Category: Legislation

We Oppose the Idea Because It Will Help People and Save Money

No Comments

Seriously, this is the state of ‘Phant ideology.

Lindasy, “Majikthise” Beyerstein notes that this is why Republican oppose any form of public insurance:

Mark Hayes, a Republican health policy adviser to the Senate Finance Committee, said Republicans have concerns because the government plan might have access to price controls and other tools not available to private insurers. This could lead to lower premiums in the government plan, which would cause most consumers to migrate out of the private market, he said.

Do you notice what Mark Hayes is saying.

He is saying that the government will provide a better and cheaper service, and so this will damage the private providers of under-performing products.

If the private sector works so well for keeping people insured, surely the private sector would beat the public sector….except, of course, that it doesn’t.

Automaker Updates

No Comments

Well, it looks like George W. Bush is throwing a hissy fit, and dragging his feet on an auto bailout. My guess is that he wants to show that he still has relevance….Even though he doesn’t.

In any case, Toyota just signaled its displeasure with the Senate filibuster by delaying the completion and opening of a new plant in Mississippi indefinitely, which is a pretty clear indicator about how the transplant automakers feel about having their supply chain cut too.

I imagine that they are getting some frantic calls from state officials, and I imaging that potential supply chain issues if GM goes under have come up.

In the mean time, it appears that GMAC swap holders have agreed to changes that may allow it to become a bank holding company, which means that they can sign up for one of the 11 new Federal Reserve sh$#pile for cash programs its offering banks.

GOP: ‘Action Alert – Auto Bailout’ – The News Hole – msnbc.com

No Comments

I’m shocked, shocked to find that gambling is going on here!

Well, it looks like the good folks at MSNBC’s Countdown, have come across a memo to Republican senators detailing strategies on the auto maker bailout.

We are all stunned and saddened that it seems to show that that the the use of the filibuster in the Senate was a crass political anti-union ploy.

Needless to say, I am disappointed. I could never imagine the Republicans using the Senate and the filibuster as nothing more than a vehicle* for crass political posturing:

From:
Sent: Wednesday, December 10, 2008 9:12 AM
To:
Subject: Action Alert — Auto Bailout

Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate Radio/TV Gallery. They would appreciate our support through messaging and attending the press conference, if possible. The message they want us to deliver is:

1. This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.

2. This rush to judgment is the same thing that happened with the TARP. Members did not have an opportunity to read or digest the legislation and therefore could not understand the consequences of it. We should not rush to pass this because Detroit says the sky is falling.

The sooner you can have press releases and documents like this in the hands of members and the press, the better. Please contact me if you need additional information. Again, the hardest thing for the democrats to do is get 60 votes. If we can hold the Republicans, we can beat this.

(emphasis mine)

So all this Sturm and Drang is just a way to take cheap shots at labor….Hoocoodanode?

*Pun not intended

Quote of the Day..

No Comments

Well, it appears that David Vitter has been doing celebratory dances about his role in killing the auto bailout, and some people beg to differ:

“I don’t know what Sen. Vitter has against GM or the United Auto Workers or the entire domestic auto industry; whatever it is, whatever he thinks we’ve done, it’s time for him to forgive us, just like Sen. Vitter has asked the citizens of Louisiana to forgive him, ” said Johnson [Morgan Johnson, president of the UAW local for GM in Shreveport], president of Local 2166. Otherwise, Johnson said of Vitter, it would appear, “He’d rather pay a prostitute than pay auto workers.”

When You Get Blasted as Know Nothing Ideologues by Dick Cheney…

No Comments

It’s official we are bizarro world:

Bush personally lobbied recalcitrant Senate Republicans after Vice President Dick Cheney failed to round up support Wednesday during a contentious two-hour meeting.

“If we don’t do this, we will be known as the party of Herbert Hoover forever,” Cheney told them, according to a Senate Republican aide, evoking the president whose inaction is widely blamed for helping trigger the Great Depression in the early 1930s.

Dick Cheney was right…I can’t believe that I said that.

Did the Dems Punk Bush and the Republicans?

No Comments

Because, after the failure of the filibuster fight over the bridge loans to the auto makers, Bush and His Evil Minions™ are saying that they will take steps to ensure that the Big 3 (Big 2½) continue to function until the next Congress.

In fact, they are pretty much flat out saying that they will use TARP money for the loans.

