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Rescue Me

by Bill O'Connell on April 1, 2009

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Can liberty be saved?  Is there a chance that we can rescue our country from the federal juggernaut that wants to reach down into the deepest recesses of your life and take control?  They spend your money with reckless abandon and say, “What Me Worry?”  Those in power would have indulged in the trappings of office, sated on money and power, and be long gone with their spoils while the crumpled bill lies on the floor for you and your children and your children’s children to pick up and pay.

They have invited many to the party, to eat, drink, and be merry with promises of “middle class” tax cuts that are the greatest April Fools joke of all time.  Don’t worry we’ll get the rich to pay for it all.  You know, those evil fat cats on Wall Street.  But the Republicans on Wall Street have long be replaced by Democrats.  That’s right, Gordon Gecko is a Democrat.  60% of Wall Street contributions went to Democrats vs. Republicans.  How long will the top 2% of earners keep shouldering the burden before they slow down, stop, or emigrate.  Who will pick up the pieces then?  Who will support the drunken revelers that Obama piled on the public dole?

AIG Outrage

All of the outrage by Congressional and Administration leadership over the AIG bonuses is the epitome of hubris.  AIG contributed $104,000 to each Barack Obama and Christopher Dodd, during the recent election cycle.  Do you remember the brouhaha over language in the stimulus bill that had a loophole that allowed the AIG bonuses to be paid?  Dodd said he didn’t include the loophole.  Later he said he did include it but at the insistence of the Obama administration.  Now is it just me or does anyone else see a quid pro quo here?  Then they come out red-faced professing that the bonuses are an outrage.  Senator Schumer, who is threatening to unconstitutionally tax the bonuses into oblivion, took $112,000 in contributions from AIG.

Lessons from Hugo Chavez?

More recently President Obama effectively fired the CEO of General Motors and now speaks of bankruptcy.  I, among many others, said they should have filed for bankruptcy long before taxpayers bailed them out.  So now after we have sunk taxpayer money into GM and Chrysler, Obama steps in and effectively runs the company on “our behalf” as owners of 80% of the company and now says bankruptcy is a good idea!  When will the amateur hour come to an end?  But watch carefully, because Obama will assiduously avoid offending the auto workers union, despite the fact that the union contracts put US auto makers at a $2000 per car disadvantage against the competition.  GM (Government Motors) will now be forced to make cars that satisfy Obama’s left wing supporters but that Americans don’t want to buy.  It will be interesting to see how the government forces us to buy them.

What Do the Europeans Think?

For years we have been told by the left that we must listen to what the Europeans are saying.  They say we have to consider foreign laws in weighing Supreme Court cases.  They decried Bush’s policies as alienating our European friends.  So what do the Europeans think of Obama now?

The president of the European Union on Wednesday ripped the Obama administration’s economic policies, calling its deficit spending and bank bailouts “a road to hell.” — Washington Post, March 25

A Very Dangerous Path

In March of 1933 Adolf Hitler, proclaiming a national emergency of a potential communist revolution asked the German legislature, the Reichstag, to grant him emergency powers to deal with the situation.  Such a proposal required two-thirds approval by that body.  The final vote was 441 in favor, 84 opposed.  From that point on, Hitler was dictator. 

 Rahm Emmanuel likes to say, “You never want a serious crisis to go to waste.”  President Obama is taking the current financial crisis to ram through a massive power grab.  The legislation is being rammed through with such force and urgency that no one has a chance to read it.  What ticking time bomb could be tucked in those pages that get voted on and passed without scrutiny?  Just look at the AIG fiasco for the answer.  No one seemed to know or admit it was in there.  If we allow this to continue, we may find some other provision included in the dead of night that will destroy our country forever.

Be on your guard.

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Kennedy Shouldn’t Rush Health Care Reform

by Bill O'Connell on February 20, 2009

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Two Doctors Operating. A Lawyer, A Bureaucrat, and An Insurance Agent Oversee the Procedure

In the category, be careful what you wish for, Ted Kennedy should be careful about pushing through Universal Health Care reform.  It has been reported that this effort has taken on a sense of urgency because of Mr. Kennedy’s brain cancer.  But what if we already had national health care?

Would Kennedy Receive Treatment?

Ted Kennedy will be 77 on Sunday.  I wish him well.  However in an opinion piece by Betsy McCaughey, she quotes Tom Daschle, who nearly became the architect of health care reform before his tax problems derailed his nomination.

Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.

In other words, sorry Ted, since any treatment is not likely to significantly prolong your life such that the expense would be justified, no treatment will be paid for.  You will just have to pay it yourself or die.  I guess the good news is that Senator Kennedy, like Senator Dascle, and most of the ruling class who pass these commandments down from Mount Capital Hill, are rich enough to pay for private treatment, if it is allowed by law.  If not, they are rich enough to take a “vacation” to, say, India and while on vacation wander into a facility their for treatment by American trained Indian doctors.

But what about you and me?  Oh dear, you better get your affairs in order.

Health Care Reform You Can Believe In

As long as the treatment received by a patient is paid for by someone other than the patient, the patient really doesn’t care what it costs.  The liberal solution is to have the government take it over, and a bunch of bureaucrats will “act on your/our behalf” and make those decisions.  The outcome of which is that you better stay healthy.  Because if you don’t, you may not get treatment until you wait a very long time for your turn, or you may not get treated at all, if the bureaucrats rule the resultant quality of life is just not worth it.

Here’s what we should really look at doing:

  • Get the consumer of health care actively involved. How?  It’s being done today with high deductible health care plans coupled with a Health Savings Accounts.  The insurance company negotiates lower treatment costs and pays them only after a hefty deductible has been paid that year.  The patient is then in a position of shopping for the best health care and deciding on what treatments and tests, in conjunction with their doctor they will or will not have.  The Health Savings Account is where the patient can put funds, pre-tax, and then use those funds to pay the expenses not covered by the insurance.
  • Tort Reforms.  Get the Lawyers out of the Examining Room. Too many doctors, in my opinion, are practicing defensive medicine.  They think of every possible test so that if something does not go perfectly with the treatment they won’t get sued for the test they didn’t perform.  Let’s follow the British System — fixed fees for the attorneys instead of a percentage of the settlement, and loser pays.  There are too many cases of people getting a $12 million settlement or judgment for something stupid (think of the woman at McDonalds who spilled coffee in her crotch and sued McDonalds because the coffee was too hot).  In these cases the lawyers typically ask for no money unless they get a settlement and when they do they get 1/3 ($4 million in this example).  It’s like buying a lottery ticket.  Who wouldn’t take a free lottery ticket on a jackpot of millions?  But who really pays for all these law suits and settlements?  That’s right you and me in insurance premiums we cannot afford now.
  • Increased Insurance Competition. Right now most insurance is regulated by the states and in many cases policies available in one state are not available in others.  Let’s open up the competition.  If we have more insurance companies competing for our business, we are likely to get better and more creative policy choices.
  • More Tailored Insurance Policies If my wife and I are beyond the point of having children, then let me buy a policy that does not cover childbearing, birth control, well baby care.  If I am young and starting out and I want those things, there are other coverages that pertain to older people that I may not want at this stage in my life.  Let’s allowed tailored policies that reflect my actual insurance needs.
  • Immigration Control.  The same people who are pushing socialized medicine are, for the most part, the same people who favor open borders.  However, where do all the illegals go for the health care needs including having babies (new citizens)?  They go to the only health care provider they know, the local emergency room.  This is also probably the most expensive form of health care delivery and since they are illegal, they’re not paying for it, the rest of us are.  I think immigrants built this great country and almost each and everyone of us can point to our forebears who came here as immigrants.  I am in favor of immigration now and in the future.  I believe these are hard working and basically good people.  BUT, they have to come here legally and follow the process.  If they are not here legally, they should be deported.
  • Medicare Reform.  You probably want to sit down for this one, but shocking as it may seem this massive government programs loses billions upon billions of dollars every year to fraud.  Who pays?  Right!  You and me.  In higher payroll taxes, and in higher health care costs as doctors and hospitals have to make up the shortfall somewhere else to stay in business.

More Liberty Under Fire

The government in proposing universal health care wants to mandate that everyone must have health care coverage.  You will not have the liberty to choose.  The government demands that you comply:

“comprehensive health care legislation should include a requirement that every American carry insurance.”

That’s the requirement, now comes the heavy hand of government:

“The ideas discussed include a proposal to penalize people who fail to comply with the “individual obligation” to have insurance.”

You must obey!  The government has spoken!

Here’s a novel idea.  How about implementing the above points first and fix the broken system that we have before we throw it out and install another new, massive, government program.  After all we can always go to the government solution in the end, confident in the knowledge that these programs work extremely well and efficiently. (e.g., Fannie Mae {bankrupt}, Freddie Mac{bankrupt} , Social Security {bankrupt}, Medicare {bankrupt}, US Postal Service {$6 billion deficit, while CEO get $850,00 salary}).

What Would the Founding Fathers Say?

A Constitution of Government once changed from Freedom, can never be restored.  Liberty, once lost, is lost forever. – John Adams

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The Auto Bailout Clings to Life

by Bill O'Connell on November 20, 2008

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It’s not over yet folks, although your voice is being heard.  The big sticking point seems to be whether the bailout money should be taken out of our left pocket ($700 billion TARP bailout package) or our right pocket ($25 billion fund to provide re-tooling for green production).  The only people talking about going Chapter 11 are people on the right such as Mitt Romney, who actually knows something about it having watched his father, George Romney, try to save American Motors, as CEO.

Politics Trumps Problem Solving

Barney Frank has weighed in to make sure the class warfare card is played.  He compared the bailout of AIG with the bailout of the auto companies as White Collar (AIG) vs. Blue Collar (GM). A blog by dbeale points this out very well.  This begs the question:  where does it all end?  Where do you draw the line?  If you bail out AIG, you have to bail out GM because they have blue collar workers.  If you bail out GM you have to bail out (fill in the company name) because they have (fill in special interest group).

But if you read the post carefully you can see the true political objectives of the Democrats and their supporters:

  1. Give the auto companies a bailout
  2. Fire most of senior management for mismanagement
  3. Threaten bankruptcy but don’t do it
  4. If the auto companies don’t reinvent themselves (which they can’t do without bankruptcy), nationalize them.  Don’t call it nationalization, call it a “quasi government takeover”
  5. Make sure the focus is on building high mileage cars, and whatever else the green program demands.  Anyone who gets in the way of that goal should be fired. To quote dbeale, “every one involved in undermining gas efficiency standards must go.”
  6. Appoint a automobile czar (don’t call it nationalization) to oversee the companies to make sure that the management isn’t paid too much, that union contracts are reinforced, the “right” kind of cars are built.
  7. Bailout with more government money every 3 years, because the root cause the problem is never addressed.

A Workable Solution

The root of the problem is that the auto companies as they are today, are not competitive.  Here is my proposal

  1. Eliminate the CAFE standards.  The CAFE standards were introduced 1975 in response to the energy crisis.  At least that was the stated objective.  The real objective was to curtail the importation of foreign cars, particularly Japanese cars, which could already meet the standards.  If you wanted to buy a car that got good gas mileage, you could.  This was a attempt by government to force U.S. car companies to make cars of similar economy.  However, their cost structure would not allow them to compete with the imports at the low end of the market.  G.M., Ford, and Chrysler don’t seem to have a problem making a profit on the luxury end of the market, on SUVs, and light trucks.  But if, for example the standard is 27 MPG, and your Cadillac only got 20 MPG.  You would have to sell eight compact cars that get 28 MPG for each Cadillac to comply with the standard.  However, it is estimated that GM is at a cost disadvantage of $2000 per vehicle.  At the luxury end there is enough margin to cover that.  At the low end there isn’t.  So, GM as a direct result of government policy has to sell eight cars at a loss to allow them to sell one car at a profit.  Why not let them sell as many cars at a profit as they can, sell no cars at a loss and let the market decide?  If need a high mileage car to save on gas for your long commute, buy a foreign car.
  2. File bankruptcy.  Reorganize and get rid of those things that are killing you.  That’s what the bankruptcy laws are for.  Yes, shareholders may get wiped out, union contracts will have to be renegotiated, commitments to continue paying revenue bonds for plants that are no longer needed can be renegotiated or voided, pension commitments revisited, etc.
  3. Slim down, come out of bankruptcy, and get competitive again.  The Big three made about 17 million vehicles in 2007.  Does any rational person believe that if the Big Three go into bankruptcy that the people and companies that bought that many vehicles will no longer need cars?  If they still need cars, someone has to build them.  That can either be the foreign makes, the slimmed down Lean Three, or new companies that are formed to take advantage of this huge demand for 17 million vehicles that no one, or not enough are stepping up to the plate to meet it.  People will be re-hired, sub-contractors will have new subcontracts, and the auto industry can actually thrive and not just limp along from bailout to bailout.

