July 6, 2009

Interesting Perspective by Kevin Hassett…

Filed under: Activism,Economy,Health Care,Taxes & Government — Rose @ 10:26 pm

This is a great commentary from Hassett on Bloomberg.com (emphasis mine):

“California’s Nightmare Will Kill Obamanomics”

July 6 (Bloomberg) — Last week, we discovered that the state of California will gladly pay you Tuesday for a hamburger today.

With California mired in a budget crisis, largely the result of a political impasse that makes spending cuts and tax increases impossible, Controller John Chiang said the state planned to issue $3.3 billion in IOU’s in July alone. Instead of cash, those who do business with California will get slips of paper.

The California morass has Democrats in Washington trembling. The reason is simple. If Obama’s health-care plan passes, then we may well end up paying for it with federal slips of paper worth less than California’s. Obama has bet everything on passing health care this year. The publicity surrounding the California debt fiasco almost assures his resounding defeat.

California has engaged in an orgy of spending, but, compared with our federal government, its legislators should feel chaste. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger.

…The federal picture is so bleak because the Obama administration is the most fiscally irresponsible in the history of the U.S. I would imagine that he would be the intergalactic champion as well, if we could gather the data on deficits on other worlds. Obama has taken George W. Bush’s inattention to deficits and elevated it to an art form.

…Back in the 1980s, Reagan’s own economist, Martin Feldstein, spoke up when he felt that the Reagan administration was pushing the deficit too far. Where are the economists with such character today? Apparently, the job description for economists has transformed from recommending policies that are defensible to defending whatever policies that the political hacks in the West Wing dream up.

As bad as the California legislature has been over the years, it has never entered a fiscal crisis like the one that we face today and then doubled down with a massive spending increase. In the end, when times got tough, patriotic and sensible Californians of both parties stood up and began acting like adults.

Maybe the same thing is starting to happen in our nation’s capital. The key players in Washington are Senator Evan Bayh and 15 Senate Democrats who joined him this year in forming a coalition of moderates. One thing that has distinguished moderate Democrats from the garden variety of the species is heightened concern about fiscal responsibility.

With the price tag of Obama-care likely to exceed $1 trillion, moderate Democrats face a simple choice. They can jump off the cliff with the president, or they can stay true to the principles that they have espoused throughout their careers.

…Moderates might support Obama’s health-care objectives if the bill also included tax increases to cover the spending increases. But those tax increases would likely be unpopular, making it almost impossible to pass a bill.

From Hassett’s keyboard to God’s inbox.

The Bailed-Out Two and Who? AP Report Nearly Ignores Impact of Ford on GM’s Market Share Erosion

FordNotGMorChrysler0709.jpgIn the later paragraphs of a story today about the latest hurdle bailed-out General Motors has managed to jump to get out of bankruptcy, the Associated Press’s Bree Fowler almost totally ignored the impact of Ford’s improvement largely at GM’s expense during the first half of 2009, acting as if GM’s decline has almost solely been the result of defections to foreign competitors.

Fowler’s only mention of Ford comes in connection with its new, apparently redesigned Fiesta. Fowler makes it appear to the relatively uninformed reader that the Fiesta is appearing on the market for the first time.

Here are the four paragraphs in question from Fowler’s foul-up:

In June, the automaker captured 20.3 percent of the U.S. market. GM has estimated that it can maintain a market share between 15 and 17 percent, reflecting its plan to sell off three brands and end its Pontiac line.

GM has several new cars coming to market next year, including the Chevrolet Volt, a plug-in hybrid electric car. The Volt might be a promising vehicle, but with an expected $40,000 price tag it might only be a niche player, said James E. Schrager, clinical professor of entrepreneurship and strategy at the University of Chicago Graduate School of Business.

Upcoming small-car models such as the Chevy Cruze and Spark may fare well, but will face heavy competition from foreign automakers already in that segment of the market and from Ford Motor Co.’s new Fiesta, which the company has already started advertising.

Overall, GM’s major challenge will be winning back customers who have migrated to foreign competitors. Some newer GM models have received good reviews for quality and performance, but that hasn’t persuaded enough consumers to buy GM cars.

