Thanks, Obama! GM Goes From Bad to Worse Since the Bailout

September 7, 2012

Readers with long memories may recall that Charles E. Wilson, president of General Motors and nominee for secretary of defense, got into trouble when he told a Senate committee, “What is good for the country is good for General Motors, and what’s good for General Motors is good for the country.”

 

That was in 1953, and Wilson was trying to make the point that General Motors was such a big company — it sold about half the cars in the U.S. back then — that its interests were inevitably aligned with those of the country as a whole.

 

Things are different now. General Motors’ market share in the U.S. is below 20 percent. It has gone through bankruptcy and exists now thanks to a federal bailout. But Barack Obama seems to think that it’s as closely aligned with the national interest as Wilson did.

 

“When the American auto industry was on the brink of collapse,” Obama told a campaign event audience in Colorado earlier this month, “I said, let’s bet on America’s workers. And we got management and workers to come together, making cars better than ever, and now GM is No. 1 again and the American auto industry has come roaring back.”

 

His conclusion: “So now I want to say that what we did with the auto industry, we can do in manufacturing across America. Let’s make sure advanced, high-tech manufacturing jobs take root here, not in China. Let’s have them here in Colorado. And that means supporting investment here.”

 

Was he calling for a federal bailout of other American manufacturing companies? And what does he mean by “supporting investment”? White House reporters have not asked these obvious questions, for the good reason that the president, who has been attending fundraisers on an average of one every 60 hours, has not held a press conference in something like two months.

 

Obama talks about the auto bailout frequently, since it’s one of the few things in his record that gets positive responses in the polls. But he’s probably wise to avoid probing questions, since the GM bailout is not at all the success he claims.

 

GM has been selling cars in the U.S. at deep discount and, while it’s making money in China — and is outsourcing operations there and elsewhere — it’s bleeding losses in Europe. It’s spending billions to ditch its Opel brand there in favor of Chevrolet, including $559 million to put the Chevy logo on Manchester United soccer team uniforms — and just fired the marketing exec who cut that deal.

 

It botched the launch of its new Chevrolet Malibu by starting with the green-friendly Eco version, which pleased its government shareholders, but which got lousy reviews. And it’s selling only about 10,000 electric-powered Chevy Volts a year, a puny contribution toward Obama’s goal of 1 million electric vehicles on the road by 2015.

 

“GM is going from bad to worse,” reads the headline on Automotive News Editor in Chief Keith Crain’s analysis. That’s certainly true of its stock price.

 

The government still owns 500 million shares of GM, 26 percent of the total. It needs to sell them for $53 a share to recover its $49.5 billion bailout. But the stock price is around $20 a share, and the Treasury now estimates that the government will lose more than $25 billion if and when it sells.

 

That’s in addition to the revenue lost when the Obama administration permitted GM to continue to deduct previous losses from current profits, even though such deductions are ordinarily wiped out in bankruptcy proceedings.

 

It’s hard to avoid the conclusion that GM is bleeding money because of decisions made by a management eager to please its political masters — and by the terms of the bankruptcy arranged by Obama car czars Ron Bloom and Steven Rattner.

 

Rattner himself admitted late last year, in a speech to the Detroit Economic Club: “We should have asked the UAW (the United Auto Workers union) to do a bit more. We did not ask any UAW member to take a cut in their pay.” Non-union employees of GM spinoff Delphi lost their pensions. UAW members didn’t.

 

The UAW got their political payoff. And GM, according to Forbes writer Louis Woodhill, is headed to bankruptcy again.

 

Is this really what Obama wants to do for all manufacturing across America? Let’s hope not.

 

From: 


Thanks, Obama! Canadians Now Richer Than Americans for First Time Ever

July 18, 2012

For the first time in recent history, the average Canadian is richer than the average American, according to a report cited in Toronto’s Globe and Mail.

The net worth of the average Canadian household in 2011 was $363,202.

If you’re thinking the Canadian advantage must be due to exchange rates, think again. The Canadian dollar has actually caught up to the U.S. dollar in recent years.

“These are not 60-cent dollars, but Canadian dollars more or less at par with the U.S. greenback,” Globe and Mail’s Michael Adams writes.

To add insult to injury, not only are Canadians comparatively better-off than Americans, they’re also more likely to be employed. The unemployment rate is 7.2 percent—and dropping—in Canada, while the U.S. is stuck with a stubbornly high rate of 8.2 percent.

Excerpted from:  http://www.usnews.com/news/articles/2012/07/18/for-the-first-time-canadians-now-richer-than-americans


Thanks, Obama! Geithner Says “Many Americans Will Face Hard Times For a Long Time to Come” (Whatever Happened to the Recovery?)

July 12, 2011

WASHINGTON (AP) — Treasury Secretary Timothy Geithner (GYT’-nur) says many Americans will face hard times for a long time to come.

He says President Barack Obama will keep working to strengthen the economy. But Geithner says will be some time before many people feel like the country is recovering.

