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Santelli for Senator

Posted by Richard on February 19, 2009

It's possible that a Senate seat from Illinois may be vacant soon. If so, CNBC's Rick Santelli would be a great choice to fill it (although he said he'd never move to Washington, D.C., because he doesn't "want to take a shower every hour"). Speaking from the floor of the Chicago Mercantile Exchange, Santelli delivered what's billed as the "Rant of the Year" on YouTube. Here it is:

(YouTube link. And CNBC link in case it gets pulled from YouTube.)  

Watching it is more fun, but here's a semi-accurate transcript excerpt (from Right Pundits):

Mr. Ross has nailed it. The government is promoting bad behavior. We certainly don't want to put stimulus pork and give people a whopping $8 or $10 in their check and think that they ought to save it.

And in terms of modifications, I tell you what. I have an idea. The new administration is big on computers and technology. How about this, Mr. President and new administration. Why don't you put up a website to have people vote on the internet as a referendum to see if we really want to subsidize the losers mortgages? Or would they like to at least buy buy cars, buy a house that is in foreclosure … give it to people who might have a chance to actually prosper down the road and reward people that can carry the water instead of drink the water?

This is America!

How many people want to pay for your neighbor's mortgages that has an extra bathroom and can't pay their bills?
Raise their hand!

This morning, I heard another sob story about someone in danger of losing their house. This was a computer technician in some New York suburb. Three years ago, on an $80k income, he bought a $550k house with no money down, and then spent an undisclosed amount remodeling it. Now, he's not getting as much overtime as he used to, has run up $30k in credit card debt, and is borrowing from family and friends to make the mortgage payments. He was portrayed in a sympathetic light as the quintessential "victim of the crisis" whom the Obama bailout is intended to help. 

You know what? I'm not one whit sympathetic. I resent the fact that I and millions of others who behaved more responsibly are going to get socked to bail this fool out of the mess he got himself into. Not to mention the added debt burden being passed on to future generations of responsible people. 

Of course, there'll be fewer responsible people in the future because, as Santelli noted, these bailouts are "promoting bad behavior," so that's what we'll get more and more of. 

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Pork for the people

Posted by Richard on February 18, 2009

The turnout was surprisingly good for the Americans for Prosperity stimulus protest today at the State Capitol — about 500 people showed up. The rally coincided with President Obama's signing of the "porkulus" bill at the Denver Museum of Nature and Science.

Considering that the rally was only announced yesterday, that it was in the middle of a work day, and that most of us anti-big-government types actually have jobs we can't skip out on, that's a pretty impressive turnout. 

And what's a noon-time rally without food, right? Well, the organizers served lunch, too (emphasis added): 

Organizers said there is too much pork in the bill signed by President Barack Obama. So they carved up a roasted pig and made sandwiches just as the president was getting ready to sign the bill. A live pig was also present before the podium as protesters spoke.

Jocelyn Armstrong of Parker carried a gigantic check for $30,000, which she said represented the cost of the stimulus to each American family. Her 8-year-old daughter Hannah signed the check because Armstrong said she would have to pay for it.

"In my opinion, Obama, Pelosi and Reed are the Bernie Madoff Democrats who want to take our money and use it for their purposes and we're here to say, 'No more,'" Jim Pfaff with Americans for Prosperity told the crowd.  

I'm sorry I couldn't attend (it's a 30-mile round trip, and I couldn't fit it in between meetings). It sounds like they had a better lunch than I did!

UPDATE: El Marco has some nice pix of the rally. (HT: LGF)

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Rally against the stimulus sham

Posted by Richard on February 17, 2009

Americans for Prosperity in Colorado is holding a rally in Denver tomorrow to coincide with President Obama's signing of the pork-laden abomination called a stimulus bill. From the email alert:

Join Americans for Prosperity at noon tomorrow on the west steps of the Capitol Building for a RALLY against the Obama-Pelosi-Reid fiscally irresponsible "stimulus" bill.

