Sunday, December 14, 2008

What Passes for Financial Journalism...

I saw this article on Yahoo!Finance. It is pretty much the standard of what passes for financial/economic journalism these days. Let's go through it line by line, shall we?
WASHINGTON (AP) -- The White House assessed its options Saturday on helping prevent the collapse of the U.S. auto industry.
The U.S. auto industry is not on the verge of collapse. GM, Ford, and Chrysler are having financial problems. Ford has even said it does not need money, and I can personally testify as to Ford's wild success in the Chinese market. If GM and Chrysler do enter Chapter 11, their factories will not vaporize into thin air. They will be able to restructure and emerge stronger companies, at least financially. Furthermore, there are plenty of other automobile manufacturers operating across the country, including Toyota, Nissan, and Honda, who employ American workers at American factories. Simply because they are not American companies does not mean that they are not firmly embedded in the American economy, putting people to work and generating quality products.
Any avenue of rescue, however, must surmount political obstacles and take into account the potential fallout on financial markets in a time of recession.
Notice no mention of the "ethical obstacle" of stealing from the American public. And it's funny how nobody thought to "take into account the potential fallout on financial markets" of stealing from the American public by printing lots of money in the 90's and early 2000's, flooding the US housing market and credit markets in general with loads of easy, government subsidized credit, and putting the American taxpayer on the hook for mortgages passed out to uncreditworthy individuals. Funny how that NEVER gets mentioned, except on sites like this one, which is undoubtedly considered a crank site unworthy of people's time or attention. After all, I don't have a degree in economics. I wasn't educated by the geniuses of finance that thought this stuff was a good idea. I'm only a chemist.
Bush administration officials kept details about any emerging plan closely held. They are talking with automakers and have yet to make final decisions on the size or length of the help.
That's funny. I'm no constitutional scholar, but I thought that the Congress was in control of the spending of taxpayer money. Furthermore, I thought that they were consulted, and that they handily rejected the idea in the Senate. Funny how I'm not being consulted about how other people get to spend my money...moral hazard, anyone?

White House deputy press secretary Tony Fratto said officials "are continuing to gather financial information from the automakers, assessing the data, their cash position going forward. We'll take a look at that information, make some judgments and review our options."

He said the focus is on "trying to get the policy right while considering the best interests of the taxpayer and our economy, and we'll take the time we have available to do that right. No decisions have been made."

Their options? Where is the Federal Government given the power to bailout financially strapped private companies in the Constitution? Could somebody point me to the line? And government officials are going to stand in judgment of the the financial practices of enterprises, which are at least productive, and not completely propped up by the power to steal upon pain of imprisonment and a money printing press in their own basement? Pot call the kettle black... or something about throwing stones and glass houses... the mind explodes with the possibilities of invective cliche... I'll save Washington some time "trying to get the policy right." Leave the big 3 alone; let them fail. Resign from office en masse, and leave the country for a labor camp in North Korea. I think that'd be in the best interests of the taxpayer and our economy, and we'd all be better off.
The White House disclosed on Friday that it would consider using the $700 billion financial industry bailout plan enacted in October as a way to help the car companies, even though it has long insisted that money should be reserved for stabilizing markets.
I love the transparency in these processes. I'm glad everybody knows what they're voting for and where the money is going.
Michigan Democratic Sen. Carl Levin, a key supporter of his state's leading industry, said the idea of emergency loans "is still very much alive."
Michigan Democrat Sen. Carl Levin should be the first guy cannibalized in that North Korean labor camp. He obviously hasn't done his economically backwards, job-hemorraging state any favors while in office. And the idea will probably stay alive so long as Americans continue to embrace socialism and thievery as an economic philosophy. Which means forever.
Highlighting those difficulties, GM announced Friday it would cut an additional 250,000 vehicles from its first-quarter production schedule -- a third of its normal output -- by temporarily closing 20 factories across North America. The move affects most plants in the U.S., Canada and Mexico. Many will be shut the whole month of January.
Good. That is a very natural response to severely backed up inventories and a cash strapped financial situation. We don't need any more gas-guzzling SUV's. The market's pretty much saturated. It would be good for the economy and may even save their company. The labor and capital would be better expended on other activities, producing products that consumers actually need. Too bad we'll be giving them money not to do this. We have jobs to save and votes to buy.
Congressional efforts to aid the industry ran aground Thursday. The White House and congressional Democrats agreed on a $14 billion measure that would have extended short-term financing to the industry while establishing a "car czar" to make sure the money was used to turn the Big Three into competitive companies. That bill passed the House on Wednesday but immediately ran into opposition from Senate Republicans who said it did not go far enough.
Car czar. Government direction of the economy. Good thing our soldiers are protecting our freedom in Iraq. That way we'll be free to practice fascism.
On Thursday, the GOP lawmakers demanded the United Auto Workers union agree to accept a lower pay and benefits package that would be in line with compensation earned by workers at U.S. factories producing cars for Japanese companies such as Honda, Toyota and Nissan. Those companies have plants in the states represented by some of the most ardent critics of bailing out Detroit. The effort ultimately collapsed when the UAW balked at the terms demanded.
Now the government wants to be in the business of setting wages. But I suppose if its going to be directing the economy anyway, that's reasonable. It's for the common good, of course. General welfare clause, all that. It's only fair. And the unions want politicians to steal money from taxpayers on whatever terms they demand. So its really an argument of which thief gets to set the terms. Is it any wonder we're in this mess? An honest citizenry wouldn't even be having this debate. America deserves its problems. It deserves more. It'll probably get them.

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