Tag: bailout (page 2)

The President's unilateral decision to all-but nationalize one of the state's largest companies, brooming its CEO while giving a free pass to other far worse players (who happened to be special interest supporters) doesn't sit particularly well the good people who value things like, oh, freedom, free markets, Capitalism, equality, the absence of double standards and hypocrisy... I could go on.  

You don't like Rick Wagoner?  Fine.  Sell your stock.  Or buy up a bunch of it (its awfully cheap these days) and exert a little shareholder control.  Its up to you because this is still America (though what it will look like three years from now at this rate...).  That's the way our market system works, or did, until late this weekend.

Our own RightMacomb was discussing the President's unprecedented intrusion into Michigan's business Sunday afternoon and by this morning Daniel Howes at the Detroit News has put pen to paper (or finger to keyboard) as well with another MUST READ:

Not since World War II, with the arguable exception of President Harry S. Truman's brief control of the steel industry, has a president exercised such forceful unilateral control over firms in the private sector. And the double-standards? Towering, as if that makes any difference.

What does it say that on the same day President Obama made nice at the White House with the nation's leading bank CEOs -- none of whom have lost their jobs despite sitting on vastly larger sums of taxpayer dough -- the head of the president's auto task force was urging Wagoner to "step aside?"

"There is no standard," Rep. Thaddeus McCotter, R-Livonia, told me. "You cannot look at what happened to Rick Wagoner and draw any policy certitude about what happened to the Wall Street CEOs. How do you reconcile the two images on Friday?"

That's a good question, but if the Congressman is looking for any sort of affirmative response I'm afraid all we'll be able to offer is the sound of crickets chirping.  Crickets and Michigan's freshman Democratic Congressman Mark Schauer who broke with even his own party boss, Jennifer Granholm (a woman whose half-hearted water-carrying for the administration on the issue wound up doing little more than make everyone her look all wet) by sounding his approval of the President's shocking behavior.

The Jackson Citizen Patriot reports:

U.S. Rep. Mark Schauer said today he respects President Obama's decision to oust General Motors CEO Rick Wagoner as a condition to receive more federal aid.

"My top priority is that the president and federal government don't give up on the domestic auto industry," the Battle Creek Democrat said.

Really?  So, if the President moved to void all union contracts and force the UAW to sign a new offer sheet at 40% of the pay and benefits that'd be cool with you too, Congressman?  20%?  Hey, he wouldn't be "giving up" on the industry, right?

And if the President were to come into the 7th District and started firing small business owners who'd been forced to layoff employees because he didn't like the job they'd been doing?

Appreciate you selling your constituents out to satisfy your partisan political interest, though, Congressman.  Swell of you.

Given the two most recent GM-related headlines coming out of the Associated Press, perhaps Mister Rich was singing truer than he knew.

Last night, though, the highlight for me wasn't the singing or the results or the Carrie Underwood cameo... it wasn't even Matt Giraud (he was the star on Tuesday, though).  The highlight for me was another Michigan guy launching a new national ad campaign... Dave Brandon, CEO of Michigan based Domino's Pizza.

Brandon isn't the first head honcho from a major company jumping into the advertising game but he may very well be the first one to get it right.  

Over the last few months we've seen presidents hawking their own goods more than ever before, and often with painfully awkward results.  Exhibit A is poor Dan Hesse, the CEO of Sprint.  Check this one out...

"This could be the only phone you ever need... ... ... ... ... ... ... Pretty cool, huh?"

No. Not really, Dan.

I haven't done any research but I'm pretty well convinced that is the longest, most uncomfortable pregnant pause in the history of television.  The man comes off aloof and superior.  Which might work for some of the nation's fanciest, wealthiest people but it really doesn't do much for me.  And I already drop a hundred bucks a month for wireless service.  

Now compare that to Michigan's own David Brandon.

THAT's more like it.  And for the last twelve hours I've been dying for a Domino's pizza.

I have mixed feelings about this. We certainly should not reward incompetence, but as someone who would like a million dollar bonus one day, I don't think we should discourage dreaming either!

As is usually the case with issues of this sort, the outrage exploded before the facts were known or contemplated (not that facts make much difference in Washington). Consider:

1. The AIG bonuses represent less than 1/1000 of the bailout money, or less than 0.10 percent. During the presidential debates, the One dismissed McCain's concerns about earmarks because, the One claimed, they involved less than 0.5 percent of the federal budget. Even at 0.5 percent, the earmarks compared to the budget are more than 5 times the relative size of the bonuses compared to the bailout. As a percentage of the federal budget, the bonuses are less than 0.005 percent, or about 100 times smaller than the earmarks the One felt were not really a problem. So, it can't be the money itself that has everyone outraged.

2. Perhaps it is the perception of greed that has everyone upset. What has been lost, however, is a fact revealed today by the New York Attorney General Andrew Cuomo in a letter to Barney Frank -- the AIG executives who got the bonuses did so pursuant to renegotiated contracts in which they agreed to take the grand sum of $1.00 -- that's one dollar -- in salary for 2009, provided they got their 2008 bonuses. That surely makes things sound a little less greedy. You don't see the One, Frank, Dodd, Reid, or Pelosi agreeing to work for $1.00.

