RedStateEclectic

Obama's Devastating Chrysler Politics

In a RedStateEclectic post entitled "USA Founded to Avoid Obama," I wrote:

"... the Colonists severed their ties with Britain, and the United States of America were founded to make sure that people like Obama and their confused and dangerous thinking - basically copying European social democracy / socialism - could never hold sway over the nation."

When you offer credit to some one or some thing, and do so on the condition that it is secured by an asset, you should be first in line to collect before those providing credit without such security. Unfortunately President Obama’s actions throughout the Chrysler bankruptcy have trampled over these well worn bankruptcy laws, contract rights, and even the rule of law.

One of Chrysler’s secured creditors was the State of Indiana, or more particularly, pension funds administered by the state. But now that Chrysler has filed for bankruptcy, Indiana and other secured creditors are being forced to the back of the line so that unions can proceed to the front. For every dollar of secured creditors’ claims, they’re receiving only 30 cents. Compare that the the United Auto Workers union, an unsecured junior creditor, who will get 50 cents on the dollar.

Why? It’s not because any contract, agreement or bankruptcy law calls for it, but because the federal government decided it was politically convenient. Of course, we’ve become far too familiar with the government robbing Peter to pay Paul, but in this instance the government is violating the rule of law to do it. The arbitrary whims of Obama’s administration threaten the very foundation of capitalism.

Henceforth lenders will hesitate to provide credit, and eager entrepreneurs and businessmen will struggle to find it, because any credit can now apparently be confiscated by government greed regardless of the law or the existence of a binding contract. Simply put, the price of borrowing will now go up because lenders must account for a new risk - government intervention.

Obama has assisted the UAW in this instance, an entity which just so happened to be crucial to his election. But how many union workers in the future will be laid off - or never hired in the first place - because their employer couldn’t find credit or loans for expansion?

Thousands upon thousands of people are getting steamrolled by this outrageous affront to the credit system, but only Indiana has objected, and its efforts appear to be fruitless thus far. I fear that President Obama’s actions in the Chrysler bankruptcy signal the dawn of a new era in which powerful political interests trump capitalism and the sanctity of contracts. May God have mercy on us all.

The full article.

Paul Walker notes in the anti-dismal blog:

Greg Mankiw is thinking of buying another car. He writes

[...] I got a copy of the Consumer Reports auto issue (April 2009).

Page 15 was particularly enlightening. There, in their "Automakers report cards," Consumers Union summarized their findings for each of fifteen major car companies.

Dead last was Chrysler. CU recommended zero percent of the Chrysler vehicles they tested. That's right--zero. Second to last was General Motors. CU recommended 17 percent of GM models. By contrast, most other companies had half or more of their models get the thumbs up. Honda was the top ranked brand; CU recommended 95 percent of its models.

Is there a message in this? Following the Consumers Union report why is anyone surprised that Chrysler and GM are going out of business? Bankruptcy for these two tells us that the market is working. These car manufacturers aren't producing product worth buying and the market punishes this with bankruptcy. Now if only the government would stay out of things.

“It’s American to Talk About Secession”

Ron Paul on the flap down in Texas over the question of secession:

The question is: are we free, or are we not?  Those who talk today about secession, however, are painted as whackos.

LLE

My Day

I just got home about an hour ago—spent the morning, and into the early afternoon, up in Lincoln at School Board related meeting.  Hooo, boy!

Observation 1:  Most school districts in the state are heavily dependent on “state aid” for their general budget.  The state is going to run short on money.  They’re counting on stimulus money to make up the difference in the shortage this year (so that schools can get most of the money of the state aid that has been promised).  Now, the school districts are trying to fight the battle over how the “state aid formula” should be re-formulated to determine need for each district.  And of course, it should be formulated so that MY school district, which obviously needs MORE than everyone else, doesn’t have to lose any dollars whatsoever.