When you look at the sequence of events:

  • Dems suggest that the TARP be used, and Bush says no, so they fold like overcooked broccoli.
  • They want Senate approval for the “Car Czar”, and Bush says no, so they fold like overcooked broccoli.
  • They want improved fuel economy standards, and Bush says no, so they fold like overcooked broccoli.
  • They want automakers to drop lawsuits against California-Type emission standards, and Bush says no, so they fold like overcooked broccoli.
  • The Republicans kill the bill that gave Bush everything that he asked for.
  • Bush is forced to use the TARP money to keep the automakers going.

It could be that the Dems screwed up in reverse, and that this is all an accident, but it looks to me like that Bush and Paulson (and for that matter, Bernanke) were punk’d.

Additionally, now that this has gone down in defeat, it appears that constituencies for the Big 3 (Big 2½) are coming out of the woodwork.

It turns out that auto dealers, for example, are absolutely incensed at this, and these folks give lots of political money:

“I have never been as disappointed as I am today,” said Versailles [Kentucky] Ford dealer Jack Kain, who was chairman of the National Association of Automobile Dealers Association in 2005.

This is Going to Get Ugly

No Comments

Well, it appears that the Republicans have successfully filibustered the auto bailout, with the aid of Max Baucus (DINO-MT), though to be fair to Baucus, his objection was to a particularly egregious tax loophole, the SILO (Sale-In Lease-Out), which basically allowed municipal transit agencies to sell their rolling stock, and lease it back, so that companies could get undeserved tax breaks for a cash payments to said agencies.

As to the Republicans, it comes down to two things, they have transplants in their states, and they want to break the UAW.

I expect to see the Big e (Big 2½) and the transplants to start having problems with their suppliers withing a week, because if I were supplying parts to an automaker right now, I’d be demanding cash on delivery, not 90 or 120 days net.

This will get ugly, and if Harry Reid had any balls, he would make the Republicans actually stand up and talk, and not just throw up his hands when he loses the vote.

Is Cerberus Pulling a Scam on the Congress With Chrysler?

No Comments

I think that the most detailed analysis of this is by Dan Gerstein, who is a a political communications consultant, and was, “Communications director to Sen. Joe Lieberman (D-Conn.) and as a senior adviser on his vice presidential and presidential campaigns,” so we know that he’s a professional liar (that’s what a political communications consultant is), and that he associates with people with no sense of decency (Lieberman), so it should be read with that caveat, but his explanation of just how Cerberus is taking the taxpayer to the cleaners is the clearest and most concise explanation. (I’ll have alternate links below)

The issues:

  • Cerberus is chock full of Republican Party apparachicks, including Former Bush Secretary of the Treasury John Snow, who personally lobbied Hank Paulson to, “Salvage Cerberus’s investments in Detroit,” additional politically connected lobbyiests and corporate officers include:
    • Bush I VP Dan Quayle
    • Former Sen. John Breaux (a Dem, but very much a DINO)
    • Former Bush legislative liaison David Hobbs
    • Uber-Lobbyist Billy J. Cooper
    • Arnold I. Havens, a former general counsel of the Treasury Department
    • Christopher A. Smith, former chief of staff in the Treasury
  • Conservative estimates are the Cerberus manages somewhere around $30 billion, so they have the wherewithal to float a loan to Chrysler.
  • I think that the likely truth is that they don’t want to back Chrysler. They bought it from Mercedes Benz in the hopes of a quick sale to GM, classic flip and flee. Certainly the reports that they are trying for a quick sale to a Chinese auto manufacturer supports this.
  • A number of Congressmen, most notably Senator Grassley of Iowa, are demanding detailed information on the financial status of Cerberus, equity warrants being sort of like stock, but are not stock, since Chrysler is private.
  • They also have 51% ownership of GMAC, the auto lending firm spun off from GM, which means that they are getting taxpayer money twice.

On the bright side, what just passed requires Cerberus to put up equity warrants in exchange for the loans, equity warrants are kind of like stocks, but only for private firms, which have no stock.

More Money to Steal

No Comments

It looks like Hank Paulson and His Evil Minions™ and his evil minions have are considering they need to steal the second half the $700 billion in bailout money:

U.S. Treasury Secretary Henry Paulson is debating whether to ask Congress for the second installment of the $700 billion bailout package, concerned about competing demands for the funds and a potentially hostile reaction from lawmakers.

This is an easy one for members of Congress.

Paulson is incompetent and corrupt, choosing to serve his friends over the nation, and doing even that incompetently.

Senator Harkin To Introduce Bill to Force Derivatives Onto Regulated Exchanges

No Comments

I think that it’s a good idea, because the markets need transparency:

Senate Agriculture Committee Chairman Tom Harkin plans to introduce a bill Thursday that would force all over-the-counter derivatives, including credit-default swaps, onto regulated futures exchanges.

