Cash for Clunkers – Deal? Or, No Deal?

So, here we are.  It only took the Government approximately two weeks to spend $1 billion (that is with a ‘B’, as in “Bucks”) on the “Cash for Clunkers” program.  Congress would have been happy to spend more of your hard-earned money up front, but $1 billion is all that was allocated in the bill.

Now we are looking at round two, and this time Congress is doubling the effort.  Because it worked so gol-darn well, the Government is going to authorize another $2 billion for the “Cash for Clunkers” program.  So ante up folks, Washington is feeling generous, as the 2010 campaigns will be getting under way.  They need a way to redistribute your wealth to make them look good and buy some more votes.

Let me state, for the record, I understand there are a lot of people that, due to the program, have new cars parked in their driveways that would not otherwise be there.  Also, there are that many older cars that no longer plague our roadways.  However, I must ask the question.  Have any of these people thanked you for your contribution to the betterment of their condition?

Yes, America.  You are now owed a great debt of gratitude for assisting in the purchases of all those new cars.  How many?  At $4500 each, $1 billion buys a total, of a little over 222,000 down payments on new cars.  At an average purchase price of approximately $25,000 per new car, the program should account for gross sales of just over $5.5 billion for the auto industry.

Bear in mind, the “Cash for Clunker” program allowed foreign manufacturers in on the deal as well, so Detroit and Government Motors will not glean all the profits; as a matter of fact, they held “true to form” and maintain their dismal market share.

For the moment however, let us assume all the cars purchased, with the assistance of the program, were purchased from Government Motors and Chrysler.  When you consider that most well run corporations operate at a profit of less than 10% of gross sales, and for purposes of recognizing that GM is now leaner and more efficient operating under President Obama, we will allow the full 10%; the program produces a profit of approximately $550 million.

If GM and Chrysler would have been the sole beneficiaries of the program, and all the profit went to repaying the massive bailout of the auto industry, they still owe the Taxpayers approximately 14.5 billion to the tax payers.

However, those $4500.00 payouts merely provide down payments; maybe we have missed the boat on this one.  Maybe the real payback is going to come from the interest earned by the finance companies, which the Government has their meaty little hooks in as well.  After all, according to the numbers used above, the finance companies would have financed some $4.75 billion, which would produce approximately $4.5 – 5 billion of gross revenues, to the finance companies, over the next five to six years.  At 10% profit, 100% of which being paid back to the Taxpayers, that should put another $500 million back in our pockets by the end of 2015, or a little under $100 million per year.  What a deal!

All right, it is time for a reality check.  The fact is, the money supplied to fund the “Cash for Clunkers” program, was first borrowed by the Government, some of which at rates reportedly as high as 30%.  In the end, you and I get to pay the tab for all those new cars, and we never even get to see them, let alone drive them.  Then of course, there is the pesky little fact that we get to pay for them at the government deficit rate, which means each car will cost up to $100,000.00 instead of the $25000.00 purchase price.  Oh, happy day!

Think about it; the Government borrows $1 billion to loan out in $4500 increments, to people who could not otherwise afford it, to purchase approximately 222,000 automobiles, at an average cost of $25,000, and we get to pay back an amount, of up to ten times the original amount borrowed by the government, to satisfy the debt.

I thought President Obama was being hailed, by some on the left, as the smartest President we have ever had.  I might be missing something here, but I do not understand the math on this one.  Maybe the tried and true formulas of mathematics have changed since I went to school; or maybe this is what they were referring to by “New Math”.

The simple truth is, America cannot afford this, or any other give-away programs intended for the sole purpose of buying votes.  “Cash for Clunkers” is not improving the economy or consumer confidence with any sustainable influence, nor will it.  Moreover, as I pointed out, the Taxpayers are going to be saddled with the debt.

In fact, we have yet to experience the unintentional consequences of the “Cash for Clunkers” program.  The program will provide a shortage of used cars and parts, thus driving up the cost of these vehicles.  You know, used cars, the very cars bought and driven by those who cannot afford new cars, but earn too much income to qualify for government assistance, the true middle class, and the actual people who will have to pay the bill in the end.

