Narcissist in Chief Gives Himself a B+ for the Year

Jake Tapper Reports:

“Good, solid B-plus,” the president said. 

Explaining, he said, “we have inherited the biggest set of challenges of any president since Franklin Delano Roosevelt. 

“We stabilized the economy, and prevented possibilities of a Great Depression or a significant financial meltdown. The economy is growing again.

“We are on our way out of Iraq. I think we’ve got the best possible plan for Afghanistan.

“We have reset our image around the world.

“We have achieved an international consensus around the need for Iran and North Korea to disable their nuclear weapons.

“And I think that we’re going to pass the most significant piece of social legislation since Social Security, and that’s health insurance for every American,” he concluded.

Pressed by Oprah as to why only a B-plus, the president said, “B-plus because of the things that are undone. Health care is not yet signed. If I get health care passed we tip into A-minus.”

If this doesn’t scream sheer ego and arrogance, I don’t know what does.  Most intelligent individuals usually know that when a question of this sort is thrown at you, the proper response would be “I believe the American people are more apt at giving me a grade than I would be…” But of course, Mr. Mirror, mirror on the wall, had to answer and gave himself a high score.

If recent polls like Gallup or Rasmussen are any indication of how the American public actually feels about him and his grade, it would seem that he really needs some extra credit or maybe some one-on-one time with his professor, the public.  Obama’s approval rating has taken a nose dive while he sits at only 44% approval and he technically still has 1 more month until he reaches his one year mark.

All of the things that Obama mentions are outright lies as far as being accomplishments or things that most people look at much differently than he does. 

Take for example the assertion that he has stabilized the economy; many argue that just because stocks are rising that does not mean the economy has stabilized or gotten better.  We are on unprecedented territory and the unemployment rate is still in double digits.  Stocks also correct themselves for inflation which is what would appear to be happening, as well as the fact that many businesses have had to cut their workforces and become more efficient with less people.  For now, companies are reaping the rewards of more efficiencies, but eventually that will plateau if they want to move forward and stay ahead of their competition. There is still a chance that the economy could experience a double dip, and if it doesn’t, the most likely situation will be heavy inflation or Japanese style deflation with no growth for years to come.

How long until people get fed up with his blame game rhetoric that he has inherited this situation?  He has inherited the situation from every corruptocrat dating back more than just Bush’s 8 years.  We should throw in Greenspan, Clinton and even Carter for that matter if we want to really get at the heart of the issue.  He should also include himself since was in fact legal council for ACORN and lead the charge in the 90’s to obtain a settlement on a lawsuit indicating that credit scores are apparently discriminatory and the CRA should be expanded – hence subprime… I could go on, but I’ve vented enough on that topic.  I just can’t stand people who continuously play the victim, meanwhile, as they point the finger, opportunities and life pass them by.  I have no respect for individuals who can’t take responsibility – and this is supposed to be the leader of the only super power left in the world!?

I’m not sure where he comes off saying that we are pulling out of Iraq?  I’ll believe it when I see it.  Seems like he is carrying out Bush’s policies for now.  I think that stating his plans for Afghanistan are the best are delusional at best.  Maybe, if he had listened to his general in the first place, we wouldn’t have had so many killed over the couple of months (more so than any time when Bush was in office).  He still did not give them the # of troops requested but merely cut the request in half – I will forever call it Halfghanistan.

We have reset our image around the world? Funny, those whom I know living abroad who were excited about Obama, even after I tried to tell them the truth about his record and his ideology, are only now realizing what a disaster he is.  He continues to snub our allies, bow to other leaders, and apologize for all of America’s perceived wrongs on his travels abroad — this has made him a laughing-stock.  The liberal media lets him get away with it, but I don’t expect it to continue forever, if he continues to decline in the polls — eventually real sentiment will bubble to the surface.

When has Obama done anything about North Korea or Iran? His foreign policy seems to be avoidance.  He has not called for harsher sanctions, he is not using anything other than words to try to disarm Iran.  While he stares at himself in the mirror and relishes the media attention, Iran is creating weapons of mass destruction with their plutonium/uranium enrichment plants.

Health care legislation will definitely be significant but significance doesn’t always mean good.  It is absolutely maddening that those in DC could care less about the polls on health care. Most of America disapproves of this bill and the way the government is handling it.  I’ve seen the way government has screwed up business, the economy, and everything else it has touched, there is no way I want them making decisions about my health! 

So continue to grade yourself a B+ Mr. Ego… I can only hope that one of these days somebody in the media has a ‘Come-to-Jesus’ moment of clarity and decides to do his/her job for the good of the country. 

I suspect that the true grade will come for Mr. President in November 2010 – EPIC FAIL.

