Tag Archives: GM

2 Cents Worth On Life Its Ownself

The thoughts of an idle mind musing the events of the day……

Well, the iphone 5 is out.  Interesting to recall that about 15 years ago Apple was down on its luck relatively speaking.  It was muddling along with only a strong following among the computer nerds who loved the Imac.   Then it was all Microsoft.  Recall that Microsoft was sued under the Sherman Anti-Trust Act and eventually lost that litigation.  It was alleged it was a behemoth in the tech world and could dominate anyone and everything in the IT world.  Well, fast forward to today.  Microsoft is now seen as the old dowdy in the tech world with a clouded although growing future.  But no one seriously believes it is the King of the Hill anymore.   About 3 years or so ago the NYSE decided to add Cisco to the Dow 30.  If it had added Apple instead the Dow today would be about 16,000 plus rather than the 13,500 where it is today.   As usual the Feds can’t get much of anything right.  They brought that suit against Microsoft to protect us all from their alleged dominance.  Even at the time of trial it was becoming obvious that Microsoft was losing its influence in the IT world but that didn’t deter the Feds from their mission to “save” us.  If the free market has much of a chance to work at all dominance will always pass as someone else comes along with a better idea or a better way to deliver and old idea.

The Muslim world seems upset allegedly over a video of some sort on the internet.   Lordy, I have news for you all.  If they are going to get upset over insulting or mocking comments, novels or movies then they can do it every day to Kingdom come.   Go back to some of the great novels of the 19th and 20th century that had any discussion of that region and you will find ample derogatory remarks about Muslims.  Likewise, review lots of the old black and white movies of a few decades ago and you you will find plenty of negative comments or portrayals of Muslims.   The list is endless.  Bing and Bob did it in their road movies, Cary Grant  and David Niven did it in their adventure flicks, the old Tarzan movies don’t give a flattering light to Muslims.  We in the West have for a couple of centuries now with the obvious exception of a few major dictatorships allowed a free flow of thought and opinion.  Read the great historian Edward Gibbon and see what he has to say about Mohamet and Islam.   If they are going to be offended really and truly by anything and everything from the West that is not flattering then they will be mad at us forever.   Are we willing to cede our freedoms and rights so as not top hurt the feelings of the Muslim world?   Its a pretty simple choice.   We should have the right to expect civilized behavior from all people around the world.  If they won’t behave in such a manner then we should defend our standards, not debase ourselves to theirs.

You probably saw the news items about the sea ice being at a 30 year record low in the Arctic seas.  It was in the papers and the news websites along with all those numerous stories about the record heat this year in the US.  Guess that is all true.  But you would have to be a real news hound to have also seen the stories about the record cool temperatures across much of Europe this summer and the fact that the Antarctic sea ice reached record high levels this year.   It’s a big world and something happening in Patagonia doesn ‘t necessarily mean then same thing is happening in Lapland.

If the ants are invading your kitchen and you worry about pesticides there is a very old remedy your grandmother may have used to deter them that is eco-friendly.  Just sprinkle or spray some vinegar in the area and you will notice they hit the road.   And it is very cheap to use.

Government Motors opened its IPO at 33 after its Federally corrupt Chapter 11 proceeding.  It is about 24 per share today and some of the executives are really wanting the Government out.  The Feds through Timmy Geithner at Treasury still hold about 26% of the stock.  Don’t look for them to sell that stock before the election.  Back publicity to take that 15 billion dollar loss before November.  After the election if BO wins who knows when it would be.  The Feds might like the idea of running a large auto outfit that they can tell what to build, like the Volt to please one of  their special interest groups.   Of course even after the Feds sell, if they do, the unions will still be the largest shareholder due to the gift from BO, well, he of course expects votes for the stock.

“The sword is the key to heaven and of hell: a drop of blood shed in the cause of God, a night spent in arms, is of more avail than two months of fasting or prayer: whosoever falls in battle, his sins are forgiven…..”  the Koran.  Ponder that as you contemplate what our policy should be toward the Muslim world.  http://www.olcranky.wordpress.com

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Government “Investment” And Management Of The Economy

Whether we like it or not since January of ’09 we have been in an era of much greater control of our economy by the Federal government than anything in the past.   Our landscape is filled with the examples of this expansion and domination.   GM, Chrysler, AIG, Solyndra, the Dodd-Frank bill and the Consumer Protection Act and the exponential growth of regulations and grabs for power by the Labor Dept and EPA all confirm this view.  Of course the elites and government groupies think this is the perfect formula for society and the economy.  They believe they can manage everything much better than the people who will only make bad decisions or allow themselves to be duped.   Their confidence in the common man is rather low but their confidence in the wisdom and goodness of government led by the elites is boundless.  History has had other examples of government expansion and central planning and mayhap we should at least consider how well those worked out before we take that next gulp of the cool aid the Dems offer.

The seventies were another time of tremendous government expansion.  It began in the second half of that decade under that fearless and dynamic leader Jimmy Carter.   The Dems had been planning for years how they were going to exploit and use the “war savings” from the wind down of the Viet Nam war to advance the next round of their social agenda.   That war had been very expensive and even some Dems and the media had been critical of Johnson for pursuing his policies of “guns and butter” at the same time on borrowed money.  Of course the war did wind down after Nixon came to office.  Regardless of what you may think of him that is a promise he made and kept–to bring the war to and end and it started as soon as he came to office.   You don’t have to take my word for it just look at the Viet Nam War Memorial and see how the deaths in the war starting dropping dramatically after he took office.   Then in ’75 we were out completely.  Unfortunately, that was followed by the election of Carter. 

