(Our) Cash for Clunkers

Our government has come to the rescue yet again, paying (with our tax dollars) $3,500 - $4,500 per clunker for pre-approved new cars with better mileage. When 'Cash for Clunkers' (C4C) was passed, the $1 billion in funding was supposed to last until October, but only lasted one week. NO WAY - a 'free' government handout program going bankrupt? That never happens! So, true to form, the spin doctors in the liberal media and the liberal Congress equated popularity with success, and voted for an additional $2 billion to extend the program. You already know how I feel about this program, but I'll tell you anyway . . . :)

First - this reminds me of the billions spent to bailout homeowners on the brink of foreclosure. In this case, the auto companies - either bankrupt, owned by the government, or on the brink of collapse - needed a government bailout to boost slumping sales. Remember when Rick Santelli famously ranted: "How many of you people want to pay for your neighbors' mortgage? President Obama, are you listening?!" C4C is the same principle, but we're paying for other people's new ride instead of their house. I'm glad the government has spent a fraction of what it spent on the foreclosure rescue program, but it is the same nonsensical principle. Making auto companies dependent on taxpayer subsidies to sell cars only temporarily and artificially grows their bottom line (with our money), and merely postpones the pains of the recession.

Second - this intervention, like every other, will cause distortions in the market. For example, as the picture shows, the clunkers get crushed, removing them from the used car market. This will cause used car prices to rise (lower supply). And instead of crushing the car, could we not at least salvage the good, usable parts? What a waste! Oh I forgot, this is a government program. Also, in order to be a true stimulus, new demand must be created. C4C merely shifts current demand for cheap political points, detracting from next year's sales.

Third - Six of the top ten new cars are made by foreign companies: Honda, Toyota, or Hyundai. That's ok with me, they must be doing something right if consumers choose their products over the alternatives. But of the remaining four, three are made by GM (the other is the Ford Focus), which is now owned by the government. So yes, the government is actually 'stimulating' itself through C4C. How convenient!!

Fourth - If lawmakers wanted to pass C4C to help the poor (not hard to imagine given the popularity of tax hikes on the rich for handouts for the poor and middle class), it isn't really working. The average annual income of those participating in C4C is $57K/yr - only 4K less than the average annual income of new car purchasers.

Last - I can't believe I'm saying this, but John McCain actually had a pretty good point . . . he asked, "why not 'cash for refrigerators?' Or 'cash for lawnmowers?' Or anything else that catches the government's fancy?" C4C is a perfect illustration of what I said in my comment on the last post: "a Governmnet may at pleasure elevate one class and depress another; it may one day legislate exclusively for the farmer, the next for the mechanic, and the thid for the [auto] manufacturer, who all thus becomes the mere puppets of legislative cobbling and tinkering, instead of independent citizens, relying on their own resources for their prosperity." Today is the day of the auto manufacturers, who have certainly become puppets of this legislative tinkering. The benefits of this program are highly concentrated on the few, at the expense of the many. I'd prefer the federal government stop looting us to subsidize the auto companies, amounting to little more than corporate welfare, on our dime. What do you think? Is C4C a good idea, or a very bad use of taxpayer funds?

Broken Promises and Big Talk

Here's a little clip from a news story about Pres. Obama not ruling out raising taxes. In a recession.

During his presidential campaign, Obama repeatedly vowed "you will not see any of your taxes increase one single dime." But the simple reality remains that his ambitious overhaul of how Americans receive health care — promised without increasing the federal deficit — must be paid for.
"If we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform," Geithner said. "We're not at the point yet where we're going to make a judgment about what it's going to take."

At what point is China going to say "Okay U.S., we've lent you trillions of dollars, and now we want to be paid back." Our current economic model is just not sustainable and it worries me greatly. I'm sure I'm preaching to the choir right now, but this spending has gotten out of hand. Raising taxes in a recession just screams bad idea all over it for me anyway. I believe in some government action and help but what we're seeing now is way more than I'd like to see.

More on Health Care

So I think more information has come out about the new Obama Care, and I wanted to share some opinions about what I like and dislike. Here's part of a news article:

House Democrats on Tuesday rolled out a far-reaching $1.5 trillion plan that for the first time would make health care a right and a responsibility for all Americans, with medical providers, employers and the wealthiest picking up most of the tab.
The federal government would be responsible for ensuring that every person, regardless of income or the state of their health, has access to an affordable insurance plan. Individuals and employers would have new obligations to get coverage, or face hefty penalties.
Health care overhaul is President Barack Obama's top domestic priority, and his goal is to slow rising costs and provide coverage to nearly 50 million uninsured Americans. Democratic leaders said they would push the measure through committee and toward a vote in the full House by month's end, while the pace of activity quickened on the other side of the Capitol.
Senate Majority Leader Harry Reid said he wanted floor debate to begin a week from Monday. Other officials said that timetable was likely to slip. Even so, it underscored a renewed sense of urgency.
The House legislation unveiled by Speaker Nancy Pelosi and other Democrats would slow the growth of Medicare and Medicaid payments to medical providers. From big hospitals to solo physician practices, providers also would be held to account for quality care, not just ordering up tests and procedures. Insurance companies would be prohibited from denying coverage to the sick. The industry also would face stiff competition from a new government plan designed along the lines of Medicare.
The liberal-leaning plan lacked figures on total costs, but a House Democratic aide said the total bill would add up to about $1.5 trillion over 10 years. The aide spoke on condition of anonymity to discuss the private calculations.
The legislation calls for a 5.4 percent tax increase on individuals making more than $1 million a year, with a gradual tax beginning at $280,000 for individuals. Employers who don't provide coverage would be hit with a penalty equal to 8 percent of workers' wages with an exemption for small businesses. Individuals who decline an offer of affordable coverage would pay 2.5 percent of their incomes as a penalty, up to the average cost of a health insurance plan.
House leaders want to move quicklyWith Obama pressing Congress to act on health care this summer, House leaders want to move their bill quickly through three committees and to a floor vote before the August congressional recess. But a group of moderate and conservative Democrats has withheld support, and no Republican votes are expected. The House bill seemed unlikely to win broad backing in the Senate.
The House bill seemed unlikely to win broad backing in the Senate, where the Senate Health, Education, Labor and Pensions Committee was expected to finish its version of the legislation Wednesday in what was looking to be a party-line vote. Another panel, the Senate Finance Committee, was striving to unveil a bill by the end of the week. But the outlook in the Senate remained uncertain.
Standing before a banner that read "Quality Affordable Care for the Middle Class," House Speaker Nancy Pelosi, D-Calif., called the moment "historic and transformative." The bill would provide "stability and peace of mind" by braking costs and guaranteeing coverage, she said.
"We are going to accomplish what many people felt wouldn't happen in our lifetime," said House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., one of the main sponsors. Obama issued a statement hailing the measure.
Speaking in Warren, Mich., where he was promoting new spending for community colleges, Obama anticipated a congressional confrontation over health care.
"There's going to be a major debate over the next three weeks," he said, deviating from his prepared text. "And don't be fooled by folks trying to scare you saying we can't change the health care system.We have no choice but to change the health care system because right now it's broken for too many Americans."
Separately, Obama spoke by telephone with Sen. Charles Grassley, the Iowa Republican viewed as critical to the fate of bipartisan negotiations in the Senate.
Democrats said the income tax increase would apply only to the top 1.2 percent of households, those who earn about one-quarter of all income. The wealthiest 4 percent of small business owners would be among them. The tax would start at 1 percent for couples making $350,000 and individuals earning $280,000, ramp up to 1.5 percent above $500,000 of income, and jump to 5.4 percent for those earning above $1 million.
The tax would raise an estimated $544 billion over 10 years.

Things I like: Health care does need to be changed, and it's been largely ignored for a very long time. I have heard a lot of horror stories about people who could not afford coverage and then had some medical condition or accident hit them and they had no choice but to file for bankruptcy. So I applaud the democrats for taking on the issue. I also like how the new system will be a lot like that of France's with a couple of differences. In France everybody pays 10% and everyone is insured by the federal government to a basic level with option to purchase additional private health insurance. In this system only the rich pays for it. My feeling would be to tax some behaviors that lead to health problems much like the tobacco tax, say a junk food tax. I believe that would raise far more money than just taxing the rich and also place the burden more on the shoulders of the people that would benefit from the new system. I also like how people with preexisting conditions will now be able to get coverage.

Things I don't like: I don't feel very good about enforcing a penalty tax of $1,000 a year on people who elect not to get coverage. I don't like placing almost the entire burden of the poor's health care just on the wealthy. I don't like how fast they want to shove this through the system. I don't know about spending even more money during a recession. And I'm sure a lot of you have a lot more objections than that. And I'd like to hear about them. And if you can think of any positives at all I'd like to hear those too.

The Battle over Health Care Reform

I'll admit that I'm not well-versed on all the issues in this debate, but I know some of you are, so I wanted to get your comments and insights. Here is insight #1 I picked up from a co-worker who is an Iraqi War Vet:

We were discussing the topic of health care over lunch one day. Another co-worker asked him why he hopes Pres. Obama's health care reforms don't pass. He simply replied, "go spend a day at the VA Hospital and I guarantee you wouldn't hope the reforms pass either." He then outlined a long laundry list of the problems he's experienced firsthand that result when the government bureaucracy comes between doctors and their patients. It was a real (scary) eye-opener for me.