Observation 2:  The defined benefits pension plans that teachers and many other state employees have is in BIG trouble.  Legislators in Nebraska are trying to figure out how to make those plans a little more solvent—one of the suggestions has been to increase the employer (school district) contribution to 102% of what the employee contributes.  Districts don’t think it should be more that 101%, and that the money shouldn’t have to come out of our general fund dollars, but rather ought to be paid for out of the state’s “cash reserve” funds.  Of course that would solve the problem for maybe one year.  As I pointed out to one person in attendance, the best way to fix the problem would be twofold: 1) raise the retirement age—for teachers in Nebraska, for instance, the “rule of 85” is in play—when your total years of service and age total at least 85, and you’re at least 55 years old, you are fully vested in the retirement system and can start collecting your full pension (I believe it’s currently 80% of the average of your last 3 years’ salary, per year, with an automatic cost of living adjustment).  Turn it into the “rule of 90”, maybe; 2) Don’t define the retirement benefits based on what your salary was during your last three years teaching—rather, define it based on a formula that looks at how much has been contributed, how old you are (and how many years the tables suggest you’ll likely live).  If you beat the odds, you still get your continued pension; if you don’t beat the odds, your heirs get the pension until such time as you would have broken even.  Of course the truth be told, many of these pensions are probably almost as big of a boondoggle as Social Security—I doubt that any teacher working 35 years has ever contributed enough to live another 30 years at 80% of their last 3 years’ salary (in teacher world, your last three years are almost always your best three years, since teachers are rewarded for years of education and time in place, rather than on merit).  Even if they put in $10,000 a year (doubtful, I suspect, even for the highest paid teachers), and they were matched at 100% by their employer.  $20,000 a year for 30 years of work would leave them with $600,000 in retirement.  Let’s say that the fund had actually appreciated in value—even by 50%—that would leave $900,000.  Let’s say the actuarial tables say they’ll live 25 years more (if you retire at 55, that’s probably not unreasonable).  That would—by my rough calculation, give you a pension of $36,000.  Compare that with the lowest education (no Masters degree) teacher in my district, who makes roughly $55000 a year after reaching the maximum seniority pay index.  Under today’s scheme, he/she would get 80% of that, or $44,000 a year for the rest of his/her life—whether it was 25 or 40 years.

Oh well.  We’ll have to fix public pensions another day.  But it surely helps to explain why some government pension programs with defined benefits packages are in such dire circumstances right now.

LLE

Deep in the Heart of Texas

Well, George Bush came from there, and Gov. Rick Perry didn’t treat Ron Paul all that well last year (even though he’s a Congressman from…TEXAS), but you’ve got to like Perry’s style on the state sovereignty issue.  Of course this throws him in league with all of the rest of us potential terrorists.

Texas is one of the few states—I suspect—that has an adequate variety of natural resources that it could—if so inspired—secede from the Union and still get along o.k.

This whole 10th Amendment issue—not secession, but merely a realigning of thought with respect to the relationship between the states and the national government—has really been one that I’ve been giving a lot of thought to in the last week or two.  More and more, it seems like states breaking free—or declaring their sovereignty as creators of the Union, rather than subservient sub-domains OF the Union—may be the only way to stop the insanity.   Of course it’s going to take some strong Governors and Legislators who are willing to refuse Federal dollars that have strings attached—one of the things that has endeared Mark Sanford to me—and now, maybe, Rick Perry.

LLE

A Tale of Two Candidates

Omaha is in the midst of a mayoral contest.  Leavenworth Street has a little post on the endorsement shindigs of the two candidates today.

Bottom line: Councilman Jim Suttle is a registered Democrat (the mayoral race in Omaha is officially non-partisan), and was endorsed by the current mayor, Mike Fahey.  Former Congressman, and Former Mayor Hal Daub is a registered (and active) Republican.  He was (if the list is accurate) endorsed by just about every Republican officeholder in the metro area—in addition to the Governor, Lt. Governor, and all of the Republican Constitutional officers of the state.

RSE’s Nebraska readership is fairly light, so an endorsement from us would really mean nothing.  Hence, for reasons that some of our Nebraska readers and contributors understand, we will NOT be issuing an endorsement in this race.  I don’t believe either candidate is committed to smaller, less intrusive government—rather, I think both are probably committed to widening the power power of the city government—and while I don’t live in Omaha, I have family members and friends who do.  Sorry guys, there’s no good choice for you there.  How about a write-in campaign? 

LLE

Frohe Ostern - "Ich bin das Leben und die Auferstehung"

Frohe Ostern - Happy Easter.

Jesus said to Martha: "Ich bin das Leben und die Auferstehung - I am the Life and the Resurrection."

Enjoy a beautiful a capella rendering (composer Heinrich Schütz) performed by the outstanding Doane College Choir that I had the great privilege and joy to listen to (in Schwäbisch Hall, Germany) on their European tour last year.

The archaic German text: Ich bin die Auferstehung und das Leben. [I am the resurrection and the life.] Wer an mich gläubet, der wird leben, ob er gleich stürbe, [The person who believes in me, even though he dies, will live.] und wer da lebet und gläubet an mich, der wird nimmermehr sterben. [Indeed, everyone who lives and believes in me will never die.]

Forces of Resistance - Federalism

Obama is so confused and illiterate (not only) on the issues he is pushing, while presumptuously posing as the leader that America desperately needs in these matters (a posture in itself un- and anti-Constitutional), if he were a Marxist, he would not know it.

Of course, he is not a Marxist, which would require a level of consistency he simply isn't capable of. He is much worse than a clearly contoured Marxist. He is the waffling receptacle for any turbid collection of ideas that are effective in destroying America. (For a taste of his waffling himself into a sense of profound mission, read this brief piece.)