3. You want to talk incompetence? Also revealed in Cuomo's letter is the fact that while AIG agreed with Cuomo that it would not pay bonuses out of its Financial Products deferred compensation plan (and it honored that agreement), the brilliant attorneys in the New York AG's office neglected to obtain the same agreement regarding the Financial Products retention plan from which the bonuses -- which were retention bonuses! -- were paid. If you lock up the savings account, you'd better make sure the checking account is covered; if you don't, you can hardly blame AIG for writing checks.

4. Ah, but you say AIG has broken the law because the $787 billion stimulus plan puts limits on executive compensation, right? Well, sort of. There are limits, but they do not apply to the AIG bonuses. Why not? Because of a little provision inserted by Democrats (remember, Republicans had nothing to do with writing this thing) in the next-to-last section of the bill, specifically section 7001(b)(3)(D)(iii), which says:

The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.

Since the AIG contracts were signed before February 11, the limits in the stimulus don't apply.

5. So we should change the law, right? Here comes the hypocrisy, by the bushel. The Enchanted Mitten's own Gary Peters has introduced a bill that he claims will effectively tax the bonuses at 100 percent. Who voted for the bill with its carve out for pre-February 11 bonus agreements? Gary Peters. Chris Dodd called the bonuses an "outrageous example" of executives "enriching themselves at the expense of taxpayers." Yet it apparently was Dodd himself who inserted the pre-February 11 bonus language and, of course, championed the bill. Any attempt now to write a law that attacks these specific bonuses will likely be challenged on the grounds that it violated the Constitution's prohibition on bills of attainder.

6. What about the renegotiated contracts between the UAW and GM? Why shouldn't AIG executives be held to the same standard? They are! They renegotiated their contracts to take their salaries down to $1.00, which in many cases means a 50 percent cut in compensation. Sure, the numbers are much larger than auto worker wages, but don't tell me they didn't negotiate.

The Detroit News and everyone else report that GM and Chrysler are expected to meet with President Obama's foreign-car driving "auto task-force" to ask for a fresh $21 BILLION in free cash to avoid the scarlet B.  (That stands for bankruptcy.  I shouldn't have to explain these things to you... if you'd been paying attention... heh.)  This is on top of the $17 BILLION they took from the feds late in 2008 and on top of the BILLIONS they've taken and are hoping to take from the Canadian government.  

As the Presidential administrations get more liberal the requests get bigger and there is still no end in sight.  This has out-of-state GOP lawmakers crying foul and even the staunchest Michigan partisan shouldn't have a tough time understanding why.  When does it end?  Is there a bottom of the barrel?  That's why some are urging a merger or bankruptcy.

There's a real debate to be had here.  On paper, in the math world bankruptcy makes the most sense.  Free the companies from the $73.50 an hour employment costs associated with Big Labor so they can compete with other American auto manufacturing plants paying closer to $25 an hour "all-in."  But in real life?  We're talking about literally hundreds of thousands of Michigan jobs that many believe WILL disappear should the Big 3 become the Big 1 or the Big 2.  On top of the hundreds of thousands that have already disappeared under Jennifer Granholm and John Cherry's clumsily catastrophic impersonation of "leadership."

The worst part is, the plight of the Big 3 is only the tip of Detroit's iceberg.  

Read on...

I've come to understand that whenever Obama promises something, it is time to expect the opposite. Nowhere is that more apparent than when it comes to fiscal responsibility. This budget does not deliver whatsoever when it comes to that. I knew it was a joke when he talked about slashing the deficit in half in four years. That's unacceptable. It needs to be balanced. Period. This is going in the opposite direction.

From the AP

WASHINGTON - President Barack Obama is sending Congress a "hard choices" budget that would boost taxes on the wealthy and curtail Medicare payments to insurance companies and hospitals to make way for a $634 billion down payment on universal health care.

Obama's first budget, which will top $3 trillion, predicts the deficit for this year will soar to a whopping $1.75 trillion, according to administration officials who spoke on condition of anonymity before the public unveiling of the budget Thursday. The huge deficit reflects the massive spending being undertaken to battle a severe recession and the worst financial crisis in seven decades.

As part of the effort to end the financial crisis, the administration will propose boosting the deficit by an additional $250 billion this year, enough to support as much as $750 billion in increased spending under the government's financial rescue program. That would more than double the $700 billion bailout effort passed by Congress last October.

The paper was the first to tell us about Senator Debbie Stabenow's little illegal-lobbyist-as-husband issue and while they don't include it this time, today they've published an op-ed claiming Democrats are "self-destructing over ethics."

The Obama administration and the new Congress are quickly handing over to Republicans the same "culture of corruption" issue that Democrats used so effectively against the GOP before coming to power.

Freshman Sen. Roland Burris, D-Ill., is only the latest embarrassment.

Disappointingly, while they cover all of the tax-cheats, bribery suspects and subjects of legal investigations, there's no mention of Michigan's junior Senator.  But nobody's perfect.  Small steps.

And the real scandal remains the way Michigan Democrats have handled the local economy.  Oh, but don't worry, Santa Claus is coming to town with a bag full of goodies for everybody.

Read on...