Big Labor = Big Corruption; Jimmy Hoffa Would Be So Proud

It’s time to clean house!  I’d like to see a sweeping investigation into any and all big labor unions, “non-partisan” taxpayer funded groups, lobbyists, and major corporations that donate to politicians. 

Union bosses are still acting much like mafia characters, and some would argue that’s what they in fact are.  A union boss is admitting to using/exploiting his union members as political activists.   

An interesting admission by James A. Williams, president of the International Union of Painters and Allied Trades in Philadelphia, can be seen in an interview he did with the Philly Inquirer. It is an admission that confirms one of the things that anti-union folks have been saying for years, but one union officials are loath to admit.

While discussing the hard economic times, the Philly Inquirer asked how the recession was affecting the union. In his answer President Wilson admitted that his union uses out-of-work members for “political events.” Wilson mentioned that they lower dues to $1 a month after a member has been out of work for more than six months, but that isn’t just the kind hearted union looking out for its members. No, the union expects something in return for that lowering of dues. 

Would exploitation and quid pro quo be considered commendable by the bleeding heart liberals?  Union leadership has always been in the business of lining their own pockets and achieving their own objectives, no matter who gets stepped on along the way, including their own members.

Obama has long been a union advocate, as are many other Democrats.  Unions became part of the Democrat voting block after FDR focused his efforts on creating certain groups that could be used for votes.  Big labor, since that time, has been a large contributor to the DNC.  Obama has spoken at the UAW, SEIU, and AFL-CIO conventions numerous times and most recently this past week.  The latest push for union control of ports and the fact that Obama supports easing the rules of union organizing should give anyone pause. 

President Obama gave a corker of a campaign speech yesterday at the AFL-CIO convention in Pittsburgh, promising to deliver on his promise to ease the rules for union organizing. If you want to know what this means in action, consider the current Teamsters play to control California ports. 

[…]

The American Trucking Association sued to block the rule, and with good cause. Federal law has long pre-empted state and local regulation of interstate trucking “prices, routes and services,” for the reason that international and interstate trade depend on uniform regulation. The courts have recognized this, and even the Ninth Circuit Court of Appeals found that the new port rule had likely violated the Constitution’s Commerce Clause, which led to a court injunction earlier this year. Trial on the merits of the rule has been set for next year. 

[…] 

Unionization would give the Teamsters enormous bargaining leverage over work rules and pay, sharply raising the cost of moving goods, as well the power to shut down ports in a strike. Some 32 trade groups, from farm organizations to the National Retail Federation, signed a recent letter to Mr. Oberstar opposing the legislation. The response of shippers would be to divert cargo to Mexico or Canada, or pass through an expanding Panama Canal for ports on the Gulf or East Coasts. California doesn’t need more reasons for business to flee the state. 

For a group who continues to point their finger at George Bush and the Republicans for the current state of the economy, it sure seems as though they would prefer the economy to stay stagnant and hand it over to big labor and government, two of the causes for our hardships now. 

An example of the sheer lack of morals and utter corruption that has corroded big labor for quite some time is the recent conviction of Jaime Enrique Feliciano, a 50 yr. old man sentenced to 25 years in prison for child molestation, possession of child pornography and the intent to manufacture child pornography.  So who is Feliciano?  He was the former district president of the California SEIU, a proud partner of ACORN.

It’s time to wake up and take control of our country again.  These big labor organizations and large non-profits that are acting as arms to the government, doing their bidding, need to be disbanded and swept clean.  People on both sides should be sick and tired of the corruption, the ponzi schemes, the pay-to-play politics, and the lack of consideration for the people of America.

Irrational Economics

I have to tend to believe that when there are so many unknowns and people believing there is an unending crisis, they begin to lose their minds.  Politicians and those in control of passing laws, creating new approaches to resolve the economic crisis, and regulators from financial entities, begin to create things willy-nilly to find a solution as quickly as possible.  These approaches, however, can be rushed and wind up making situations worse or just completely dumbfound the public.

Two recent examples of the lunacy regarding our markets are 1. the new creation of McG’s [sic] for the mortgage-backed securities much like what the GSE’s, Fannie & Freddie, dealt with, and 2. the Chinese government admitting that the US and Chinese governments are creating more bubbles to resolve the original bubbles.

HUH!?

I thought the point of this financial ‘Crisis’ was to find the mistakes and learn from them – not repeat them!?  When people perceive a crisis they either pull through with flying colors and act valiantly in the face of pressure, or they crumble and act irrational.  I think we are seeing the latter of the two.