Especially in the area of energy Carter and his cronies believed they could control prices and events and naturally protect us from ourselves.  We had already been through one Arab oil embargo and then a second came.  The continued and accelerated spending by the government made the already painful inflation a real disaster.  More regulations rolled off the presses at breakneck speed.  We also got FERC to control oil and its price.  Inflation was over 13% for much of this era; mortgages were equal that and the dollar wouldn’t buy a bucket of spit in the world market because no one wanted the dollar because it kept falling so fast.   The centrally planning for energy led to those awful gas lines and mis-allocation of fuel.  Oil  profits were restricted because they were “windfall” profits and not truly earned somehow.   They got one price for old oil and another for “new” oil and had to ship fuel were instructed by bureaucrats.  Guess what?   Lots of the oil people simple decided to sit on their hands and hope for a better day.   Why run the risk of drilling and building new refineries if you weren’t even sure you would make a profit or if you did then the bureaucrats might decide their were excessive or windfall and take the away from you.   Domestic production of oil and gas dropped and imports rose even more.   The Arabs loved Carter and his  bureaucrats.  

This was similar to the kind of “economy” they had in the Soviet bloc countries by this time.   The central planners  had their ideas about what should be manufactured and how and the industries of course had to follow suit.  They were required to comply.  No one in the Soviet Bloc and the world market really wanted the Czech steel or the East German machines and thus the central governments had to subsidize these and other industries even more heavily.   The planners were sure they were right and it was great redistributive policy and good social policy for the workers.  They ended up by actually subtracting value from their economies because the finished product they made were a net loss; the finished products were worth less than the raw materials.   During Carter the oil in the ground was worth more than taking it out so why drill.    East Germany made computers during the ’90’s but they weren’t very good and besides they couldn’t make enough of them; they only made 1/50th of what Austria produced during that time with less than half the population.  But when the central government and the elites have an idea they won’t take no for an answer from other parties or the people and pour even more money into their ideas.   Anyone heard of Solyndra?   Read the papers and you will also see the First Solar is shutting down some production as are many other solar companies around the world simply because there is little demand without heavy government subsidy and the Europeans are cutting back big time now that they have to try to balance their books.

What mattered to the Communists was not economics but politics.  (Judt–Post War).  That is true with all with a socialist bent.  The current administration is about politics not economic growth.  The growth is subject to their social agenda and the distribution of not only money but power.  If society is structured the way they want it to be then they don’t really care about the economy.  If economy was really important to the WH then why don’t they have many senior advisors and cabinet members with real backgrounds in the private markets?  The WH is filled with academics and career bureaucrats or politicians.   Nothing but elites.   They are pulling us in with a velvet rope that is all nice and soft but a rope nevertheless. 

“That way madness lies”  King Lear, Shakespeare…www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

If the economy continues to struggle we might have to adjust our price.   Who knows this might turn out to be the only thing you could buy for 1 cent but for now we will try to maintain our exorbitant price point.

I wonder how fearful those Yankees are this morning of Global warming as they dig out from another major snowstorm in 2011 and this one before Halloween!  But don’t believe your own eyes trust what those UN types tell you the weather is doing.

Government Motors stock is down over 28% since it went public to great fanfare less than a year ago.   There was also lots of bragging about “paying” off its government loan early even though that was with other borrowed money from the Feds.   The Feds still are the single largest shareholder behind the Union pension and health funds and they can’t seem to find the buyers for that stock.   While this is going on GM just granted a bonus of 5 grand for each union worker and that awful low salary for the new hires was raised substantially.  I mean did you really think that was going to last?  Hope all you taxpayers are enjoying your terrific investment for the UAW.

Still amazed at how the phone works.  You speak into a transmitter where the vibrations of your voice in the atmosphere is somehow translated into electronic signals on the electromagnetic spectrum.  Then that sound/electronic transmission makes its way through miles of hard wire lines and through switching stations and somehow ends up at the phone of the person you are talking with.  Those same lines carry many other conversations at the same time yet yours is distinct somehow from all those others and gets re-coded from electronic pulses to sound waves again when it arrives at the receiving phone.  When you think about it it is truly magical and since most of us can’t comprehend how that works.

Speaking of the phone you might like to know that when Bell first tried to interest investors in developing the phone for commercial use he was rebuffed.  They did not view it as a technological breakthrough.   To them it was just a fancy toy.  Their view was that for serious matters people could send a telegram if speed was important or even a hand written letter.  They asked why anyone would want to talk on a phone for any length of time.   I guess they didn’t think about the market for teenage girls.

When the guy in the White House announced the final withdrawal of troops from Iraq I never heard so many “I’s, me’s, my promise, my policy”.   In fact you will recall that the timeline for the removal of troops was done under Bush during the fall of ’08.  Forget whether or not it was a good idea then or now it just irks when someone tries to crowd in the front of the line for credit for other’s work.  I just hope we withdraw our money along with our troops.  Why do we owe the Iraqis anything? 

Its only about 7 weeks to another Christmas ladies.   Oh and don’t forget that little Thanksgiving buffet before then.

The teachers will all earn their money today with the kids being so excited about getting out of school and home to start their Trick or Treating.