President Obama will be at the Denver Museum of Science and Nature between noon and 3:00pm tomorrow to sign the $787 billion "stimulus" package which is laden with pork-barrel spending and payoffs to liberal special interest groups.  [Jim Pfaff] Local and national media will be present at the capitol with us, so come and make your voice heard. We will be making the case for limited government and real opportunity.  

We need to send a message to President Obama and the Congress to stop mortgaging our nation's future away.  They need to get the message that politically-motivated government spending hurts our economy and kills jobs and prosperity!

The rally starts at noon Tuesday, Feb. 17, at the State Capitol, 200 E. Colfax Ave. Speakers include Michelle Malkin, Dick Wadhams, Jon Caldara, State Senator Josh Penry, and other state legislators. Be there if you can!

UPDATE: Jon Caldera, President of the Independence Institute, has added his call to attend (via email): 

We'll have over-sized checks you can sign to show your family's $30,000 commitment to the bill. I'll be joined by Michelle Malkin, Mike Coffman, Bob Beauprez, Jim Pfaff from AFP and many others.

I'm not usually one for public protests, because like so many on our side, I have a day job. But I just can't allow this huge push down the slippery slope to socialism be signed here in Denver without standing up and saying, "hell no."  I wish to go on record.

Let's let the world know there were at least some of us who didn't want to put our kids into debt for a bill that spends more than has been spent in the entire conflict in Iraq.

Please come to the $30,000 a plate pork roast!
 
More info at i2i.org.

I was pleased to see that both of the local newscasts I watched tonight — KDVR and KMGH — had good stories about the negatives of the stimulus bill (sorry, neither link is directly to the story because they aren't on the website yet).

KDVR in particular had a great story about the cost per household of the stimulus bill plus the financial system bailouts. Depending on your household income, it ranged from $4600 to over $90,000 per household. So Caldera's $30,000 price tag is in the ballpark.

If you're a bit disturbed by what it will cost you to get an $8 – $13 per month tax break, and you're in the Denver area, take a long lunch and attend the rally.

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Trekonomics

Posted by Richard on February 13, 2009

Jed Babbin:

The Obama team wants to boldly take our economy where no economy has gone before. Ladies and gentlemen, I give you the birth of “Trekonomics.” It’s like the old “Star Trek” series, just without the brainy, logical Vulcans.

The monstrosity known as the "stimulus" package reportedly scraps much of the highly successful welfare reform of the 90s, so I guess there'll be many more Klingons.

But as Babbin argued, instability and uncertainty in government policies are the enemies of sound business planning and a serious problem for the economy going forward. Yet, this administration is making it all up as they go along, and they don't mind saying so: 

As if to drive the instability knife deeper, Geithner did say of his new strategy, “We will have to adapt it as conditions change. We will have to try things we've never tried before. We will make mistakes. We will go through periods in which things get worse and progress is uneven or interrupted.”

This announcement was the perfect antidote to confidence: any credibility Obama and Geithner had gained in the over-hyped lead up to the announcement was vaporized. …

RTWT. 

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Hopenchange or fooled again?

Posted by Richard on February 6, 2009

Steve Clemons, September 26, 2008:

Tonight, George Bush succeeded I think in scaring Americans that this crisis could be a systemic threat. Bush said “our entire economy is in danger.”

That’s the fear button. He pushed it. And he said the clock was ticking.

This seems like a bad episode of “24.”

President Obama, January 20, 2009:

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.

President Obama, February 4, 2009:

"A failure to act, and act now, will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future," Obama said in his prepared remarks.

President Obama, February 5, 2009:

"This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," Obama wrote in the newspaper piece titled, "The Action Americans Need."

President Obama, February 6, 2009 : 

The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work.

That didn't take long. "Meet the new boss, same as the old boss …" 

Maybe more senators are buying into this fearmongering, but fewer and fewer of us ordinary citizens are. 