McG’s would act as a government backed regulator, that would take the place of Fannie and Freddie, but their debt will not be guaranteed by the government, another similarity of the GSEs. The reason Fannie and Freddie crashed was due to it’s over-leveraged position and no government guarantee on their debt/credit risk.  There are arguments that the leveraging itself did the damage and that the government can be usurped to avoid the risk in the future if caps are put on the amount of debt and risk a company can carry.  Some other notes about McG’s: Interest and Credit would be split between bond holders and the McG’s.  Private investors would make profit from these McG’s, but taxpayers, who would establish the McG’s would receive nothing in return.

However, the full story on the notion of McG’s is best explained through a video clip from CNBC.  It’s a shame that more people don’t watch CNBC, but I assume a person has to have the stomach to watch markets, numbers, and finance.  Personally, getting my masters in Finance has been enough when it comes to listening to financial topics for hours on end.

There have been other concerns raised regarding this new idea from the MBA as well as some suggestions from Market Ticker:

This is idiotic. Let’s count the ways:

-A “strong regulator” eh? You mean like the FHFA? Fannie and Freddie had a so-called “strong regulator” that nonetheless allowed them to lever up at 80:1 (or 200:1 depending on how you looked at their books) which was clearly outrageous on its face and led to their demise.
-That same “strong regulatory framework” had Fannie and Freddie buying other-than-actual-prime paper. It detonated. Any questions?
-Fannie and Freddie turned into revolving-door agencies with the government, winding up as political tools on both sides of the aisle.

Simply put, credit risk is controlled by imposing leverage limits on buyers. This is done by requiring down payments. A 20% down payment requirement limits leverage to 5:1, and unlike a political process it requires no regulation – you simply make it unlawful to give out mortgage money without 20% in cash on the barrel. Presto: credit risk problem solved.

The 100-year-old set of standards:

-20% down payments, in cash, are required
-28% “front end” (all housing expenses) maximum ratio
-36% “back end” (all debt service including housing) maximum ratio

China has also confirmed what many of us have believed for quite some time. Our government and many others are creating more bubbles to try and fix the old ones.

In a phenomenal demonstration of frankness and true economic assessment, the head of the China Investment Council, Lou Jiwei, who controls China’s $298 billion sovereign wealth fund, admits the ponzi nature of today’s markets:

Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.

Indeed, they can’t lose thanks to the criminal silence on behalf of Mr. Jiwei’s US financial counterparties. It doesn’t get any simpler than that folks. Keep in mind Madoff was thrown in jail for a few hundred years for much less: what’s $55 billion when you are dealing with a $20 trillion+ global equity market Ponzi scheme. And yet both China and the US continue their struggle to perpetuate a Ponzi, with the full implicit backing of all financial, regulatory and legal authorities. The system is now officially broken, even ignoring the conspiratorial ramblings of fringe bloggers.

Haven’t our financial markets been set-up much like ponzi schemes for a while now? The government intervention and involvement in our economy has made it ‘fake’ for some time now, and the actions of our current administration is certainly making it much worse.

This is just a simple lesson in irrational economics. Then again, we couldn’t expect much else from the far left – people like Krugman who believe a third stimulus is needed (yea that’s the ticket!) or Van Jones who believes that a new green economy should take the place of our current capitalist structure for social justice purposes. Care to take a lesson in some basic supply and demand equations?

An Inconvenient Health Care Truth For Media Conveniently Afraid Of Statistics

The media during Bush’s 8 years certainly was not afraid to pull out any statistics that would discredit Republicans or the administration.  One of their favorite statistics was the number of deaths during the Iraq War. 

However, now that there are wars still being fought in Afghanistan and Iraq, the media has conveniently left that tiny issue to the way-side.  The only individual who still has her principles is Cindy Sheehan.  I may not agree with Ms. Sheehan’s politics, but I can at least commend her for her consistency. (via the Examiner): 

After receiving the email, I asked Sheehan to give me a call, so I could verify that the note in fact came from her.  She did, and we discussed her plans to protest next week in Martha’s Vineyard, where President Obama will be vacationing.  “I think people are starting to wake up to the fact that even if they supported Obama, he doesn’t represent much change,” Sheehan said.  “There are people still out here who oppose the war and Obama’spolicies, but it seems like the big organizations with the big lists aren’t here.”

I asked Sheehanabout the fact that the press seems to have lost interest in her and her cause.  “It’s strange to me that you mention it,” she said.  “I haven’t stopped working.  I’ve been protesting every time I can, and it’s not covered.  But the one time I did get a lot of coverage was when I protested in front of George Bush’s house in Dallas in June.  I don’t know what to make of it.  Is the press having a honeymoon with Obama?  I know the Left is.”

I have more appreciation for those who stay true to their beliefs no matter what those beliefs are, rather than changing them based on whichever way the political wind is blowing, especially when your guy won the biggest office in the land. 

So I sit here scratching my head wondering why the media hasn’t reported the latest news coming out of Canada and their health care system?  The new president of the Canadian Medical Association states that Canada’s health care is imploding.  Canada has also encouraged its citizens to buy and use private insurance to ween them off of government-run health care. 