Best pancakes ever are those served at the entrance to West Yellowstone Park in Montana.  It is the entrance least used by visitors in the far northwestern portion of the park.  Almost everyone comes from the east or south to enter the Park.  Those pancakes are thick, fluffy and light to the taste and go great with bacon, ham or sausage.  Those with a steaming cup of coffee is a wonderful way to start the morning and get your cholesterol shot for the day.

Remember the old saying about being careful what you ask for.  One wonders what those protesters on Wall Street would do if they got their wishes?  I mean exactly how would they go about divvying up all that wealth they made the 1 per cent surrender?  How would they make sure it was shared equally?  You think they would form a committee to do the work and would that committee agree unanimously on the solution?   One wonders how much of that wealth would deteriorate to nothing while they argued about what to do with it?  Since they don’t like banks or debt they would have to use nothing but cash and we simply don’t have that much physical cash on hand to dole out.  Wonder if they ever thought of that?

The best long-term foreign policy we could have for the next generation would be total energy independence.  Fortunately we now have that ability with the shale formations and the oil and gas available there.  We should do that and make it a national priority.  That would sure reduce the need to be so concerned with events in other parts of the world and reduce the influence of the Mid East and folks like Chavez or China from applying pressure on us to do or not do certain things down the road.  It is in our strategic interest to do this and for our kids.  It will save us enormous sums of money and allow us to project our power thoughtfully and carefully in the future.  Go natural gas, save the US.

“We will either find a way or make one”.   Hannibal  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

Let’s explore some memories and the Alice In Wonderland headlines of the day, along with criticisms and observations of human foibles.

Those poor folks in California are having to bow again at the alter of the tree huggers.  First it was some kind of smelt fish that caused water restrictions for farmers and ranchers.  Now those Feds have a new one, the sucker fish.  There very name sounds so disgusting but by golly we are going to protect it regardless of costs to the economy and certainly at the cost of those farmers.  I would love to hear the hard evidence at a trial about exactly how the extinction of this fish would destroy our world.  I mean over the eons more than 90% of all the species of life on earth that ever existed have become extinct with only a miniscule portion remotely attributable to human action.  Most bison are gone.  But would those folks on the Great Plains really like millions of them roaming all over the land breaking fences and blocking road, bridges and railroads?  But never mind logic, common sense or science the religion of the tree huggers rolls on.   Will someone ever point out that the Emperor is not wearing any clothes?

Don’t mind arguing with someone who understands the facts but it is annoying to listen to those who are so far off on their facts.  Heard a protestor on Wall Street (with encouraging shouts from the crowd) that it was horrible for a hedge fund manager to make 5.9 billion.  They seem to think and surely articulate an argument that these people are using their money and the money of other very rich people to invest and make these millions.  First those profits are for the hedge fund itself.  Those profits go back to the investors in the fund.  Yes, I am sure the manager makes tons of money on the deal but the “profits” are not theirs alone; the overwhelming bulk of profits are disbursed.  Second, the investors are those pension funds, the endowments and even governmental funds.  Harvard and Yale both have about 40 billion endowment funds.  Where do you think that put that money?  It is not hiding under the school’s president’s mattress.  They invest with those hedge funds just as thousands of other public employee funds do.  Yes, those funds are for the “little” people.   Teachers, firemen and all public employees better hope those evil hedge funds make lots of money to fund their retirements.

Someday I want to understand exactly how it is that the full moon always rises at sunset regardless of the time of year.  I mean in winter in our latitude the days are only about 10 hours long and in summer they are about 14 and that is quite a difference but the Moon and Sun dance in harmony regardless of the season.  I know it must have something to do with the tilt of the earth on its axis and speed of rotation of earth.  But still it is another reminder of just how special a place we have been given in all the known universe.

How would our economy look today if we had not bailed out anyone?  No banks, not Government Motors, AIG, Fannie or Freddie.  We could have guaranteed the depositors for less money and let all the creditors take the hit as they should have in a free capitalist market.  There would have been some pain for sure but we would have recovered by now.  Other or new banks would have stepped in to fill the void, GM would have filed Chapter 11 and emerged on its own feet, smaller but viable as could have Chrysler.  Those investors with AIG, Fannie and Freddie would have taken a loss as they should have for the mistaken investment.  The housing market would have been down but money never sleeps and home loans are still a very good loan to make and the private market would have wanted that.  Yep, loan standards would have gone back to what they should have been and you would need to be credit worthy to get the loan.  In spite of the pain it would have caused, can you make the case that it would have been worse than what we are dealing with now and will continue to deal with for the foreseeable future?

NATO is known as a Western alliance to protect itself from Soviet attacks from eastern Europe.  It actually had its birth from the Brussell’s Pact made on a couple of years after WWII between France, England and Belgium to protect themselves from attack by Germany!  I mean Germany was still just a rubble heap at that point and the full dimensions of the Cold War weren’t yet clearly defined.   It was the aggressive, hostile and threatening actions of Stalin and his socialists cohorts over the next couple of years that made the West realize the true danger and upgraded the Pact to NATO.   Then the big issue was whether or not to re-arm Germany.  The Germans were reluctant for many reasons.  For one thing they were still cleaning up the mess of a country they had and France in particular didn’t want them armed for fear of a German revanchism.   Another ten years down the road and Germany was re-armed to help be a bulwark against the Soviets.  The wheel turns.