Please. Acting as if there has been no migration from GM to Ford is flat-out ignorant, as the following chart shows:

VehicleSalesOfBig4June07toJune09

(Source Data: Wall Street Journal monthly Auto Sales Chart for June 2009 and June 2008; USA Today for Dec. 2008 and Dec. 2007; Web-Archived WSJ Auto Sales Chart for June 2007)

Since GM started positioning itself for a bailout a year ago, and then began taking bailout money from the government in December:

  • Ford has in the past six months gained even more “Big 4″ market share (4.9%) than GM has lost (4.0%). For all of its considerable cost problems, in the 18 months leading up to the bailout, GM’s sales standing compared to its three largest competitors had actually improved.
  • Ford is the only “Big 4″ company showing a December-June unit sales increase.
  • As seen at this Wall Street Journal detail of June 2009 sales, Ford outsold GM in light trucks for the first in many, many years (93,791 to 91,495). That should be huge news.
  • (Not shown) That Wall Street Journal detail also notes that Ford’s overall market share has gone from 14.0% to 17.2% in the past year, an increase of 3.2%. GM’s share has slipped 1.7%. Ford gained more than GM lost, and yet Fowler doesn’t mention Ford as a factor except as it relates to a new model.

There is little doubt that foreign competitors other than Toyota have also nibbled away at GM’s once-commanding lead in the market. Their overall market share has increased by 5 points in the past six months. But for Fowler to pretend in light of what has transpired that Ford barely exists is ignorant at best, and disingenuous at worst.

Cross-posted at NewsBusters.org.

Lucid Links (070609, Morning)

Filed under: Lucid Links — Tom @ 8:28 am

Noteworthy Net-Worthies:

I suppose someone’s going to try to make hay out of the FBI “revelations” that Saddam Hussein claimed to have been bluffing about having weapons of mass destruction (WMDs) because he was more afraid of Iran than anyone else.

First, just because the country was being run by a madman doesn’t mean he had a detailed knowledge of or control of everything occurring under him.

Second, this is/was Saddam, who killed thousands of Kurds in gas attacks; emptied marshlands, displacing thousands; and killed enough Iraqi people from time to time (without, ahem, ever admitting it) to fill 270 mass grave sites. Now we’re supposed to believe that a guy like this would “of course” level with the FBI, instead of, oh, perhaps thinking (see Item 1) that he had safely shipped his WMDs to Syria during the needless months of dithering at the UN.

Third, the late Saddam’s statements don’t alter the reality of media-reported specific findings of actual WMDs, findings which have never been refuted.

Fourth, those statements don’t refute an official finding that certain items found in Iraq qualify as WMDs.

Fifth, there’s this “little” matter of 550 metric tons of yellowcake uranium, which IBDeditorials.com calmly noted is “the stuff that can be refined into nuclear weapons or nuclear fuel.”

Multiple sources show that there WERE WMDs in Iraq during and after the time going to war was being considered. The Left’s tired whining that there were NO WMDs in Iraq (not “a few”; not “no significant stockpiles of”; not “inconsequential quantities of”) was, has been, still is, and shall ever be a lie.

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An updated “word problem,” in the spirit ofFun With Numbers“:

Problem: Chrysler sold 68,297 vehicles in June during 25 selling days. The average number of dealers during month, considering that 800 of them were forced to close their doors on June 9, was 2,600 (about 3,200 at the beginning of June, and about 2,400 after June 9). How many vehicles did the average Chrysler dealer sell per selling day in June?

Answer: 1.05 (68,297 ÷ 25 ÷ 2,600 = 1.05), barely up from 0.95 in May, even with going-out-of-business pricing at the terminated dealers.

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Read it and seethe — Jim Tarbox is a terminated Chrysler dealer who is still appealing his termination in the courts. Based on data in the article, his sales figure per selling day, at 1.23 (750 divided by roughly 305 selling days in a year divided by two dealerships), was well above the pre-termination average of 0.95 noted above — and he sold high-profit Jeeps.

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Quick primer on whose side to root for in HondurasCode Pink is there, supporting Zelaya, who was ousted legally after attempting to consolidate his power illegally.

Not long ago, Code Pink leader Medea Benjamin, fresh from her group’s defeat and our troops’ victory in Iraq, sponsored a “Reality Tour” of Iran (you can’t make this stuff up), the purpose of which was to inform us that the Supreme Leader who literally calls all the shots and his puppet-thugs like Ahmadenijad really aren’t such bad guys.

The Code Pink-ometer indicates that those who want to keep Zelaya out of power in Honduras are clearly in the right. President Obama’s position in the matter is also Code Pink’s.

Update: For those who need a primer on why the Hondurans are right to keep Zelaya away, and why Code Pink, Barack Obama, and the 2004 State Department during Bush 43′s presidency are and were all wrong, Mary Anastasia O’Grady’s Wall Street Journal column today provides a quick catch-up.

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What’s the only difference between those who sell their wares in the world’s oldest profession perversion and Washington Post publisher Katharine Weymouth? Their price tag.