If we had a responsible rather than spiteful president, he’d reform this bloated and inept agency. Read it all and burn.

WSJ

The 4% FAA spending cut that somehow delays 40% of flights.

As travellers nationwide are learning, the White House has decided to express its dislike of the sequester—otherwise known as modestly smaller government—by choosing to cut basic air traffic control services. We wrote about this human- rights violation on Tuesday in “Flight Delays as Political Strategy,” but the story gets worse the closer we look.Start with the Federal Aviation Administration, better known as the Postal Service without the modern technology. Flyers directly fund two-thirds of the FAA’s budget through 17 airline taxes and fees—about 20% of the cost of a $300 domestic ticket, up from 7% in the 1970s. Yet now the White House wants to make this agency that can’t deliver what passengers are supposedly paying for even more dysfunctional.

Ponder this logic, if that’s the right word: The sequester cuts about $637 million from the FAA, which is less than 4% of its $15.9 billion 2012 budget, and it limits the agency to what it spent in 2010. The White House decided to translate this 4% cut that it has the legal discretion to avoid into a 10% cut for air traffic controllers. Though controllers will be furloughed for one of every 10 working days, four of every 10 flights won’t arrive on time.

The FAA projects the delays will rob one out of every three travellers of up to four hours of their lives waiting at the major hubs. Congress passed a law in 2009 that makes such delays illegal, at least if they are the responsibility of an airline. Under President Obama’s “passenger bill of rights,” the carriers are fined millions of dollars per plane that sits on the tarmac for more than three hours. But sauce for the goose is apparently an open bar for the FAA gander.

The White House claims the sequester applies to the budget category known as “projects, programs and activities” and thus it lacks flexibility. Not so: This is a political pose to make the sequester more disruptive. Legally speaking, the sequester applies at a more general level known as “accounts.” The air traffic account includes 15,000 controllers out of 31,000 employees. The White House could keep the controllers on duty simply by allocating more furlough days to these other non-essential workers.

Instead, the FAA is even imposing the controller furlough on every airport equally, not prioritizing among the largest and busiest airports. San Francisco’s Napa Valley airport with no commercial service will absorb the same proportion of the cuts as the central New York radar terminal, which covers La Guardia, JFK and Newark International, as well as MacArthur, Teterboro, New Haven, Republic and other regional fields.

Anyone who has flown in or out of those terminals knows that they are hardly (more…)

Sequester tweets, collected by Jim Geraghty:

Shortly after midnight, this is what happened, according to Twitter:

Stephen Gutowski: “Just tried driving but since sequestration went into effect the roads have all crumbled into dust.”

Brendan Loy: “OH MY GOD THERE ARE GOVERNMENT WORKERS SPONTANEOUSLY COMBUSTING ALL OVER THE PLACE, THIS IS HORRIBLE, PLEASE MAKE IT STOP” He added, “BREAKING: CALIFORNIA DECLARES WAR ON OREGON; KENTUCKY LAUNCHES SNEAK ATTACK ON TENNESSEE. MASS CHAOS.”

Jonah: “It wasn’t until I ate my neighbor’s pancreas that I realized president Obama was right about the sequester.”

Iowahawk: “The corpses are piling up outside my window like cordwood, oh my God the humanity.”

Sebastian: “Nothing to worry about! I grabbed my double barrel shotgun & blasted #sequester through the door, just like the VP said.”

Ari Fleischer: “President Obama is right. Undo the sequester! I can’t stand it already.”

Becket Adams: “I don’t think my neighbors are taking sequestration seriously. They’re giving me weird looks and making fun of my war paint and loincloth.”

Exurban Jon: “So this is what anarchy feels like . . . From now on, I shall be known as ;ExJon, Warlord of the Western Deserts.’”

Buck Sexton: “Did America lose 170,000,000 jobs in the last 10 minutes? Keep me informed, everyone.”

Brandon Morse: “The #sequester may now join the Mayan Calendar and the Y2K bug in the “[Stuff] Everyone Survived” Hall of Fame.”

By morning, it was even worse:

Rick Wilson: “A few hours of fitful sleep, the sound of sirens and screams of the victims of the Barackolypse rending the night air . . . I saw their fires in the dark, savagery swiftly tearing away the thin veneer of civilization only government diversity programs provided.”

John Podhoretz: “Just looked out the window. Five hedge fund guys fighting over a piece of raw meat.”

Barack Obama met with Al Sharpton and other “African American leaders” to discuss the president’s “plan to strengthen the economy for the middle class and continue to build ladders of opportunity for those striving to get there,” according to the White House.

Whoa! Listening to Al “Kingfish” Sharpton about economic issues?

Watch this clip from the 2004 Democrat Presidential Debates. The last 30 seconds are priceless.

For those too young to understand the Kingfish reference, watch a bit of this:

Here’s another Obama “Green economy” bust. A federal grant to a Michigan battery plant, supposed to produce 440 jobs, instead sits idle while the staff plays board games.

Seriously.

The Obama administration’s electric car efforts took another hit on Wednesday after a federal inspection found a South Korean advanced battery maker never scaled up U.S. production despite receiving $142 million in federal grants.

A Holland, Mich., factory owned by LG Chem Ltd., 051910.SE +0.50% part of LG Corp., 003550.SE -0.48% was half-funded by a government grant and estimated to add some 440 jobs building battery cells for General Motors Co.’s GM +0.13% Chevrolet Volt and other vehicles.