Geithner tells NBC’s “Meet the Press” that it’s a very tough economy. He says that for a lot of people “it’s going to feel very hard, harder than anything they’ve experienced in their lifetime now, for a long time to come.”

From:  http://news.yahoo.com/geithner-says-hard-times-continue-many-150523958.html


Obama’s Economists: ‘Stimulus’ Has Cost $278,000 per Job; Economy Now Shedding Jobs Faster Than Creating Jobs

July 4, 2011

The stimulus is now causing the economy to shed jobs.

When the Obama administration releases a report on the Friday before a long weekend, it’s clearly not trying to draw attention to the report’s contents.

Sure enough, the “Seventh Quarterly Report” on the economic impact of the “stimulus,” released on Friday, July 1, provides further evidence that President Obama’s economic “stimulus” did very little, if anything, to stimulate the economy, and a whole lot to stimulate the debt.

The report was written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs.

The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.  

In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.

Furthermore, the council reports that, as of two quarters ago, the “stimulus” had added or saved just under 2.7 million jobs — or 288,000 more than it has now. 

In other words, over the past six months, the economy would have added or saved more jobs without the “stimulus” than it has with it.

In comparison to how things would otherwise have been, the “stimulus” has been working in reverse over the past six months, causing the economy to shed jobs.

From:  http://www.weeklystandard.com/blogs/obama-s-economists-stimulus-has-cost-278000-job_576014.html

 


Obama, Where’d The “Stimulus” Money Go? Existing-Home Sales Continue to Plunge…

March 22, 2011

Sales of previously owned U.S. homes fell unexpectedly sharply in February and prices touched their lowest level in nearly nine years, implying a housing market recovery was still a long off.

 

The National Association of Realtors said Monday sales fell 9.6 percent month over month to an annual rate of 4.88 million units, snapping three straight months of gains.

 

The percentage decline was the largest since July.

 

Economists polled by Reuters had expected February sales to fall 4.0 percent to a 5.15 million-unit pace from the previously reported 5.36 million unit rate in January, which was revised slightly up to 5.40 million.

 

The median home price dropped 5.2 percent in February from a year earlier to $156,100, the lowest since April 2002.

 

“If the price declines persist, even with the job market recovery, that could hamper recovery in the housing market,” said NAR chief economist Lawrence Yun.

 

Compared with February last year, sales were down 2.8 percent.

 

Oversupply of homes and a relentless wave of foreclosures are pressuring prices, holding back recovery in the sector, whose collapse helped to tip the U.S. economy into its worst recession since the 1930s.

 

From:  http://www.cnbc.com/id/42192395


Thanks, Obama! Gallup: U.S. Unemployment Jumps to 10.0% in Mid-February

February 17, 2011

Underemployment surged to 19.6% in mid-February from 18.9% at the end of January

 

PRINCETON, NJ — Unemployment, as measured by Gallup without seasonal adjustment, hit 10.0% in mid-February — up from 9.8% at the end of January.

 

The percentage of part-time workers who want full-time work worsened considerably in mid-February, increasing to 9.6% of the workforce from 9.1% in January.

 

Underemployment Surges in Mid-February

 

Underemployment, in which Gallup combines part-time workers wanting full-time work with the U.S. unemployment rate, surged in mid-February to 19.6% — mostly as a result of the sharp increase in those working part time but wanting full-time work. Underemployment now stands at basically the same place as it did a year ago (19.8%).

 

The Jobs Situation Now Versus a Year Ago

 

The unemployment rate in mid-February is 0.8 percentage points lower than it was at this time a year ago, compared with a 1.1-point improvement at the end of January. This suggests that jobs are less available now than they were in January.

 

More troubling, however, is the surge in underemployment. On this broader basis, current job conditions are barely improved from what they were at this time last year. Essentially, what has happened over the past year is that some people who were unemployed got part-time jobs but are still looking for full-time work. This is not much to show for a year in which many macro-economic indicators showed improvement.

 

This is likely why Gallup’s self-reported spending remains stuck in “new normal” even as consumer optimism continues to hit new highs. Jobs remain the key to getting the U.S. economy moving, and mid-February underemployment results suggest little or no progress is being made in that regard.

 

From:  http://www.gallup.com/poll/146147/Gallup-Finds-Unemployment-Mid-February.aspx

 


Thanks, Obama! U.S. Consumer Prices, Jobless Claims Both Rising…

February 17, 2011

Rising global demand for food and fuel pushed up the U.S. cost of living more than forecast in January. The consumer-price index advanced 0.4 percent for a second month, led by the biggest increase in food costs in more than two years, according to figures today from the Labor Department in Washington.

Americans are paying more for air travel and clothing as growing economies in Asia and Latin America boost demand for commodities like oil and cotton.

Another report today showing more people than projected filed claims for jobless benefits last week indicates workers don’t have the power to seek bigger pay increases, evidence inflation is unlikely to flare.

From: http://www.bloomberg.com/news/2011-02-17/consumer-prices-in-u-s-rise-more-than-forecast-on-higher-food-fuel-costs.html