Douglas “Wrong Way” Corrigan was an aviator in the 1930s.  In 1938 he mistakenly flew from New York to Ireland when he was supposed to fly from New York to California, because he claims he misread his compass.  It later turned out that he really intended to fly to Ireland but couldn’t get permission.

What’s Hillary’s excuse?  As the Obama Administration has called the removal of Honduran President Manuel Zalaya a coup d’etat, more attention is being focused on what the law in Honduras really says.  The Congressional Research Service looked into it and had this to say:

“The Supreme Court of Honduras has constitutional and statutory authority to hear cases against the President of the Republic and many other high officers of the State, to adjudicate and enforce judgments, and to request the assistance of the public forces to enforce its rulings.”

—Congressional Research Service, August 2009

So why is Hillary Clinton now attacking the Honduran Supreme Court by pulling the visa of all fifteen members of the court?  The U.S. sided with Hugo Chavez and Costa Rica to reach a “negotiated” settlement that would put Zalaya back in the presidency.  Honduras said, sorry, that would violate our constitution.  He broke the law, we dealt with it according to our constitution, and that’s that.

Mary Anastasia O’Grady writes in the Wall Street Journal:

The upshot is that the U.S. is trying to force Honduras to violate its own constitution and is also using its international political heft to try to interfere with the country’s independent judiciary.

Hondurans are worried about what this pressure is doing to their country. Mr. Zelaya’s violent supporters are emboldened by the U.S. position. They deface some homes and shops with graffiti and throw stones and home-made bombs into others, and whenever the police try to stop them, they howl about their “human rights.”

When will the apology tour end and we start standing up for liberty and democracy?  Is it more important that Hillary have an accomplishment she can brag about than following  the rule of law?  This administration has so much, so backwards it is hard to keep track of it.  They focus all their time and energy doing things they are not constitutionally authorized to do (health care, taking over car companies and banks, funding ACORN), and ignoring their fundamental constitutional duties of foreign policy and national defense.  Let’s hope some pressure can be brought to bear on the Obama Administration to back off before Chavez puts a puppet in place.

Just when you thought this administration had gone about as far as it could go in turning America into the old Soviet Union another subtle clue is revealed.  When you craft legislation that is over a thousand pages long and you try to slam it through before anyone can read it, all kinds of creepy things come crawling out when you turn the lights on.  This is from the White House’s blog:

“There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care.  These rumors often travel just below the surface via chain emails or through casual conversation.  Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to flag@whitehouse.gov.”

Turn in your neighbor?  Does this not sound like Cuban block watchers in Castro’s worker’s paradise?  Is your name in their database?  If you apply for a government job, do you think you might run into a “problem”?  Will the IRS come knocking on your door to audit you?  If this doesn’t send chills up your spine, you are made of sterner stuff than me.

What’s really Fishy?

To be fair, everything this administration has said about health care, or is it health insurance, seems fishy?  So should all Americans be writing to the White House to complain?  Be careful, I am sure they are taking the names on both sides of the e-mail.  This Administration wants the First Amendment only to apply to the titan of the teleprompter.  But if you criticize the state, you are Astroturf, an unruly mob, crazed right-wing plants.  When do they send the goons in to break up the crowd and beat a few participants to send them a lesson.

Be Careful Before You Take a Bite Out of that Apple

The administration is touting the Cash for Clunkers program as a great success.  But as the auto dealers file for the rebates they are faced with this {emphasis added}:

“This application provides access to the DoT CARS system. When logged on to the CARS system, your computer is considered a Federal computer system and is the property of the U.S. Government. Any or all uses of this system and all files on this system may be intercepted, monitored, recorded, copied, audited, inspected, and disclosed to authorized CARS, Dot, and law enforcement personnel, as well as authorized officials of other agencies, both domestic and foreign.”

This was widely reported by Glenn Beck and immediately the statists came forth to attack him as a right wing fanatic.  I also saw some insipid posts saying, “well how are they going to be able to do that?  I’ll smack anyone who tries to touch my laptop; that web site is only for the dealers, not for consumers, etc., etc.”  To that I say, read it for yourself and decide.  Perhaps, as some suggest, it was some overly aggressive government lawyer who was trying to protect…  Protect what?  Rebates?

The pattern is shocking and the pattern is clear.  If the government gives you TARP money, the government sets your salary.  If the government bails out and then takes over the car companies, the government will decide what kind of cars it will build and if it loses money for years (Amtrack, the Postal Service), the government can decide to keep them afloat to achieve their agenda.  Keeping all those UAW members on the government teat, will keep their votes in the Democratic column.  Now if you want a rebate, the government owns your computer.  Let’s see, is there any disparaging information about the Obama administration on there?  No rebates for your dealership and we’ll fire off an e-mail to flag@whitehouse.gov to boot.  And what about that reference to foreign agencies?