When demand for the plant’s batteries didn’t meet expectations, the company filled orders with cells made at a factory in South Korea, leaving the Michigan plant largely idle, according to the report by the Department of Energy’s Inspector General, Gregory Friedman.

LG Chem said in a statement that production delays at the Michigan facility were “market-driven,” adding that it is “developing specific plans for the start of production.” The company said it regretted that it applied for reimbursement for “employment costs that were not allowed” under its U.S. grant.

“Market-driven” is euphemism for nobody wanted the damn things, except President Progressive who thinks he’s a big thinker.

The inspector general said that to avoid layoffs at the factory LG Chem paid idle workers $1.6 million in the third quarter of last year, about half of which was covered by its U.S. grant, even though there was nothing for them to do. The workers played board games, watched movies, and volunteered at local animal shelters during regular work hours, Mr. Friedman said. LG Chem has since paid back the government’s share of those charges.

Debra Saunders:

“Why this fat cat likes Obama’s tax plan” was the headline of a full-page ad La Jolla, Calif., investor Norman Lizt took out in The New York Times in August.

No, it wasn’t really an endorsement. Lizt wrote that he has been a successful investor over the years, but if Americans re-elected President Barack Obama and his proposed tax hike became law, Lizt would face a marginal tax rate of “well over 50 percent.” He wrote, “This represents the crossing of an inviolate threshold to me and is entirely unacceptable.”

Lizt explained that he liked Obama’s tax plan because it would prompt him to shutter his business, move his money into low-risk investments and give less to charity — while he would devote his time to traveling the globe with his fiancee, Rachel Martin.

I emailed Lizt to see whether he had made good on his warning. When we spoke Tuesday, the 71-year-old told me that he and Rachel had just returned from a two-month trip around the world. He told me he had closed down his business that invested in small-capital concerns that created jobs, even medical breakthroughs.

“We did very creative work,” Lizt said. “Now we’re just going to do very boring conservative land investment.”

“Maybe I’ll never have income again,” Lizt told me. “That’s the way I want it. ‘No Income Norman.’”

Somehow I don’t think Obama cares.

WSJ

President Obama said a fair bit during the fiscal-cliff negotiations—speaking for 45 minutes in one 50-minute meeting, for example—but today let’s zero in on the claim he kept repeating: “We don’t have a spending problem. We have a health-care problem.” For our money—and yours—those are two of the most remarkable sentences our Orator in Chief has ever strung together.

Not so much on the merits, insofar as the federal government is the largest, and worst, buyer of health care in America. But didn’t we recently have an epic debate on this very topic? It seems only yesterday that the President was saying that health-care reform “is no longer just a moral imperative, it’s a fiscal imperative” and “one of the best ways—in fact maybe the only way—to reduce those long-term costs.”

To be precise, that’s how Mr. Obama put it in March 2009, in a White House speech kick-starting the Affordable Care Act. In May of that year, he drew attention to “one clear, indisputable fact,” which was that “the explosion in health-care costs has put our federal budget on a disastrous path.” He added that disciplining those costs “is essential to reducing budget deficits.”

The Democratic supermajority that ran Congress proceeded to write legislation they said would achieve those goals. A year later, speaking at a pep rally for House Democrats shortly before they voted to pass what he called “one of the biggest deficit reduction measures in history,” Mr. Obama said that “Everybody who’s looked at it says that every single good idea to bend the cost curve and start actually reducing health-care costs are in this bill.”

So why is Mr. Obama invoking a special health-care spending problem now? The rational way of reading his fiscal-cliff refrain is as a concession that his cost-control promises are being repudiated by reality. Entitlement spending is headed up, as are overall U.S. health-care costs.

The health entitlements—Medicare, Medicaid, the children’s state insurance program and soon ObamaCare subsidies—accounted for 21% of the budget in 2012. But that will rise to about 24% this year, and about 33% by the end of the decade. As a share of the economy they’ll grow to 10.4% over the next 25 years from 5.4% today, according to the Congressional Budget Office, even with all those supposedly good cost-control ideas in the Affordable Care Act.

CBO wrote in November that unless these entitlements are reformed, or other spending drastically cut or taxes drastically raised, “deficits will be much larger in the future than they have tended to be in the past.” This conclusion “applies under any plausible assumptions about future trends in demographics, economic conditions, and health-care costs.” Many liberal health experts are already declaring that the Affordable Care Act was only a cost-control prelude.

So at first we thought Mr. Obama might be making a concession by acknowledging an ongoing health-care spending problem. But according to our sources, he didn’t therefore propose X, Y and Z reforms. He seems to believe his own advertising. The White House position is that the government health gnomes now have the tools they need to solve the problem. And that would help explain why Mr. Obama refused to consider more than token reforms in the budget talks in 2011 or after the election.

Nothing in practice supports this delusion. Last week Health and Human Services actuaries reported that national health expenditures rose 4.1% in 2011, the third year of relatively low growth by historical standards. HHS Secretary Kathleen Sebelius did cartwheels, claiming that “the statistics (more…)

Jim Geraghty at National Review on the cuckoo ideas burped up by progressives.

The curious thing is that most progressives are zero sum thinkers (someone’s gain must require someone else’s loss because the economic pie is only so big). Yet they treat public money as if it were infinite.