The key to this working is to get government out of the mix.  We are facing a plethora of problems and most of them can be traced to government intervention in the market place.  The financial crisis is a direct result of government programs such as Fannie Mae, Freddie Mac, the Community Reinvestment Act, the strong arm tactics of the Clinton Justice Department and HUD to demand more sub-prime lending, and the resistance of Barney Frank and Chris Dodd for more oversight.

The tragedy is that we have problems created by the government and we think that more government is going to fix them.  Keep up the fight.  Let your representatives and senators know, NO BAILOUT

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Taxpayers to GM — Get Yourselves Out of This Mess

by Bill O'Connell on November 18, 2008

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It’s hard to read the news about the auto industry and not clench your fists at the outrage.  GM and to a lesser extent, Ford and Chrysler, are asking the American taxpayer to bail them out, but what is their position?

  • The unions say they are not going to negotiate anything to help the situation
  • The CEO of GM says that they are not filing for Chapter 11 and not preparing to file, despite that they may run out of cash by the end of December.  Not even as a contingency, Mr. Wagoner?
  • Wagoner refused to consider resigning, even if it would help them get aid
  • GM’s board is supportive of Wagoner

This company negotiated an agreement with its union that pays them almost full pay if they are laid off.  Let me get this straight.  You lay people off, as painful as that may be, to cut costs.  GM negotiates an agreement that keeps the costs, but sends the people away.  From their perspective, it’s free labor, they pay for it either way so put them to work!  But no, I’m sure there are union restrictions about what you can put them to work doing.

Remember the Dot.com Bubble?

In 2000 we saw the Dot.com bubble.  What was the fallout?  Millions were lost on Wall Street.  Companies by the bushel basket went out of business.  Thousands were thrown out of work.  How much did taxpayers cough up to bail them out?  Nothing.  The market dealt with it.  The strong companies re-grouped, the weak fell by the wayside.  John Chambers, CEO of Cisco Systems, changed his own salary to $1 per year until he righted his ship.  Today Cisco has $26 billion in the bank and Chambers is still at the helm.  Nice work, John.  It wasn’t done with arrogance and going hat in hand to Washington looking for a hand out.

Deja Vu

In the 1970s and 1980s in the UK, British Leyland, maker of the Triumph, MG, Rover, Jaguar, Austin and five others, was in need of a bailout to keep going.  The British government complied eventually pumping in $16.5 billion in taxpayer money to the company.  It limped along for another few years and then went out of business.  It sold its Jaguar and Land Rover brands to Ford, which then poured $10 billion into Jaguar.  It recently sold both brands to Tata of India, getting back about half of what it paid for the brands.

Did the British economy go under?  Is the British military without tanks?  Let’s not forget that the Jeep was made by American Motors.  Where is American Motors today?  A company named AM General makes the military Hummer.  Guess what the “AM” stands for?  GM, Ford and Chrysler combined made about 17 million vehicles in 2007.  Does anyone think this demand will vanish if GM, Ford and Chrysler vanish?  Of course not.  Either GM, Ford, and Chrysler will re-make themselves, new companies will emerge, or U.S. based foreign companies will grow to take up the slack.  The jobs will move around.  The demand is there, the supply will emerge to satisfy it.

The Way Out

The way out of this mess is to go Chapter 11, reorganize, renegotiate onerous labor contracts, sell off properties no longer needed but tied up in commitments to bonds that were sold to attract a factory, etc.  The government should do their part and dump the CAFE standards.  Americans will still want high mileage cars and companies will build them.  It may not be GM, Ford and Chrysler who build them, but if they trim down, maybe they will.  But they do make a profit on their premium models and light trucks.  Let them.

But keep your hand out of my wallet.

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