How many jobs will be lost due to the rising cost of used cars and the lack of parts?  Used car dealers will not be able to sell as many cars, thus they will maintain fewer salespeople.  Parts will be harder to come by, and consequently more expensive, thus causing closures and layoffs at small repair shops who thrive on keeping these cars running at the lowest possible cost.  In addition, how many of the people, assisted by the program, in purchasing new cars, will default on the loans, causing yet another hit on the still shaky financial industry?

No, folks.  It seems to me that Scary Barry and his Congressional Cronies have not thought this one through.  It seems there are too many negatives for the Taxpayers in this “Cash for Clunkers” deal.

Hey!  I got an idea!  How about, we tell Barack Obama Hood and his merry men in Congress to stop looking for ways give away and spend money that we do not have, in an effort to buy our votes?  Maybe instead, they can start looking for ways to begin paying down the national debt.

Mr. President, if you really want to give us something, give us a plan to restore our national financial security.  Give us a plan to secure our borders against invasions of all types, a plan to restore our nation and our military to the “superpower” status we have rightfully earned.  Give us a plan to reduce the size of the Federal Government, a plan to restore the value of our currency returning to a free market and capitalism.

Globalization of our Nation

As I proclaimed previously in “Cash for Clunkers”, the creation of Government Motors has firmly placed the Government in bed with the United Auto Workers (UAW).

The UAW still has a labor contract with Chrysler, who was bought out by FIAT. The Italian Government subsidizes FIAT, to offset the taxes paid from the sales of FIAT’s products in the U.S.

Just one big, happy, global, auto industry family, and you and I, the Taxpayers, are on the hook to pay for the wedding. Gee, not only did we not get a piece of cake, we were never invited to the wedding. No, we were never even consulted about the new arrangements of intimacy.

Then too, we cannot forget to add our new “Dutch Uncle”, the Chinese, to the equation. The Chinese will not be reduced to eating leftovers after becoming the single largest holder of American debt. Now that the Chinese have bought the Hummer line from GM, you can bet they will play heavily in the final formula.

I believe you are beginning to get the picture. President Obama is taking drastic steps to globalize our market. The creation of a partnership between the Labor Union and the Government is a major step toward Socialism. The UAW is acting as the modern day proletariat, as described by Karl Marx in his Communist Manifesto.

The UAW, as the modern day proletariat, will now have direct access to influencing policy and increasing their funding, by tapping into tax money. On the other hand, the Government will have a way to launder money through the auto industry, and the UAW, into political war chests, to finance the campaigns of their favorite liberal stool pigeons.

Upon further review, there is the little matter of “conflict of interest” on the part of the UAW. The UAW is still contracted to provide labor to Chrysler, now owned by a foreign carmaker, while at the same time being part owner of a domestic carmaker. I cannot help but wonder how much influence the Italian Government will have in our Government through a proxy relationship, using FIAT and the UAW as a conduit.

Now doesn’t that make for a nice, cozy little package? But, hey! If we play our cards right, this comfy little arrangement could put us in line for a membership in the European Union.

As for our new “Dutch Uncle” from China, of course, because they own so much of our debt, we will be told that we must enter into a free trade agreement with them. Then they will have a market for those fuel efficient Hummer’s. You know, the SUV’s the Government keeps claiming nobody wants to purchase.

This is starting to look a lot like a solidification of “Global Citizenry”, or more commonly known as “One World Government”. Do you think that is a stretch? Then argue the points I have made.

While you are at it, try to explain what constitutional role we play in a “Global Justice” effort, using our military as an “International Police Agency” instead of the highly trained fighting force of our nation. Try to rationalize why we are sending FBI agents to Afghanistan to read Miranda Rights to captured “enemy combatants”, before CIA agents can question them, thus extending the Constitutional Rights of American citizens to the people of other nations.

Did I mention that these individuals are “enemy combatants”, caught on the battlefield? The policy, quietly adopted by President Obama, seeks to protect those who actively target U.S. military personnel, and citizens, in attempts to harm and kill us.

What is next? I wonder how long before we attempt to concede more sovereignty to the United Nations. That could begin to pave the way to extend voting privileges to Castro, Kim Jong-il, or Mahmoud Ahmadinejad. Or, maybe we can release the detainees at Guantanamo Bay and have them create a Jihadist Party and a Hamas Party to vie for political power against the Democrats, Republicans, and Independents.

As I claimed in “Just an Average American”, I will attempt to provoke thought. Think about my comments here. As troubling as it sounds, it makes sense.