I’ll let Stephen Green get you up to speed:

In case you missed it, yes, there have been calls for the Treasury to mint itself a platinum coin, stamp a one and a dozen zeroes on it, and call it money. Yes, Tim Geithner has the Constitutional authority to do so. Yes, he’d be removing a trillion dollars from productive use by the stealth tax of inflation.

To date, most of the idiots and vile progs (but I repeat myself) hopping on this particular bandwagon have been low-level blogger types. Like me, but viler and even dumber. Now they have Paul Krugman on their side, which will drum up big support in Blue States where political idiocy is what people have with their coffee every morning.

I’ll give you a moment for your head to stop spinning. Now, our Dan Foster lays out a couple of reasons why this is a bad idea:

Of course, there’s a hitch or two in the plan to mint The Coin. For one thing, numismatizing the debt by striking trillion-dollar debt discs is not exactly what former representative Mike Castle (R., Del.) had in mind in 1995 when he introduced the legislation that turned into the provision in public law 104-208. Dylan Matthews of the Washington Post tracked down this “unsuspecting godfather” of the platinum gambit, and Castle confirmed as much. “That was never the intent of anything that I drafted or that anyone who worked with me drafted,” Castle told Matthews. Indeed, the legislation was designed to give the Treasury flexibility to create more affordable platinum coins for collectors. To use that authority to backdoor the 17th and 18th trillion dollars of the national debt would be, according to Castle, “so far-fetched and so black helicopter-ish a type of methodology of trying to resolve something like this that I think the public would totally scoff at it.”

Some on the left understand this. Take, for instance, Kevin Drum of Mother Jones, who flatly titles a post on the subject “No, a $1 Trillion Platinum Coin Is Not Legal.” Drum, doubting there is enough of the requisite straitjacket brand of strict constructionism in the U.S. court system to uphold such a tortured reading of the statute, dismisses the ploy as “the kind of thing that Herman Cain would come up with” (the dread reductio ad Hermanum, a conversation-stopper in progressive circles).

They say that because the coin isn’t meant for general circulation — “hey, can anybody make change for a trillion?” — it won’t be inflationary. Yet like a lot of folks with a lot more financial savvy than myself, I’m a bit wary of telling the world financial markets, “Hey, don’t worry about the U.S. federal government’s ability to pay for everything that it wants to buy and to pay back the unimaginable sums it has borrowed; we’ve got a magic trillion dollar coin now, so we’ve got a trillion bucks more than we did a little while ago.”

And Dan explains why he thinks this idea is going nowhere: “If the president minted The Coin, it might win him a few cheers from the same folks on the professional left who have called him a wuss for four years. But it would convince just about everybody else that he’s back on the Choom Gang. That’s why it won’t ever happen unless the luck of the GOP is as good in 2013 as it was bad in 2012.”

For what it’s worth, at least one Republican congressman wants to make such a move illegal:

U.S. Rep. Greg Walden (R-Ore.) today announced plans to introduce a bill to stop a proposal to mint high-value platinum coins to pay the federal government’s bills.

“Some people are in denial about the need to reduce spending and balance the budget. This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution. I’m introducing a bill to stop it in its tracks,” Rep. Walden said.

“My wife and I have owned and operated a small business since 1986. When it came time to pay the bills, we couldn’t just mint a coin to create more money out of thin air. We sat down and figured out how to balance the books. That’s what Washington needs to do as well. My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt. We must reduce spending and get our fiscal house in order,” Rep. Walden said.

Frank J.: “If you put a trillion dollar coin into a soda vending machine, you now own all soda manufacturers.”

Ace of Spades

Obama was permitted by the media to claim, or at least strongly imply, that the painful cuts Romney was talking about (and Obama, the Great Leader, was not talking about) could be averted simply by levying a small tax on the “richest 1%.” It was a lie. It was further a lie the media assisted in. All those Fact Checks and not a single column noting that the central pillar of Barack Obama’s Re-Election Strategy was a baldfaced lie that only the uninformed or innumerate could possibly believe.

The media is strongly complicit in this lie.

If I were someone in power, I would make this connection vigorously, and lay the blame at the feet of the media, and inform the public the media lied to them, and if they’re about to get a unwelcome shock, they should write to ABC, CNN, NBC, and the rest of the clownshow and ask them why they chose not to report the actual numbers.

But I’m sure they won’t, because they’re stupid.*

At any rate, the public does believe this (and why shouldn’t they? The President told them the only fix that was needed was a tax hike on the rich and the media vouched for him).

Time to strip them of that misapprehension and force them to confront the actual choice.

* Also, why the hell didn’t Romney and Ryan pound this? Stupid, stupid, stupid.

Why not… give Obama his tax hike on the rich and the small cuts he’s willing to agree to — and then refuse to raise the debt ceiling any further?

Call him out. “You said you could balance things with these measures. So do so.”

Ann Coulter:

One bright spot of Barack Obama’s re-election was knowing that unemployment rates were about to soar for the precise groups that voted for him — young people, unskilled workers and single women with degrees in gender studies. But now the Democrats are sullying my silver lining by forcing Republicans to block an utterly pointless tax-raising scheme in order to blame the coming economic Armageddon on them.

Democrats are proposing to reinstate the Bush tax cuts for everyone … except “the rich.” (Why do only tax cuts come with an expiration date? Why not tax increases? Why not Obamacare? How about New York City’s “temporary” rent control measures intended for veterans returning from World War II?)

