Corporate Welfare

Most liberals in Washington want to limit the amount of money executives are paid and yet they want to fork over 25 billion to bankrupt companies. I think the latter sounds much more like corporate welfare.

Unbelievable.

 

You have to suspend reason to be liberal.

 

Not to mention creating little political jingles that rhyme. And of course you have to be able to, ever so eloquently, utter hypocrisies.

 

Crony Capitalism, Predatory Politicians, and the Detroit Three
by Newt Gingrich

"There’s a term that’s commonly applied to the economic systems of some Asian and Latin American countries. It’s “crony capitalism.”

Crony capitalism is when government controls significant parts of the economy. Under this kind of bureaucratic micromanagement, politicians -- not the free market -- call the shots. And that means that the decisions that control the economy are of necessity political decisions, not economic ones.

Crony capitalism is bad for government. Economic power in the hands of politicians breeds corruption.

Crony capitalism is bad for democracy. Individuals and businesses outside favored industries have an unequal voice in self-government.

Crony capitalism is bad for business. Politicians wedded to the status quo stifle growth and innovation.

And there’s one more thing about crony capitalism: It’s come to America.

Predatory Politicians Practicing Crony Capitalism Created the Economic Crisis

It’s the nature of crony capitalism to expand -- for government to acquire more and more of the economy.

The agents of this expansion are elected officials. Call them “predatory politicians.”

Crony capitalism practiced by predatory politicians is at the root of the current financial meltdown.

In exchange for campaign cash and support for favored constituents, predatory politicians aided and abetted the government-backed Fannie Mae and Freddie Mac as they created and fed the subprime mortgage market.

Now Predatory Politicians Are About to Make It Worse

And to fix the mess they created, what have predatory politicians turned to? Why, more crony capitalism of course.

First, they designed Wall Street bailouts in which a former chairman of Goldman Sachs got a blank check to disburse hundreds of billions of dollars to his former colleagues on Wall Street.

Then they took over an insurance company at a hugely inflated cost.

Now predatory politicians want taxpayers to fund a bailout of three bloated, stagnant companies that have been losing money for years, one of which is currently hemorrhaging over $1 billion a month.

The Detroit Three: An Investment Only a Predatory Politician Would Propose

To reward the unions that helped produce its electoral victory, the newly empowered Democratic Congress is proposing that American taxpayers pony up $25 billion to bail out the Detroit Three automakers, Ford, GM and Chrysler.

Democrats are using the current financial crisis as their excuse to bailout the autos. But in fact, the Detroit three were unprofitable long before the current crisis hit.

According to one economist, GM and Ford made more money-losing investments in the 1980s than any other U.S. companies. And the Detroit money pit only got deeper in the ensuing two decades. Since 1998, GM has been losing an astonishing $1.5 billion a month.

That’s an investment only a predatory politician would propose.

Bringing Fannie and Freddie Style Accountability to the Auto Industry

One of the things that makes crony capitalism so profitable for politicians is that Washington exempts itself from the economic and financial rules it imposes on private industry.

For example, in 2003, federal regulators discovered that Fannie Mae and Freddie Mac had engaged in Enron-style accounting fraud. But while executives at private companies who engaged in similar fraud went to prison -- and Congress responded by imposing the draconian and business-killing Sarbanes-Oxley bill on private businesses -- Fannie and Freddie executives barely received a slap on the wrist.

One of the reasons was House Financial Services Committee Chairman Barney Frank (D-Mass.). Frank fought tenaciously against the regulation that would have held Fannie and Freddie executives accountable and might have averted the financial crisis.

Now Chairman Frank wants to bring his particular style of crony capitalism to the auto industry.

Any Detroit Bailout Government Board Should Be Subject To Sarbanes-Oxley

On “Face the Nation” this Sunday, Chairman Frank announced that not only would he push for a taxpayer bailout of the Detroit Three during the special session of Congress this week, but he would also create a government oversight board for the three companies -- in effect, a board of directors made up of predatory politicians.

I believe that it would be a mistake for the taxpayers to be forced to bail out Detroit. Companies at which union workers make $71 an hour in wages and benefits -- compared to just $47 an hour at Toyota’s U.S. plants -- are not going to be saved by a $25 billion government check.

But if Democrats do find the votes to bring crony capitalism to Detroit, Americans should at the very least insist that any government board of directors created for the auto industry be subject to the criminal penalties and lengthy prison sentences in Sarbanes-Oxley.

What’s fair for the rest of us is fair for predatory politicians.

A Chance For President-Elect Obama to Deliver Real Change

The solution to our economic problems, be they in Detroit or on Wall Street, isn’t more crony capitalism; it’s economic growth.

While politicians in Washington are constantly calling on taxpayers to put up more and more money to bail out flagging businesses, there are practical things that wouldn't cost the taxpayers a penny that we could do to make America a better place to create jobs.

One of these things is to repeal Sarbanes-Oxley. As I outline in more detail here, Sarbanes-Oxley has had the unintended consequences of stifling innovation, killing new business start-ups and driving listings overseas.