The former president of the Canadian Medical Association was on O’Reilly last night and confirmed the same thing.  Although O’Reilly, as usual, wasn’t letting him get his statements in completely, he intimated that there are not enough doctors able to cover the volume of people covered under their system.  This leads to rationing of care and increased costs to attempt to fund everyone.  Rationing is the only way to say you are covering everyone, and try to cut costs at the same time.

France also reported that it’s health care system is going bankrupt, nearly two weeks ago.  No mention of their single-payer system and the nightmare it created for the citizens of that country by the MSM.

The English system also has horrible statistics.  Their rate of survival for any cancer or serious illness is significantly worse than it is in the States.  The National Center for Policy Analysisalso conducted a study and concluded the NHS was putting the patient last.  If NHS was a business it would fail miserably based on its standard operating procedures and business practices that it chooses to implement.

The CBC has just released new statistics that show Americans’ life expentency is on the rise while deaths are not.  But I thought American health care was ranked last?  It’s amusing to hear liberals use the common argument that the US ranks 37th out of 37 countries when comparing their health care systems.  However, when you ask for the context of those statistics, since stats can be masterfully manipulated based on outside factors/variables used to conduct studies, it’s no wonder that the CATO Institute was able to debunk that ranking. 

Those who cite the WHO rankings typically present them as an objective measure of the relative performance of national health care systems. They are not. The WHO rankings depend crucially on a number of underlying assumptions–some of them logically incoherent, some characterized by substantial uncertainty, and some rooted in ideological beliefs and values that not everyone shares. Changes in those underlying assumptions can radically alter the rankings.

[…]while the United States ranks 37th, there is no ranking for which both claims are true. Using OP, the United States does rank 37th. But while France is number 1 on OP, Canada is 30. Using OA, the United States ranks 15th, while France and Canada rank 6th and 7th, respectively. In neither ranking is the United States at 37 while France and Canada are in the top 10.

Which ranking is preferable? WHO presents the OP ranking as its bottom line on health system performance, on the grounds that OP represents the efficiency of each country’s health system. But for reasons to be discussed below, the OP ranking is even more misleading than the OA ranking. This paper focuses mainly on the OAranking; however, the main objections apply to both OP and OA.

But, as Newsbusters reports, the media has conveniently overlooked the story regarding Canadian health care, especially when early proponents of Universal health care, like Hillary touted the system as a model the US should use. 

One would think that the media would want to get all facts out to the public, and unfortunately, if some of those facts get in the way of what they idealistically felt was the answer, then so be it.  The people will be better off knowing the truth and making their decisions on health care from there.  It may also help certain representatives who are on the fence.  It’s scary to know that the media is willing to throw the country down the toilet and inevitably bankrupt the nation in order to reach their liberal ‘Utopia.’ 

Facts just seem to get in their way.

Another Obama Double-Cross, Media Cover-up: No Additional Social Security Money Until 2012

Par for the course I guess, but this is becoming quite a pattern with the Obama administration and the news media.  Obama has this strange habit of promising everybody the world, but once in power, takes it all back and simply does whatever he wants. 

The latest political promise, double-cross involves his base – a group that I would not want to upset.  Obama had promised to implement a payroll tax on those making over $250K/year, the people he calls millionaires and billionaires, to help pay for the ever depleting bucket of money in social security.  His base strongly approved of this pledge to uncap the taxing threshold – here is what he said:

Social Security is strong, but as more baby boomers retire, the long-term cash-flow needs to be addressed. We have to make sure Social Security is there for future generations…

Here’s where I would start. Right now, the Social Security payroll tax is capped. That means most middle-class families pay this tax on every dime they make, while millionaires and billionaires are only paying it on a very small percentage of their income. That’s why I think the best way forward is to first look to adjust the cap on the payroll tax so that people like me pay a little bit more and people in need are protected. That way we can extend the promise of Social Security without shifting the burden on to seniors. And we should exempt anyone making under $250,000 from this increase so that the change doesn’t burden middle-class Americans. This means that 97% of Americans will see absolutely no change in their taxes under my plan – 97%…

This promise, via the Collins Report, has been taken back by Obama, and due to that fact alone, Obama is now pushing the burden onto seniors to pay for this debacle (another government-run system).

Citing a 2008 third quarter cost of living decline, Congress has voted no cost of living increase in next year’s Social Security checks for the first time since 1973.

The Democrats are pointing to their own prediction of a “… [steady] decline in consumer prices through the first three quarters of this year…” Based on this they claim to foresee no need for raises until possibly 2012.