Raising taxes only on the top 2 percent of income earners will do nothing to reduce the deficit. There’s not enough money there — even assuming, contrary to all known history, that the top 2 percent won’t find ways to reduce their taxable income or that the imaginary increased government revenue would be applied to deficit reduction, anyway.

Apart from Obamacare, it’s difficult to think of a more effective method of destroying jobs than raising taxes on “the rich.” This isn’t a wealth tax on useless gigolos like John Kerry — it’s an income tax on people who are currently engaged in some profitable enterprise. Their business profits, which could have been used to hire more employees, will instead be used to pay the government.

But Republicans are over a barrel. Unless Republicans and Democrats reach an agreement, the Bush tax cuts expire at the end of the year. By pushing to extend the tax cuts for everyone except “the rich,” Democrats get to look like champions of middle class tax cuts and Republicans can be portrayed as caring only about the rich.

And when the economy tanks, the Non-Fox Media will blame Republicans.

The economy will tank because, as you will recall, Obama is still president. Government rules, regulations, restrictions, forms and inspections are about to drown the productive sector. Obamacare is descending on job creators like a fly swatter on a gnat. Obama has already managed to produce the only “recovery” that is worse than the preceding recession since the Great Depression. And he says, “You ain’t seen nothing yet.”

The coming economic collapse is written in the stars, but if Republicans “obstruct” the Democrats by blocking tax hikes on top income earners, they’re going to take 100 percent of the blame for the Obama economy.

You think not? The Non-Fox Media managed to persuade a majority of voters that the last four years of jobless misery was George W. Bush’s fault, having nothing whatsoever to do with Obama.

The media have also managed to brand Republicans as the party of the rich, even as eight of the 10 richest counties voted for Obama. And that doesn’t include pockets of vast wealth in cities — Nob Hill in San Francisco, the North Shore of Chicago, the (more…)

The budget sequester, one of the worst ideas cooked up in DC in a long while, was the work of  Barack Obama. He blames Congress.

Bob Woodward says President Barack Obama got some of his facts wrong on sequester at Monday night’s debate.

Woodward’s book “The Price of Politics” has been the go-to fact check source for the president’s answer, in which he claimed the idea of using deep, automatic, across-the-board domestic and defense spending cuts to force Congress to address the nation’s burgeoning federal deficit originated from Congress, not from the White House.

“What the president said is not correct,” Woodward told POLITICO Tuesday. “He’s mistaken. And it’s refuted by the people who work for him.”

Woodward, a Washington Post journalist who was a key reporter on the initial coverage of the Watergate scandal, said he stands behind his reporting in the book, which drew upon sources involved in last year’s deficit talks and detailed notes taken in the meetings.

Elizabeth Price Foley at Instapundit:

THE OBAMANOMICS OF GAS PRICES:  This was the dumbest comment I’ve ever heard out of anybody, anywhere, about our astronomically high gas prices. When Romney told the second debate audience that gas prices had climbed to over $4/gallon after having been less than $2/gal when Obama was elected, Obama incoherently replied:

Well, think about what the governor — think about what the governor just said. He said when I took office, the price of gasoline was $1.80, $1.86. Why is that? Because the economy was on the verge of collapse, because we were about to go through the worst recession since the Great Depression, as a consequence of some of the same policies that Governor Romney’s now promoting. So, it’s conceivable that Governor Romney could bring down gas prices because with his policies, we might be back in that same mess.

So Obama thinks high gas prices are due to a vigorous, recovering economy that’s supposedly no longer on the “verge of collapse”?   There are so many fundamental errors in basic economics that it almost leaves one speechless.

Gas prices, like anything else, are a function of supply and demand.  A recession or depression reduces demand.  If supply stays constant, gas prices will fall.  But if the supply side of the equation is also negatively affected/reduced– as, for example, the reduction of leases and drilling on federal land, as pointed out by Romney–gas prices should rise (as they have).  The bottom line?  Gas prices should have–probably would have– fallen in our current recession, due to decreased demand.  But since the Obama Administration’s anti-carbon, anti-fossil fuel policies have taken hold, the negative impact on supply has outpaced the reduction in demand, leading to significantly higher prices.

Let’s also take Obama’s illogic straight on:  If he’s right that an improved economy = higher gas prices, then isn’t he telling us that we can never expect to see gas prices fall again (because of course we all know his policies are causing a “huge recovery”)?  That’s comforting– kind of like the statement of his Dep’t of Interior Secretary Steven Chu from Feb, 2012 that the Administration’s goal was   “somehow we have to figure out how to boost the price of gasoline to the levels in Europe” (around $8/gal.).

It isn’t so much what President Obama says (though that is bad enough), it is what he doesn’t say that one has to listen very closely to hear.

Government can’t create jobs, but it can stifle those who do.

Joel Gehrke

Fifty-five percent of small business owners and manufacturers would not have started their businesses in today’s economy, according to a new poll that also reports 69 percent say President Obama’s regulatory policies have hurt their businesses.

“There is far too much uncertainty, too many burdensome regulations and too few policymakers willing to put aside their egos and fulfill their responsibilities to the American people,” said Jay Timmons, president of the National Association of Manufacturers, which commissioned the poll along with the National Federation of Independent Businesses. “To fix this problem, we need immediate action on pro-growth tax and regulatory policies that put manufacturers in the United States in a position to compete and succeed in an ever-more competitive global economy.”

