The School System Monopoly

In an interview with Brenten Miniter South Carolina state Sen. Robert Ford, a Democrat, said recently that he saw the inside of a jail cell 73 times, he did so to make a point. He was referring to the arrests that occurred during the civil right’s protests of the 1960’s. Today this African-American Democrat says the new civil-rights struggle is about the quality of instruction in public schools, and that to receive a decent education African-Americans need school choice. He wants the President's help. "We need choice like Obama has. He can send his kids to any school he wants."

Mr. Ford now advocates tax credits and scholarships that parents can spend on public or private schools. He has studied, over the past three and a half years, how school choice works and he's now advocating what some call a ‘voucher’ system. And he is not the only Democrat to think so.
In Economics a monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it. It has long been frowned upon in the U.S. except in certain cases – the public school system being one of those cases.

Teacher unions have the exclusive right to represent teachers and to negotiate teacher contracts with school boards in 90 percent of American schools. To put this in economic terms, they enjoy a near-monopoly of teacher supply in the education market. This gives them enormous power to raise the price of teacher services—and in effect to divert spending from better education to better pay and conditions for their members.

So what do we end up with as parents? More money being thrown into the educational systems K-12, but not with better educated children, but higher teacher incomes and more teachers doing less work for more money. And what keeps all of this monopolistic activity continuing: A public school system with too many administrators and the knowledge that there is no competition for the education tax dollars coming in to the bureaucracy. No one is forced to be accountable.

I know about this from personal experience. My husband and I lived in Tucson Arizona at the time and our son was part of the grand ‘busing’ experiment that failed miserably – he was a 3rd grade student. We lived in an area of town that included a junior high school and a high school and elementary school but our son was bused out of our area to another part of town. We attended meetings with angry parents that were concerned that their children were being bussed out of the areas where they lived, spending countless hours on buses and fracturing their ‘neighborhoods’ in the process. These were parents from all areas of town, including low, middle and high income families. No one cared about the parents, no one listened, certainly not the school district or the elected officials of Tucson. They were going to bus children to a central holding facility and then re-distribute them out to schools everywhere.

When our son started 3rd grade I volunteered as a reading instructor in his class two mornings a week. You learn a lot about what goes on in a classroom when you volunteer, by the way. The classroom was in constant motion with none of the children remaining seated at their desks, all of them talking to each other and not listening to the teacher, and certainly no education was going on. My reading group, which included my son, had to move to another room to have the quiet necessary for studying. The teacher in that classroom was an overpaid babysitter, a babysitter who no one could fire due to incompetance since she had been on the job long enough to have tenure, the most evil word in the public school sysem.

Then the school asked me if I would like to help them improve the education for all of the children by helping to turn the school into a magnet school. We as a committee worked for hours and days and weeks on the project and as the project wound down I felt that the school would become a good educational experience for all of the children, our son included. That is when I was informed that my son would not be attending the school but would be bussed to some other school. When I asked which school they couldn’t tell me. Our son was being used in some grand scheme known only to the bureaucrats. We pulled our son out of the public school and placed him in a private school. We didn’t want any further ‘experimentation’ using our son as a guinea pig.

Public schools charge people for educating their children even when they send them to private or parochial schools. And since very few parents can afford to pay twice for their children's education, they are effectively compelled to use the public schools and to pay, through various forms of taxation, for the inflated salaries and low productivity negotiated by the teacher’s unions. And since these parents cannot go elsewhere, they have no leverage to compel the public schools to raise their performance.
Overall, therefore, the education market, like all monopoly-dominated markets, is inefficient, uncompetitive and marked by low innovation, poor standards and high prices.