Think about the actions and proclamations of President Obama in his short tenure in the Oval Office. He has travelled the globe, apologizing for America’s exceptionalism, admonishing our standards of living, and condemning our past foreign policies. According to that which Barack Obama preaches, America is a portrayed as a cancer to the rest of the world, and the President alone has the cure. His policies of reaching out to empower and appease our adversaries and the endless degradation of America are the answers he proposes.

Let me give you a news flash. France and Spain tried this method of achieving peace. They were bombed for their trouble, demonstrating that their practice of appeasement was an exercise of futility. Maybe, then State Senator Obama, was too busy studying and perfecting the implementation of Saul Alinsky’s radical teachings, to pay attention to the unfolding real life events.

Then again, Barack Obama is not the sharpest knife in the drawer when it comes to learning lessons from History. After all, the President espoused the belief that the Constitution of the United States is a list of “negative rights”. He went on to express, and I paraphrase, the Founders only mandated the restrictions of Government, they failed to express what Government is supposed to do for the people.

In my opinion, this is the most troubling public statement Barack Obama has ever made. As a graduate of Harvard, and a Constitutional Professor, he should understand, better than most, that the Founders intentionally set out to limit the authorities and power of the Government. They believed that authority and power should be reserved to the people and the States, respectively.

In his mind, instead of being elected into an office of servitude, Barack Obama has succeeded in his bid for power through the mantra of “Hope and Change”. Now he fully intends to push our nation in a direction it was never intended. He is adopting policies of socialism, at the cost of individual liberty and responsibility. He works tirelessly toward the induction of our exceptional nation into the mediocrity of globalization. In doing so, he attempts to reduce the greatness of liberty and freedom, to the oppression of a socialized, tyrannical dictatorship.

If you still think that is a stretch, think about the power President Obama has already seized for the Government. We now know that the banks were forced into the financial bailout, and that they were repudiated when they attempted to return the bailout money. We also know that a large amount of the bailout money for the financial industry went to foreign owned banks.

We have watched President Obama lead the way for a hostile Government takeover of the auto industry; farming pieces of it out to foreign ownership. He espouses support of failed energy policies, restricting domestic production of energy sources and forcing our dependence on foreign entities.

He marches lockstep in supporting the vilification of the corporate world, consistently attempting to persuade people to vacate “Corporate America”. He preaches that greedy CEO’s make too much money, and therefore require “Government imposed salary caps”. What’s next, more Government ownership?

Maybe the President does not understand that part of our country’s greatness depends on our industrialization, which by the way is profit driven. Conversely, could he be setting the stage to sell corporate ownership to foreign interests, as a means to promote further globalization?

In short, the examples are numerous and the evidence is clear; you only need to look past the sycophant media spin to see that all indicators point to our being led into a socialistic state.

I for one, appreciate my liberty and freedom, and my right of self-governance. I revel in the opportunity to make the best of myself, without limitations placed on me, through the process of rulership. I reject any individual that would pervert the standards and values of my nation, and any efforts to devalue that, for which so many have fought and died. I know what America is, and what it represents, and oppose any who attempt to redefine it.

There you have it. I leave no questions as to what I believe, or where I stand. What do you think? Are you American enough to stand with me, “just an average American”, in support of individual freedom and liberty, and oppose the socialization of our nation? Are you willing to stop the induction of our country into a doctrine of globalization, under which we would become just another member state of a “One World Government”?

Step back from your party affiliations and the rhetoric. Try to personalize the events of our nation, as if the events were limited to your life, your household, within your community, and the neighboring communities. Look at what is happening and what has already transpired. Understand the implications, and the consequences of current events.

Are we, as a nation, protecting individual liberty and freedom? Are we promoting self-governance, and personal responsibility? Are we preserving the vision of our Founders? Or, as a people, are we allowing the government to lead us into a state of dependency? Are those we elected, attempting a form of tyranny? Worse yet, are they conceding our sovereignty?

You decide. Do you want to be part of an independent nation based on liberty and freedom? Or, would you rather become a “citizen of the world” and therefore reduce our nation’s status to that of a simple, socialistic member state of the world?

Think about it.

Cash for Clunkers – The New Government Motors Corp.