The poll reports another ominous statistic for job creation: “67 percent say there is too much uncertainty in the market today to expand, grow or hire new workers.” Why? Because “President Obama’s Executive Branch and regulatory policies have hurt American small businesses and manufacturers,” according to 69 percent of the business owners surveyed.

Here are the key findings in the poll, as highlighted by NAM:

• 67 percent say there is too much uncertainty in the market today to expand, grow or hire new workers.
• 69 percent of small business owners and manufacturers say President Obama’s Executive Branch and regulatory policies have hurt American small businesses and manufacturers.
• 55 percent say they would not start a business today given what they know now and in the current environment.
• 54 percent say other countries like China and India are more supportive of their small businesses and manufacturers than the United States.

“Instead of smoothing the way, our government continues to erect more barriers to growth through burdensome regulations that increase costs for small businesses and all Americans,” NFIB president Dan Danner said.

Those statistics suggest that even Democratic and independent small business owners criticized Obama, because only 46 percent of poll participants identified as Republicans, per Roll Call.

“It’s clear that small business owners and manufacturers are becoming increasingly more frustrated by the federal government’s inability to solve America’s economic problems,” Bill McInturff, whose Public Opinion Strategies conducted the poll. “Manufacturers place most of the blame squarely on policies coming out of Washington.”

The WSJ sticks a few footnotes down you-know-who’s throat.

The 10% President

A question raised by President Obama’s immortal line on CBS’s “60 Minutes” on Sunday—”I think that, you know, as President, I bear responsibility for everything, to some degree”—is what that degree really is. Maybe 70% or 80% of the buck stops with him? Or is it halfsies?

Nope. Now we know: It turns out the figure is 10%. The other 90% is somebody else’s fault.

This revelation came when Steve Kroft mentioned that the national debt has climbed 60% on the President’s watch. “Well, first of all, Steve, I think it’s important to understand the context here,” Mr. Obama replied. Fair enough, so here’s his context in full, with our own annotation and translation below:

Assistant editorial page editor James Freeman on President Obama blaming George W. Bush for deficit he exploded and how the policies he endorsed while in the Senate contributed to the financial crisis. Photo: Associated Press

“When I came into office, I inherited the biggest deficit in our history.1 And over the last four years, the deficit has gone up, but 90% of that is as a consequence of two wars that weren’t paid for,2 as a consequence of tax cuts that weren’t paid for,3 a prescription drug plan that was not paid for,4 and then the worst economic crisis since the Great Depression.5

“Now we took some emergency actions, but that accounts for about 10% of this increase in the deficit,6 and we have actually seen the federal government grow at a slower pace than at any time since Dwight Eisenhower, in fact, substantially lower than the federal government grew under either Ronald Reagan or George Bush.7”

***

Footnote No. 1: Either Mr. Obama inherited the largest deficit in American history or he won the 1944 election, but both can’t be true. The biggest annual deficit the modern government has ever run was in 1943, equal to 30.3% of the economy, to mobilize for World War II. The next biggest years were the following two, at 22.7% and 21.5%, to win it.

The deficit in fiscal 2008 was a mere 3.2% of GDP. The deficit in fiscal 2009, which began on October 1, 2008 and ran through September 2009, soared to 10.1%, the highest since 1945.

Mr. Obama wants to blame all of that on his predecessor, and no doubt the recession that began in December 2007 reduced revenues and increased automatic spending “stabilizers” like jobless insurance. But Mr. Obama conveniently forgets a little event in February 2009 known as the “stimulus” that increased spending by a mere $830 billion above the normal baseline.

The recession ended in June 2009, but spending has still kept rising. The President has (more…)

Bruce Krasting at Business Insider Follow the link to see his excellent graphs and charts. See where your money is going.

The Congressional Budget Office (CBO) did a good job of shredding the electric car industry and the government’s role in its evolution with this report (Link).

I’m not knocking electric cars, I’m knocking DC’s role in this industry. Washington has provided the loot necessary for research on battery design, it has committed to up to $25Bn of soft loans to the auto industry and it is subsidizing every electric car that is sold. Without the massive support from our “rich” Uncle Sam there would be no electric car industry in the USA. The question is, “Is this money well spent?”

The government’s role with electric cars goes back to the 2009 emergency spending program ARRA (American Recovery and Reinvestment Act):

ARRA provided $2 billion in funding to the Department of Energy (DOE) for grants under that program. Of that amount, $1.5 billion was awarded to battery producers, intermediate suppliers for those producers, and recyclers of vehicle batteries; the other $500 million was awarded to manufacturers of components for electric vehicles and intermediate suppliers of that manufacturing.

DOE’s Transportation Electrification Initiative has made commitments for $400 million in grants for demonstration, deployment, and education projects involving electric vehicles. (Party Time!)

I think it’s important to note that the original objective of supporting electric car production was that it was a plain old economic stimulus. This was dropping money from a helicopter in the hope that it (and all the other money) would stabilize a rapidly declining economy. Another motivation for the federal investment/subsidy was that it created a back-door support package for the auto industry that was falling off a cliff back then.

Washington also agreed to provide $25Bn in cheap loans to the companies who make electric cars. So far, $8.4Bn has been committed. The rest of the money will be doled out before 2019. The money is being lent by the Federal Financing Bank (FFB). Because the loans are guaranteed by DOE, there is no risk of repayment to FFB. As a result, the loans are excluded from the calculation of the debt limit. The 25 ‘large’ is all “off balance sheet”. A very neat trick indeed!