The Ivory Tower Background's of United States Supreme Court Justices

In a speech given yesterday by President Obama he was extolling the virtues of Judge Sotomayor and that, to paraphrase, it would be great to have someone on the Supreme Court that didn’t grow up in an ivory tower. Of course Clarence Thomas immediately came to mind but let us take a closer look at Justice Thomas as well as some of the other Justices of the United Stated Supreme Court, and what ivory tower beginnings they had:

Clarence Thomas was born in Pin Point, Georgia, a small, impoverished African American community. His family are descendents of African American in the American South. His father left his family when he was two years old. After a house fire left them homeless, Thomas and his younger brother Myers were taken to Savannah, Georgia, where their mother worked as a domestic employee. Thomas' sister Emma stayed behind with relatives in Pin Point.
When Thomas was 7, the family moved in with his maternal grandfather, Myers Anderson, and Anderson's wife, Christine, in Savannah. Anderson had little formal education, but had built a fuel oil business that also sold ice. Thomas calls his grandfather "the greatest man I have ever known." When Thomas was 10, Anderson started taking the family to help at a farm every day from sunrise to sunset. His grandfather believed in hard work and self-reliance; he would counsel Thomas to "never let the sun catch you in bed."

Ruth Joan Bader Ginsberg was born March 15, 1933 in Brooklyn, New York, and was nicknamed "Kiki" by her family. She was the second daughter of Nathan and Celia (née Amster) Bader. The family belonged to the East Midwood Jewish Center, where she took her confirmation seriously. At age thirteen, Ruth acted as the "camp rabbi" at a Jewish summer program.
Her mother took an active role in her education, taking her to the library often. Ginsburg attended James Madison High School, whose law program later dedicated a courtroom in her honor. Her older sister died when she was very young. Her mother struggled with cancer throughout Ruth's high school years and died the day before her graduation.

An only child, Antonin Scalia was born in Trenton, New Jersey; his mother, Kathy Panaro, was born in the United States, while his father, S. Eugene, a professor of Romance languages, had immigrated from Sicily. Five years later, the family moved to the Elmhurst section of Queens, New York, during which time his father worked at Brooklyn College in Flatbush, Brooklyn.
Scalia started his education at Public School 13 in Queens. A practicing member of the Roman Catholic Church High School in Manhattan. He graduated first in his class and summa cum laude with an A.B. in History from Georgetown College in 1957. While at Georgetown, he also studied at the University of Fribourg, Switzerland and went on to study law at harvard Law School, where he was a Notes Editor for the Harvard Law Review. He graduated magna cum laude from Harvard Law in 1960, becoming a Sheldon Fellow of Harvard University the following year. On September 10, 1960, Scalia married Maureen McCarthy, an English major at Radcliffe College. Together they have nine children—

John Paul Stevens was born on April 20, 1920, in Chicago Illinois, to a wealthy family. His paternal grandfather had formed an insurance company and held real estate in Chicago, while his great-uncle owned the Stevens department store. His father, Ernest James Stevens, was a lawyer who later became a hotelier, owning two hotels, the La Salle and the Stevens Hotel. He lost ownership of the hotels during the Great Depression. His mother, Elizabeth Maude Street Stevens, a native of Michigan City, Indiana, was a high school English teacher. Two of his three older brothers also became lawyers.

David Souter was born in Melrose, Massachusetts, September 17, 1939. He is the only child of Joseph Alexander Souter (1904–1976) and Helen Adams Hackett Souter (1907–1995). After moving from Melrose at the age of 11, he spent most of his childhood and adolescence at his family's farm in Weare, New Hampshire. He attended Concord High School in New Hampshire.
He went on to Harvard College, from which he received his A.B. He was selected as a Rhodes Scholar and earned an M.A. from Magdalen College, Oxford, in 1963. He then entered Harvard Law School, graduating in 1966.

Stephen Breyer was born to Irving Gerald Breyer and Anne A. Roberts, a middle-class jewish family in San Francisco, California. Breyer's father was legal counsel for the San Francisco Board of Education. Both Breyer and his younger brother Charles, who is a federal district judge, are Eagle Scouts. In 2007, Breyer was honored with the Distinguished Eagle Svout Award by the Boy Scouts of America.

In 1955, Breyer graduated from Lowell High School. After graduating from Lowell, Breyer went on to receive a Bachelor of Arts in philosophy from Stanford University, a Bachelor of Arts from Magdalen College at the University of Oxford as a Marshall Scholar, and a Bachelor of Laws (LL.B) from Harvard Law School.

