Obama Fails as a Businessman: Government Motors Crashing and Burning
Well, I guess being a Community Organizer doesn’t really prepare one to own major companies; only how to take them over by force and then run them further into the ground:
GAO: Full recoup of gov’t auto investment unlikely
Nov 2 12:57 PM US/Eastern
By KEN THOMAS and STEPHEN MANNING
Associated Press Writers – via Breitbart
WASHINGTON (AP) – Government investigators say the U.S. government is unlikely to recover all of its investment in General Motors or Chrysler because the companies’ value would need to “grow substantially above what they have been in the past.”
A Government Accountability Office report released Monday is the latest review to cast doubt on the likelihood that taxpayers will fully recoup more than $80 billion invested in the two U.S. automakers.
Treasury officials told the GAO that they are considering initial public offerings or private sales to dispose of the government’s nearly 10 percent stake in Chrysler and 61 percent share of GM. But government officials won’t say when that could happen because they don’t want to undermine the potential return on the investment.
“To dispose of,” you say? Interesting choice of words… Nope, we wouldn’t want to let anyone know that Obama’s Government Motors is a unmitigated disaster for the Commies, now would we? After all, that might “undermine the potential return” on their money when they abandon it like rats fleeing from a sinking ship.
Meanwhile, Ford, the company which didn’t play ball with the Commies, reports nearly a $1 billion dollar profit in the 3rd quarter of this year:
Ford reports nearly $1-billion profit in third quarter
LA Times – Nov. 2, 2009
Ford, the only Big 3 automaker that avoided bankruptcy, shows positive cash flow while improving its market share. Investors respond favorably.
Continuing its comeback effort, Ford Motor Co. reported a third-quarter profit of almost $1 billion as it cut costs and improved market share, making money in the crucial North American automotive market for the first time since the first quarter of 2005.
[...]
Yup, seems to me that those “failed economic policies” (that is to say, Capitalism), Obama and his Communist buddies like to deride, are actually succeeding, while their Communist economic policies are doing what they always do: Crashing and burning.
2 November, 2009 at 2:12 pm
Nice of the gubmint to reduce Ford’s competition. I wouldn’t buy a Chrysler or GM car as long as the gubmint owns them, and I have heard a lot of others say the same thing. People are voting and protesting with their pocketbooks.
2 November, 2009 at 2:16 pm
Ford posted a profit. Isn’t that a little dangerous in this current anti capitalist environment?
2 November, 2009 at 3:41 pm
I smell a windfall profits tax coming on.
2 November, 2009 at 9:36 pm
Ford must be exterminated for not following the party line. How dare it prove the Genius Leader of Economics wrong!
3 November, 2009 at 6:12 am
DocBulldog,
I would be interested in knowing your opinion about how much of this problem, economic meltdown was during the reign of or from the previous administration?
Are you saying that the crisis is the current Administration’s fault or are you saying that his handling of the crisis is making it worse?
3 November, 2009 at 11:55 am
“Are you saying that the crisis is the current Administration’s fault or are you saying that his handling of the crisis is making it worse?”
I’m not DrBulldog, nor do I play him on TV, but I’ll venture a response anyway.
Yes, and Yes. It should be obvious, but just to review how the Democrats own this mess…
http://bobmccarty.com/2009/09/18/obama%E2%80%99s-ties-to-acorn-show-complicity/
…and don’t miss this excellent summary…
3 November, 2009 at 12:31 pm
UPDATE
So, what’s next?
Pelosi tells Dems to drink the KoolAid and commit political suicide, because… well, that’s what she wants them to do.
http://online.wsj.com/article/SB10001424052748703399204574505423751140690.html
They have little time left to prove Capitalism can’t withstand their attacks on it, and for the cause she is willing to allow as many Democrats as necessary to destroy their careers, so that her pet demon can live. How noble of her.