Have you heard? Congress is now considering giving out cash for clunkers.  That is, they are considering the idea, of giving buyers up to $4500.00 for their old, gas guzzling clunkers, toward the purchase of a new, fuel-efficient vehicle.

Now things are beginning to make sense.  As you know by now, the Government is the proud new owner of approximately 60% of General Motors (GM). The United Auto Workers Union (UAW) has partnered with the Government, and purchased approximately 15% of GM. This is ironic when you think of how much of the Auto Bailout money was ultimately received by the UAW, as “legitimate expenses” paid by GM and Chrysler, before the takeover.

But first, let’s look at the business aspects of what is going on here. No matter your social viewpoint, the whole idea for a company to be in existence in a capitalist, free market system is to make profits. The auto industry is no exception to this ideology; they must continuously develop their products, to appeal to the buyers, and thus maintain marketability. Like it or not, without profits, they cannot pay the overhead, or maintain the research and development necessary to sustaining the business. The only way this joint venture can be profitable is to lure people to buy their newly acquired product.

Up until now, auto manufacturers used factory rebates as a sales tool. Now that the Government is in the auto industry, they are legislating the use tax rebates. If you think about this for a moment, the entire auto bailout fiasco could have been avoided, if the Government had used tax incentives toward new car purchases, of American made cars, as proposed by Andrew Wilkow. Mr. Wilkow argued that the money was going to originate with the people regardless, and that using a tax incentive would entice people into purchasing new, American made vehicles, thwarting the need of a Government bailout, and at least allowing the people to have something to show for the money they spent. Now they have legislated the use of tax incentives, but as an unfair advantage to compete for market share.

Has anyone thought to ask where the money is coming from to pay for the incentives being offered?  You can bet its coming from the same place as all the funding for all the other Government programs, your pocket.

This takeover is looking more, and more, like an attempt to monopolize the auto industry, with the exception of Ford Motor Company, who has refused to give in to government ownership. Do you think the Government would adopt new ecological or economical standards for the auto industry, and then give their “Government Entity”, GM, exclusion? Of course, the exclusion would extend to foreign auto manufacturers. That would teach Ford; they would soon wish they had accepted money from the bailout.

As a side note, most of the testing for automotive research and development takes place on the racetrack. I can just imagine, Team POTUS. Look out NASCAR; you could be the next step.

No way! The Government in auto racing? Why not? Besides money, NASCAR already has something that the Government envies, fan loyalty. The Government sees NASCAR Fans the same way they view any other demographic group, a voting block; typical, conservative, “good ole boy” types, loyal to a common interest. You think?

The GM takeover takes place on the heels of the Government supporting a deal for a foreign auto company to purchase Chrysler, who went bankrupt after the bailout. The support is in the form of the Supreme Court allowing the “merger” of Chrysler and FIAT, and at the same time, the forced closure of auto dealerships, thereby allowing the new owners to escape the dealer’s contracts with Chrysler. So much for the promise of saving American jobs. Did I mention the UAW received money from Chrysler as a “legitimate expense” as well?

I wonder if the money received by the UAW, from the manufacturers, as a result of the bailout, was ultimately used as purchasing capitol in this latest scheme. If so, I wonder if the Taxpayers now technically own part of the UAW, as the bailout was paid from tax dollars.

To compound the issue, it seems the UAW will still have labor agreements with FIAT, who bought out Chrysler. FIAT is tied to the Italian Government, in as much as, to offset American taxes paid for the sales of their automobiles here in the U.S., FIAT is subsidized, thus completing the loop.

The U.S. Government, the UAW, and the Italian Government, all members of one big, happy, global, auto industry family, and you and I, the Taxpayers, are on the hook to pay for the wedding. Gee, we didn’t even get a piece of cake. I almost forgot, the Chinese are going to be our new “Dutch Uncle”, because they bought the Hummer line from GM. That should work to throw a monkey wrench in the SUV Market.

As to financing, the Government is already controlling several financial institutions. It is only a matter of timing until the announcement of a special, low interest auto-financing program. I bet it will have full Government backing, just like Fannie Mea and Freddie Mac. Wow, how about that?

No matter how you serve it up, President Obama is leading our nation down a road to failed ideologies and policies. Keep watching, if you dare, for where I think it could lead us.

(Check out my follow-up to this article in Globalization of Our Nation)