John Roberts was born in Buffalo, New York in January 27, 1955, the son of John Glover (Jack) Roberts, Sr. (1928-2008) and Rosemary, née Podrasky. All of his maternal great-grandparents were from Czechoslovakia. His father was a plant manager with Bethlehem Steel. When Roberts was in second grade, his family moved to the beachside town of Long Beach, Indiana. He grew up with three sisters: Kathy, Peggy, and Barbara.
Roberts attended Notre Dame Elementary School, a catholic grade school in Long Beach then La Lumiere School, a Catholic boarding school in LaPorte, Indiana and was an excellent student and athlete. He was known for his devotion to his studies. He was captain of his football team (he later described himself as a "slow-footed linebacker"), and was a Regional Champion in wrestling. He participated in choir and drama, co-edited the school newspaper, and served on the athletic council and the Executive Committee of the Student Council.
He attended Harvard College graduating with an A.B. in history summa cum laude in three years. He then attended Harvard Law School, and was the managing editor of the Harvard Law Review. He graduated from law school with his J.D. magna cum laude in 1979.

Samuel Alito’s father, a long-time employee of the New Jersey state legislature, was a first-generation Italian American. During his confirmation hearings, Alito stated that the stories his father told him about being discriminated against for his nationality and Catholic religion and about having to build a comfortable life from humble beginnings had made him more disposed to treat everyone who came before him with respect. These statements were made in response to criticism that, as a Circuit Court judge, Alito had consistently ruled against the poor and minority litigants who came before him.

Anthony Kennedy might be the closest to an 'ivory tower' upbringing, growing up in Sacramento, California as the son of a prominent attorney. As a boy he came into contact with prominent attorneys such as Earl Warren. He served as a page in the California State Senate as a youngster. Kennedy graduated from C. K. McClatchy High School in 1954. He was an undergraduate student at Stanford University from 1954-58, graduating with a B.A. in Political Science, after spending his senior year at the London School of Economics. He earned an LL.B. from Harvard Law School in 1961.

So there we have our ‘ivory tower’ Supreme Court Justices. Perhaps President Obama was speaking of the ‘ivory tower’ at Harvard University Law School and that Judge Sotomayor comes from lowly Yale Law School?

Rationing Health Care

Writing in salon.com former Treasury Secretary Robert Reich noted:

“According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees would go a long way to funding universal healthcare. Employer-provided health insurance is the biggest tax break in the whole federal income tax system...The President will need to tax employer provided health benefits in order to finance universal healthcare… Many in Congress and in the White House are convinced it's the only good option.“

The government also believes that given the choice families will gravitate towards the new health care system rather than paying the higher taxes for coverage. “Most middle-class American families rely on their current insurance programs and won't want to give them up even if a new universal system becomes available. Among those are organized labor who rightly considers these benefits among the union movement's proudest achievements,” says Secretary Reich.

So why is the government so intent on providing all of us with health care? Supposedly it is to make sure that the people in our country that can't afford medical treatment are taken care of. The government also wants to control prices within a medical system where prices are skyrocketing.

Will universal health care bring better medical treatment to everyone equally? According to economic theory it will not. In a government mandated universal health care system prices are not permitted to ration demands, which brings us back to an earlier economic concept - scarcity - we want more than we have. In a world of scarcity some form of rationing must be inevitable. In the free market system rationing is done by prices. Under current government-mandated health insurance programs around the world rationing is done by waiting, because people are forced to wait for weeks and/or months for whatever level of medical care is offered to them.

Canada is often touted as having a wonderful health care system. They use time to ration treatment (numbers provided by Government Accounting Office - GAO):

Orthopedic 10-25 weeks

Opthamology 8-22 weeks

Internal Medicine 4-6 weeks

Cardiovascular 12-17 weeks

Neurosurgery 10-17 weeks

General Surgery 6-9 weeks

Gynecology 5-9 weeks

We do have a form of univeral health care in this country, the Veteran's Hospitals - run by the government. According to a veteran being interviewed by the GAO about the VA Hospitals, Retired Army Major Elmer Erickson said, "Be prepared to spend the day there. Bring a book and pack a lunch. You eventually will see a doctor."

Is this what we want for our children and grandchildren?

And Speaking of America's Pasttime and I Do Not Mean Political Discourse

If Lou Gehrig were not so well known for his consecutive games played and the disease that cut short his life, more people might remember him as one of the greatest hitters of all time. His lifetime batting average and lifetime slugging average are both higher than those of anyone who has played since 1960.

