Lickety-Split Links (080609, Morning)
Michelle Malkin’s “Culture of Corruption” will hit Number 1 on the August 16 New York Times Bestsellers List. Heartiest congrats.
Michelle notes that “It happened without a single review in a mainstream newspaper.” The “pretend it doesn’t exist” outlook was also present with Mark Levin’s seminal “Liberty and Tyranny,” which spent 12 of 13 weeks atop the NYT’s list.
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Sound-bite summary of this Mark Steyn critique of Jason Weisburg’s pathetic Obama excuse piece at Slate — “It’s getting a little old to blame Bush for the horrors of the Bush presidency. So why not blame Bush for the horrors of the Obama presidency?”
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Read Kurt Brouwer’s “Crackpot Economics & Cash For Clunkers.” It’s as good a collection of sound economic thought from a variety of sources, including Kurt himself, as I think you’ll find anywhere.
The consensus, not surprisingly: It stinks.
The post has a spot-on analogy that was originally at Econbrowser, referring to “the Agricultural Adjustment Act of 1933, which paid farmers to slaughter livestock and plow up good crops, as if destroying useful goods could somehow make the nation wealthier.”
Disabling and destroying a perfectly usable car is really about the same. Personally, it never even occurred to me, and I suspect many others, that a program like this would mandate the substantive destruction of hundreds of thousands of cars. As so many commenters at so many places have already asked in one form or another, “Why not give the cars away to poor people, students, or struggling charities that need them?”
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Also noted at Kurt’s place in the same post — When Germany recently embarked on a similar plan, other consumer goods retailers complained that the program was “sucking out spending” from the retail sector.
There may be a parallel effect in play here. In the U.S., “…. retail sales decreased 0.2 percent for the week ending Aug. 1, the International Council of Shopping Centers (ICSC) and Goldman Sachs reported Tuesday. On a year-over-year basis, sales were down 0.7 percent.”
The Associated Press’s Anne D’Innocenzio writes that “It’s still early, but analysts’ grades already are coming in: the back-to-school shopping season is off to a lousy start.” D’Innocenzio quotes an economist who, using a very appropriate verb, says that Cash for Clunkers “might siphon away sales from other categories like clothing and home furnishings.”
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Heard something really, really interesting yesterday — Glenn Beck told listeners during the 11 a.m. Eastern hour that he has refused to carry advertising from General Motors. I don’t know the specific date that this began, but I do know that it’s because Beck said he can no longer trust them. I also (I believe safely) assume that he objects to the government’s ownership.
I believe that if I were in Beck’s place I would have done the same thing. I certainly wouldn’t be doing what Sean Hannity has been doing. It’s not just that Hannity is still carrying GM ads; he’s narrating them. And it’s not just that he’s hawking the vehicles; he’s actually telling listeners to learn all about the “new GM” (I heard that pitch on Monday or Tuesday).
I don’t think I’m alone when I say that Mr. “Conservative Underground, Conservatism in Exile” is engaging in more than a little hypocrisy in taking money from a state-run enterprise that came into being largely by shafting bondholders out of their contractual rights.
I guess if Obama’s unwieldy health plan passes, we’ll hear Sean singing ad-driven praises of the Health Choices Administration and the Bureau of Health Information in the coming years.
I guess I shouldn’t be surprised, given that Hannity has been a virtually non-stop all-Mitt Romney, all-the-time lap dog for almost two years, despite Romney’s drop-dead obvious Objective Unfitness. But it’s deeply disappointing, given that Hannity (heaven help us) is Limbaugh’s heir apparent if/when El Rushbo ever hangs up the Golden EIB microphone.
I’m not up on what Rush has or hasn’t done since the GM bailouts began, or since the GM bankruptcy; but I don’t think he’s presently carrying GM advertising either, and I believe he hasn’t been for several months.
Here’s my bigger-picture take: GM, as I recall it, barely ever advertised nationally on conservative talk radio until mid- to late-2007. If there were any ads before that time, I don’t think the hosts ever narrated the pitches themselves. The company almost certainly wasn’t giving the hosts and their employees cars to try out for a few weeks before then. By late 2007/early 2008, almost all of them (Limbaugh, Hannity, Beck, and Ingraham for sure) were narrating ads and singing the praises of the loaned models (i.e., putting their reputations on the line, as opposed to merely carrying canned ads).
I believe that GM did what it did largely to mute anticipated criticism of its likely plans to seek government help. Yes of course it wanted to sell cars, but conservative talk didn’t all of a sudden become an effective advertising medium in 2007.
By mid-2008, writers at Forbes, the Wall Street Journal, and others were already speculating that the company appeared to be dressing itself up for a government bailout of some kind. In hindsight, it does seem that the company, with its hype of the barely on the drawing board Volt and other green and politically correct posturing, combined with seeming neglect of its core brands, was doing just that.
If buying off conservative talk radio was indeed the strategy, it worked well enough. You would expect the talkers to have been in all-out rant mode last December at bailout crunch time. Instead, my recall is that their criticism, though present, was comparatively perfunctory. If they feel I’m being unfair, they know how to contact me.
We can’t undo the bailout; our best hope now of getting some taxpayer money back is if the new GM can somehow eke out a survival. I hold no ill will towards the current employees of GM, and do not think there is anything wrong with Hannity or anyone else trying to get us to look at their products.
Comment by George in SA — August 6, 2009 @ 9:51 am
#1, the problem is that there’s a lot more at stake.
If bailed-out companies “succeed” or are perceived to have “succeeded,” bailouts will never end.