Liz Peek in Fiscal Times

If you’re wondering why the rich are getting richer, ask Mr. Bernanke.

President Obama has accused Mitt Romney of being a “reverse Robin Hood” – taking from the poor and giving to the rich. Ironically, that’s exactly what Fed Chair Ben Bernanke is doing, with the blessing of the Obama White House. Mr. Bernanke has again opened the central bank spigots, promising another round of quantitative easing, or bond and asset purchases, aimed at keeping interest rates low for the foreseeable future.

The upshot? Rising gasoline prices which will hurt low-income Americans, reduced income for retirees, and soaring stock prices. While seniors worried how they could cope with diminished incomes, the 40 wealthiest people in the world saw their net worth jump by $29 billion this past week.

This is not a fantasy. In his press conference following the policy announcement, Mr. Bernanke agreed that his plan would “affect stock prices.” He was right. Since the first quantitative easing was initiated in 2008, stock prices have soared over 60 percent. More recently, on the day the Fed announced its new, open-ended purchase program, the Dow Jones gained 1.5 percent; more important, both the Dow and the Standard & Poor’s index hit their highest levels since the end of 2007.

Why this exuberance? Because traders understand that flooding our monetary system with hundreds of billions of new dollars will crush yields, leading return-hungry investors into higher-risk investments like stocks. The joy was not limited to our shores; stocks in Asia and Europe celebrated as well.

…as he claims, then why would they include this, part of a list of “2016 Obama’s America” inaccuracies?

“D’Souza even claimed that President Obama passed the bank bailouts when the facts clearly show that it was President Bush who signed the Troubled Asset Relief Program into law in October 2008.”

They can’t have it both ways, although they will try.

Reuters

General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn’t a good thing for the automaker’s bottom line.

Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts. GM on Monday issued a statement disputing the estimates.

Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.

And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.

GM’s basic problem is that “the Volt is over-engineered and over-priced,” said Dennis Virag, president of the Michigan-based Automotive Consulting Group.

And “under-wanted.”

…he hasn’t met with his Jobs Council since January. Golf and campaigning are so time consuming.

Jake Tapper

VP Biden railed against Romney backing a territorial tax system.

But a number of advisers to the president support the idea as well – including members of the President’s Export Council, the commission the president set up to recommend ways to reduce the deficit, and members of his Council on Jobs and Competitiveness.

In a letter to President Obama on December 9, 2010,the chairman of his Export Council, Boeing CEO Jim McNerney, writing on behalf of the private-sector appointed members of the Council, called for a “competitive territorial tax system for the United States,” one that “should broadly follow the practice of our trading partners and should not be designed to raise new revenue, or to destabilize the U.S. corporate tax base, but rather to make the US tax system more competitive with its major trading partners.”

“The rest of the world increasingly uses territorial systems under which foreign earnings – taxed once in the foreign country – can be brought back for reinvestment in the domestic economy without incurring additional home country tax,” McNerney wrote, noting that of the 34 countries in the Organisation for Economic Co-operation and Development, twenty-five use territorial systems, with the United Kingdom and Japan having adopted them in 2009.

CNN:

Anyone watching the Democratic National Convention on Tuesday night heard the number 4.5 million several times.

“Despite incredible odds and united Republican opposition, our president took action, and now we’ve seen 4.5 million new jobs,” San Antonio Mayor Julian Castro, the party’s keynote speaker, said.

Chicago Mayor Rahm Emanuel, who served as President Barack Obama’s chief of staff, and Massachusetts Gov. Deval Patrick, who followed Obama’s November rival Mitt Romney as governor of Massachusetts, both cited the same number.

It’s a big-sounding number, given the still-sputtering job market. So we’re giving it a close eyeballing.

The facts:

The number Castro cites is an accurate description of the growth of private-sector jobs since January 2010, when the long, steep slide in employment finally hit bottom. But while a total of 4.5 million jobs sounds great, it’s not the whole picture.

Nonfarm private payrolls hit a post-recession low of 106.8 million that month, according to the U.S. Bureau of Labor Statistics. The figure currently stands at 111.3 million as of July.

While that is indeed a gain of 4.5 million, it’s only a net gain of 300,000 over the course of the Obama administration to date. The private jobs figure stood at 111 million in January 2009, the month Obama took office.

And total nonfarm payrolls, including government workers, are down from 133.6 million workers at the beginning of 2009 to 133.2 million in July 2012. There’s been a net loss of nearly 1 million public-sector jobs since Obama took office, despite a surge in temporary hiring for the 2010 census.

Meanwhile, the jobs that have come back aren’t the same ones that were lost.

According to a study released last week by the liberal-leaning National Employment Law Project, low-wage fields such as retail sales and food service are adding jobs nearly three times as fast as higher-paid occupations.

Conclusion:

The figure of 4.5 million jobs is accurate if you look at the most favorable period and category for the administration. But overall, there are still fewer people working now than when Obama took office at the height of the recession.

President Barack Obama says his re-election might help end the political stalemate in Washington, much like “popping a blister.”

And a loss will sound like a good flush.

In an interview with Time magazine, Obama says he expects Republicans in Congress to work more cooperatively in a second term, since his re-election would no longer be a factor.