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The federal doorbell subsidy

Posted by Richard on February 5, 2009

Nothing better epitomizes what a craptastic thing the "stimulus" bill is than the hundred grand it includes for doorbells in Laurel, Mississippi. I found that item at StimulusWatch.org, where provisions of the bill are rated, ranked, and commented on by locals who know about a project. It's a good resource, along with ReadTheStimulus.org (which I linked to last week), for understanding just how much pork, special interest payoffs, and expansion of government (and how little real stimulus) this bill contains.

Also, check out the NRO piece by Stephen Spruiell & Kevin Williamson cataloging what they think are the 50 most outrageous things in the stimulus bill.

Once you're sufficiently motivated, contact your senators. Do it now and do it by every means you can manage. This thing is coming to a head quickly. There's no deal yet, but some of the RINOs are pretty wobbly, and those senators in particular need to hear from their constituents.

If you haven't already, take a minute to sign this petition. Then, go here and have Citizens Against Government Waste send a letter to each of your senators (take a few minutes to personalize the text they provide) — there's no charge, although they'd appreciate a donation. For a minimum $25 donation, you can send a fax message to the President and all the Republican senators.

But personal contact beats petitions and blast emails or faxes. Call your senators' Washington and/or local offices — it only takes a minute to tell the staffer who answers that you oppose this irresponsible bill. If you're a Coloradan, call Senator Michael Bennet at (202) 224-5852 and Senator Mark Udall at (202) 224-5941. For other Senate office phone numbers and for email addresses of senators and staffers, go here.

You can get phone numbers for your senators' local offices on their web sites, which you can get to from here. 

Do it now. Do it all. This bill will, all by itself, cost you and your family ten grand. And, far from stimulating the economy, it will cripple it for years to come.

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Fight the stimulus bill

Posted by Richard on January 30, 2009

Want to know what's in the $819 billion stimulus bill the House passed? ReadTheStimulus.org has the entire 1588-page monstrosity on line in both PDF and text form, and it's searchable. They also have the Senate version, the House GOP alternative, the CBO report, and other related documents.

If you read even a tiny portion of this behemoth bill, you're ahead of almost all the 244 Democrats who passed it.

After you've had your fill of perusing this profligate pork-fest, head over to NoStimulus.com and sign the petition against it (sponsored by Americans for Prosperity ). It's commendably brief and to the point:

“Congress should not enact an expensive spending bill under the pretense of stimulus or recovery. We cannot spend our way to prosperity, and such an expansion of the federal government will put a crushing burden on taxpayers in the long-term.”

Then please make a donation to help fund this fight. 

Don't think this is a quixotic quest. The opposition is mounting. In the House, Republicans showed uncharacteristic resolve and unanimity, with every single one of them voting no. And they even got eleven Democrats to vote with them — so in fact, the opposition to this bill was bipartisan! It was the pro vote that was entirely partisan. 

It's looking possible that GOP Senators will be similarly united in opposition, and if the Republican leadership handles it competently, given the Senate rules of procedure, they may be able to block this thing.

Meanwhile, the American people seem to be turning against this abomination. The latest Rasmussen poll shows support for the Democratic spendfest has slipped to 42%, and support for a GOP all-tax-cut alternative is growing. And a new Opinion Dynamics poll found that:

Less than half (45 percent) of Americans think “Barack Obama’s proposed $825 billion dollar economic recovery plan” will help the economy. Twenty-nine percent think the plan will not make a difference, while 18 percent think it will hurt the economy. …
…

Just 27 percent of Americans think elected officials in Washington are part of the solution when it comes to improving the economy, while 61 percent think they are part of the problem. …
…

More Americans think the focus of an economic stimulus plan should be “cutting taxes” (50 percent) than "increasing government spending on new programs and infrastructure projects” (29 percent). …

Contact your senators, sign the petition, make a donation, write a letter to the editor — if we want to avoid Carter II or worse, we've got to stop this thing!