The recent Bank of America fee for debit card charges reminds of some of the history of banking innovations and changes over the decades.  There used to be a few what were called “custodial” banks around.  They dealt almost exclusively as trustee for estates created by probate or trusts.  They handled money for other people.  Mellon was one of those back when.  There were the commercial banks that had regular consumers and there were the ones like J P Morgan that mostly were bankers for other banks, companies and even governments.   In its heyday it was a real mark of distinction to have a checking account with J P Morgan.   They wouldn’t accept just anyone off the street as a depositor.  It was almost like applying for membership in a private club.  To issue your personal check on a Morgan account signalled to the payee right off the bat that you were a heavyweight.

“A good name is more desirable than great riches…”  Proverbs.  www.olcranky.wordpress.com

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2 Cents Worth On Life Its Ownself

The gray matter churns and turns out these thoughts even when we try to restrain them.  So let’s see what comes out of the lost and found bin this week.

Don’t know about you but that recent ad by Ford with the guy talking about how he wanted to buy a car from an American company that didn’t take government handouts and that failure was a step along the path to maturity and character really struck a positive cord with me.  It was right.  It reflected the way I feel about Government Motors and Obama Chrysler and the obscene way the Feds pounded that Chapter 11 through the courts.   Very ominous that they pulled the ad after “complaints” from the White House.   The White House can write an op ed if they want or hold a news conference stating their position but to employ that kind of pressure on a private company is unconscionable.

Now the Fed is embarking on Operation Twist to manipulate the bond and mortgage markets even more.  They and the Treasury have already pumped trillions into the economy in ill-advised schemes to bolster the economy, a state planned and dominated economy, with miserable results thus far.  They used to refer to Bernancke as “Helicopter Ben” due to his reference to just throwing money out of a helicopter to stimulate the economy.  That analogy is so yesterday now.  It doesn’t get close to describing the actions of the Fed under him.  A more apt description would be “Bomber Ben”.  It would take a B-29 or B-52 to unload the amounts of money he has bombed onto the economy.  I just wonder where the target area was because I never saw any of it floating down my way.

The next time you hear the Left shouting about green jobs just think Solyndra.   The Feds under the Energy Department are acting just like hedge funds or venture captilists.  I mean those are supposed to be those mean guys on Wall Street.  They accuse Wall Street of playing favorites all the time but if you are a big fund raiser apparently that is ok and you are not trading on inside information.  I think it is a terrible idea for the Feds to be our collective stock broker picking the risks in the market to back with our money.  Let the government do the things it is authorized to do under Article One of the Constitution and not else and we’ll all be much better off with our accounts.   Oops, this just in, the Feds unloaded another 1 billion of our money into two more solar outfits just yesterday.  If those are good deals why aren’t private investors willing to put their money on the line?

Speaking of Warren Buffet’s secretary, one wonders just how much she makes.  You gotta believe his secretary is at least in the $150,000.00 range.  Probably in the 28% range but that only kicks in after well over 100k in earnings.  She is bound to itemize her deductions and probably has a child or two.  You know she has received stock options and bonuses over the years and cashes those in now and again.  Her effective rate is probably well below 20%.  Of course we don’t know the exact facts but those are reasonable estimates.  Warren baby pays most of his taxes on capital gains which are taxed at 15%.  His salary will be taxed at the regular rates.   Warren seems to forget that the capital gain rate is applied to millions of other people in the country trying to become as rish as he is and create new companies and ideas that peopl want.  Hell, like lots of the world we shouldn’t charge anything for capital gains to encourage growth.  Unless we finally get to a flat tax he should stick to investing and quit trying to preach.  His congregation is getting restless.

It seems that sometimes Mother Nature knows just how and when to give us a little pick-me-up.  Ever had those times when things are bit troubling but then just outside the window you see a Cardinal or Bluebird (not a bluejay but the real thing) or hearing the distinctive honk of the geese on the move and go out to see those Vees flying high above.  There is something always truly refreshing about those moments.   Nice things do happen even when we are in the midst of concern.

Why is it that Oprah Dr. Phil and The View and all those other shows of similar stripe so often remind me of my childhood when my mom used to listen to “Queen For the Day”.  It was a radio show that moved to TV for a few years in the early 50’s.  Some poor soul would come on and tell her story of woe.  The more woe the better.  They always cried and if the could get the audience to cry also that was like hitting the brass ring.   Bad marriages, illnesses, lost jobs, troubles with children were all fodder for the show.  At the end the one with the saddest tale of all would receive a prize or prizes.  Ironing boards, washers, dryers, TV’s and clothes were always the standard reward but sometimes they would go overboard with a car or some such.  Not much new in the media world after all.  It is an old format.

No one knows for sure how we ended up with the 24 hour day.  It could be whatever we wanted it to be, ten hours or 15.  Long, long ago people watched and paid more attention to the sky; it was cheap entertainment after all.   All the days of the week are named after the Sun, Moon and planets.  Then we have the signs of the Zodiac.  The ancients thought of the day as two parts, day and night and early own began to divide it into segments.  But much later we did the 12 hours of daylight and 12 hours of night, regardless of the length of them.   That 12 came from the Zodiac.  Times didn’t become uniform around the world until the 19th century and the railroads came along needing uniform times for scheduling.

