“He Who Pays the Piper Calls the Tune.” Rick Wagoner, CEO of GM, learned the hard way the truth of this idiom. GM took a huge bailout from Uncle Sam, GM apparently wanted more, and the Obama administration wanted Wagoner out. If I were the largest stockholder in GM and I was dissatisfied with Mr. Wagoner as CEO, I might want him out also. However, there is a very big difference between stockholders and the Federal government.

Stockholders first and often only priority is to make money. The same cannot be said of the Federal government – it does not need to “make money” because it can actually make money. It can also tax you and me whenever it wants to spend more. If Mr. Wagoner had that ability he would still be in charge of GM.

For a moment assume that Mr. Wagoner’s resignation is necessary to “save” GM. Now what? Does the Obama administration get to appoint the new CEO? Does it have veto power over the selection? Does anyone believe that a Federal administration, Democratic or Republican, would appoint the CEO of a major corporation without any political consideration?

Now, imagine that the new CEO of GM decides the company needs to build a new automotive assembly plant. Does the Obama administration sit idly by while the new CEO of GM decides to build the plant in Mississippi, a non-union, Republican leaning state? Hardly. Either the administration appointed CEO knows better, or one way or another is pressured to build the plant in a Democratic union state. 

How far down the corporate ladder does the Obama administration reach in directly or indirectly appointing people? How about the presidents of GM’s divisions? Vice-presidents? Managers?

Then there is the issue of product control. Will the left-wing, liberal Obama administration decide that the gas guzzling Corvette is environmentally unfriendly and thus should be discontinued?

I do not have any poll numbers, but I would guess that more Republicans and conservatives own pick-up trucks than Democrats and liberals. How long before there are no pick-up trucks?

Certainly, what is “good” for GM is good for the banks. Will Mr. Geitner now be asking for the resignation of bank CEOs?

It is about time Americans started calling the bailouts and stimulus packages what they are: socialism.

We are back to Tammany Hall politics, where those in political power can blatantly hand out jobs in return for votes.

Thanks to George Will for reminding me of the FDR lend-lease quote and President Obama’s recycling of it:

“Suppose my neighbor's home catches fire, and I have a length of garden hose. ... I don't say to him ... ‘Neighbor, my garden hose cost me $15 ... ‘”
-- Franklin Roosevelt, Dec. 17, 1940

“When the town is burning, you don’t check party labels. Everybody needs to grab a hose.”
-- Barack Obama, Feb. 10, 2009

Yes, Mr. President, when the town is burning everyone needs to grab a hose. But, what happens after the fire is out and it turns out your neighbors had been playing with matches and gasoline? Do you punish them or reward them?

If you reward them, won’t they just do the same thing again?

If you do not punish them, why should they change?

While I do not want to speak for my wife, I will only comment for me when we would probably be more correct.

I (we) have been very blessed in many, many ways.

We have been offered numerous opportunities by financial institutions to take some of the equity out of our house, but:

• We did not trade-up to a mansion.
• We did not buy icon cars.
• We did not take extra vacations.
• We did not buy all kinds of electronic gadgets.
• We did not run up extraordinary balances on our credit cards.
• We did not put ourselves into debt.

In short, we did not play with matches and gasoline.

While I cannot prove it, I suspect that some millions of those Americans (not all, but many) who “need” to be bailed out:

• Did take significant equity out of their homes.
• Did buy mansions with pools.
• Did purchase other houses as investments (thank you, Flip This House).
• Did take more expensive vacations.
• Did buy more expensive status symbol cars and electronic gadgets.
• And so on.

So now they are in over their heads, or “underwater”.

Yes, we should save them.

But, once we do, what is the punishment for setting the whole town on fire?

The United States Treasury will purchase a $5 billion stake in GMAC and lend $1 billion to GM so GM can help with GMAC’s reorganization as a bank holding company.

According to The Liberal New York Times, “GMAC lowered its credit score for financing to 621, which is one point above what is generally considered a subprime loan.” The median credit score for Americans is in the 720-740 range.

GMAC has no plans to offer loans to those with credit ratings at 620 or below. Too risky, I guess – but 621 is okay. Well, you have to draw a line somewhere.