What the Heck?

SHANGHAI (AP) May 13, 2009-- General Motors Corp. plans to begin exports of vehicles made in China to the United States within two years, ramping up sales to more than 50,000 by 2014, reports said Wednesday.

A spokeswoman for GM in China did not immediately respond to a request for comment on the reports, which were said to be based on a company recovery plan given to U.S. lawmakers.

GM intends to sell 17,335 made-in-China passenger cars in the U.S. market by 2011, the Shanghai Securities News and other reports said. By 2014 exports would triple to more than 51,000, it said.

___________________________________________

So let me get this straight - in order to cut costs General Motors is going to China to build cars that GM will ship at major expense back to the U.S. for sale at higher prices then its competitors who build cars in the U.S. (Ford, Toyota, Honda, etc.) with GM not even entertaining the idea that perhaps they shouldn't go to China for workers but pay their workers here less so that they don't price themselves out of the competitive auto industry which they are going to do anyway by moving to China and having the extra expenses involved with moving finished products - automobiles - back to the U.S.

And this is how they are going to save themselves? Or perhaps our tax dollars will again go to subsidizing stupidity?

There is a term that refers to building a product in a location that you plan on selling it to cut down on the huge expense of moving the product across oceans and/or continents. It is why Toyota builds cars here in the U.S. and why Coca Cola is manufactured worldwide. It is called smart business practices.

What Doesn't the Press Understand About Free Markets?

So I was out hiking this morning listening to National Public Radio (NPR)when they started discussing the pirates in Somalia. I stopped in my tracks when the so-called reporter called the pirates tradesman and what they were doing the only business the poor souls could do since the fishing industry in their country was not doing well - as an aside Somalia has more coastline than most of the countries in Africa. NPR interviewed two 'businessmen' to find out what led them into their current 'trade' and it was as if they were interviewing Bill Gates or the owner of the gas station on the corner or the person running the Burger King down the street. I just do not understand! Pirating is not legal and is punishable by life in prison or death in a whole lot of countries, yet NPR thought these guys were legitimate businessmen? This is the same radio station that has been beating down the businessmen in this country for being the reason for our current economic crisis. Let's see - U.S. businessmen are evil and pirates are good? What can NPR be thinking? They are not.

Oscar Wilde had an opinion on journalism: "In old days men had the rack. Now they have the press. That is an improvement certainly. But still it is very bad, and wrong, and demoralizing. Somebody — was it Burke? — called journalism the fourth estate. That was true at the time no doubt. But at the present moment it is the only estate. It has eaten up the other three. The Lords Temporal say nothing, the Lords Spiritual have nothing to say, and the House of Commons has nothing to say and says it. We are dominated by Journalism."

But in 1752, earlier than Wilde's comment, Henry Fielding wrote: Of our political writers ... take[s] notice of any more than three estates, namely, Kings, Lords, and Commons ... passing by in silence that very large and powerful body which form the fourth estate in this community ... The Mob."

And finally there is Senator John Kerry, who held a hearing on the future of newspapers: "If we take seriously this notion that the press is the fourth estate, or the fourth branch of government," Mr. Kerry said in a prepared statement, "it's time we consider its importance to democracy." Talk about a Freudian slip. Newspapers becoming the "fourth branch of government" is exactly what people most fear from any hand extended to save an independent press.

Who Else Saw This Coming?

On January 22, 2009 there was a news conference with the newly sworn in President Obama and the Speaker of the House Nancy Pelosi. If one looks closely at video or pictures of the conference there is a decided strain on Mr. Obama's face as Ms. Pelosi discusses the future, their working together, and items on her list of things to do. Body language suggests that Ms. Pelosi felt that she would be taking the President by the hand and leading the Democrat agenda. At the time I told my husband that there would be a tug of war between the two of them for control of the Democrat agenda, and in my opinion Ms. Pelosi would not be the one on the winning side. I knew, even then, that she would not make it through the President's first term as Speaker and that something would happen. It sure looks like it has, and stupidly enough it is nothing illegal, it is Ms. Pelosi caught in a lie. The White House has remained behind the scenes in this 'scandal' but it has sent out Leon Panetta and others to stir up the water. The lady REALLY misunderstood what her role would be with an Obama administration and I think it is just dawning on her now.