“This Republic was not established by cowards; and cowards will not preserve it.”  Elmer Davis, American writer.  www.olcranky.wordpress.com

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GM IPO–A Sure Bet For Profits?

Well, we’ll soon see if all those who advocate big government, government intervention into every aspect of commercial life and the market and crony capitalism are willing to put their money where their mouth is.  The GM IPO to offer stock to the public will be coming out soon.  They have already filed the paperwork with the SEC.  I wonder if all those Hollywood types will be writing big checks for shares to show their support for Government Motors and the whole concept of Government, Inc.  I mean Robert Redford and Spielberg by themselves could probably fund the entire offering.  George Soros might be willing to throw in a few hundred million.

The lovers of big government and union power were ecstatic with joy when GM got that huge bailout by the Government.  Don’t confuse what Bush did what the current gang did.  Bush made a relatively modest loan of a few million.  It was the gang that can’t shoot straight that upped the ante by scores of billions and opted for a direct government take over of the company.  The massive bailout and Chapter 11 and government ownership was the now administration’s doing.

Let’s see, they violated numerous provisions of the criminal sections of the Federal laws regarding bankruptcy; acted like thugs in strong arming certain out of favor creditors for no other reason than they expected their rights to be upheld in a court of law; they bowed down and gave the keys to the safe to the UAW for money for everything, including those very high-end benefits for health care and pensions.  Then they dictated who would be on the board of directors and who would fill the top management positions.  They also “urged” that building of the Volt for bolster their green agenda credentials.  They have propped that up with the tax credit for it; this was after the cash for clunkers program to bribe folks to buy government cars.  They have subsidized car loans by taking over GMAC and then allowing it to take over another company with borrowed money from the government. 

Of course they toot the horn that GM made a profit last quarter.  Well, blow me over with a feather!  With no debt anymore, government tax credits the other competitors having to make do own their own, they made a profit.  The real question is how could they have lost money.   Of course that profit and future profits at least as far as we can see now are completely dependent on government subsidizes of one fashion or another.   Will folks actually buy stock in a company whose business plan depends on government money forever? 

Naturally, the liars in the Administration, starting at the top, maintain that they had nothing to do with “running” GM and won’t in the future.  Well, in the prospectus that GM is required to file with the SEC the facts are laid out a little differently.  They have to be forthcoming there are the guys at the top could be sued along with the lawyers and accountants.  So they have pretty honestly laid out just how much the government is in charge of matters. 

The Prospectus states that the Treasury does have the power to control top management and require changes.  Treasury has the right to be involved in the operational decisions of the company including the selection of vehicles it will produce.   GM warns that it might have serious problems negotiating with the UAW soon.   This in spite of the wails or anguish from the UAW and the white house about all  the sacrifices it has made to save GM.  No one should be surprised by any of this but it is getting virtually no coverage in the media.   Treasury runs the darn company.  I can’t imagine a worse business proposition than partnering up with the Feds on anything.  It is always their way or the highway.   Their way is blown by the political winds not sound business judgment.   It will be fascinating to see who really will buy these shares.  The prospects for future profits look very slim.  Of course Treasury might advance more money to pay dividends to boost the stock worth for a while so the whole thing will look successful and draw in even more suckers when they make their next offering.   Private bankers manipulating stock prices that way would be in a heap of criminal trouble.  But Treasure with Geithner in charge probably wouldn’t flinch at running close to the edge on the  law.  It sure wouldn’t be the first time they did it.

Even after the IPO if it is successful Government, Inc. will still be the majority shareholder and in control of the whole shebang.   Good luck with that.   I think I will watch from the sidelines  on this one.

Columbia University in New York city started out with a different name and location.  It is now in the Harlem area.  Originally, it was in the southern end of Manhattan.  It was called King’s College.  Several of our Founding Fathers attended it including A. Hamilton.  After the Revolution it was decided that it really shouldn’t be called “King’s College” anymore.  Later it made the move north.  www.olcranky.wordpress.com

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Dog Bites Man And Govt. Motors Pays Itself

Those headlines would deserve  equal credit as to newsworthiness in a sane world.  But over the last 18 months or so since the current administration took the reins of power such news is heralded as the most wonderous of events.  I watched some of the “ceremony” at GM this morning as they breathlessly announced their repayment of 5.8 billion to the US and Canadian governments as though that was some stupendous achievement.  There was lots of hoopla and all that was lacking was the confetti and balloons.  All that happened in reality was that the government paid itself.  Not one darn bit different than if you wrote a check to yourself out of your checking account and then deposited it right back.

The fact of the matter is that Government, Inc. owns GM.  It is merely paying itself.  The fact that they have been able to make a profit should come as no surprise to anyone with an IQ higher than weeds.  You could take almost any major company from the Standard and Poors 500 that had lots of debt and do the same thing as occurred with GM.  I mean the “new” GM came out of the government mandated Chapter 11 with nothing but assets.  All its debts were left behind with the old GM.  Is it remarkable at all that given that scenario it has made a profit?  The surprise would have been if it made only a small profit. 

Don’t forget that in addition to the 5.8 billion in direct loans during the Chapter 11 that GM had a capital infusion of about 50 billion.  Give me a company with no debt and a fresh 50 billion to play with and I will guarantee you a profit even if I was selling buggy whips.   Also don’t forget that GMAC its partner in crime also got I believe it was over 40 billion in Government funds to continue its financing arrangement.  This was conveniently done under TARP when GMAC during the holidays of ’08 was converted into a “financial” institution with a bank charter from the Feds.  