So, yes, the Dems were the cause, and now, yes, the Dems seek to make things worse by as many orders of magnitude as possible.
3 November, 2009 at 12:44 pm
I am saying that the current economic crisis is the fault of ALL the administrations, beginning with Jimmy Carter and finally collapsing under the watch of GW Bush. However, Obama has made it much, much worse by immediately stealing almost 1 Trillion dollars from the American taxpayers and using those funds as a Trojan horse to implement his Marxist agenda.
Unless you are purposely trying to destroy your company, only the most idiotic of CEO’s would think it a good idea to max out all the company’s credit cards and write rubber checks when the company is experiencing financial difficulties; those bills, complete with interest, will come due, sooner rather than later, and the company will have no way to pay them off.
Furthermore, if I were on a Board of Directors and had hired a CEO to handle a problem that had cropped up under the previous CEO’s watch, I would immediately fire any CEO who kept going around blaming everything on the previous CEO. Obviously, the new CEO was not hired to steal money that we don’t have—using it to destroy our free market system—and then sit around complaining, blaming the previous CEO, and giving excuses for his own failures.
In fact, everything Obama has done to address the current “economic crisis” and revitalize the private sector has been a dismal failure.
He was hired to fix the problem, not make it worse; if he can’t handle that, then he needs to step out of the way, because it is obviously way above his pay grade.
Cheers
3 November, 2009 at 3:44 pm
Since he was inaugurated, Obama has more than tripled the deficit. That doesn’t count his health care boondoggle or cap-n-tax. (as an aside, the health care bill is pretty sneaky: taxes go into effect immediately, but the spending doesn’t start until 2013-2014)
Our national debt will double by 2019 under Obama’s budget plan, not counting the big ticket items, and making some very unrealistic assumptions about revenue.
In 9 months, the money base has doubled. A central bank has never been successful in pulling back such radical increase in money supply in time to prevent inflation (mass or hyper). And they are still printing.
Nobody, unless they are a complete idiot, thinks if they are buried in debt, the answer is to double or triple their spending and add big ticket, long term expenditures. The laws of economics do still apply to governments. Math doesn’t lie.
This cannot be blamed on Bush, regardless of his many faults and mistakes. Obama has the power to stop it. He has signed the spending- and held the veto pen -since January 20.
Doc is right: the only possible explanation is they are intentionally trying to collapse the country. Cloward-Piven to overwhelm the government and economic systems, Alinsky to collapse the social order.
3 November, 2009 at 4:02 pm
Thanks for the analysis.
Sorry for the additional question, some banks were given money and have paid it back, for those then it would seem the right solution, no?
If anything, I am not into economics at all and I find the only thing that I understand was that the crash came because people were giving credit and speculating on money that in fact did not exist. Also that to kickstart an economy may require the simple moving of money around – forcing spending, like how the US and German governments did after the Great Depression.
So I think.
Thus opinions for me are very interesting.
3 November, 2009 at 9:50 am
I very much suspect Ford’s success was due to the fact that it did not take government aid, the average American considers those on welfare useless spongers. Nobody trusts useless spongers, be it a welfare queen or GM.
4 November, 2009 at 2:45 am
Solkhar,
I’m moving this thread down here so there will be a little more room for it.
“…some banks were given money and have paid it back, for those then it would seem the right solution, no?”
No. Like Bush, Obama forced banks to take money that they didn’t need. A few of the smaller banks were allowed to give it back, but the larger banks were unable to do so; because, Obama wants to maintain control of the banks. When the banks were given the money, they were forced to sign a contract with the government which pretty much put them under the government’s iron fist to dictate where and how that money was spent. The small banks that were able to give the money back did it not because they could necessarily afford it, but because they grew tired of the government telling them how to run their businesses.
Here’s an article from the Wall Street Journal that discusses this very thing:
http://online.wsj.com/article/SB123879833094588163.html
Also, there have been over 110 banks that have gone out of business since Obama took the Oval Office (113 as I write this). That’s more than double the number of banks that failed during the entire 8 years of GW Bush! Obviously, these banks didn’t see any of that “stimulus” money.