What Don't I Understand?

So the U.S. Government has allowed the unions to have 55% of General Motors, and allowed those same workers that have been laid off to still receive a full salary, and all of that is being subsidized with our tax dollars. At the same time the U.S. Government, overseeing GM, has asked the company to close down some of their dealerships. So the people that sell the product, that bring IN money to the company, are being shut down. What don't they understand about marketing a product?

Nonprice Rationing in One Paragraph

As mentioned in our first paragraph we live in a world of scarcity. When a government tries to prevent monetary prices from doing their job unintended results occur. Nonprice rationing is both more costly and more complex than most people imagined, so why does the government keep trying it? It sounds good to help the poorest in our society, but the answer is not by having rent controls or affordable housing or raising the minimum wage. Let’s look at rent control – a legal limit on rent that landlords may charge for apartments, a limit that does not change over the years but stays static. This has led to increased homelessness in the U.S., led to a rise in descrimination, and has caused the destruction of thousands and thousands of apartment units in major cities in this country. The government might try to enforce the idea of a rent control but the laws of supply and demand win out. Let us say you are living in a rent control apartment building in New York City and it begins to cost the landlord more to maintain that building than what your rent covers. What does the landlord do? He cannot go on losing money and at some point he stops making as many repairs on the apartment. As time goes on and goods and services become more expensive it is even more of a drain on the landlord’s wallet. From the landlord’s perspective you see a losing investment and you try to sell the building. When this does not happen you simply walk away, leaving the building to fall in ruin and the inhabitants to try to find housing elsewhere. This idea can be expanded to the current housing crisis. Banks and mortgage companies, under Congressional laws, lower the standards for who can borrow money – the idea being to allow lower income families to move into homes they have not been able to afford in the past. Congress thought they were doing the right thing and in the process brought down the banking and real estate industries in the country. Nonprice rationing has never worked in a free market society as can also be seen in wage controls. Bump up the minimum wage and an employer will hire fewer people and the people that the employer hires will need better education and skills to match the higher wage. The raise in the minimum wage does just the opposite of what the government intended. So now we have a government that is ignoring the lessons of the past only this time we are not talking about better wages or affordable housing. The government wants to create an affordable health care system.

Supply and Demand in One Paragraph

The law of demand states that if a business lowers the price of something they are selling there will be more people interested in purchasing that product. If that same business raises the price of that same product then fewer consumers will be interested. The obvious example is gasoline at the pumps. The price skyrockets and fewer people drive, they buy small gas-efficient cars, they carpool, or take mass transportation. The price drops and it is time to take the SUV out of the garage. The law of demand is the core of economic theory and goes a long way to describe the behavior of consumers. More people will sit in the cheaper bleacher seats at a baseball game than in the more expensive box seats; therefore stadiums have a larger supply of the less expensive seats – which leads us into the law of supply. Supply characteristics relate to the behavior of firms in producing and selling a product or service. The higher the price of a good or service the more a business will profit and the more it will produce. Farmers are a good example. If the price of a commodity rises then the farmer will produce more. If the price lowers then less is produced. And this is where supply and demand come together, because ultimately an increase in supply must be met with an increase in demand in order for the price increases to be sustained. The farmer can only raise prices if the consumers are willing to pay more. Lower prices are the market’s signal to farmers that they have produced too much of something or that it is something consumers do not want. But at some point the consumers will stop purchasing as the price becomes too high. A good marketer learns to produce for the market. Since the very first farmer stood at the fence talking to his nextdoor neighbor and asked, “I would like to purchase that cow from you and I will give you five chickens and a rooster”, and the other farmer answered, “I will take ten chickens and two roosters,” and they bartered back and forth the laws of demand and supply have been allowed to proceed ALMOST unhindered. What could possibly hinder such a pure display of free markets? It is called nonprice rationing and it is when a government gets involved and seeks to prevent monetary prices from doing their job. Nonprice rationing is the topic for our next paragraph.