The power brokers and czars in Washington must think we really have a short attention span or they are contemptuous of our ability to reason.   Speaking of czars, you have surely noticed that Mr. Rattner who lead the government team doing all the negotiating with creditors of GM has run into his own buzz saw of accusations recently.  Really nice to know we had such an honorable fellow carefully selected by the White House to run that show and ram through the Chapter 11 of GM.   This entire situation is another example of the danger of the too big to fail syndrome that has consumed Washington since the fall of ’08.  The financial regulations being proposed by Dodd, of Countrywide fame, does not solve this problem but only exacerbates it.  Please read it for yourself.  The fine print gives authority to bureaucrats appointed and funded by the politicians  the say to determine who is a systemic risk and what should be done.  It allows them to determine who will be paid and how.  Worst of all it allows for unlimited government backing of the credit of a failing company.  If it quacks like a bailout, walks like a bailout, it is a bailout regardless of the headline news and the disclaimers of Dodd.   Geithner defends it so you know it must be a really bad idea. 

Every time you buy a GM car or part you are supporting the gang in Washington.  It is not a private company but a captive of government and in turn the auto unions which were the real raison d’etre behind the bailout of GM in the first place.  I hate it that I can’t support them anymore.  Years ago I loved my Suburban.  Unfortunately they have become part of the problem with our economy and government and not any contribution to the solution or a better path for the country.  The Democrats got themselves even more loyal ground troops for the political wars.  They already had the overwhelming majority anyway but now they have tens of thousands of cadre to send out on the political warpath.  Even better for them every GM car sold is nothing more than a political contribution for the largest political PAC supporting Democratic candidates there ever was.

The great pyramids in Egypt are quite something to behold.  More remarkable is the preciseness of the engineering that was employed with only the most rudimentary of tools. They had no GPS or laser  controlled measuring or surveying devices.  Line of sight, plumb bobs and string and knowledge of basic geometry is what they worked with.  The Great Pyramid near Assuan was about 150 yards high and was about 250 yards wide on each side of its base.  Those blocks weighed a lot.  There were 7 yards long and hand to be man-handled to the top.  Amazingly, the engineers were so good with their limited tools that the mean error of the base line was only 6/10’s of an inch in length and 12 seconds in angle from a perfect square.  I wonder if we could do that well today.   http://www.olcranky.wordpress.com

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Supply Side Economics From Centuries Ago

With all the bailouts and Stimulus money floating around and the unimaginable amounts of money printed by the Fed being injected into our economy there is renewed debate about the best way to turn our economy around.  Many, especially those in the current administration, tout the idea that we need to keep pouring on the money machine or things would be worse and that only Government, Inc. can lift the economy from its depths.  Of course that is a political view as much as anything sense there are those who love big government and view it as benevolent and further they like the idea of folks being dependent upon government and placing all their faith in government.  Paul Krugman is an advocate of such an approach.   They are completely dedicated to the Keynesian model and method.   That goes well beyond merely deficit spending for a short period.  The government as the engine of growth and prosperity is their long-term goal.   Consolidating command and control of the economy into D. C. is their vision of Nirvana.

Those of this view are already talking about even more stimulus and more government programs to revive the economy.  They have floated the idea of bringing back a WPA type program.   So far all the stimulus money has done the way I see it is to prop up banks and financial institutions that should have been allowed to fail and go out of existence, create even more government jobs, facilitate the takeover of the bulk of the auto industry and make the granting and marketing of mortgages a Federal government program and all the people with mortgages the wards of the State.   Remember that more than 90% of all mortgage loans these days are made directly by the government (FHA, VA, etc) or held by the government (FHLB, Fannie and Freddie).   That can’t be a good thing.   The only growth industry these days is government.  D. C. continues to grow, literally in population and the amount of our national resources that it consumes and the stimulus money has been utilized thus far to primarily attempt to bolster payrolls of other government employees at the State level.   Now the push is on to completely control and regulate the health system, not merely insurance but the delivery of medical services.

Others prefer a so-called supply side approach to fix the current problems and as the best long- term program for expansion of our economy and the continued improvement in the standard of living for the people.  That approach basically calls for less taxation, less regulation and a tax code that offers real monetary incentives for investment into new business ventures large and small.  That was the approach that Reagan brought with him to the White House in 1980.  We had to suffer the pain a bit by squeezing out the inflation and stagflation that had gripped the country for the preceeding decade.    That same philosophy with a few ups and downs was followed by Clinton.  He mostly followed it because the Congress had enough Republicans that they wouldn’t allow tax or budget changes that would gut that supply side approach.  In fairness I believe he also thought it was a pretty good way to foster growth in the economy.  We had remarkable growth and upward mobility throughout the ’80’s and the ’90’s.  It was Clinton’s administration that repealed the Glass-Steagal Act to allow the commercial banks and investment banks to merge into one being and perform the complete gamut of financial services to the populace.  Another day we can discuss the cause of the current problems.  The biggest issue was 9/11 which is mostly forgotten by folks now.  The economist seem to particularly overlook it.  We were shut down and had to respond some way just as we did after Pearl Harbor.  Government mandates about how money could be loaned and who it was loaned to also poured poison into the economic system because so many of those mortgage transactions were not made on sound financial reasoning but to fulfill government edicts.  We reaped what Government, Inc. sowed.