“My expectation is that there will be some popping of the blister after this election, because it will have been such a stark choice,” Obama said.

After his 2010 “shellacking,” Obama faced a stark choice and chose wrong.

The president says he also wants to do a better job of explaining to the public how his policies will help the economy grow. Obama claims he didn’t do a good enough job selling Americans on the stimulus plan and the auto company bailout because he was so focused on acting to fix the economy.

“[W]e were in the midst of a once-in-a-lifetime crisis, so we had to just do stuff fast. And sometimes it wasn’t popular,” Obama told Time. “And we didn’t have the luxury of six months to explain exactly what we were doing with the Recovery Act, which was basically a jobs act and making-sure-middle-class-families-didn’t-fall-into-poverty act.”

Again with the explaining. Maybe he can explain why:

• he outsourced the stimulus bill to Nancy Pelosi and Harry Reid
• he couldn’t get a single GOP vote for it
• it was passed without hearings or even sufficient time for anyone to even read it
• he thought there were shovel ready jobs heh-heh, heh-heh…

In my city of Thousand Oaks, Ca. they’ve just spent some stimulus money resurfacing a two mile stretch of Moorpark Road that didn’t seem to need it. (People in LA would be furious, given the state of its roads.)

So Obama’s emergency bill took 3.5 years to fund a project in my city.

How odd that tax dollars flow from 50 states to Washington DC, get nibbled away and wasted, then some central planners dole them back out as gifts.

What sense does it make for Obama’s federal government, so far removed, to decide what streets get paved in my town? And for taxpayers in say, Utah or LA, to help pick up the tab?

Maybe he can explain it to me.

An old joke: “How do you plan to buy for $1 and sell for 75 cents and stay in business?” Answer: “We’ll make it up in volume.”

In an attempt to draw a clear contrast between himself and his Republican opponent, President Obama on Thursday touted his supposed “rescue“ of the auto industry and claimed that he intends to do the same for ”every industry”:

“I said, I believe in American workers, I believe in this this American industry, and now the American auto industry has come roaring back,” the president said during a campaign speech in Pueblo, Colo. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.”

“I don’t want those jobs taking root in places like China, I want those jobs taking root in places like Pueblo,” he added.

So sayeth he who touts himself as a citizen of the world.

The president also advocated the renewal of tax credits for “green” energy projects and spoke about establishing credits for companies that bring jobs back from overseas.

“Gov. Romney brags about his private sector experience, but it was mostly invested in companies, some of which were called ‘pioneers of outsourcing,’” the president said. “I don’t want to be a pioneer of outsourcing. I want to insource.”

Sure, like Solyndra. Then there’s GM itself:

GM’s bigger problem may be a stock price that’s in retreat, prolonging the day on which U.S. taxpayers will get back their remaining $26.5 billion investment in the company.

GM is a vastly better company than it was three years ago, when massive losses forced it into an unusual Chapter 11 filing, with Uncle Sam providing much of the funding needed for a fresh start. But the automaker has hit a rough patch this year. Second-quarter earnings tumbled 41 percent from 2011, and overall revenue fell, too. Losses in Europe are the biggest drain on GM’s profits.

But the huge automaker has also stalled in its home market. North American car sales are up 14 percent so far this year, but GM’s sales have risen only three percent. Its market share has fallen from nearly 20 percent a year ago to less than 18 percent. GM’s stock price, which enjoyed a nice runup for the first three months of 2012, has since fallen back to about $20, leaving it flat for the year.

The downshift seems to have scotched any notion of the government selling its stake in the company prior to the November elections, since that would amount to a taxpayer loss of roughly $17 billion, and a major embarrassment for Obama.

Nah, Obama is beyond embarrassment.

Ideologue Obama nixed the Keystone pipeline, which would have brought oil from Canada to refineries in Texas. Those well-paying middle class jobs are gone.

Did he expect Canada to just sit back and take it? Who knows.

William Tucker in American Spectator

One of the saddest and most tragic spectacles in history is to witness a nation trying to exercise its power long after the economic origins of that power have gone into decline. Think of Austria languishing as the rest of Europe industrialized or France trying to defend itself against Germany in 1940 or even Russia trying to play the Cold War combatant as Communism rotted it from within.

Today we are undergoing a similar dance in our economic relation with China. And wouldn’t you know, it’s our liberal friends in Congress, so enthusiastic about hamstringing American enterprise, who are the last to realize that they are undercutting our political hegemony as well.

I am speaking, of course, of Senator Charles Schumer of New York and Representative Edward Markey of Massachusetts, both of whom have decided we are in a position to tell a Chinese company that it cannot acquire a Canadian company because… well, because we’re Americans and the world has to pay attention to what we say.

Here’s the setup. Last week the Chinese National Offshore Oil Company (CNOOC) offered $15 billion to buy Nexen, a Canadian drilling company with large holdings in the Athabasca Tar Sands of Alberta, which is rapidly becoming Canada’s pot of gold in energy development. Now it so happens that only six months ago the Canadians were planning to ship nearly all of this newly developed oil to Texas via the Keystone Pipeline. Environmentalists, however, swore the pipeline would be built over their dead bodies and President Obama, not wanting to be left with no natural constituencies except single mothers and minorities, decided to appease environmentalists and block the pipeline.