Democrats ignore Consumer Price Index: hide behind flat Inflation

Obama’s base will suffer the most. While 80% of our big cities voted for Obama it’s apparent the elderly, both White and minority, will be asked to “balance the budget” by themselves. There might not be any inflation but the Consumer Price Index (CPI) has risen steadily since January, and people are living by the CPI not the rate of inflation.

Numbers show ignoring the CPI will crush elderly and minorities.

A little history:

Back in the 80’s, Congress changed the way that the CPI was applied to the Social Security COLA, with the express intention of limiting the COLA increase.  That same year, they voted themselves a raise.  The resulting rage among seniors was palpable.  This time around things could get interesting!

There are those who are stating this is old news, but it still begs the question, why is nobody in the media bringing up the fact that he has incessantly lied to those who elected him and the American public?  Yes, all politicians lie, but I’m not sure I have ever seen it to this extent – I know, I know, I’m young, but still…

Cash For Clunkers Is Getting The Hook!

It’s about time too!

The Cash for Clunkers program has been a disaster of significant proportions, which is quite sad considering how insignificant and minuscule this program is on the scale of things.  If a simple clunker program that the Germans have been using, although they have had their own issues, can’t even be run effectively and efficiently for a month, how can the government run programs that will directly impact our lives/well-being?  The simple answer is: They Can’t!

Even if we forget what is in the health care bill for a second, just think of an entity that has never sucessfully run anything, and the consideration of handing your life, your childrens’ lives, your friend’s lives, your parents’ lives over to them?  Excuse me if I’m a little skeptical. 

The Cash for Clunkers program has had too many flaws in too short a period of time.  It has been a bad business investment for many dealers because they can’t even get reimbursed by the government.  They are sitting there with losses on their books, crossing their fingers for some future payment.  If a dealership is small enough and is dependent upon payment within a period, of let’s just say, net 30 days – this could spell disaster!

The Obama administration plans to end the popular $3 billion Cash for Clunkers program on Monday, giving car shoppers a few more days to take advantage of big government incentives.

President Barack Obama said in an interview Thursday that the program has been “successful beyond anybody’s imagination” but dealers were overwhelmed by the response of consumers. He pledged that dealers “will get their money.”

Dealers have complained of delays in getting reimbursed and backlogs of vehicle paperwork getting processed in the program. Dealers have said they face a risk of not being reimbursed but LaHood has pledged that dealers will get paid for the incentives.

President Obama and his administration are still as delusional as ever.  I’m not sure how you call a program an economic success when charities were hurt, used car dealerships were damaged, dealers participating in the program had to give away vital information to the government via cars.gov, some may not get reimbursed, and all-in-all they found the following via a survey from cardealerreviews.com

Transportation Secretary Ray LaHood said earlier Wednesday that all dealers would be reimbursed.

However, the NADA said, in its statement, that the group had “confirmed elsewhere” that dealers would not get paid if cash ran out.

Although, according to press reports, Secretary LaHood stated today that “there will be no car dealer that won’t be reimbursed,” NADA believes that this is based on DOT’s view that sufficient funds remain available. It is important to note that NHTSA has confirmed elsewhere that if the program’s money runs out before a dealer is reimbursed, that dealer will not be paid.

In an Automotive News survey of nearly 800 dealers,

-97% of dealers who responded, say the government is not reimbursing fast enough
 
-13% of dealers have dropped out the program because the government is not reimbursing fast enough

-87% percent of dealers are concerned the money will be exhausted
 
-3% of CARS program deals have been reimbursed
 
-66% of dealers have not received one payment from the government
 
-25% of dealers are experiencing severe cash flow problems that require short-term loans to alleviate

-11% of submitted applications have been approved (though dealers still are waiting for the money)

-16% of submitted applications have been rejected

-55% of dealers are not confident they will get reimbursed for every deal
 
-40% do not want the program to continue, even if changes are made to the CARS program

For more opinion/write-up on Cash for Clunkers go here.

Your Taxpayer Dollars Continue To Subsidize Chinese Owned US Assets

If you thought the government, couldn’t get any more insane, it has. The government is backing/funding China’s purchase of US assets. We are creating a PPIP for the Chinese, whereby, the US Treasury matches private purchases of US assets like bonds or property and credits/guarantees 6x as much as the total lump sum after the match.

The Chinese company, China Investment Corp (CIC) plans on purchasing $2B worth of AAA distressed US mortgages. The US Treasury would match that amount for a total of $4B and then credit up to $24B. In essence, since the US Treasury has no money of its own, we, as taxpayers, are funding the purchase of our country, not only via our debt, but our mortgages/property, by the Chinese.

It is being reported that China Investment Corp (CIC) intends to purchase $2 billion of AAA rated, distressed mortgages in the United States. The press reports are suggesting that CIC is presently interviewing 9 American money managers.