If they fail, esp one as big as GM that has involved at least $70 billion of taxpayer money (probably more like $100 billion, including breaks), then companies thinking about asking for bailouts won’t.
I hold no ill will towards current GM employees either; I wish their management hadn’t sold them out, and I hope they’re keeping their options open.
If you object to the bailout, I don’t see how you say “oh well, it happened, now let’s move on.” Hannity’s posture in this instance makes him a willing accomplice to the very statism his good friend Mark Levin so despises.
Now, if you proposed that the government’s ownership somehow gets disbursed to the American people (in escrow, or in trust) and gets irrevocably taken away from the government itself, accompanied by the firing of the car czars, that’s a totally different matter. If properly structured, that would be worthy of enthusiastic support. But until then, GM is a statist enterprise (as is Chrysler of course), and as such is totally undeserving of sensible, principled conservative support.
Comment by TBlumer — August 6, 2009 @ 10:06 am
It was not just their management that sold them out, don’t forget the hand their “saintly” union handlers played in that scenario too.
And to me, the second scenario us just as bad as the first. The government has no job taking over any company for even two seconds. If your escrow/trust scenario were to “succeed” we’d have the justification by the government to take over any and all businesses and an excuse for any company to hand themselves over to them. “But see, the American people benefited!” A properly structured government intervention is still a government intervention.
What should have happened is that the companies should have left to sink or swim on their own. If they had failed, it would have hurt, but would have been so much better off for America in the long term.
Comment by zf — August 6, 2009 @ 11:16 am
#3, I’m not pleased with the existence of the second scenario, but I would enthusiastically support it as a superior and far from perfect alternative. “Perfect” would be that the bailouts never happened.
If the statists know that ultimately the people will want to own it and that the statists won’t control it, the statists *might* be more reluctant to engineer the bailouts in the first place. It’s the best, or better, of a bad situation. They don’t really care about “success,” they care about control. In fact, I’d bet if legislation were passed in dream world that mandated such an ownership arrangement in such bailout situations where the statists couldn’t touch it, you might never see another bailout occur.
We’re talking in theoreticals though, because POR will never let it happen.
Comment by TBlumer — August 6, 2009 @ 12:02 pm
Gasoline demand figures in: http://tonto.eia.doe.gov/oog/info/twip/twip_gasoline.html#demand
Demand is down again against last year. The price of gas is still rising. Come September, when the drop off in driving traditionally occurs will we see a drop in demand or a continued steady state? Based on the chart, the summer driving season has been a bust! I.E. no uptick in economic activity as would normally be expected for the summer season. It’s no wonder the seasonally adjusted unemployment numbers are so huge, no summer hires. We talked about this months ago, you heard it here first at bizzyblog… Just like we talked about the mortgage debacle before it happened.
11% unemployment, here we come.
Comment by dscott — August 6, 2009 @ 1:49 pm
I hold the employees responsible. They ‘negotiated’ their deals in bad faith, using political pressure so that GM could never manage their employee cost. Then, when the politics were in line, they used politics to maneuver themselves into an ownership position. Regardless of whether or not GM succeeds or fails, the next congress should mandate that the US share of holding be sold at auction, with all proceeds to go to the bondholders who were shafted. That way, GM probably gets hurt (depressing the value of the holdings), the US Treasury sees no ‘profit’, the bondholders get some recompense, and there is no further reason for additional funding to be provided by the government to continue funding GM – unless Canada wants to kick in money.
And yes, Hannity is an unprincipled hack when it comes to pimping Gov’t Motors.
Comment by NewEnglandDevil — August 6, 2009 @ 2:22 pm
Perhaps Hannity is caught in a moral dilemma: breach a valid business contract and thereby breach the very principles he’s trying to uphold. Also, the business aspect has to be a factor; does the income provide him the ability to reach more people with his show…thereby parodoxically condemning the government bailouts while hawking the products. It does discredit him to some extent, too, so maybe he needs to re-evaluate the cost-benefit relationship. It is refreshing to hear Beck has discontinued GM as a sponsor.
Comment by Michael — August 7, 2009 @ 8:54 am
#7, you have a possible point, but I’m having a hard time with the raw enthusiasm as Hannity regales us with the wonders of going to gmreinvention.com, and learning how “GM is becoming a lean, green, blah-blah company” (just heard it yesterday at about 4:55 PM ET and wanted to hurl).
It would seem to me, though, that all contracts with GM may have become null and void when it entered bankruptcy and a “new GM”emerged (literally a different entity, because the “old GM” still exists and has all the crap the new GM didn’t want to bother with, like consumer lemon law claims and the like).
Comment by TBlumer — August 7, 2009 @ 9:37 am
Oh Tom, guess what?
In fact, AN reports that the IRS issued an advisory bulletin yesterday confirming that yes, the federal rebates dealerships receive for CARS trades count as taxable gross income.
http://www.autoblog.com/2009/08/01/doh-dealers-learn-cash-for-clunkers-rebates-count-as-taxable-in/
So Tom, did any of the dealers make ANY money off the sale of any transaction or did the Congress rip off the dealers under a ploy to empty the lots of excess inventory? Didn’t the Dems say capitalism was a failure?
Comment by dscott — August 8, 2009 @ 8:36 pm
#9, I know NHTSA was stupid to claim that CARS cash would not be taxable, but the dealers weren’t born yesterday, and should have known that the money would be cash received on a sale just like any other cash received.
In fact, if the $4,500 per car had been tax-free, we’d be justifiably upset that dealers who were spared the axe got an undeserved free bennie, while those terminated less than 60 days ago were hung out to dry.
Comment by TBlumer — August 9, 2009 @ 6:56 am