Trying supply side economics is not something really all that new although to listen to some you w0uld think it had never been tried until 1980.  They may know a lot about economics but they sure haven’t studied their history. 

In the mid 5th century the Roman Empire was beginning to crumble. It had already been assailed by Attila and other barbarians and was now permenantly divided into the Eastern and Western Empires.  Things were rather bleak to say the least.  Roman power was diminished but it still had some swagger and the idea of a Roman Empire continued to command respect even if no longer deserved as before.   It was a weakened giant.   In this period one more citizen stepped forward to assume the mantel of the purple and rule as emperor over the Western empire, his name was Majorian.  He probably was the last of strong and decent emperors.  He wrote the Conscript Fathers of the Senate with his pledge to restore Rome.  They were called conscript fathers because it had been viewed for centuries in the Roman world that the nobles had a duty to fulfill toward the Empire.  They were “conscripted” to fill that duty as Senators to give back for the largesse they received as Roman citizens from the Empire.  In those days many of the subject peoples still under the rule of Rome were required to not only pay taxes for mostly local use but also had to pay an annual tribute to Rome for the use of the central government.  Upon taking power he required tax collectors to deal honestly and rooted out corruption and he also forgave the annual tribute payments to Rome from the provinces of Gaul.  The past due tribute was forgiven and the future ones put on hold.  Lo and behold,  the revenues to Rome actually increased.  The people had felt repressed and in despair over the burden imposed by these tribute payments; now they had hope for the future and felt their labors would be rewarded.  The economy thrived for those brief years under Majorian.  Alas, the decay and decadence of past regimes had eroded the foundations of Empire too far and the structure continued its decline.  There really isn’t anything new under the Sun.

“Dictators always look good until the last minutes”  T.  Masaryk   http://www.olcranky.wordpress.com

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2 Cents For These?

The following are worth what you paid for them but the asking price is still 2 cents per each as they say on the loading docks.

When you have spent an hour on the tarmac with no word from the cockpit about take off or pulling up the the gate, you wonder if those pilots were “distracted” with their computers and heated discussions about company policy.  Like the policy for keeping passengers informed.

The current health care proposal to have a public option but with a provision to allow States to opt out of the program has one glaring fault.  The folks in Kansas might not want to have anything to do with a Federally run and mandated health care program and decide not to participate.  But, but, but, the new Federal taxes of all stripes being implemented to pay for the program will still be in place so those good folks in Kansas will still pay the taxes and the people in Michigan will get the benefit of the program with a subsidy from Kansas.  That’s a real Hobson’s choice opt out if I ever saw one.

One wonders sometimes if the US will survive the length of the Roman Empire.  The myth of Remus seeing the 12 buzzards flying over Rome supposedly meant that the empire was to last for 12 centuries and that turned out to be pretty close to the facts.  Will the US enjoy ascendency for 12 score of years?

You watch the news and see our troops and allies training Afghan soldiers with modern weapons and how to use proper infantry techniques.  Then sometimes they are firing larger weapons like machine guns.  It is usually some scruffy looking fellow who looked like he just came in from the fields.  Am I the only one that has a concern that all we may be doing is supplying and training our future adversary on the field of battle?

Now our good friends at GMAC are back asking for more money.  This time it appears to be about 3 or 4 billion more in addition to the 12 billion it has already received to make loans for Government, Inc.’s autormobile industry.  Hmm, let’s see if GMAC went out of business then folks would have to get their car loans from a local or regional bank or even a credit union.  Wouldn’t that be a good deal for everyone.  I thought we were all worried about those too big to fail banks.   Why don’t we let the local banks have that business and stir the local economies.  Government, Inc. is subsidizing GM and Chrysler and they are subsidizing GMAC and there is no end in sight.  You really think the UAW will ever agree to meaningful changes to their contracts to make our auto industry truly competitive as long as Government, Inc. will be there to pick up their tab with taxpayer money from throughout the nation?

Interesting to see that someone finally is reading our Constitution.  Note the recent letter from some members of Congress to the guy in the White House that he can’t accept the Noble prize without approval of Congress.  They are right.  Hate to rain on anyone’s parade but one would hope that occasionally the current gang in Washington would follow the law and the press would hold them to it.  The provision is not comlicated.  Art. 1, section 9….”No title of nobility shall be granted by the United States: And no person holding any Office or Profit or Trust under them, shall, without the consent of Congress, accept of any present, Emolument, Office, Title, of any kind whatever, from any King, Prince, or Foreign State.”  It is not a big deal if followed but it is our law and either it should be followed or not.  Maybe we will ignore it jsut as we do our own immigration laws and pretend they don’t exist.

Speaking of Art. 1, section 9, it requires that there be a “regular Statement and Account of the Receipt and Expenditures of all public money”….. Do you think the off books accounting used for Medicare, Social Security and soon the other like comports with that Constitutional requirement?  Don’t we have the right to demand under that section as legitimate an accounting as is required by other public companies regulated by the SEC?  Government, Inc. official would be prosecuted for fraud if that were held to the accounting standards of the private market.   They make “material misrepresentations” with every alleged budget and accounting they submit. 

Rather than give money to big banks and GM why not use that money to fund big increases in the NASA programs.  It would create thousands of new and well paying jobs.  It would continue the true nature and purpose of Man to venture out and test the new and explore.  It would have side benefits not yet imagined.  We could send a manned crew to Mars.  The scientific knowledge alone would pay for it down the road.  What are we getting for our money in GM or Citigroup?