He is a leftist community organiser, and a president only insofar as the Peter principle gets one into that office - or has the Peter principle demoted the office to the level of a leftist community organiser?

We have frequently discussed the question here at RedStateEclectic whether there is anything that can effectively stop the out-of-control arbitrariness of the political decision makers in Washington.

The apocalyptic helter-skelter produced by the Obama Administration in the past 50 days or so, holds clues for opposing forces that may turn out formidable ones:

(1) America's business world.

I claim, the fact that a few thousand (extremely powerful and effective) businessmen in America collude despicably with the government should not distract from the fact that America is still the country with the largest number of women and men blessed by admirable business acumen and the commendable personal values and qualities that go with it - including courage and uprightness.

(2) America's creditors.

(3) Federalism.

On the latter consider the below two articles (the first one I liked before I discovered who the author is. It's a guy I like a lot. The second was chosen, because I like the guy a lot, implying most importantly that I always feel wonderfully enlightened by his reasoning:

It seems that most everyone focuses his or her attention on what is happening in Washington, D.C. People don't seem to get excited about politics until a national election rolls around or unless the President makes some startling announcement. Even well-meaning Christian leaders seem to spend the vast majority of their time dealing with policies that emanate from Washington, D.C. Already, I'm hearing leaders of the so-called Religious Right talk gushingly about who the next Presidential nominee of the Republican Party will be. Who cares? Do you mean to tell me that with all we have to deal with right now, we can't find anything else to talk about? How shallow — and utterly ineffective — can we be?

In the first place, Washington, D.C., is a lost cause. It really is. We have about as much chance of flying to the moon in a glider as we do of seeing any significant change in Washington, D.C. Neither the Republican nor Democrat parties at the national level offer any hope. The federal government is hell-bent on turning the United States into a socialistic global village, and the two major parties are in it up to their necks.

If the principles of freedom and independence have any chance of surviving the next few years, it will be because individual States have the courage to pick up the banner and fight. Therefore, freedom lovers need to focus their energy and attention more on State government and less on national politics.

Read the full article and find out about the author - make a guess beforehand.

Our Colonial ancestors petitioned and pleaded with King George III to get his boot off their necks. He ignored their pleas, and in 1776, they rightfully declared unilateral independence and went to war. Today it's the same story except Congress is the one usurping the rights of the people and the states, making King George's actions look mild in comparison. Our constitutional ignorance -- perhaps contempt, coupled with the fact that we've become a nation of wimps, sissies and supplicants -- has made us easy prey for Washington's tyrannical forces. But that might be changing a bit. There are rumblings of a long overdue re-emergence of Americans' characteristic spirit of rebellion.

Read the full article and find out about the author - make a guess beforehand.
Speaking of "a nation of wimps, sissies and supplicants" is somewhat uncharacteristic of the author. In my view, he is an immaculate patriot, in a meaningful sense of the word. He is a universally schooled economist.

Sanford Stimulus Update

So apparently Mark Sanford had already said that he wasn't interested in accepting stimulus money for his state? Good for him--that puts him back on my list of eligible governors who could get my support for the Presidency.  But, WAIT!  What's this?

In part because of Sanford's vocal opposition to accepting bailout money from a federal government that simply borrowed the funds for the loan in the first place, Rep. James Clyburn (D-S.C.) inserted a clause in the "stimulus" bill that allows state legislatures, through passage of a concurrent resolution, to override Governors who refuse to accept bailout cash, and take the money anyway. Clyburn couldn't be expected to allow even a portion of his state to get cut out of the free trip to the candy jar, you see, so he needed to make sure an actual fiscally-responsible executive like Sanford couldn't put an ix-nay on the andout-hay for the Palmetto State.

I'm not sure how that provision could even be Constitutional.  But theoretically it would make it possible for Sanford and Jindal and whoever else to be against the stimulus money before it flows into the state and they're responsible for spending it efficiently.  Interesting.

LLE

Does This Bother Anyone Else?

That Governor Kathleen Sebelius, of Kansas--who recently announced that Kansas wouldn't be refunding tax returns to its citizens for a while because of a cash shortage--is now emerging as the likely pick for Health and Human Services.  HHS is the LARGEST consumer of budget dollars of any of the Departments of government (larger even that the Defense Department), and we're going to place her in charge of that, when it appears that she (and the Kansas legislature) have been unable to manage their resources (at about 1% of the HHS budget, if I'm doing my math right--when we get too many zeros, I get confused) sufficiently to return overpayment of taxes to citizens?  To my way of thinking this doesn't really bode well for fiscal responsibility.

LLE

The Judge Rules

Kansas and California have said that they're going to withhold state tax refunds for a while.  Not so fast, says Judge Napolitano: