President Obama is in Japan today and plans to issue a joint statement on nuclear disarmament.  It’s not yet clear how far he will go towards apologizing for Hiroshima and Nagasaki, but one can never tell with his worldwide apology tour.

Let’s Ban All Nuclear Weapons

With the same idiocy that is used in gun control here in America where criminals with illegal guns are given a government issued guarantee that their prey will be defenseless, the Obama Administration wants to extend this to the world of nuclear weapons.

Can’t you just see the grinning Ahmadinejad, with a secret stash of nuclear weapons, as President Obama ceremoniously destroys our last nuclear weapon?  Or how about Kim Jung Il?  Do you think he will feel a little taller that day?  Can’t Obama just do something innocuous like Gerry Ford and hand out WIN buttons?  Does each of his programs have to do damage to our country on such a massive scale?

When democracies having nuclear weapons are demonized, only demons will have nuclear weapons.  God help us all.

Democrats Lining Up to Vote for Cap and Trade

The tide is turning against the case for man-made global warming.  An article in today’s Wall Street Journal has the following:

“Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as “deniers.” The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.” — The Climate Change Climate Change, WSJ, June 26, 2009

So if the case for controlling CO2 emissions is gaining skeptics, what would a reasonable person do?  They would probably pause and listen to see if they should alter their position based on this new information.  What do the statists do?  Double their efforts to jam this gargantuan tax bill through Congress, again without reading it because it’s too big, before the American people find out just how monumentally stupid it is.

Nancy Pelosi, Henry Waxman, and Ed Markey are the lead lemmings jumping into the sea and expecting all of us to follow.  You see, if they can slam this thing in they will have enormously increased their power and make it very difficult to unwind this monstrosity.  Their disdain for what is right for this country and what is best for the American people is truly astounding.  Their arrogance and sense of empowerment knows no limits.

Scientists Speak Out

Far from Al Gore’s pejorative and dismissive label of “deniers”, some real scientists weigh in:

“The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. — 13 times the number who authored the U.N.’s 2007 climate summary for policymakers. Joanne Simpson, the world’s first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak “frankly” of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming “the worst scientific scandal in history.” Norway’s Ivar Giaever, Nobel Prize winner for physics, decries it as the “new religion.” A group of 54 noted physicists, led by Princeton’s Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists’ open letter.)”  — The Climate Change Climate Change, WSJ, June 26, 2009

Can you feel your liberties slipping away as those in power do what they want rather than representing us.  Sounds like it’s about time for a tea party.

How much time do we have left before Joe Biden’s prophesy comes true that within six months of taking office Obama, and by extension we, will face an international crisis?  Well, unless you haven’t been paying attention, I think he will hit his mark before his 100 days are up.

Obama and Biden and the rest of their supporters have confused the difference between being liked and being respected.  Daniel Patrick Moynihan, while ambassador to the UN called the world, “A Dangerous Place.”  When trying to be a leader in a world that is dangerous, it is far better to be respected than liked.

The Obama Feel Good Tour

As President Obama tours the world and grovels at the feet of the Europeans, the Saudis, and Latin American dictators, trying to “repair the damage,” done by President Bush, our enemies are licking their chops.  The Europeans flocked to see him, touch him, kiss him, but when he asked for a commitment of more troops for Afghanistan, how did they respond?  Awkward silence and an offer of 5,000 troops to train police while at the same time an insistence that the “world” should have some say in the regulation of the U.S. economy.

While President Obama achieved his goal of improving the U.S.’s likability quotient, pirates were taking ships on the high seas, North Korea sent an ICBM over Japan, Iran celebrated Nuclear Technology Day, and the Taliban made inroads in Pakistan.  How did the popular leader respond?  To North Korea, he scolded that actions have consequences and words have meaning and proposed more words from the UN to be piled on top of the words the North Koreans are already ignoring.

Disarmament

To continue with the feel good groove, we have stopped calling terrorists terrorists.  Their acts are now to be called Man Caused Disasters and I guess the terrorists themselves are to be called Man Caused Disaster Causing Men (or Women).  After all, we don’t want them to be offended by being called terrorists.  Isn’t that was caused 9/11?  It was merely a response to our bad behavior, no?  Our lack of likability?

There is no longer a War on Terror.  It’s an Overseas Contingency Operation.  We don’t want to raise Osama bin Laden’s sensibilities thinking we might be at war with him, but we do need contingency planning in case something happens.  As a further show of good faith, let’s start re-writing the Al Qaeda training manual for them by telling them exactly what kind of interrogation techniques we use so that they can best prepare the training of their members to resist them.  Of course, we already swore we would never use them again anyway, but we have to make sure they are prepared for the infidel’s trickery.  Repeat after me: “I am not going to drown.  I am not going to drown.  I am not going to drown.”  There, it’s simple, now they can resist even our most diabolical torture.  But we shouldn’t forget to tell them that if an interrogator so much as raises his voice they should do the following:

1. Ask for a lawyer
2. Insist on having their Miranda rights given to them in both English (so their lawyers can verify it) and in their native tongue
3. A clean, untouched by infidels hands, copy of the Koran
4. Immediate transport to the United States
5. A green card
6. A path to citizenship
7. A tenured professorship at the college of their choice

If that doesn’t get them to lay down their arms, what will?

Respect Not Likability

The only time the United States is both respected and liked is when the bullets are flying and the United States is saving the hides of our new friends.  When the shooting stops or it is confined to a theater far away from the talkers, the United States will be disliked but, however begrudgingly, respected.

Ronald W. Reagan may have been liked personally in private but when the klieg lights were on, he was “an amiable dunce,” and  “a cowboy.”  But Reagan stood firm and put Pershing II missiles in Europe against all protests.  Such steadfastness led to the eventual arms negotiations and winning the cold war.  At the moment President Reagan took the oath of office, the Ayatollahs in Iran released the American hostages they held for 444 days.  They respected that Reagan would act, not just talk.

George W. Bush was not liked.  He was another cowboy, one who was inarticulate to boot.  But he was respected.  After 9/11 the world respected that he would hunt down and kill America’s enemies.  After the Iraq invasion, Libya publicly shut down their nuclear program.  Quadaffi didn’t want to be next.  President Bush kept America safe for seven years after 9/11.  Now, this Congress and this President want set aside over 200 years of precedent and to put them on trial for doing that.

Preparing for Our Enemies

President Obama plans to keep America secure by cutting our defense budget by 25%.  He plans on a staggering increase in our national debt and selling it to the Chinese.  Picture the Chinese doing to the USA what Obama did to General Motors.  Can you just see the head of the Chinese Communist Party saying to Obama, “Well, we own you now.  You’re fired.”

Can this Juggernaut be Stopped?

On April 15th over 1 million people gathered at Tea Parties around the country to protest the growth of government, the taking of our liberty and out of control taxes.  The Obama main stream media largely ignored the event, or willfully disparaged it.

A recent Rasmussen poll, “85% of mainstream Americans say the government has too much money and power, just 2% of the political class agree.”  If they have no bread, let them eat cake! The poll went on to say, “51% of Americans have a favorable view of the Tea Parties but the political class strongly disagrees.” {emphasis added}  How more out of touch with the people can they be?  How more arrogant in their shameless grab for power can they be?

I will end this post, my friends, with a quotation from the Declaration of Independence.

“WE hold these Truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain inalienable Rights, that among these are Life, Liberty and the Pursuit of Happiness — That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed, that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or abolish it, and to institute new Government, laying its Foundation on such Principles, and organizing its Powers in such Form, as to them shall seem most likely to effect their Safety and Happiness.”

July 4, 1776

I hope to see you at the Tea Party on July 4, 2009

If you earn less than $75,000 per year, you are in line to get a tax break of about $8 a week.  Let me get out of your way as you grab the car keys to take your $8 and go on a spending binge that will have the economy humming in no time at all.

There are No Earmarks in this Bill

Do you long for the days of Bill Clinton when he waxed philosophical about the meaning of the word “is”?  President Obama said:

“We are going to ban all earmarks, the process by which individual members insert projects without review,” he told reporters on the Hill Tuesday as he tried to build support for the measure.

So, if no Congressional member specifically inserts language about a specific spending request in a particular district, it doesn’t meet the definition of an “earmark.”  So cut out some of the specifics and voila, an earmark is no longer an earmark!  A pet project of Nancy Pelosi, preserving the habitat of the salt marsh harvest mouse, has $30 million, earmarked, er, included in the stimulus bill.

Republican lawmakers said they learned of the marsh money when asking about how various agencies plan to spend stimulus money. The vitality of the mouse has been an issue for Mrs. Pelosi and other California Democrats since the early 1990s.

While the Republicans are raising questions about how American’s tax dollars are being squandered in the name of stimulus, Democrats are responding by calling Republicans unpatriotic, obstructionists, against the will of the American people.  When Speaker Pelosi’s office was asked about the $30 million a spokesman had this response:

“The speaker nor her staff have had any involvement in this initiative. This is yet another contrived partisan attack,” Pelosi spokesman Drew Hammill said. “Restoration is key to economic activity, including farming, fisheries, recreation and clean water.”

Does anyone with a room temperature IQ actually believe that statement?  The spending is in San Francisco which is where Nancy Pelosi’s district it located.  Are we supposed to believe she had nothing to do with $30 million of spending in her district?  Was it a Valentine’s Day gift from Steny Hoyer?  If she knows nothing about it, TAKE IT OUT! Those evil Republican partisans had the temerity to ask this question:

“This certainly doesn’t sound like it will create or save American jobs,” Mr. Steel said. “So can Speaker Pelosi explain exactly how we will improve the American economy by helping the adorable little” critter?

The American People Weigh In

Maybe Pelosi can explain it, but she’s not going to.  Perhaps that is why a recent Rasmussen poll had that 67% of Americans think that they could do a better job on the economy than Congress.  Do you think Nancy’s mouse is one of the reasons for that?  Even more embarrassing:

Forty-four percent (44%) voters also think a group of people selected at random from the phone book would do a better job addressing the nation’s problems than the current Congress, but 37% disagree. Twenty percent (20%)are undecided.

Selected at random from the phone book! We pay these people $167,000 a year and we think names drawn at random from the phone book could do a better job!  Is it only me, or does someone else see a problem here?  These clowns are going to bankrupt us and our children and grandchildren, so they can push through this porka-palooza as fast as possible so no one gets a chance to look at it.  Spending didn’t fix the Great Depression.  Spending didn’t end the lost decade in Japan.  Why do we think it will work now?  Isn’t that the definition of insanity?

Tax cuts were proven by JFK, and Reagan, but let’s not try anything that has actually worked before.  The Democrats say that the reason spending didn’t work in Japan is that the spending wasn’t high enough or fast enough!  So, if this “stimulus” fails to work, as many are predicting, we can expect Congress to come back and say, well it’s those Republicans.  They didn’t let us spend as much as we wanted, so now we have to go back and spend $2 trillion.

So while you ponder that, enjoy your $8.  Don’t spend it all in one place.  But when you put your head on the pillow tonight, rest easy, the salt marsh harvest mouse got $30 mill.  But remember, the Democrats are looking out for you.  And don’t forget to start saving $2,500 for each member of your family, because that’s the size of the tax bill the Democrats will be leaving you and your children.

President Barack Obama held his first press conference last night and did a masterful job of controlling the communication while dodging any hint that he let this stimulus package spin out of control, at the hands of Nancy Pelosi.

Elkhart, Indiana

I found it curious that President Obama chose Elkhart, Indiana, the RV capital of the world, as the backdrop for the current economic situation.  After all, in the campaign he said that driving SUVs and RVs was irresponsible.  What kind of gas mileage does an RV get?  He campaigned on Cap and Trade.  What would Cap and Trade do to the good people of Elkhart, Indiana if implemented?  How many people are going to out and buy an RV, which can cost up to $600,000, with the $10 per week tax cut President Obama is proposing.  Remember, he is dead set against across the board tax cuts, which could actually prompt an evil “rich person” to buy an RV.  It reminds me of the 10% tax on luxury yachts sales that killed the boat building industry and put many blue collar people out of work.

Disaster by Design

Of all the schemes tried over the years, from the Great Depression forward, to stimulate the economy, why does this President insist on going with the ones proven not to work?

No less an authority than FDR’s Treasury secretary and close friend, Henry Morganthau, conceded this fact to Congressional Democrats in May 1939: “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”

Spending in the Great Depression didn’t work and that is according to the guy doing the spending.  Last night President Obama mentioned the lost decade in Japan.  However, all of the massive public works spending in Japan during that decade didn’t work.

What did Japan get from sustained and massive public works spending by the LDP after a real estate bubble burst in the late 1980s?  According to a recent article in the IHT, one thing is clear:  taxpayers ended up being saddled with the largest public debt in the developed world, totaling 180 percent of its $5.5 trillion economy.

While there are disputes over how to view the results, the Japanese appear to have learned a lesson, while US officials like Treasury Secretary Timothy Geithner, who spent time as a financial attaché in Japan after the collapse, appear to determined to repeat it on a larger scale

President Obama alluded to the “failed policies of the last eight years,” as if tax cuts created this mess. But today, Treasury Secretary Geithner opened his remarks on the bank bailout by basically saying that government action or inaction coupled with Wall Street excesses caused the financial debacle not tax cuts.  They were:

• Interest rates too low for too long – driving up home prices
• Complicated financial intruments that no one understood bundling mortgages
• Failure of government oversight
• People being encouraged to borrow beyond their means (by government)

But we are supposed to believe that only government can get us out of this.  So, government created the mess, they are ignoring what has worked in the past (tax cuts: Kennedy, Reagan, Bush), choosing those things that were proven failures (spending: Great Depression, Japan) and we’re supposed to be angry at Republicans for putting up a goal line stand to protect us from this impending disaster.

If this passes, be afraid, be very afraid

At 06:00 this fine Saturday morning, the Obama folks released an analysis by their economic team of how their economic stimulus package is supposed to work (see full text here).  Quite frankly, I think there would be more stimulus from handing out coupons to Starbucks for a good shot of Joe, than this stimulus plan suggests.

Among the first things to catch my eye was the following statement:

“It should be understood that all of the estimates presented in this memo are subject to significant margins of error.”

There’s nothing like a good caveat to start off an explanation of how you’re going to spend nearly $1 trillion.  It brings to mind the old economic joke of how economists have successfully predicted eight out of the last five recessions.  While I understand the need to explain that these economists don’t have a crystal ball, you wish they were sitting at the table with a much smaller pile of our chips.

The thrust of the plan calls for “ substantial investments in infrastructure, education, health, and energy. “  To me that translates into bigger government than we have now.  Infrastructure is largely government owned.  There is also a significant lag effect in infrastructure projects.  Education is also government run.  After over $1 trillion in spending by the Department of Education, our education system is no better and probably worse than when it started.  Teacher employment has skyrocketed with the goal of making class sizes smaller with no demonstrable improvement in learning.  So, let’s pour more money into that arena and make sure we saddle communities with higher property taxes for years to come.  Sounds great!  Where do I sign up?  But, it does make the teacher’s unions happy.

Another chunk of the stimulus packages is to provide:

“State fiscal relief designed to alleviate cuts in healthcare, education, and prevent increases in state and local taxes.”

In other words, let’s take money from one government entity and give it to another, the reason being so that they don’t have to run a deficit at the state level.  Instead, we’ll run a deficit at the federal level.  Brilliant!

When you look at the charts, here’s where it really gets interesting.  The plan says it will take 5 years for unemployment to return to a 5% level, which is higher than pre-recession levels and it will reach this level with or without a stimulus package.  The difference is that the stimulus package will provide faster relief in the intervening period.  Their forecast is that unemployment will peak at 8% in 3Q09 with the stimulus, and at 9% in 2Q10, without the stimulus.  So we are to spend ¾ of a trillion dollars for a 1% improvement in the unemployment rate, for four years.  That’s an additional $193 billion a year for four years to get us to the same place we would be without the stimulus.  What the analysis doesn’t show is the stimulative impact on the economy of not having a $775 billion dollar deficit to pay off after the economy recovers.

The analysis then addresses the effect of tax stimulus:

“It is important to note that the jobs effects of temporary broad-based tax cuts would probably be considerably smaller. Large proportions of temporary tax cuts are saved, blunting their stimulatory impact on output and employment. The prototypical recovery package only provides for the first two years of the Making Work Pay tax cut. Our analysis assumes that households treat the tax cut as permanent in determining their short-run spending.” {emphasis added}

I would take that argument a step further.  As we saw earlier in 2008, there was a minimal stimulative effect from the $300-$600 tax credit that was issued.  Given a finite dollar amount, as the proposal states, most people are inclined to save rather than spend it.  I would argue that tax relief of any fixed dollar amount, that would be realistic as we can’t give everyone a check for $1 million, is going to have a limited stimulative effect on the economy.  However, when you cut tax rates, the stimulative effect is genuine and long lasting.  Why?  In the Obama plan, the tax relief is $500 or $1000, depending on if you file individually or jointly.  If I know that I am getting $500, regardless of how much I work, the stimulative effect of the $500 depends on what portion of my income that is. But like the $300, it is likely going to be used in these times for saving or paying down debt.  The fact that I may, and I repeat, may get another $500 next year, isn’t likely going to make me splurge on a new car.  However, if I know that my taxes will be lower on every dollar I earn, because of lower tax rates,  I am encouraged to produce more, work more, keep more, and spend more.

From an article in Reason this past Monday before Obama’s speech:

“Lets break this down. Its nice to see that the change we can believe in won’t alter the way Washington plays games with taxpayer money. We can give Obama the benefit of the doubt until we hear from him later this week, but if “officials” are really committed to “historical and empirical evidence” of how to get out of a recession, they won’t stimulus spend. Japan spent 10 years–its “lost decade”–trying to spend its way out of recession and wound up doubling unemployment and increasing the debt level above GDP. “Historically” real tax cuts for the wealthy and business world increased productivity and national growth, but they aren’t politically savvy, so we’re unlikely to see those too.”

So the search is for “popular” tax cuts, not effective tax cuts.

If you ask someone today which president is most responsible for the Great Depression, the answer will likely be Herbert Hoover.  However, Hoover was president for only three years of the Great Depression, while Roosevelt was president for eight of those years.  So while Hoover, without question, make some key errors that made the situation worse, Roosevelt couldn’t find his way out of the problem for almost three times as long, and yet the Democrats are using Roosevelt as a model but saying we have to do it bigger.  Are you getting a little concerned now?

Obama can use this to his advantage.  Just like Roosevelt and Hoover, Obama can and will blame the economic problems all on George W. Bush, for as long as Obama remains in office.  No matter what he does or fails to do, he can point to Bush and then to the Great Depression and say, hey, these things take a long time to fix.

Another point the Reason article makes is that recipients of the Obama tax cuts are very likely to be people who do not pay income taxes:

“While Americans know better what to do with their money than the federal government, many people got those checks who didn’t pay taxes in the first place, so they got other people’s money back. That redistributory system doesn’t encourage growth, it just hands out money.”

Americans do know better what to do with their money.  So here’s my prescription for the economic problem:

• Make the Bush tax cuts permanent
• Explore making the tax cuts deeper, going back to the rates that Reagan put in place starting the longest peacetime expansion in history.  Face it folks, if you want to get the economy moving, you have to give tax relief to people who actually pay taxes.  That’s were the money is, and it will be put to work to invest in businesses and create jobs, not to pay off the credit cards.
• Start dismanteling the federal government.  It is too big, it spends too much money, programs that start never end, and it is eating up too much of the economy.
  • Why is education a federal issue?  Kill the Department of Education
  • Why is the Department of Agriculture as big as it is when only 2%-3% of the population work in agriculture
  • Why are food stamps a federal program rather than being at the state or local level?
  • Why can’t we fix Social Security and Medicare.  The average return on Social Security investments is about 1%-2% per year, which is dismal
  • Why was the Grace Commission report, prompted by Reagan and finding about $400 billion in savings, largely ignored?
  • Why is our tax code, that is estimated to cost taxpayers $200 billion per year to comply with, not replaced with a flat tax?
• Kill the uncertainty overhanging the economy.  Tell businesses that the bailout window is CLOSED. Go back to running your businesses like you should, or face the consequences of your actions.  Government should clearly state what it will do and what it won’t do.  Without that, everyone will sit on the sidelines waiting for the other shoe to drop.

Once people stop waiting to hear what the government plan is, they will set about doing what they have to do for themselves.  Many of the problems that got us into this mess were caused by the government (Fannie, Freddie, Community Reinvestment Act, bailing out this company but not that one, keeping interest rates too low for too long, enormous deficit spending).  How any sane person thinks that “only the government” can get us out of it, escapes me.  This great country has enjoyed tremendous growth and prosperity through much of its history, with government playing a very small role.  But government programs and initiatives (New Deal, Great Society) have saddled us with a host of problems that we will be dealing with for many years to come.  It’s time that when the doorbell rings and we open it to hear, “I’m from the federal government, and I’m here to help you,” that we slam the door and follow the age old advice, “If you want something done right, do it yourself.”

The conga line for companies with their hands out forms on the left.  The next ones bellying up to the slop trough are GM and Chrysler.  They need $25 billion to help them through a tough patch or they may go out of business.  It is a loan?  Is it buying a stake in the company?  Is it that thing of which we dare not speak– socialism?

What’s Next?

The question is are we, by the continued intervention of the government, managing our way out of a recession and into a full blown depression?  For all the warm memories of FDR, the depresion lasted more than twelve years thanks to, “We’re from the government and we’re here to help.”  Perhaps it’s time to take our medicine, pull the covers up under our chin, sweat it out, and get back on our feet.

Business, like many things, runs in cycles.  There are up cycles and there are down cycles.  We can’t eliminate them, they are a necessary part of the process.  But just as there is no cure for the common cold, sometimes it is best to let it take its course as soon as possible and be done.

Was Government Intervention Wrong?

I don’t believe so.  It was unfortunately necessary to end the panic.  When lenders have no confidence that if they lend they will be paid back, and if they have non-performing assets and they can’t sell them because they don’t know how to price them, the whole system locks up.  The system needs a lender of last resort and the only one big enough to step into that role is the government.  However, that should be for the least amount of time possible.

The Problem with the Auto Industry

The auto industry has had 35 years to figure this out.  With the Arab Oil Embargo of 1973, Japanese auto companies made major inroads into the automobile markets.  Imagine buying a car that got 20 miles per gallon, rather than 8, was better built, and cost less.  Well, that’s what the Japanese companies were offering, but what did Detroit learn?  Union contracts too expensive, let’s invest in robots and get rid of the expensive people!  GM bought boatloads of robots and later ended up scrapping them.  Why?  Because the workers weren’t the problem.

Who transformed the Japanese auto industry?  An American by the name of W. Edwards Deming.  After World War II, Japan’s industry was in shambles.  Deming went to help them get their industry back on its feet and taught them about statistics and quality control.  They learned their lessons well.  They focus on incremental changes every day.  If someone sees a problem on the assembly line and takes action to stop the line, he doesn’t get chewed out, he gets applauded.

The Big 3 have had all this time to figure out what they were doing wrong and fix it, but what did they do?  During the good times, they just rolled along.  If signing a big labor contract kept the peace and kept the factories running, they would buy off the unions.  But when the trouble starts, there’s no room to maneuver.

Leading the Way to the Future

The Japanese saw the need to cut back further on fuel consumption, but they knew there was a limit as far as how much mileage you could squeeze out of a gasoline engine, so they came out with hybrids.  Initially they were a novelty, but when gas was headed for $4 per gallon, they we economical.  Where was Detroit on this?  Lagging behind, of course.  Don’t develop a hybrid car until your customers demand it, but by the time they do, they would rather buy the tried and true hybrids being built by Toyota and Honda.  Ford promised to produce 250,000 hybrid cars but rescinded that pledge nine months later.  Why?

“According to a Ford spokesperson, an internal panel of experts analyzed customer interest in hybrid cars and did not feel that there was enough demand to warrant the expense of building 250,000 hybrids.”

What was the price of a gallon of gas when they made that decision? $2.20, the lowest it had been in ten months.  The other half of that article quoted above said, “Toyota remains top hybrid producer.”  GM is now placing a very big bet on the Chevy Volt, which will be an electric car scheduled to launch in 2010.  Although there is little fanfare, Toyota, Nissan and Mitsubishi are all planning electric cars in the next two years.

To Bail or Not to Bail?

So why should the taxpayer be on the hook for the mistakes of the Big 3 auto maker’s management for these past 35 years?  Perhaps they should just go into Chapter 11, reorganize and come out as more competitive companies.  Why prop them up so that they can stumble along for another 5-10 years until the next downturn and come back to the trough?  The stockholders have been electing the boards of directors for these companies for 35 years and buying their stock.  The boards have been hiring the management team and providing them with their compensation.  The management team has made the product decisions, negotiated the labor agreements, and all the other missteps.  Why should American taxpayers have to step up to the plate and bail them out.  They got themselves into this mess, let them get themselves out.

But that’s just my opinion.