Insight #2: On ABC's "Prescription For America" program, completely unbiased as the name indicates, a neurologist really put Obama on the spot. He suggested that elites often propose health care solutions that limit options for the general public while they themselves are secure in the knowledge that if they or their loved ones get sick, they will be able to afford the best care available, even if it's not provided by insurance. The neurologist then asked Obama if he would be willing to promise that he wouldn't seek such extraordinary help for his wife or daughters if they became sick, noting that various independent studies show that Obama's proposed "public option" would actually limit tests and treatments. Visibly flustered by the question, Obama refused to make the promise and quickly changed the subject. Ouch - I'm sure this didn't help the marketing campaign for Obamacare, especially coming off the heels of Obama's personal physician for 22 years, Dr. David Scheiner, coming out and saying, "I'm not sure he really understands what we face in primary care."

For my part, I'm naturally skeptical of a government takeover of anything (as you'll remember from reading my posts about GM), especially if it comes with a CBO-announced price tag of another 1.6 trillion over the next decade. I'm puzzled why so many believe that more money, higher taxes, and more government involvement in our lives will magically solve all of our problems. Throw more money and more government regulation at the problem, and it will go away. I'm not convinced that this is an effective approach. The patience of the public is growing thin. How many billions/trillions has the government spent trying to turn the economy around? Yet the unemployment rate continues to spike. While I realize there are problems with the health care status quo, things could be much worse . . .

Herding Cats

Last Thursday night I attended a meeting at Mt. Logan Middle School. About 150 people attended. It was sponsored by the "Independent Caucus" and included several speeches and presentations, generally designed to tap into dissatisfaction with the way things are going in the country.

While I was sitting in between two friends, I penned the following observation:

"Getting large numbers of people who believe in independence to unite in a common cause is like herding cats."

That occurred to me because each speaker, in turn, was admonishing people in the audience to get out and protect the Constitution and their rights against intrusion and interference. But when asked what specifically a person can or should do, they seemed stumped. To their credit, they did not say "Follow me blindly and help me throw off the yoke of despotism." But this dilemma is an organic obstacle to well-organized resistance to socialism. Those who oppose governmental control of their lives are by the same nature disinclined to commit their loyalty to any political organization.

Government Motors and the Law of Unintended Consequences

If anyone still reads this blog, you probably know GM is bankrupt, and after [another] 30 billion dollars down the drain, Obama has made sure that the federal government will be the majority shareholder when all is said and done. So what will the future hold? Here's a sneak peak. . .

Now that the government has its sought-after mechanism to coerce us into smaller, more fuel efficient hybrid cars, despite their weak demand and high prices, expect to be called 'unpatriotic' if you have the nerve to get behind the wheel of a gas-guzzling truck or SUV. Forgive the pun, but is there a better vehicle to kick-start the government's "enlightened" green energy policies than to nationalize the country's largest auto company? How will the government protect "our" investment (aka bailouts)? Here comes the parade of inevitables . . .

Declining sales of Chevy's and Hemi's will prompt tax breaks for their buyers and higher taxes for those who buy other brands. Then tariffs on imports will go up, and foreign factories in the U.S. will be subject to Value Added Taxes to subsidize unsold government cars, leading to a trade war. And because the federal government has no clue how to operate anything for a profit, the taxpayers will continue to subsidize the losses of Government Motors: tens of billions more coming in bailouts. And because the money supply is finite, the only way for GM to succeed in the long run will be if the government substantially reduces competition from foreign brands and jacks up gas taxes. Higher gas prices will then push Ford into bankruptcy (its profitable truck and SUV sales are keeping it afloat). Michael Moore is already on the war path, pushing for an additional $2 per gallon gas tax, and I'm not even kidding - check his website.

So can the Obama administration assume that GM consumers will remain loyal after the government takeover? Don't hold your breath. When your favorite restaurant comes under new ownership, and that ownership is notorious for serving bad food elsewhere, do you keep eating there? Maybe if you want food poisoning. I predict that many consumers have bought their last GM product. Why?

Austrian economist Ludwig von Mises put it this way: "The real bosses in the capitalist system are the consumers. By their buying and abstention of buying, they decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old purveyors. With them nothing counts more than their own satisfaction."