Here’s the current database of bank failures from the U.S. Government:
http://www.fdic.gov/bank/individual/failed/banklist.html
So, once again, Obama fails miserably. He can’t blame Bush for those recent bank failures because he (Obama) and his administration should have been more judicious in doling out the tax-payer’s money to the banks that needed it the most.
“I understand was that the crash came because people were giving credit and speculating on money that in fact did not exist.”
The U.S. Government, under the control of Socialist administrations, FORCED the banks to give out loans to high-risk, low-income individuals. You will notice that I continually rag on ACORN—a lot! That is because: using the Community Reinvestment Act (enacted by Congress in 1977 and signed into law by Socialist Jimmy Carter), ACORN went around strong-arming the financial institutions into giving loans to high-risk, low-income individuals. This created an artificial housing bubble in the financial markets. The end result was predictable—massive defaults burst the bubble and collapsed the financial markets.
There is an excellent video called, “Burning Down the House,” which strips out the confusion and puts it all in perspective for the average layman:
“Also that to kickstart an economy may require the simple moving of money around – forcing spending, like how the US and German governments did after the Great Depression.”
Moving money around didn’t help end the Great Depression, WWII ended the Great Depression.
Why is this? It is because you can’t just move money around in a haphazard fashion and expect results. The money must be given to the institutions which require it the most and will use it in an efficacious manner. During the Great Depression, Franklin D. Roosevelt tried to throw cash around, allowing workers to demand salaries about 25 percent above normal, in an effort to stimulate the economy. He failed miserably and prolonged the Great Depression by an estimated seven years!
There is an excellent research paper written by two UCLA economists which was published in the Journal of Political Economy in August of 2004 that focuses on Franklin D. Roosevelt’s “New Deal” stimulus policies and how those policies actually prolonged the Great Depression. The research paper was entitled, “New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis,” by Harold L. Cole and Lee E. Ohanian.
After digging around on the net, I have managed to find a 2001 draft version of their research paper which can be downloaded by CLICKING HERE.
Lee E. Ohanian, one of the authors and the vice chair of UCLA’s Department of Economics, said, “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”
Obama obviously failed to read their research paper!
The almost 1 Trillion Dollar Stimulus Package Obama and his Commie buddies shoved down everyone’s throat is a massive Marxist Trojan horse. Out of every dollar, only about 12 cents is for something that can plausibly be considered a growth stimulus.
Here is another article from the Wall Street Journal that discusses this at length (as you have probably guessed by now, I read the Wall Street Journal religiously):
http://online.wsj.com/article/SB123310466514522309.html
Verdict: Obama fails miserably in economics!
Cheers
4 November, 2009 at 3:51 am
Doc,
not going to deny I understand all of what you said there, but I will say that the failed banks list you gave me rather made my three remaining stones slip further down and give me bladder cramps.
To be quite blunt the global economic crisis has not really hit hard here and Morocco was rather immune except for those that have investments overseas. My pension scheme which is in Rabobank in The Netherlands was pretty much safe. Moroccan banks are pretty independant from those European ones except for BMCE which is part owned by Paribank in France and that was under a protection clause so they were also not affected.
What we have only is a down turn in demand or closures of some European owned textile companies. Even the tourism and hotelier industry here has not really been so affected, in fact the loss of those no longer chose to come here from say the US was made up by those Europeans that normally travelled more further chosing to simply come here.
I appreciate your giving me your analysis, as I keep saying, I do not take sides nor pretend to understand completely but I certainly want to know the various opinions. Two nights ago I was watching Wolf Blitzer and he said something and I though “the Doc would disagree and I would also”, it was about local priorities in rural and small-town America. He implied that there was unanimous support and bipartisanship for the administration’s stimulous plans.