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Remove impediments

Posted by Richard on January 28, 2009

In a newspaper ad (PDF) paid for by the Cato Institute, hundreds of economists, including Nobel laureates and others prominent in the field, have challenged President Obama's claim that "we need action by our government, a recovery plan that will help to jumpstart the economy" (emphasis added):

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth. 

Call your Congresscritter's office and tell them you think spreading around another trillion dollars that we don't have is insane and irresponsible, and giving billions of it to organizations like ACORN is contemptible and criminal. Tell them tax rate cuts will stimulate the economy, just as they did for Kennedy, Reagan, and Bush. Tell them you get more of what you reward and less of what you punish, so we should reward production, job-creation, and success — not failure.

UPDATE: I've learned via email from Cato that the ad ran in today’s New York Times (page A11) and is also scheduled to appear in the Washington Post, Los Angeles Times, Chicago Tribune, and Washington Times. Good work, Cato!

UPDATE2: The House passed the abominable $819 billion monstrosity, but with all the Republicans and 11 Democrats voting no: 

The 244-188 vote was not what Mr. Obama had hoped for. A week of presidential wooing — including a visit to the Capitol, a return visit to the White House by moderate House Republicans and a bipartisan cocktail party Wednesday night — did not yield a single Republican vote. The president also lost 11 Democrats.

Instapundit passed along this suggestion: 

UPDATE: Reader Mark Cates writes: “You might mention that it would be worthwhile to send these guys a Thank You for their vote. They probably need as much encouragement as they can get. I sent one to Shuler.”

Good suggestion.

Yep. And if, like me, you're represented by one of the 244 sleazeballs who are gleefully increasing the federal budget by 30% in one year, and during a recession to boot, send them a "Shame on you!" This battle may have been lost, but the war is just beginning. Keep the heat on!

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Recession batters law firms

Posted by Richard on January 27, 2009

Every cloud has a silver lining:

After upending a succession of U.S. industries, the recession has arrived for U.S. law firms, which have long seen themselves as partially insulated from economic downturns. In December, Thelen LLP, another large San Francisco firm, also shut down for good, citing recessionary pressures. Later that month, Thacher Proffitt & Wood LLP, a 160-year-old New York firm, announced that it was closing. Dreier LLP of New York is dissolving after its founder was arrested for fraud.

After the arrest, all the other partners and associates decided they wanted to spend more time with their families.

Pay cuts and layoffs are becoming commonplace. …

In November, New York legal giant Cravath, Swaine & Moore LLP announced it was reducing year-end bonuses for junior lawyers, and that it wouldn't raise its billing rates in 2009. Latham & Watkins LLP, one of the nation's highest-grossing firms, said in December that associates would not get raises in 2009 — a move followed by many other firms.

"More firms are in a fragile condition than I've ever seen," says William Brennan, a law-firm consultant with Altman Weil Inc. and formerly chief financial officer at two large Philadelphia firms.

Profits, on average, were down 8% to 12% across the industry last year, after 15 years of consistent profit growth, says Peter Haugh, managing director for the Legal Specialty Group of Wachovia Wealth Management.

Throughout the industry, business has dropped off in such key practice areas as mergers, public offerings, and corporate finance. Litigation, often counted on to carry firms through downturns, has become less profitable as clients increasingly settle big cases, forgo lawsuits altogether, or pressure firms to discount their fees, lawyers say. Some practice areas, such as bankruptcy, however, are robust.

Litigation is less profitable — more good news!

Too bad about the bankruptcy business, though.

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The Limbaugh compromise stimulus plan

Posted by Richard on January 27, 2009

The other day, President Obama explained to Congressional Republicans what he means by a bipartisan stimulus plan: the Republicans should acknowledge that he won and go along with whatever he wants. So much for the new inclusive politics.