Barack Obama is a disciple of Saul Alinsky and he knows a thing or two organizing and defeating his opponents, not by logic or reason, but by attack and disinformation.  That is how dictators grab power.  Will we be able to do as our Founding Fathers did and stop the spread of this tyranny?  The recent town hall meetings with our legislators give me reason to hope that Americans are paying close attention and do not like what they see.

Our once proud automobile industry

The government institutes regulations such as CAFE that force the automobile companies to build many cars they can’t sell at a profit for each car they can.  The unions negotiate contracts that pay people who have been let go 90% of their salary and give retirees extremely generous packages.  The automobile companies stagger under this load to the brink of bankruptcy and what happens?  The CEO of GM gets booted out and the government and the unions end up owning the car companies.  In the case of Chrysler the UAW will end up owning 55% of the company if the government’s plan is approved.

Had the automobile companies gone into bankruptcy before the bailout, as this author advocated, the union contracts could have been voided and a new workable deal struck.  But the government said bankruptcy was bad. The government said we had to give the car companies billions of our tax dollars.  The government said, if you automobiles companies don’t accept our deal, you will be forced into bankruptcy.  Huh?

So tell us again, Mr. Obama, how this is not socialism.

He looked nervous.  He curled up the corners of his two hole cards, aces.  He eased them back down on the table and scanned the other players.  Nancy Pelosi had a stack of chips totaling $25 billion and he wanted all of them.  No, he needed all of them.  Desperately.  The other three, all Japanese, sat expressionless behind their dark glasses.  At every hand all they said was “Call”.   No raise.  No drama.  Very cool.  Very dangerous.

He looks again at the four cards on the table.  Nothing to help him there.  He needs another ace. He needs the ace he calls the Volt. Pelosi turns to him. “So, what’s your plan?”  He swallows hard, trying hard not to show it and says, “All in,” and pushes his remaining chips into the center of the table.  The dealer burns another card and then peels off the “river.” And we’ll be right back for the final outcome of tonight’s game.

GM on the Precipice

That must be how Rick Wagoner feels.  It seems he’s betting everything on the Chevy Volt. If he draws that ace, he’s a hero.  If not, he’s history.  So what are his chances?

If that’s all he’s got, they’re pretty long odds.  The Volt is not due to hit the showroom floor until 2010, and at a whopping $40,000 per copy.  Not a bad price for a Cadillac, but for an untested electric car with a 40 mile range?  That’s a tough sell.  Even at that, the $40,000 might not be profitable, just break even.  But, there will be a tax credit of $7,500 to help take the sting out of it.

Without Bankruptcy

Without a major revamping of their cost structure that can probably only be achieved through the bankruptcy courts, GM is still carrying $2,000 per vehicle in labor costs that its competition doesn’t have.  And what about those three players to his right in the dark glasses, do you think they are standing pat?  Although very low key, it is reported that Toyota, Nissan and Mitsubishi are all planning to introduce electric cars in the same time frame.  If they do that and they also have the $2,000 per vehicle edge, it will be very bad for GM and any bailout will go down the drain.

The other factor is the way the Japanese do strategic planning.  They typically do not look to just the next quarter.  They are known for developing 50 and 100 year plans.  That is not a typo.  So if they introduce a vehicle they will do it for the long haul.  Believe it or not the Toyota Prius has been on the market for seven years already.  The Japanese are not afraid to introduce a pretty good model and then continuously improve it and if they believe the direction is right, they are willing to wait for the results.  The Big Three, on the other hand tend to have a shorter planning horizon.  Witness Ford’s announcement that it intended to build 250,000 hybrids and then did a market survey when gasoline was about $2.30 per gallon, and decided that they should not go forward.  When gas prices took off they were caught flatfooted while Toyota was selling Priuses at a premium and they couldn’t make them fast enough.

New Administration, New Congress, New Energy Policy

Then there is the energy issue.  Putting more and more electric cars on the road is a good idea and a way toward energy independence.  However, the new administration and the incoming Democratic Congress want to kill the coal industry.  Coal currently generates 49% of our country’s electricity and when it comes to coal reserves, the U.S. is to coal what Saudi Arabia is to oil.  But the new incoming chairman of the House Energy committee, Henry Waxman of Beverly Hills, California, is more determined than ever to implement a green agenda and kill coal.

So what do you replace the coal with?  Oil? Gas? Nuclear?  On the campaign trail, I heard Barack Obama and Joe Biden mumble some things about nuclear being okay, but it was hardly a ringing endorsement.  Do they think for a minute that wind or solar are anywhere near replacing coal?  So, they actually plan to reduce our electric generating capacity by 49% and then not only replace it but grow it to be able to handle all these electric cars.  Where’s that plan?