These managers have been approved by the Treasury to participate in the PPIP program as servicers. CIC will pick one or perhaps two to manage its investment program.

Has this been going on for a while in the US? Of course it has, but does that make it right and when does the insanity stop? The real losers in this mess are the American working public who do not make up the elite class and the Chinese people who are not part of the oligarchy. It begs the question of how far away from a Republic are we?

A serious question must also be presented that questions what type of property would be purchased as well. It could get very precarious if the property involved included farms, and other vital properties. Just food for thought!

Cash For Clunkers: I Told Ya So!

Here is what I originally wrote about when Cash for Clunkers was still being debated in Congress, when I was still unsure as to whether this bill really had a chance, since it seemed like complete idiocy to me – little did I know:

Cash for clunkers sounds like a great idea. It seems so simplistic: I get money for turning in my old car. However, there is much more to this than meets the eye.

Cash for clunkers is another brilliant liberal idea, and by brilliant, I mean brain dead.

Liberals say that if you trade in your used car, you will receive $4.5K for a new one. It can’t be that basic if it comes out of D.C., so why isn’t the media challenging this piece of legislation? We all know the answer to that one…ask ABC.

There are numerous downsides to this bill:

– If dealers anticipate a rebate for a trade in, they will only increase their base price for the car to make up for it.

-People drive old cars because they cannot afford new ones how will $4.5K actually help? The down payments that many banks are asking for are much higher due to risk and tighter lending practices. The monthly payments are also tough to meet if you are of low income status. I just bought a new Mini Cooper and have a great credit/beacon score… but because I couldn’t put down $15K on the spot, I couldn’t get a bank loan. I had to settle for the higher rate at the BMW dealership.

-This will also increase the cost of used cars. If more people are trying to purchase new cars, then used car dealerships will suffer and will be forced to raise their prices to make a profit, rather than make a profit from volume of sales. In essence, this will hurt the lower middle class and the poor – the very people he professes to help.

-Charities will be negatively affected by this law. There are over 350K charities that are used car donors. These charities will see a direct decrease in donations if people believe they are getting a kick-back. These charities will have to cut staff and operations, causing more unemployment and fewer used cars for those who really need them.

-The proposed cost of this law would be $4B. This is another “government pays” bill. Therefore, one would think that maybe this is another bill that is circular… The Government will tax you to help pay for your car… why not just pay for it yourself then? All estimates that come out of the government are conservative at best; therefore, you can and should always tack on another 50% to the original value.

-Other industries may suffer if there are consumer shifts. Priorities of consumers will shift based on whether they think they are getting a better deal. If cars go up something else will inevitably go down.

-The fact that the Democrats are global warming alarmists happens to be another excuse they will use. They will exclaim that used cars cause more pollution… I don’t believe that in the slightest, so I won’t even touch it. There is still plenty we do not know about hybrids and whether or not they truly are as effective as people would like to believe. I also do not believe in the hoax or the hype – ’nuff said. Personally, my Mini Cooper’s gas mileage goes up as it gets older…just sayin’ And will the government really be able to control the types of vehicles that people purchase with their rebate? Not yet, at least.

-This is another pay-to-play scheme to pay off the $400M campaign donations given to Democrats and Obama by the UAW. If old cars are scrapped, new cars will have to be manufactured and purchased and more money into the pockets of the UAW.

This type of legislation has been tried before, in another country no less:

Germany has used a similar program for a few months, and of course it has actually cost at least three times more than government “estimates.” More than this, studies of the German experience have shown it has largely led to a mere shift of spending priorities. Consumer electronics sales fell in ratio to automobile spending meaning there has been no net gain for Germany’s economy.

It is so interesting and disturbing how Obama and the Democrats have gone after charities and small business. Charities have been attacked on both the stimulus front, the taxable deductions front, and now this idea for clunkers. A study showed that conservatives give more to charity than any other ideological group, because they do so through their churches. These churches are involved in many charities across the nation and it’s quite disheartening to see the Liberals be so antipathetic towards religious movements.

Obama and the Democrats are hell-bent on making people so dependent on the government, and only the government, that they will soon need to get their diapers changed by them too. This is insanity!

So what exactly has happened since they did in fact wind up passing Cash for Clunkers?

– The Cash for Clunkers bill did in fact pass, after it’s passage, even moderate like McCain tweeted “The American people have just been sold the biggest lemon in US history.”

– I was slightly wrong on the original allocation of the program.  I had guessed that $4B would be required to pass this bill and would come from tax-payer dollars.  This would mean that those who pay taxes and are trading in their cars are really getting a rebate that they paid for.  The original allocation was $1B instead of $4B but the government figured that the $1B estimate would last until November 2009 when the program would come to an end.  WRONG! The government, as usual, is so incredibly inefficient, incompetent and has no clue how to conduct long-term strategic planning that it required the passage of another ‘burst’ of money – $2B.  That’s a total of $3B spent on this program so far… I wasn’t that far off 😉 by November it could be more!