Which cars will better "satisfy" consumers - those produced by a government-owned and operated company, or those cars produced by a privately-owned company? As long as there are better alternatives to what the government puts out (bet on it!), GM will never be profitable. Therefore, Obama will have to monopolize most of the U.S. auto fleet to truly succeed with GM. Half-way measures won't do. Just ask USPS about their competitive disadvantages in operating against FedEx, UPS, etc. Either get out now, or go all in! I think you already know which option I prefer :)

Obama taking on the Base

Despite the cartoon (sorry, I just couldn't resist) this post actually compliments Obama. This past week, he made a couple of tough decisions which have inflamed the ACLU, other human rights organizations, and much of the liberal base. He has reversed on his promise to release several controversial photos of detainees because, according to Obama, "the most direct consequence of releasing them, I believe, would be to further inflame anti-American opinion and to put our troops in greater danger." It was reported that this was actually the belief of his top military commanders in Iraq and Afghanistan who were concerned less about politics and more concerned about saving American lives. They urged the President to reconsider his position, which he did.

The second decision was to restart the Bush-era military tribunals - which Obama halted by executive order during his first week in office. Regarding this policy reversal, Obama said, "These reforms will begin to restore the commissions as a legitimate forum for prosecution, while bringing them in line with the rule of law. This is the best way to protect our country, while upholding our deeply held values." Contrast this statement with something he said on the compaign trail when he described Guantanamo tribunals as "a flawed military commission system that has failed to convict any one of a terrorist act since the 9/11 attacks and that has been embroiled in legal challenges."

Amnesty International's Larry Cox is ticked. "President Obama is reinstating the same deeply-flawed military commissions that in June 2008 he called an 'enormous failure.' In one swift move, Obama both backtracks on a major campaign promise to change the way the United States fights terrorism and undermines the nation's core respect for the rule of law by sacrificing due process for political expediency."

So I'm curious, what is really going on here? Was it really 'politically expedient' for Obama to make these decisions? It doesn't seem like it. It seems, based on the leftist critics, that he's departing from campaign promises of transparency, accountability, and a different direction than Bush. I personally applaud President Obama for these two moves. He showed real courage knowing that he would upset the liberal base. This was also a step towards more Presidential maturity. I think he has come to realize that it is one thing to talk big on the campaign trail. But if staying true to some of these campaign promises means endangering American lives in the real world, I'm glad he decided that it was more important to protect those lives than to appease the party base. To me, these developments are encouraging. What do you guys think?

Was Pelosi Dishonest?

I'm sure many of you will be surprised, I'm actually not quite sure on this one. Here's her original statement with the conservative spin:



So are they being unfair? Was it reasonable for her to wait until they come and tell her after they've actually done it before she will give an OK? Was that ex post facto-type entrapment, where she's egging them on by not expressing initial disapproval so they can illegalize it later and then arrest everyone? I'm not quite sure what to make of this to be honest.

Heated Interview

This post doesn't really have a purpose, I just wanted to show you guys this heated interview because it's just intense and I think it's kind of funny:

Carrie Prejean and Liberal Double Standards

I'd like to make a few comments about the recent Miss America controversy. For those who aren't up to speed on it, here's a quick vidcap:



By now you all know I'm conservative, so my feelings on this aren't exactly a mystery. However, in this case my discomfort runs deeper--I think--than mere conservatism. As I mentioned in my comment on the previous post, I think there are common standards of decency that apply across the board, whether you're liberal or conservative. One of the most important ones, I think, is consistency, which I think has been violated by many of the left with a glaring double standard. Here's another video which I think illustrates my point:



So here's my question: can you imagine Martin Luther King trying to make sure that his civil rights movement applied ONLY TO BLACK LIBERALS? To be fair I can understand the uneasy feelings feminists have about the whole pageant scene because it degrades women, but as you saw on that clip that's not what they really have a problem with. If it were the other way around, for example, and a conservative judge wasn't happy with a liberal contestant's answer, this feminist would be outraged. In short, I think it's clear that only women who sympathize with the entire liberal agenda are "worthy" of the benefits of feminism, at least to this particular feminist. So again, isn't that the equivalent of M.L.K. achieving conditional civil rights only for black people who have certain beliefs? Would that even make any sense? And if not, then why would it be any different for feminism? Isn't it just another civil rights issue? I thought part of the reason M.L.K.'s movement caught on was because it harmonized with the Declaration of Independence that you don't have to earn rights because "all men are created equal" and that they are all "endowed by their creator with certain inalienable rights"? If I'm not mistaken, M.L.K. actually quoted the Declaration in his famous "I Have a Dream" speech. Maybe I'm just not supposed to understand it because I'm a conservative, but I still can't see how such a stance can do anything but hurt her cause...am I wrong?

But here's the funny thing about all this: if anything Carrie Prejean has only benefitted from all of this. I think she's actually better off now than if she had actually won the pageant, because nobody would even be talking about her. But thanks to all this controversy, she's on the news all the time now. Anyway, I just think it's ironic that Perez Hilton actually jump-started her career in the process of trying to destroy it. I guess it's like they say, there's no such thing as "bad publicity," though I guess that also applies (unfortunately) to Perez Hilton. For the record, though, I think Prejean came out on top.