President-elect Obama won an historic victory two weeks ago on the promise of delivering change to the American people. Bailing out the Detroit auto dinosaurs is not change. It is crony capitalism in service of a failed status quo.

President-elect Obama should stand up to congressional Democrats and say “no” -- “no” to saddling future generations of Americans with the bill for today’s crony capitalism.

That would be change we could believe in."

 

Wow, I never paid any attention to Newt before... the cronyism thing is huge really, Bush didn't seem to see things in any other light, Democrats spread the wealth around to benefit themselves and all their welfare recipients, government workers, and union members, and recklessly too. That's what got Gov. Davis recalled in California and it will be what takes down Big O too... Davis was insisting that the insurers were not allowed to leave the state and they, with upraised middle fingers were saying "who the hell put you in charge of overriding reason and reality?"

 

Here's another good one:

As GM Goes, So Goes the GOP
by Patrick J. Buchanan

"Understandably, Republicans are seething.

When Hank Paulson demanded $700 billion to haul away the trash in the dumpsters of JPMorgan Chase and Goldman Sachs -- assuring us we could hold a garage sale of the junk -- they rebelled. They acted as the nation, by 100 to one, demanded. They killed the Wall Street bailout.

The Dow quickly sank another 1,000 points, and, charged with criminal irresponsibility by the elites, the GOP buckled, reversed itself, rescued the bailout -- and was wiped out on Nov. 4.

Now we hear from Paulson that the $700 billion Congress voted will not, after all, be used to buy up all that rotten paper on the books of the big banks. Some banks are using the cash to buy other banks.

So Republicans are right to be enraged. They are victims of the biggest bait-and-switch in political history. But they are now about to do something terminally stupid. With GM, Ford and Chrysler teetering on the brink, they are turning a cold stone face to Detroit and are about to follow the counsel of that quintessential Bushite Dick Darman, who said of our computer chip industry, "If our guys can't hack it, let 'em go."

America responded -- by letting George H.W. Bush and Darman go.

Are Republicans aware of what they are about to do?

When workers, execs, engineers, dealers, salesmen and suppliers are all factored in, the Big Three employ 3 million people who contribute $21 billion a year to Social Security and Medicare, and $25 billion in federal income taxes. Add in all the businesses that depend on the auto industry, and we are talking about one-tenth of the U.S. labor force.

As columnist Tom Piatak of Chronicles and Takimag.com writes, 850,000 retirees, and their families, depend for pensions and health care on the Big Three. If they go under, the burden falls on us.

And to let the auto industry die is to write America out of much of the economic future of the planet.

In a good year, like 2005, Americans buy more than 17 million new cars, and West Europeans as many. Tens of millions in Eastern Europe, Russia, China, India and Southeast Asia are now moving into the middle class each year. These folks will all need or want one or two family cars. If we let the U.S. auto industry die, that immense and burgeoning market will be lost forever to America, and ceded to Asia.

"Who cares?" comes the free-traders' reply. Japanese and Koreans are setting up factories here. They can pick up the slack.

But that means Americans will work for and depend on foreign companies for a necessity of our national life as vital as the imported oil and gas on which our cars and trucks operate. All the profits of the mighty automobile industry in America will be sent abroad.

Before Republicans follow this free-trade fanaticism to their final interment, they might study the results of a poll by Peter Hart:

-- Seventy-eight percent of Americans believe the U.S. auto industry is highly or extremely important. Three percent think we can do without it.

-- Ninety percent of Americans believe the death of the U.S. auto industry would do great damage to our economic future.

-- By 55 percent to 30 percent, Americans favor federal loans to save it. And by 64 percent to 25 percent Americans back President-elect Obama's resolve not to let the U.S. auto industry go under.

If the GOP blocks these loans, and the industry dies, the party can forget about Ohio, Michigan and the industrial Midwest. For the Reagan Democrats will never come home again. Nor should they.

By the choices we make, we define ourselves and reveal what we truly care about. Thus, consider:

We bail out the New York and D.C. governments of Abe Beame and Marion Barry. We bail out a corrupt Mexico. We bail out public schools that have failed us for 40 years.

We bail out with International Monetary Fund and World Bank loans and foreign aid worthless Third World regimes.

We bail out Wall Street plutocrats and big banks.

But the most magnificent industry, the auto industry that was the pride of America and envy of the world, we surrender to predator-traders from Asia and Europe, lest we violate the tenets of some 19th-century ideological scribblers that the old Republicans considered the apogee of British stupidity.

Nancy Pelosi is talking about tying loans to a restructuring of the industry. But Congress is not competent to do that.

What needs to be restructured is the U.S. tax-and-trade regime.

Dump globalism. Instruct Japan, Canada, Korea, Germany and China that if they wish to sell cars here, they will assemble them here and produce the parts here. And we shall have the same free access to and same share of their auto market as they have of ours.

To accomplish this, use the same import quotas and tariffs Ronald Reagan used to save the steel industry and Harley-Davidson.

Reciprocal trade. Even Democrats like FDR used to practice it."