The Canadians were shocked. They had long planned to sell this oil south of the border. Canada is already our largest supplier of foreign oil and it was inconceivable that we wouldn’t want to take more it instead of relying on Iraq, Nigeria, Venezuela, and other unpredictable sources. All this brought the sudden realization that Canada is dependent on us for 97 percent of their oil exports. Prime Minister Steven Harper quickly decided it was time to diversify. He took a well-publicized trip to China and the Nexen purchase was one of the first results.

Like any other voluntary exchange, the deal will bring benefits to both sides. Canada is actually running short of capital in developing its tar sands resources and China’s investment will help. At the same time, China wants access to both oil resources — something they are pursuing around the world — and Western knowledge and technology. Nexen has some very sophisticated expertise in offshore drilling

In passing, it might be worth noting that the Canadians are becoming very prosperous at this. They are developing resources in a way that we aren’t. They’ve also gotten control of their government. They recently passed the U.S. in average income and are starting to purchase US resources. A recent analysis of the Phoenix housing market found it was beginning to come back because of an influx of Canadians buying second homes.

So who could possibly be opposed to all this? Well, liberal Democrats, of course. They can’t stand the idea of anybody getting rich without being able to tax them. Nor can they countenance the idea of people just going out and doing things without asking permission. Remember, “You didn’t build that. Somebody else did,” and so when two entities, even foreign corporations, do things without permission the government has to intervene.

And so our friend Chuck Schumer fired off a letter asking Treasury Secretary Timothy Geithner to block the deal until the Chinese government takes “concrete, enforceable steps to open that country’s markets to foreign investment and level the playing field in international trade.”

It is rare that we have so much leverage to exert upon China. We should not let this window of opportunity pass us by. At some point, we have to put our foot down over China’s refusal to play by the rules of free trade.

Markey followed with a letter demanding that Geithner insist that CNOOC pay royalties on tracts that Nexen recently won in the Gulf of Mexico where the government offered them royalty-free. “I believe this merger could lead to a massive transfer of wealth from the American people to the Chinese government, and I strongly urge you to block this proposed transaction until, at a minimum, parties to the merger agree to pay royalties to the U.S. taxpayer on all oil produced off American shores or relinquish any ownership interests in these leases,” Markey fulminated.

From February 2009.

Wahoo! GM turns to subprime loans to hawk its cars. Your tax dollars at work.

President Obama has touted General Motors (GM) as a successful example of his administration’s policies. Yet GM’s recovery is built, at least in part, on the increasing use of subprime loans.

The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.

Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit.

Renamed GM Financial, it has played a significant role in GM’s growth .

The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.

Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime.

Subprime Key Driver

GM Financial auto loans to customers with FICO scores below 660 rose from 87% of total loans in Q4 2010 to 93% in Q1 2012.

The worse the FICO score, the bigger the increase. From Q4 2010 to Q1 2012, GM Financial loans to customers with the worst FICO scores — below 540 — shot up 79% to more than $2.3 billion. The second worst category, 540-599, rose 28% from about $3.4 billion to $4.3 billion.

Thomas Sowell:

Barack Obama’s great rhetorical gifts include the ability to make the absurd sound not only plausible, but inspiring and profound.

His latest verbal triumph was to say on July 13, “If you’ve been successful, you didn’t get there on your own.” As an example, “Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.”

Let’s stop and think, even though the whole purpose of much political rhetoric is to keep us from thinking and stir our emotions instead.

Even if we were to assume, just for the sake of argument, that 90 percent of what a successful person has achieved was due to the government, what follows from that? That politicians will make better decisions than individual citizens, that politicians will spend the wealth of the country better than those who created it? That doesn’t follow logically — and certainly not empirically.

Does anyone doubt that most people owe a lot to the parents who raised them? But what follows from that? That they should never become adults who make their own decisions?

The whole point of the collectivist mindset is to concentrate power in the hands of the collectivists — which is to say, to take away our freedom. They do this in stages, starting with some group that others envy or resent — Jews in Nazi Germany, capitalists in the Soviet Union, foreign investors in Third World countries (where the government confiscates investments and call this theft “nationalization”).

Freedom is seldom destroyed all at once. More often it is eroded, bit by bit, until it is gone. This can happen so gradually that there is no sudden change that would alert people to the danger. By the time everybody realizes what has happened, it can be too late, because their freedom is gone.

All the high-flown talk about how people who are successful in business should “give back” to the community that created the things that facilitated their success is, again, something that sounds plausible to people who do not stop and think through what is being said. After years of dumbed-down education, that apparently includes a lot of people…

Washington Times

President Barack Obama addressed supporters in Roanoke, Virginia on Saturday afternoon and took a shot at the business community. President Obama dismissed any credit business owners give themselves for their success:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.  They know they didn’t — look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.  (Applause.)

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires.

Some people have a talent for entrepreneurship, just like others have a talent for basketball or music.

Among those are the few with the drive to start something from nothing, to bet their life savings on their idea, to work 80-hour weeks, to go without pay during the rough times to keep the doors open.

Obama knows nothing of this. He’s a fool and a loud mouth.

As we know, 80% of businesses fail within five years. Does Obama’s government reimburse those failed entrepreneurs? If not, then what claim does Obama’s government have on their success?

As for the Internet, yes it was built on a structure created by the Pentagon. But the world-changing Internet of today is the expression of thousands of individuals with unique ideas and the know-how to make them a reality. Had Obama’s government been in charge, it would look like AOL 3.0.

And the tragedy is no one would know what we’d missed.