Quote of the Day

"Experience should teach us to be most on our guard to protect liberty when the government's purposes are beneficial. Men born to freedom are naturally alert to repel invasion of their liberty by evil minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding."

Justice Louis Brandeis
Olmstead v. United States
277 U.S. 479 (1928)

A Day at the Ballpark

Attendance is down at the new Yankee Stadium. Here is a beautiful new stadium but they can’t manage to fill the seats even with A-Rod batting .317 with 10 home runs and 31 RBI’s. The Steinbrenner’s are blaming the recession, but according to Team Marketing Report’s Fan Cost Index a family of four will spend $410.88 to see a single Yankee game. That is up 49% from last year. The Steinbrenner’s argue that the stadium is smaller than the old stadium and therefore they need to raise prices to make ends meet. They can join the club of people currently in positions of power, whether management or politics, who don’t understand basic economics. All the Steinbrenner’s need to do is look at how the Arizona Diamondback’s are doing. A family of four can attend a game for $114.29 in Phoenix, which is down 29.8% from 2008. They have maintained and in some cases increased attendance as they adjust ticket prices to meet the needs of baseball fans.

Economics 101 in One Paragraph: Scarcity and Trade-offs

All of us live in a world of scarce resources and we have unlimited things that we want. So we need to make choices and trade-offs. Each of those trade-offs come with a cost, in other words we must give up something to obtain what is valuable to us. We work in a large city because that is where the jobs are but we give up the small town quiet life, we live in a small town because that is where our children will have the best schools and give up the advantages of a big city, we retire to warm climates to spend more time outdoors but a lot of other folks want to do the same thing so retirement areas are crowded. There are costs and benefits because of choices that we make. We choose to have airbags in our vehicles because the majority of the time they save lives, but on occasion airbags have killed passengers in the vehicles. The FDA takes a great deal of time to test new medications making sure they are safe for consumption before allowing them to be sold to the public, but during that time many people who could possibly benefit from the new drugs are suffering and dying. The largest single use of Ethanol is as a motor fuel and fuel additive. Ethanol can be made from corn or sugar, and is supposed to keep cars running efficiently without causing as much pollution as gasoline. But rain forests in Brazil are being cut down to allow sugar crops to be grown to create Ethanol. Also, where corn is used to create Ethanol the price of corn has gone up dramatically because of high demand and leaving an agricultural mainstay in most cultures around the world in limited supply. After the September 11, 2001 attacks on this country by terrorists the government created new methods of trying to find people that might be a threat to the country, and in doing so found it necessary to infringe on certain citizen’s privacy. So everything has a cost, and there are trade-offs that we all make everyday. It also means that we all have the freedom to make those choices on what to eat, what to wear, where to live, where to work, and how to spend our leisure time, which could include a day at the ballpark.

Tomorrow - Economics 102 in One Paragraph: Supply and Demand from an Ethanol Point of View

Obama makes push for credit card legislation

On the AP Wire: Putting himself on the side of fuming consumers, President Barack Obama is pushing Congress to send him legislation by Memorial Day that would put a tighter rein on the credit card industry. "Americans know that they have a responsibility to live within their means and pay what they owe." Where has the President been the past few months? Just who does he think was partially to blame for the current economic criisis? How about all of the folks who moved into houses they couldn't afford or just chose to make money by flipping houses and were stuck with 2or 3 additional homes? Did they pay what they owed or did they just walk away from what they owed? Or even worse did they allow the taxpayers to bail them out using Tarp money?

President Obama continued, "But they also have a right to not get ripped off by the sudden rate hikes, unfair penalties and hidden fees that have become all-too common. I'm calling on Congress ... to pass a credit card reform bill that protects American consumers so that I can sign it into law by Memorial Day," Obama said. "There is no time for delay. We need a durable and successful flow of credit in our economy, but we can't tolerate profits that depend upon misleading working families. Those days are over.'"

What do the banks say about his newest consumer protection plan? The banking community is fighting back. Credit-card executives maintain that new restrictions could backfire on consumers, making it harder for banks to offer credit or put credit out of reach for many borrowers.

I guess the President has not read up on his Economics 101 lately. I think it is time for this blog to give some lessons on cause and effect, scarce resources, and other fun ideas.