Strange though, two months ago before our tax dollars went to GMAC, GMAC set its loan level at 700. 

GMAC lowered its requirements for loans so GM could sell more cards to people who may not be able to afford them.

So, buy a house you cannot afford and get a government bailout; then buy a car you cannot afford from a partially government owned company and no doubt when you cannot make the payments get a government bailout.

GM and Chrysler are getting a $13.4 billion loan to keep going; AIG $150 billion; then there is Fannie and Freddie; the financial industry gets a $700 billion bailout; and the Democrats may be talking about as much as a $1 trillion economic stimulus package over the next two years.

But wait, The Liberal New York Times in an editorial on December 21, 2008 called for:

• “End production of the Air Force’s F-22…The net annual savings: about $3 billion.”
• “Cancel the DDG-1000 Zumwalt class destroyer…Cutting the last two could save more than $3 billion a year.”
• “Halt production of the Virginia class sub…Net savings: $2.5 billion.”
• “Pull the plug on the Marine Corps’s V-22 Osprey…Net savings: $2 billion to 2.5 billion.”
• “Halt premature deployment of missile defense…for a net savings of nearly $5 billion.”
• “Trim the active-duty Navy and Air Force…Reducing the Navy by one carrier group and the Air Force by two air wings would save about $5 billion a year.”

According to The Times:

“The cuts above could save $20 billion to $25 billion a year, which could be better used as follows:

o       Increase the size of the ground force.

o       Pay for the Navy’s needed littoral combat ships.

o       Resupply the National Guard and the Reserves.”

Now just based on the editorial, some of the suggestions would seem to make sense, except that accepting The Liberal New York Times as a reliable source on military needs and spending is like thinking Saddam Hussein never used WMDs.

Gee, I wonder what is really more important to the future of the country: AIG or national security?

Without debating the merits of the specific suggestions, the most telling comment in the editorial was:

“Halt production of the Virginia class sub…The program is little more than a public works project to keep the Newport News, Va., and Groton, Conn., naval shipyards in business.”

Almost as an aside, one could discuss what the future might hold if we did not have these shipyards to build naval vessels?

What does The Liberal New York Times think is the point of the $1 trillion economic stimulus package? Certainly not public works projects!

I guess the liberal view of the stimulus is that it is to get Americans back to work and improve the Nation’s infrastructure everywhere except in the defense industry.

According to The Liberal New York Times (26 November 2008) the U.S. government’s financial assistance/economic stimulus/bailout was at least $7,800,000,000,000. Now that is $7.8 Trillion.

Several commentators have asked, “Where is all that money going to come from?” One even asked if the Federal Reserve was going to print it? Missing the point that the Federal Reserve does not print money, that is done by the Department of the Treasury’s Bureau of Engraving and Printing.

It is important to understand that the government is not spending all that money.

$3.1 trillion is being used by the government as an insurer for guarantees to investors and depositors (think FDIC). Now granted, in theory the $3.1 trillion is “at risk”, but it is very, very unlikely that it would be lost. In fact, much of the money is earning interest.

$3 trillion is available to the government to invest in commercial paper, banks, etc. Commercial paper is usually considered a safe investment and both the commercial paper and the capital investment in banks earns interest. Again, low risk with a potential for a return on the investment.

$1.78 trillion is for loans. These short term loans are backed by collateral. It is assumed most will be paid back. For those that are not paid back, the government can sell the collateral, but probably at a loss. The amount of the lost is unknown.

To paraphrase a quote attributed to Everett Dirksen: A trillion here, a trillion there, and pretty soon you're talking real money. But, it is important to remember that the U.S. government is not going out and buying flat panel televisions and trips to Cancun. In fact, so far it has only “spent” about $1.4 trillion. 

Roll back the calendar to the early days of presidential nomination process…

Today, candidate for the presidency Carl Marks outlined his position on domestic policy. Basically, if elected, he has said he will:

o       Spend hundreds of billions, perhaps trillions of tax dollars to buy parts of several major U.S. industries.

o       Spend additional billions to make loans to other big industries.

o       Appoint new “Czars” to oversee each industry, who under certain conditions will have the power to order the industry as to what they must do/produce.

o       Raise the national debt to pay for these new initiatives.