– The government has squelched on its promise to reimburse dealerships involved in the cash for clunkers plan within 10 days, but after weeks of the program’s start, dealerships have yet to see a dime.

Dealers say the government is putting them in financial peril. The law requires dealers to deliver a new vehicle to qualifying customers, even if the government payment hasn’t yet arrived. The government says it will reimburse dealers within 10 days of the applications’ approval.

But dealers say payments have been slow to arrive. “We’ve got 155 clunkers on the ground and no money in the bank,” says Earl Stewart, owner of the Earl Stewart Toyota dealership in North Palm Beach, Fla. “We’re selling ourselves into a very negative cash-flow situation.”

With dealers on average earning about $1,000 on a new-car sale, most face a loss on each transaction until the government pays up. Mr. Stewart says the government owes him $672,700 in rebates and hasn’t paid any. “The more cars I sell, the worse it gets.”

– Used car prices, and other dealerships not involved in cash for clunkers have had to raise prices due to an increase in inventory on their books and no demand.  The demand for cars has been shifted to this program and other dealerships, especially older used cars are suffering.

– The pollution meme has not been heeded, many are purchasing cars that do not get the best MPG.  The program also stipulates that perfectly usable cars that are traded in are to be scrapped and junked and the engines stripped out.  The crushed cars are then put into a landfill.  How does this curtail pollution? That’s rhetorical…

– Another interesting tidbit surrounding cash for clunkers has been the uptick in foreign car sales.  So much for driving business back into the American economy- most of the cars being purchased after trade-ins are Hyundai’s, Toyota’s, or Honda’s, as evidenced in the picture below:

– An example of the government’s inefficiency is how much money is really being spent on every 3.5K-4.5K rebate.  The current real cost estimates to the government are 45.35K for every car.  How would a business survive if every service or product produced was actually costing more than what it was being sold for.  That means that the government, who is already spending our taxpayer money on these rebates is technically spending about 10x more to cover overhead, administrative, and other costs to produce new cars etc.  This is probably the biggest waste of taxpayer money I’ve seen since… oh, let’s just say… the stimulus.

The “cash for clunkers” program is yet another boondoogle – an expensive waste of precious taxpayer dollars. Government spending should be reined in, in light of the multi-trillion dollar unsustainable deficits that this nation now faces. However, if we must increase government spending, the money would be better spent on infrastructure and education improvements that might help bring jobs back to America, and encourage long term growth, rather than cosmetic improvements to the short term earnings of makers of high mileage automobiles, many of which are foreign companies.

This government is, unfortunately, a reflection of the current state of economic immaturity that prevails in America. The vast majority of people, including most people in Congress, do not understand the forces that drive the real economy, and see only the short term view. That is how they get manipulated into allowing the Federal Reserve to behave like a slush fund for big banks, passing programs like TARP into law, and enacting programs like “cash for clunkers” which all abuse the taxpayers.

– Other industries are in fact suffering because people have chosen to buy a car, foregoing something else they would have otherwise purchased instead.

– The biggest loser in all of this, besides the American public, are more specifically the charities and poorer individuals who really do need cars.  These cars being traded in are not that old since the bill stipulated that couldn’t be REAL clunkers.  Real clunkers are those ‘hoopties’ that probably couldn’t pass an emissions test and have weird blue smoke billowing out the back.  No, the cars being traded in are usable Toyota’s, Honda’s, Chevy’s etc. that still have plenty of years and mileage left on them.  Instead of giving the trade-ins to charities to make the most of the vehicles, the program, and give back the most to everyone, they are dumping the cars into landfills. 

If Obama and the Democrats were so interested in social justice and really caring for the poor, they would be all about charitable donations and giving away these cars to make a difference.  Instead, charities, which are 80% backed by Christian and other religious institutions are being punished.  Reports show that charities are suffering and so is the lower class.

For the government to consider this program a success, especially after that computer worm was found at cars.gov, it has become blatantly obvious that the politburo running DC has completely lost its ‘collective’ mind.  So I ask, with the utter lack of strategic planning, and the consideration for the entire picture/cause and effect that goes into most business decisions, is it any wonder why Americans are incredibly fearful of the government getting involved in our health care, our energy, and our lives in general?  The government couldn’t run the Mustang Ranch and figure out how to sell the most profitable commodity: sex.  What would ever make anyone believe the government could run as lemonade stand, let alone giving them a blank check to run important bureaucracies that would have some control over our lives?