The problem for some folks, like hedge funds and former Lehman employees is that this will shut their business model down, because it is predicated on secrecy.

It’s not a problem for me, though. Just shut it down, and the stuff that continues, let a Commodity Futures Trading Commission with serious teeth aggressively enforce this.

Any business model that is predicated on information asymmetry and secrecy is dishonest at its foundations, and should be restricted.

Sometimes, Good Legislation Comes Back Too

No Comments

In this case, a change to bankruptcy laws that would allow judges to modify mortgages on primary residences.

Right now it can be done on a vacation home, recreational boat, etc., but not on a primary residence, but Senator Dick Durbin (D-IL) is bringing back a change in bankruptcy law to change this.

According to reports, this will be a priority of Obama, but we are hearing that about a lot of things right now.

This is a very good law for a number of reasons:

  • Modifying mortgages is cheaper than foreclosure.
  • With mortgages sliced and diced 6 ways from Sunday, it is currently impossible to get consent from the holders of the mortgages to renegotiate the loans.
  • It punishes the players who created the bubble.
  • The cost to people taking out mortgages is minuscule, on the order of 25-75 basis points (¼-¾%), which should not make a significant difference in home affordability.
  • It makes the use of arcane financial instruments on home mortgages less certain, and hence less likely.

Complete Pwna63*

No Comments

As has been noted in various places Bush and His Evil Minions&trade have been aggressively creating new regulations in the run-up to the inauguration, in order to saddle Obama with the fallout from their insane ideology for months or years.

Well, it looks like they goofed:

“Fortunately, [the White House] made a mistake,” said a top Senate Democratic aide.

Last May, White House chief of staff Joshua Bolten instructed federal agency heads to make sure any new regulations were finalized by Nov. 1. The memo didn’t spell it out, but the thinking behind the directive was obvious. As Myron Ebell of the conservative Competitive Enterprise Institute put it: “We’re not going to make the same mistakes the Clinton administration did.”

President Bill Clinton finalized regulations within 60 days of the 2001 inauguration, meaning Bush could come in and easily reverse them.

It could take Obama years to undo climate rules finalized more than 60 days before he takes office — the advantage the White House sought by getting them done by Nov. 1. But that strategy doesn’t account for the Congressional Review Act of 1996.

The law contains a clause determining that any regulation finalized within 60 legislative days of congressional adjournment is considered to have been legally finalized on the 15th legislative day of the new Congress, likely sometime in February. Congress then has 60 days to review it and reverse it with a joint resolution that can’t be filibustered in the Senate.

In other words, any regulation finalized in the last half-year of the Bush administration could be wiped out with a simple party-line vote in the Democrat-controlled Congress.

(emphasis mine)

*Ownage.

Inflation is the Solution, Not the Problem

No Comments

So, we have noted investor Julian Robertson saying that the US is looking down the barrel of a 10-15 year downturn, and we have concerns that the bank bailouts will cause a period of “hyper inflation”.

I think that these are related, but not in the way that the economic community does.

I think that inflation is the solution, rather than the problem.

The problem right now is that assets are in too many cases worth less than what is owed on them.

The problem is not that assets are currently underpriced, but that they were overvalued when they were purchased.

The solution is to devalue the currency that is owed on these loans, and the word for this devaluation is inflation.

As long as we put in a structure that ensures that wages (not income, but earned wages) for the bottom ½ or ¾ of the population keep pace, so that people can live, people will do OK, and the people at the core of this crisis, banks and entities that act like banks, will pay for their problem by a reduction in the value of their cash hoards.

Retirees and near retirees will take a serious hit, but society as a whole will do better.

I think, given the enormous amount of money pumped into the system by Alan “Bubbles” Greenspan over the past 20 years, and the positively mind boggling amount of money pumped into the system over the past few months by Bernanke and Paulson, that inflation is inevitable anyway.

With 20% inflation, prices would double in about 3½ years*.

One of the problems here is how to reign in the beast before you need a wheelbarrow of currency to buy a loaf of bread, and how you stop inflation once the problem is done.

My suggestion is to do it via legislative fiat: Instead of allowing inflation to come, simply pass a law devaluing the US dollar by 50%.

This law would necessarily ensure that the payments for existing contracts, including wages, would necessarily double, as would regulations such as the minimum wage.

Of course, I I’m an engineer, not an economist, dammit,† and I’m sure that any economist would consider my proposal batsh%$ insane.

*Rule of thumb on interest: If you divide the number 72 by the interest, you get the approximate time to double. It’s called the rule of 72.
†I LOVE IT when I get to go all Doctor McCoy!!!