Rush Limbaugh has proposed a real bipartisan compromise (link may work only a short time for non-subscribers). He noted that Keynesians think you can best stimulate the economy with lots of federal spending on "infrastructure," while supply-siders think the best way to stimulate the economy is tax cuts, putting more money in the hands of the people and businesses that create jobs. Both sides have many supporters, and he argues that a real bipartisan stimulus plan would give both sides a fair shake:

Mine is a genuine compromise.  So let's look at how the vote came out, shall we?  Fifty-three percent of voters in this country — we'll say, for the sake of this proposal, 53% of Americans — voted for Obama.  Forty-six percent voted for Senator McCain, and 1% voted for wackos.  Let's give the remaining 1% to President Obama, so let's say that 54% voted for President Obama and 46% voted for Senator McCain.  As a way to bring the country together and at the same time determine the most effective way to deal with recessions, under the Obama-Limbaugh Stimulus Plan of 2009, $540 billion of the one trillion will be spent on infrastructure as defined by President Obama and the Democrats.  The remaining $460 billion, or 46% that voted for Senator McCain, will be directed towards tax cuts, as determined by me.  

These tax cuts will consist primarily of capital gains tax cuts and corporate tax rate cuts.  So Obama gets $540 billion to spend his way.  The other people of this country who did not vote for his way get $460 billion spent the way they would like it spent.  This is bipartisanship! This is how bipartisanship really works.  Okay, Obama wins by a 54-46 majority, so he gets 54% of the trillion bucks.  Spend it his way.  We get 46% of the trillion bucks to spend our way, and then we compare. Then we see which stimulus actually works and works the fastest, and I will guarantee you that if this plan is adopted, just the announcement that $460 billion will go toward paying for tax cuts, capital gains, and corporate tax rates — we could throw in some personal income tax rate reduction in order to make sure that the voters don't think it's all about helping the big guys.  But we need jobs, do we not?  

Who hires people?  Businesses!  Businesses need tax cuts.  The US corporate tax rate is obscene.  It is the highest of all industrialized nations.  It's 35%.  Cut it.  Cut it in half.  Make the capital gains rate go away for three months, and then get out of the way to see what happens on Wall Street.  And once Wall Street starts ticking up 500 points a day, you watch what happens to the rest of the private sector.  It will follow right along.  This would ensure a bipartisan compromise bill, as Democrats have said that they're always about. It would satisfy the American people's wishes, as polls currently note; and it would also serve as a test, going forward, as to which approach best stimulates the growth of jobs — and it can be measured side by side.  It could be determined where the new jobs are coming from. 

If Congress has got to pass a massive stimulus bill, I'd rather see this than the steaming pile of pork (much of it to be spent 2, 3, 4 years down the road) they're currently putting together. Although I'd rather see a long-term capital gains cut than a short suspension.

Of course, the Limbaugh plan has zero chance of even being considered. The Republicans are too gutless and disorganized to embrace and promote it. The Democrats won't even listen to anything with Rush's name on it. And I suspect many of them know he's right about which will be shown to produce more jobs, and they can't afford to fail that test.

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Auto bailout bill fails

Posted by Richard on December 11, 2008

The $14 billion bailout for the auto industry died in the Senate tonight (hooray!) despite marathon negotiations late into the night:

The Senate rejected the bailout 52-35 on a procedural vote — well short of the 60 required — after the talks fell apart.

The implosion followed an unprecedented marathon negotiations at the Capitol among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

The group came close to agreement, but it stalled over the UAW's refusal to agree to wage cuts before their current contract expires in 2011. Republicans, in turn, balked at giving the automakers federal aid.

On its 10 PM newscast, CBS4Denver quoted Colorado Sen. Wayne Allard as saying that all sides agreed to give up something except the union.*

In keeping with my obscure Rand reference in last night's post, I'm compelled to speculate that the UAW negotiator must have been Fred Kinnan.

