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Victor Davis Hanson warns about the generation that thinks it can have it both ways.
Today’s Americans inherited the wealthiest nation in history – but only because earlier generations learned how to feed, fuel, finance and defend themselves in ways unrivaled elsewhere.
Lately we have forgotten that and instead seem to expect others to do for us what we used to do ourselves.
Take our plentiful, cheap and safe food supply. Long ago, Americans struggled to create farmland out of swamp, forests and deserts, and built dams and canals for irrigation to make possible the world’s most diverse and inexpensive agriculture.
Now in California – the nation’s richest farm state – the population is skyrocketing toward 40 million. Yet hundreds of thousands of acres of farmland this year are going out of production, and with them thousands of jobs.
Why? In times of chronic water shortages, environmentalists have sued to stop irrigation deliveries in order to save threatened two-inch-long delta fish that need infusions of fresh water diverted from agricultural use. And for both environmental and financial reasons, we long ago stopped building canals and dams in the Sierra Nevada Mountains to find sources of replacement irrigation water. …
Michael Barone starts a section on Chrysler.
… Obama’s attitude toward the rule of law is apparent in the words he used to describe what he is looking for in a nominee to replace Justice David Souter. He wants “someone who understands justice is not just about some abstract legal theory,” he said, but someone who has “empathy.” In other words, judges should decide cases so that the right people win, not according to the rule of law.
The Chrysler negotiations will not be the last occasion for this administration to engage in bailout favoritism and crony capitalism. There’s a May 31 deadline to come up with a settlement for General Motors. And there will be others. In the meantime, who is going to buy bonds from unionized companies if the government is going to take their money away and give it to the union? We have just seen an episode of Gangster Government. It is likely to be part of a continuing series.
Holman Jenkins has the skinny on just how bad Obama’s Fiat deal was.
… A year ago, Fiat Chief Sergio Marchionne’s big play in the U.S. was to begin reintroducing the Alfa Romeo brand. He fretted about where to get the $100 million to fund the marketing effort. Now, with a global auto depression descending, he gets $6 billion of American and Canadian taxpayer money to lean on.
Don’t underestimate the appeal of that cushion for Fiat.
As for Chrysler — well, you could call this merger made in Washington George Bush’s baby as much as Barack Obama’s.
Chrysler would be in deep yogurt in any case amid the market collapse, but its other problem is a decent franchise in Jeeps, muscle cars, minivans and pickups — and nothing to meet Congress’s stiff new “corporate average” fuel economy rules, and nobody to supply the billions to develop such vehicles and (inevitably) bribe customers to drive them off the lots.
Daimler, its previous parent, certainly had no desire to fund such profitless extravagance. The Germans took a lot of guff but they’re the ones laughing now. They sold their majority stake in Chrysler just months after Democrats took over Congress, and just weeks after President Bush began blathering about “oil addiction” and echoing Democratic demands for stringent new fuel-mileage rules (after opposing them for years). …
George Will has a look at the auto business too.
… Many months and many billions of dollars are being wasted by the administration’s determination to spare the car companies, and especially the UAW, the rigors of a straightforward bankruptcy. The president’s “surgical” bankruptcy plan for Chrysler requires some of the company’s lenders, mostly non-banks, to receive less than they would as secured creditors under bankruptcy law.
The law may still make itself heard over the political thunder. Meanwhile, the president faults these “speculators” for not being as cooperative as are most of the banks that have lent to Chrysler. But the banks are compliant because they are mendicants: Having taken the government’s money, they are the government’s minions.
When the president was recently asked what had “humbled” him in office, he mentioned that “there are a lot of different power centers” in America, so, for example, “I can’t just press a button and suddenly have the bankers do exactly what I want.” Perhaps not a button, and not exactly what he wants, but in dealing with Detroit he pressed and they were accommodating.
It is Demagoguery 101 to identify an unpopular minority to blame for problems. The president has chosen to blame “speculators” — a.k.a. investors; anyone who buys a share of a company’s stock is speculating about the company’s future — for Chrysler’s bankruptcy and the dubious legality of his proposal. Yet he simultaneously says he hopes that private investors will begin supplanting government as a source of capital for the companies. Breathes there an investor/speculator with such a stunted sense of risk that he or she would go into business with this capricious government? …
Even the Economist, long in the tank for BO, recognizes the Detroit folly.
NO ONE who lent money to General Motors (GM) or Chrysler can have been unaware of their dire finances. Nor can workers have failed to notice their employers’ precarious futures. These were firms that barely stayed afloat in the boom and both creditors and employees were taking a punt on their promise to pay debts and generous health-care benefits.