So, would you have voted for this candidate?

No. I doubt many Americans would either, but that is exactly what our elected politicians are doing. With an incoming Democratic President and Congress we can only expect more of the same.

Of course, no one on the Republican side has offered any alternative, other than by saying “no” to the loans to the auto industry.

Clearly, the nation is in difficult economic times. Saying “no” is fine, if you offer an alternative to get the country out of the situation, but just saying “no” is not enough.

The current lame-duck Republican administration and the incoming Democratic administration and Congress have made their plan clear: spend trillions to bailout industry and raise the national debt. What is the “new” Republican and/or conservative alternative? Right now there does not seem to be any.

My first car was a used 1964 Chevy Impala. Today, I drive a Toyota Matrix and in-between I have driven so called “American” and foreign cars, although it was near impossible to tell where the cars, much less their parts were made. My ’64 was fairly easy to maintain and fix, a screw driver, wrench and a few other tools and you could fix most anything. My ’05 Matrix forget it, you need a special computer and program just to begin.

My first bank account was a saving account opened in elementary school. The man from Franklin National Bank came to the school every few weeks, I would put 25¢ into my savings account and he stamped my book with the deposit. Today, most of my money and debts are with Citicorp.

To me banks and cars are utilities, like a washing machine. I want them to work when I need them and to make my like easier. 

Some things seem pretty obvious (otherwise why would they need billions of tax dollars?):

• Neither industry has been run well. 
• Management has not done its job.
• The lower level workers will be hurt the most.

What I do not understand is why the banks (financial institutions) can get hundreds of billions of dollars thrown at them with almost no questions asked, and the auto industry must jump through hoops to get a few billion.

Maybe the auto industry was not making the cars Americans really wanted, but the banking industry was making loans they knew were problematic at best.

Maybe the benefits the auto-workers receive and received were too high, but what about the huge year-end bonuses those in the banking industry received year after year?

If AIG, Citicorp, et. al. are “too big to fail”, how can all three of the U.S. auto be small enough to be allowed to fail?

If bankruptcy is an option for the big three, why wasn’t it an option for the financial industry?

Sure the auto industry and the unions have poured millions into the political system, but so has the financial industry.

From a purely political philosophy I am opposed to all these government bailouts, loans, etc. But, government was part of the problem, so it must be part of the solution. And since we have started down the road of nationalizing industries, where do we stop? Certainly, not at the auto industry.

By opposing the loans to the auto industry, Republicans and conservatives need to wake up and realize that they are going to be seen as supporting the rich and oppressing the middle class.

Okay, I will admit it, I am not a good American and while I do not want to speak for my wife, she isn’t either, so I will only comment for me when we would probably be more correct.

I (we) have been very blessed in many, many ways. I am sure many other Americans would say this so that does not make me a bad American.

First, what makes me not a good American is the mortgage on our house is much less than whatever the value may be in the current market. We have lived there for over ten years and have been offered numerous opportunities by financial institutions to take some of the equity out of our house. A few years ago we want to do a total gut remodeling of our kitchen. We thought we had enough money to pay for it, but wanted a cushion just in case. We discussed it and decided to take out a small equity loan, say $25,000. The bank offered us $250,000!

Now we did not take that money and buy icon cars (more on that it a bit), we did not take extra vacations, we did not buy all kinds of electronic gadgets.

Nope, we were bad Americans, we did not put ourselves into debt.

Then there are our cars, again we are bad Americans. Since I like to garden and tinker around the house, I got a big car, a Toyota Matrix, so I can shove all kinds of thing in the back. My wife has a Honda Fit. No gas guzzlers.

Then there are our credit cards. Even in these tight credit times, we keep getting unsolicited offers of credit cards. Yes, we do have balances on our credit cards, but nothing extraordinary. Again, bad, bad Americans.

Speaking only for myself, I did not do my part as an American to put myself so in debt that the government would have to bailout those corporations whom I cannot pay back.

Come to think of it, I am not only a bad American, I am a stupid America. I should have bought a big private plane. Then when I could not make the payment, may be the government would take over my debt.