Atlas PukedI'm not the only person who's been reminded of Atlas Shrugged in recent weeks. A friend of mine brought it up back in October when Joe the Plumber hit the news. Today, Rush Limbaugh brought it up (link will only work for a short time for non-subscribers). He suggested that we're living through a sequel to Rand's novel, this one called Atlas Puked — or maybe Atlas Laughed His Butt Off.

But as Limbaugh noted, the consequences won't be amusing.

* Allard's statement is not yet available on the CBS4Denver web site or on his web site, which is apparently updated only every three weeks. I guess at times TV news still has a significant immediacy advantage over the "new media."

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Stop the auto bailout

Posted by Richard on December 10, 2008

The House passed a $14 billion bailout bill for the "Big Three" automakers tonight. And what a steaming pile of crap it is. Fortunately, it may not get the 60 votes it needs in the Senate. ALG put the whole thing into perspective: 

December 10th, 2008, Fairfax, VA—Americans for Limited Government President Bill Wilson praised Senators John Ensign (R-NV), Tom Coburn (R-OK), Jim DeMint (R-SC), David Vitter (R-LA) and Richard Shelby (R-AL) for their efforts to oppose the $15 billion bailout package for the Big Three automakers.

…

“The American taxpayer cannot and must not be forced to perpetuate the mismanagement of the Big Three by financing failure. There is no excuse for putting taxpayers on the hook for keeping failed companies afloat that could much better be reorganized under normal Chapter 11 bankruptcy,” Wilson added.

Under Chapter 11 bankruptcy protection, companies have the ability to broadly restructure the scope of operations, redo labor contracts, and otherwise scale back in order to emerge from bankruptcy with a profitable business model.

“Everything that Congress says it is attempting to do, to create a deal to reorganize these companies, to return them to profitability, is precisely the purpose of Chapter 11 bankruptcy protection. The $15 billion bailout is just a reason not to go into Chapter 11. In fact, the real intention is to perpetuate bad management and Big Labor excesses at taxpayer expense,” said Wilson.

Mark Perry posted a succinct illustration of just why GM is circling the drain:

GM sales in 2007: 9,370,000 vehicles
Toyota sales in 2007: 9,366,418 vehicles

GM profit/loss in 2007: -$38,730,000,000 (-$4,055 per car)
Toyota profit in 2007: +$17,146,000,000 (+$1,874 per car)

So on average, it costs GM about $5,900 more to make a car than it does Toyota. The solution, according to the President and Congressional Democrats, is to give them enough money so they can continue losing four grand per car for a few more months.

Adding to the lunacy, Democrats have insisted that these money-losing, teetering-on-the-brink companies need to spend hundreds of millions, maybe billions, to completely retool so they can make more fuel-efficient and "greener" cars — as gas prices continue to plummet. Sure, let's force GM's cost of making a car up even higher! That'll help!

And don't forget the bill includes a "car czar" to tell the automakers how to make cars, what kind of cars to make, and how to run their businesses. "Car czar" is the media's name, not the formal title of the post. I suggest they call it Director of Economic Planning and Natural Resources and appoint Wesley Mouch to the job.

Contact your senators and tell them to oppose this disgusting, stupid, and costly corporate welfare scheme.

UPDATE: Earlier this evening, Instapundit said, "The bailout is unpopular with the public. I’m surprised that more GOP politicians aren’t taking an anti-bailout stance, since it’s an opportunity to align action with both public sentiment and small-govermnent principles." In case you haven't noticed, Glenn, a significant number of GOP politicians are clueless about both public sentiment and small-government principles!

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The Corker plan

Posted by Richard on December 6, 2008

Sen. Bob Corker of Tennessee proposed a plan for how to bail out the "Little Three" (GM, Chrysler, and Ford) that doesn't suck nearly as much as what the Congressional Democrats and the Bush administration are talking about. Larry Kudlow had a good summary:

Mr. Corker wants a deal where, first, carmakers must restructure all their debt at some price, perhaps 30 cents on the dollar. But the bond owners must be satisfied so the government doesn’t have to pick up the tab. Second, Mr. Corker wants carmakers to get their worker-compensation levels exactly equal to those of the Japanese transplants in Detroit south. That means about $48 total hourly labor costs. GM’s labor costs were $73 in 2006, an estimated $69 in 2008, and are projected to be $62 in 2010. This, of course, includes pension and health benefits. If these two conditions are satisfied, Mr. Corker then believes some kind of government loan might be granted. We’ll have to wait and see where this thing goes.