The bet has failed. The recession has tipped both firms into the abyss—together they lost $48 billion last year. Chrysler has entered bankruptcy, from which it may emerge under Fiat’s control (see article). GM could soon follow if efforts to hammer out a voluntary restructuring fail. America’s government, keen to protect workers, is providing taxpayers’ cash to keep the lights on at both firms. But in its haste it has vilified creditors and ridden roughshod over their legitimate claims over the carmakers’ assets. At a time when many businesses must raise new borrowing to survive, that is a big mistake.
And Megan McArdle who blogs at The Atlantic Monthly.
… We are hardly Zimbabwe, or even Venezuela. But if we keep using TARP to create a sort of “Most Favored Borrower” status, we’ll erode the safeguards that keep election to office in America from being the kind of giant spoils system that’s common in much of the world. What the bankruptcy judge did was entirely right and proper–it’s his job to allocate losses among creditors. And it’s always true that some of the creditors won’t like the deal they get. On the other hand, what the administration did really wasn’t. It got its pet majority stakeholders to screw both their own shareholders, and the other creditors, in order to give a powerful union a sweetheart deal.
When the government gives money to favored constituencies–well, I don’t like it, but as PJ O’Rourke says, that’s basically what our government does. “It ought to be right there in the constitution: ‘We the People, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and give money to jerks . . . ‘ “ But when it starts stepping in and trying to bypass the bankruptcy rules in order to make someone else give money to jerks, that’s different in magnitude, and in kind. …
Part three of Thomas Sowell’s columns on empathy.
There is a reason why the statue of Justice wears a blindfold. There are things that courts are not supposed to see or recognize when making their decisions— the race you belong to, whether you are rich or poor, and other personal things that could bias decisions by judges and juries.
It is an ideal that a society strives for, even if particular judges or juries fall short of that ideal. Now, however, President Barack Obama has repudiated that ideal itself by saying that he wants to appoint judges with “empathy” for particular groups.
This was not an isolated slip of the tongue. Barack Obama said the same thing during last year’s election campaign. Moreover, it is completely consistent with his behavior and associations over a period of years— and inconsistent with fundamental principles of American government and society.
Nor is this President Obama’s only attempt to remake American society. Barack Obama’s vision of America is one in which a President of the United States can fire the head of General Motors, tell banks how to bank, control the medical system and take charge of all sorts of other activities for which neither he nor other politicians have any expertise or experience. The Constitution of the United States gives no president, nor the entire federal government, the authority to do such things. But spending trillions of dollars to bail out all sorts of companies buys the power to tell them how to operate. …
George McGovern continues to appose the “employee free choice” act.
The recent news that Pennsylvania Sen. Arlen Specter has become a member of the Democratic caucus has given new life to legislation that many thought had been put to rest for this Congress — the Employee Free Choice Act (EFCA).
Last year, I wrote on these pages that I was opposed to this bill because it would eliminate secret ballots in union organizing elections. However, the bill has an additional feature that isn’t often mentioned but that is just as troublesome — compulsory arbitration.
This feature would give the government the power to step into labor disputes where employers and labor leaders cannot reach an agreement and compel both sides to accept a contract. Compulsory arbitration is bound to trigger the law of unintended consequences. …
David Ignatius says boomers have done a poor job saving for retirement.
… How bad are baby boomers at financial planning? Extremely bad, according to Annamaria Lusardi and Olivia Mitchell of the National Bureau of Economic Research. They found that more than one-quarter of boomer households thought “hardly at all” about retirement and that financial literacy among boomers was “alarmingly low.” Half could not do a simple math calculation (divide $2 million by five) and fewer than 20 percent could calculate compound interest. The NBER researchers also found that, as of 2004, the typical boomer household was holding nearly half its wealth in the form of housing equity. Uh-oh.
For a closer look at the retirement squeeze, consider a study released last month by the Congressional Research Service. Patrick Purcell analyzed the most recent data on consumer finances gathered by the Federal Reserve. He found that for the 53 percent of households that hold at least one retirement account, the median combined balance was a mere $45,000.
Hold on, you say, that figure includes some younger workers who haven’t started saving in earnest yet. Okay, for households headed by persons between the ages of 55 and 64, the median value of all retirement accounts was just $100,000. Purcell noted that for a 65-year-old man retiring last month, that $100,000 would buy an annuity that would pay a paltry $700 a month for life, based on current interest rates. …
The Economist reports we’re doing science on YouTube.
Borowitz reports CNN thinks the swine flu threat will run through sweeps week.
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