If you don’t have enough electricity, you can’t charge up your electric cars.  If good old supply and demand does its usual thing, the price of electricity should skyrocket and I can tell you first hand that in New York, it’s not cheap right now.  If electricity skyrockets, whatever manufacturing is left in New York and other rust belt areas will be pulling up stakes left and right and heading south.  If that population follows the jobs, does that mean more votes for the red states and a shift in Congressional seats as well?

The Democrats better re-think that plan if they want to stay in power.

I was having lunch with a colleague the other day and the conversation turned to the economy. He spoke of some recent analysis of the number of jobs that would be lost if the Big Three failed.  He recounted not just the employees of the auto companies themselves, but the employees of their suppliers, advertising firms that produce car ads, and on and on.  His final tally was well over 1 million jobs lost.  He concluded by saying it would make the current financial crisis a walk in the park.

Getting enough exercise?

Does that mean that we are all going to start walking?  Not that that would be a bad idea, we could all stand to lose some pounds, but for someone who has a 23 mile one-way commute with no option for mass transit, it’s just not going to happen.  So what do we do?  Well, one of several scenarios is going to happen.

Scenario 1:  The Big Three Close Their Doors

If this scenario came about, what would we do?  We would go buy Toyotas, Nissans, Hondas, Volkswagons, etc.  Those companies would have to scale up to fill the void caused by the Big Three closing their doors.  That demand would need people.  So a significant number, but by no means all, of the laid off workers from Detroit would move south to North Carolina, Alabama, and other points south, and join these auto companies at their U.S. plants.

Likewise the suppliers would form new alliances to supply these car companies, as would all the other ancillary companies that currently support Detroit.  Would jobs be lost?  Yes.  Would it be anywhere near the number of jobs my friend projected?  No.

Scenario 2: The Big Three Reinvent Themselves

The liberty of the car companies to reinvent themselves is constrained by government regulations.  Surprise!  If the Big Three have any hope of reinventing themselves, they have to have the freedom to do so.  Start by eliminating the CAFE standards.  CAFE, which stands for Corporate Average Fuel Economy, is the mileage standards dictated by the government that the auto companies must comply with or face heavy fines, draining more money from the Big Three’s coffers.  So for every car that the Big Three build that may get 20 mpg, they may have to build and sell perhaps 3 that get 30 mpg, in order to meet the standard.  But what if they can make money on the 20 mpg car, but they lose money on every 30 mpg model?  What if the reason they can’t make money is because of their labor costs per vehicle, their pension costs per vehicle, their health care costs per vehicle, when added up are too high compared to their foreign competitors.  They are basically forced by the government to make an unprofitable product.

Why not abandon the CAFE standards?  Let Detroit build the cars and trucks that they can make at a profit.  Let the foreign manufactures make cars that they can make at a profit, including high mileage cars.  Let the American people have the freedom to choose which they want.  As the price of gasoline climbs as it did, and will again, people will want to buy high mileage cars, hybrids, electric cars, but they will also want to buy SUVs, luxury cars and light trucks.  Why does a particular manufacturer have to produce all kinds?  When has government ever made the right call on what products to produce? (Hint:  think of all the five-year plans and Great Leap Forwards from the Communist world).

Scenario 3: The Government Bails Out the Big Three

The government prints up a bundle of cash, $25 billion or more, gives it to the auto companies and hands the IOU to you and me.  The new Democratic Congress and Administration will toe the line for their backers in the environmental movement and demand higher CAFE standards for the auto companies in the interest of addressing: our dependence on foreign oil; green house gases; and helping consumers.  This will put increased pressure on the Big Three to make more unprofitable products and we will find ourselves back in the same place a few years hence.  More liberties will be vaporized as the government appoints a czar to oversee the auto companies to be sure they are building the right products, that management is not getting paid too much money, and well let’s face it, they would basically be nationalizing the auto companies.  Management talent would dry up, and socialism would make greater inroads into the U.S. economy.

The Best Scenario

The Big Three file for bankruptcy, if that is what they need to do.  The stockholders would probably be wiped out, the management team would be replaced, and this will let them re-negotiate their labor agreements.  Congress and the new Administration realize that people will want to purchase cars with higher mileage as the price of gas climbs regardless of any government requirement.  There is no justifiable reason that any particular auto company has to build a particular car because the government says so.  Achieving this state of enlightenment, Congress repeals the CAFE standards.  With the liberty to manage the company to make a profit rather than meet the constraints of a bevy of interest groups, a more energized management team takes the reins, and returns the Big Three to competitiveness.

Drawing a line in the Sand

If we don’t take a stand here and now, every company that wants a cash cushion will be working the halls of Congress to get their hands on your money.  There is not enough to go around.  In addition, many of the problems we are facing were created by government initiatives.  The mortgage mess was not the result of not enough regulation but by government programs that compelled lenders to give loans to people who could not afford them.  Detroit’s problems are a result of CAFE standards. and onerous union contracts.  Since government created many of thse problems why do we think that government knows how to fix them?  What we need to do is tell them to back off and let the free market work.