Would you invest in the NEW Chrysler…or buy one of their new cars?

OK. So I am confused. Will Chrysler, which was once one of the centerpieces of the American automobile industry, do anything or say anything in an attempt to stay afloat? Yes! Will President Obama do anything or say anything in an attempt to give more power to the federal government over business and our free enterprise system? Yes! Will the federal government share power with the AFL-CIO in the manufacturing of automobiles? Yes!

Chrysler is bowing and scraping to our government hoping they will be saved again from bankruptcy. They were saved before, a few decades ago, but they did not change their methods of operation obviously and are now in the same situation. Will they change this time or did a whole bunch of taxpayer dollars disappear down the drain for nothing? Part of Chrysler’s deal making is allowing the federal government to run the company, a move that is sure to make them viable again. After all, it stirs confidence in all of us that all those government legal eagles are going to be designing the automobiles of the future.

In their defense the company is making sure that the people that have invested in Chrysler over the past decades do get a return on their investments – a huge 1% of total dollar value of those investments. Well at least they didn’t get shut out completely. And those same investors can take heart in the fact that 55% of the company is being GIVEN to the AFL-CIO. Does this mean that Gettelfinger will be on Forbes richest businesspersons list next year? Who is Gettelfinger? He is the head of the AFL-CIO, and he was quoted as saying that union members were the ones taking the biggest risks in the Chrysler reorganization. But Mr. Gettelfinger should be excused for his missteps considering that he is under a great deal of pressure these days, what with making public policy and working with President Obama in the dismantling of contract law in this country.

Some questions: What is the government going to do next to protect ‘our’ investment in the American auto industry? Is this protectionism going to extend to imports and exports? Or to renegades like Ford Motors who wouldn’t fall into lockstep with Chrysler and GM under the president’s grand scheme? Perhaps there will be incentives for the people of this country to buy Fiat. After all it was recently said by a U. S. government official that the Alfa Romeo was the BMW for the common man. And he should know, being an expert in the automobile industry now.

Would you invest in the NEW General Motors…or buy one of their new cars?

OK. So I am confused. Will General Motors, which was once the centerpiece of the American automobile industry, do anything, say anything, or be anything in an attempt to stay afloat? Yes! Let’s see what they have done so far:

GM bowing and scraping to the U.S. federal government to save them from their mistakes of the past – mostly making cars that folks didn’t want to buy and allowing the unions to create their business model. Part of that begging to the government allows said government to run the company, a move that is sure to make them viable again. After all, it is a nice touch having all those government legal eagles trying to design cars of the future. Would you want a car designed by John McCain or Chuck Schummer? Would you even want to sit in said car, turn it on and drive it?

In their defense the company is making sure that the people that have invested in GM over the past decades do get a return on their investments – a huge 1% of total dollar value of those investments. Well at least they didn’t get shut out completely.

And how about GM allowing 55% of the company to be given away to the AFL-CIO? Does this mean that Gettelfinger will be on Forbes richest businesspersons list next year? Who is Gettelfinger? He is the head of the AFL-CIO that was quoted as really saying that union members were the ones taking the biggest risks in the GM reorganization.

A few questions remain: What is the government going to do next to protect ‘our’ investment in the American auto industry? Is this protectionism going to extend to imports and exports…or to renegades like Ford Motors?

This interview is a great illustration of political bungling. Including it here is also a perfect beginning to my blogging career and asks the question:

DO OUR POLITICIANS HAVE A CLUE?

BROKAW: …. if we work our way off carbon-based fuels, in the meantime, this is not going to happen overnight.
PELOSI: You can have a transition with natural gas. You can have a transition with natural gas. That is cheap, abundant and clean compared to fossil fuels.
***
PELOSI: I'm -- I'm investing in something I believe in. I believe in natural gas as a clean, cheap alternative to fossil fuels.
***
PELOSI: The fact is, the supply of natural gas is so big, and you do need a transition if you're going to go from fossil fuels, as you say, you can't do it overnight, but you must transition.These investments in wind, in solar and biofuels and focus on natural gas, these are the real alternatives.

Nancy Pelosi is helping to shape the nation's energy policy. But shouldn't someone tell her that natural gas is a fossil fuel?