Security account containing your money, but more importantly, the U.S. Supreme Court has ruled on two occasions that Americans have no legal right to Social Security payments.

We can thank public education for American gullibility.

 

More Lies

Posted in Chuck Norton, Click & Learn, Government Gone Wild, Health Law, Obama and Congress Post Inaugration, True Talking Points | Leave a Comment »

Gov. Christie: Government Union Spent $6 million in TV Ads Motivating People to Hate

Posted by iusbvision on June 12, 2011

Six million in less than three months…

Posted in 2012 Primary, Chuck Norton, Click & Learn, Leftist Hate in Action, Unions | Leave a Comment »

 
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