When you go to the hospital and they make you put on one of those darn gowns with your rear end exposed wouldn’t you prefer to be dressed as you like and tell them you will be glad to undress for their exams or check ups everytime they need one?  I mean those gowns are not a medically necessity it is for the convenience of the staff which I appreciate but gee whiz.  They are so demeaning.  I would rather dress and undress 8 times a day but be able to look normal between times.  It would sure elevate my mental state, don’t know about you.   Then you probably have a cuter rear end than I do.

How is it that the Holidays seem so far away at Easter and then you get hot and before you can blink they are only 7 weeks away?

“The Democratic Party has a vested interest in depression at home and war abroad.  Its leaders are always troubadours of trouble; crooners of catastrophe.  Public confusion on vital issues is Democratic weather.  A Democratic President is doomed to proceed to his goals like a squid, squirting darkness all about him”….  Hard to believe but that is from the New York Times, February 1959.   It could apply to their headline for tomorrow.    http://www.olcranky.wordpress.com

 

 

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Clunk Goes The Cash, Up Goes The Votes

I think it is quite important that the US maintain a strong heavy industry and manufacturing base.  I have nothing against the auto industry as an industry and believe it is a good thing that we make many products for consumers here and around the world.  I am not supportive however of Government, Inc. owning and operating that industry or any other industry.  Since the Government is the majority owner of both GM and Chrysler and that ownership came about to foster the perpetuation of Democratic politicians, it is no surprise that they are handing out taxpayer money to keep that symbiotic relationship between the unions and the Democratic party strong.  I just don’t abide the hypocrisy of it all.  It would be a lot more honest if Government, Inc. had simply written a check to the UAW for 1 billion rather than go through the charade of the cash for clunkers program.   Those companies were saved strictly to benefit the UAW and not the shareholders or consumers or anyone else.  Those UAW members and their families represent hundreds of thousands of volunteers, voters and fund raisers for the Democratic party and they are getting their reward for delivering the votes.  Likewise the union is getting its payoff for delivering those votes and no doubt remind the Democractic leadership of those votes on a regular basis.  Now the program appears set to expand again for another couple of billion for the UAW.

I realize that the White House and Democratic leaders think it would be unseemly to write a check direct to the UAW and doing this program gives them the cover of saving US jobs and rebuilding communities and having the loans of the government repaid, blah, blah, blah.   I wonder why we aren’t doing the same thing for the furniture manufacturing base in North Carolina.   I think I know the answer to that one.  There are no unions in North Carolina that deliver votes.   Why don’t we all get a check to go out an buy a new bedroom suite or living room layout for our homes?  Why not a clothing allowance check for the ladies to purchase new outfits at the Gap or wherever they buy those things?   Again, no union votes to be had.  While we are handing out billions to favor only one segment of our economy why don’t we use it to defray medical costs.  Is anyone surprised that people went out to buy new cars that allowed them to trade in a car that was worth maybe only $1500 for a $4500 credit?   Of course that money like all money is not free.  The government doesn’t make anything of value.  It collects taxes that belongs to the people.  That money that is being doled out comes from other taxpayers to benefit a few and the UAW.   Someone will be paying for that free lunch, like someone always does.  

I wonder how much fraud will be committed with this program.  Sending in people with clunkers to buy a new car with financing from GMAC (government) and then they walk the note and the car disappears into the nether world to be resold again at a profit since nothing was ever really paid for it in the first place.   Think about the possibilities for fraud.

Of course at the same time the administration will take credit for the bump in the GDP during the third quarter with all these sales.  It merely recycled printed money through the system to make itself look better without really doing anything that created real products and services that people want and can afford to buy.   You are reminded that last week while the  government on the one hand was doling out this billion for clunkers it was borrowing over 200 billion with the bills and notes auction.  That is the amount for only that week.  Treasury is selling over a trillion dollars worth of debt instruments this year alone.  In addition to that the Fed is printing up money out of thin air and passing it into the system.   Those debts and that worthless money will have their consequences for us, they always do.

Only yesterday the administration talking heads began laying the groundwork for increasing taxes on everyone.  They would no longer totally rule out tax hikes.  Of course those tax hikes won’t come next year since it is an election year.  They will be brought up in 2011.  They can’t tax only the rich, however they decide to define that term, because that won’t come close to reducing the deficits.  But not to worry the union votes will have been locked in for another voting season.  They should do a similar program for family vacations.  Las Vegas and Orlando are hurting along with many other resort areas.  The SEIU is very strong in those places  and I am sure some of the Dems will wake up to that fact sooner or later and realize they could use those votes too.  Why not give out $2500.00 per family for the family vacation?  That would stimulate all those local economies and the SEIU members would be very grateful.  Hey, its free money, it came from the government.  We didn’t have to pay for anything.  Such a deal.

Be very, very leery of any prognostications of the eonomists or talking heads about the economy.  There is no historical comparison to what we are doing now with our debt and the printed money.  Nothing from the Depression or WWII has any relevance.  The scale of the debt increase is off the charts, literally.  Likewise the amount of new money printed up has no historical base for comparison.  We are in uncharted waters.  As any experienced mariner would tell you that is always dangerous waters.   www.olcranky.wordpress.com

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