I suspect it will go nowhere. The UAW, although they've recently offered both meaningful concessions (regarding the "jobs bank") and meaningless gestures ("delays" in retiree benefits funding), aren't about to OK significant permanent labor cost reductions, and that means all their congressional lackeys will completely ignore the Corker proposal.

But good for Sen. Corker for throwing it out there anyway. It would be nice to get an on-the-record up or down vote on this, but I'm not holding my breath.

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Bailout bubble

Posted by Richard on November 28, 2008

Catching up on a couple of days' worth of Instapundit, I spotted one of those short, brilliant quips for which Glenn is known:

Could we be in the midst of a “bailout bubble?” And if so, what happens when it bursts?

Yes, we could. Especially as the line for bailouts (predictably) keeps growing beyond all reason, and the politicians keep feeding it beyond all reason. 

The problem is, when this bubble bursts — unlike the housing bubble, tech bubble, or "tulip mania" bubble — it won't hurt just those who willingly (and foolishly) bought into it. 

This time, we've all bought into it, whether we wanted to or not.

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Crony capitalism

Posted by Richard on November 20, 2008

When you start handing out free money, expect a long line to form. Wall Street bankers and insurance companies have been joined in the bailout line by student loan debtors (and their creditors), domestic auto makers, states, municipalities, … I'm sure the line will get longer day by day.

The heads of the "big three" car makers were in Washington begging today (after flying there in their private jets). They were accompanied by UAW president Ron Gettelfinger, who joined them in begging for taxpayer money. But Gettelfinger made it clear that the union wouldn't accept any pay or benefit cuts.

This is absurd, and the claim that the current financial crisis caused the carmakers' problems is nonsense. GM's losses have averaged more than $1.5 billion per month for years, so its share of the proposed $25 billion bailout merely lets it continue on an unsustainable course for a few more months. It's like giving someone a transfusion while their severed carotid artery continues spurting blood. 

The severed artery that the "doctors" in Congress don't want repaired is the UAW contract. Total employee compensation for the "big three" averages about $73 per hour. For the American factories of Toyota, Honda, and Nissan, it's about $44 per hour.

And that cost disparity doesn't even take into account the deleterious effect of an inch-thick union contract full of bureaucratic, restrictive, and onerous work rules. Or the thousands of union members in the "jobs bank" program getting $31 an hour plus benefits to work crossword puzzles and watch TV for 40 hours a week.

Bill Wilson, president of Americans for Limited Government, neatly summarized what's wrong with this bailout plan in a letter to Congressional leaders: 

“The automotive industry’s problems cannot and should not be passed on to the American taxpayer. And they will only be compounded if the federal government now offers billions of dollars of taxpayer-financed loan guarantees to companies that would otherwise file for bankruptcy,” Wilson wrote in the letter.

…

“These taxpayer loans will, by design, perpetuate these companies in their present form,” Wilson said. “However, it is the very present forms of each company that must be addressed and resolved by market forces, a process that will not occur if government gets in the way of bankruptcy.”

Newt Gingrich has a name for what's happening in Washington these days: 

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.

Read the whole thing. Then contact your senators and representative and tell them, "Enough! No more bailouts! No more crony capitalism!"

UPDATE: The Center for Individual Freedom will blast fax the President and Congressional leaders on your behalf. But in addition (or instead), it's best to call your congresscritters' offices and tell the nice staffer whose keeping a tally of calls for and against what you think. (Oops, forgot the link — fixed now.)

 

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