It’s The Economy Stupid

I have been hearing all the pundits and supposed economists stating that the recession is over, we are in the clear and out of the woods. However, I believe this to be wishful thinking on the part of everyone rooting for the Obama administration to claim that spending more than all presidents combined fixed the economy.

I recall Obama’s name drop of Warren Buffett during his final debate with John McCain, stating that Buffett was an advisor to him when it came to markets and economics. So why is it that Warren Buffet doesn’t even know what shape the economy is going to take during a recent interview with Bloomberg TV? He actually skirts the entire question. I actually heard from a close friend that he feels weare headed for, what many of us in finance know as, the dreaded W double-dip recession/economy? Roubini, another economist who has been dead-on (gloomy but dead-on), believes we are also headed there.

If you take a gander at the shape of the letter W you can see how it begins by crashing down, as evidenced last year, then a recovery (bear market rally), and another crash. This next crash is expected to hit at some point this Fall, per more objective and experienced economists.

A W-shaped recession or “double dip” recession, occurs when the economy has a recession, emerges from the recession with a short period of growth, but quickly falls back into recession.

The Early 1980s recession in the United States is cited as an example of a W-shaped recession. The National Bureau of Economic Research considers two recessions to have occurred in the early 1980s.[4] The economy fell into recession from January 1980 to July 1980, shrinking at an 8 percent annual rate from April to June of 1980. The economy then entered a quick period of growth, and in the first three months of 1981 grew at an 8.4 percent annual rate. As the Federal Reserve under Paul Volcker raised interest rates to fight inflation, the economy dipped back into recession (hence, the “double dip”) from July 1981 to November 1982. The economy then entered a period of mostly robust growth for the rest of the decade.

It’s funny how the last W-shaped economy/recovery took place during/after Jimmy Carter which parallels what we are going through today.  If there is any president that Obama is following based on policies, stimulus, possible (to me it’s inevitable) inflation, and high unemployment, it is Jimmy Carter.  That’s why it’s important that we look back at history to assume that this recession will be no different.

Several ‘economists’ are calling for another stimulus which would be three all together.  The more money that gets pumped into the economy, the less valuable it becomes.  Short stimuli can be helpful – it’s not an all or nothing position, but when stimuli lasts for extended periods of time, and with the original TARP from Bush, the next stimulus from Obama, an unprecedented budget, an unprecedented deficit, and those calling for more stimuli will certainly cause inflation.  Some stipulate that the government wants inflation because it will be easier to pay off the debt when there is a ton of money but it’s not worth much.  Tax increases could also be another outlet to pay off this seemingly insurmountable debt – which would have another negative effect on an economy attempting to recover. 

Let’s take into account the bills sitting in Congress as we speak; Cap & Trade, Health Care reform, and Amnesty.  Amnesy will increase our population and require more jobs, although our own unemployment rates are really in the double digits.  Cap & Trade will tax middle America and put massive regulations on industry for green jobs and our own personal life.  Health Care will also require taxation, as Obama said in Portsmouth: “I plan on rolling back the Bush tax cuts to pay for reform.”  I hope people understand that when tax cuts are pulled, taxes go up. 

This administration is planning on transforming our economy in the name of green jobs, health care, and illegal immigration.  This could cause the perfect storm and an absolute disaster if inflation occurs simultaneously.

A clear indication of the lies being perpetuated about our economy are the recent retail sales numbers and unemployment claims.  Unemployment may be a lagging indicator but it is still a very important index when measuring our economic stability.  The administration was boasting that the unemployment numbers had taken a sudden drop to 9.4% a week ago, however, they forgot to include the fact that a significant reason for this drop was due to people giving up on finding jobs and in essence walking out of the unemployment lines to just wait it out.  A report had actually been presented that said the real unemployment numbers were above 10%.

So why have retail sales declined unexpectedly by .1%?

The Commerce Department said Thursday that retail sales fell 0.1 percent last month. Economists had expected a gain of 0.7 percent.

While autos, helped by the start of the Cash for Clunkers program, showed a 2.4 percent jump — the biggest in six months — there was widespread weakness elsewhere. Gasoline stations, department stores, electronics outlets and furniture stores all reported declines.

And why have jobless claims risen by 4,000K?

The number of newly laid-off workers filing claims for unemployment benefits rose unexpectedly last week, while continuing claims fell sharply.

The Labor Department says new claims increased to a seasonally adjusted 558,000, from 554,000 the previous week. Analysts expected new claims to drop to 545,000, according to Thomson Reuters.

It’s obvious that economists or the wishful thinkers out there are not looking at the entire picture.  The reason why continuing jobless claims fell has more to do with people giving up looking for work than anything else, as I state above.

All of this spells dismal times on the horizon for this country as well as many others.  Be cautious and continue to take what you hear out of the MSM and from economists associated with a particular political party/administration with a grain of salt.