American Clean Energy and Security Act Required Reading

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On today's House of Representatives agenda:

HOUSE COMMITTEE MEETINGS

Tuesday, May 19, 2009

HOUSE MEETS AT 10:30 AM

ENERGY & COMMERCE------------------------------------------------------------10:00-Open

Full Committee. Markup of H.R. ___ – American Clean Energy and Security Act. 2123 RHOB.

.Any Congressman who votes for this bill without fully reading and comprehending it should be recalled. This legislation has the most ironic title in the history of the United States.

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Energy And Climate Change Bill

SEARCH BLOG: ENERGY

C-SPAN 3 broadcast the House discussion about the Climate and Energy Change Bill that is in draft form of 932 pages and growing.

Democrats have been talking about CO2 pollution; Republicans have been talking about the economy.

There is little doubt that the bill, which was given to the representatives late Friday, will pass with enormous consequences and little understanding.

This is the beginning of the end of the Democratic Party. People will vote with their wallets.

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Iran As A Cause

SEARCH BLOG: IRAN

Yesterday, I listened to an interview with Amir Taheri, author of "Persian Night." He brought a perspective that Western leaders tend to overlook when examining the issue of Iran's relationship... or lack thereof... with the West, particularly the U.S.: the western, liberal leaders look at Iran as a nation which will respond to logic, reason, and incentives in a negotiation process, but they fail to recognize that there is Iran the Cause which goes beyond the dynamics of the nation.

In some respects, this mirrors... darkly... the history of the U.S. as both a nation and a cause. The concept of a republic comprised of individuals who determined their own destiny and controlled their own government for their own benefit was more than the founding principles of a nation; it was a philosophy, a gospel, to be spread among the nations of the world. Iran sees itself in a similar position today. The difference is the philosophy or cause being represented.

Last December, Mr. Taheri had another interview where he covered this concept with the New York Post:

THE PERSIAN NIGHT

IRAN'S LEADERS PROMOTE DELUSION, NOT DIPLOMACY

By JAMES S. ROBBINS

"The Islamic Republic of Iran has three phobias," according to Iranian expatriate journalist Amir Taheri. "Women, Jews and America." Forget bombs. Maybe we should send in Barbra Streisand.

Iran is a standing challenge to Western liberal notions of "the intrinsic worth of the individual, freedom of conscience and the rule of law," not that any of that bothers the regime, Taheri says. He describes the activities of the Islamic Morality Brigades, the state-supported Holocaust denial movement, Iran's practice of executing dissidents and homosexuals - the rich tapestry of contemporary Iranian life that should make the country an international embarrassment but for the fact that the regime feels absolutely no shame.

The United States, a former Iranian ally, is viewed as the focus of evil in the world, and a hapless giant that "cannot do anything." Meanwhile, the United States' relationship with Iran has had its embarrassing moments, such as when former President Clinton said that Iran is "the only country where progressive ideas enjoy a vast constituency" or when US Ambassador to the United Nations Andrew Young called the Ayatollah Khomeini "a twentieth-century saint."

Mohammed Raza Pahlavi, the former Shah, who is usually dismissed by Western intellectuals as a brutal puppet, was the real progressive saint compared with his successor. Indeed, it is useful to remember that his liberal, pro-Western policies made Iran "the first Muslim nation to acknowledge women as citizens with equal rights." And the Shah's 1960s-era pro-women reforms were what drove the Ayatollah Khomeini over the edge. One of the first acts of Khomeini's revolution was to readjust the status of women in Iranian society, following the dictum of Iran's Chief Justice, "A woman's basic duty is to be a slave to her husband."

Now the hijab has become the most recognized symbol of the status of women in the new Iran, necessary because, according to Abol-Hassan Bani-Sadr, the first president of the Islamic Republic of Iran, women's hair gives off "dangerous rays that drive men crazy." The regime has raised the ideological value of the hijab to extraordinary heights; as one Iranian woman supporter of the headgear noted, "The superpowers know that the hijab is the foundation of Islamic government and that to conquer the Persian Gulf and plunder its oil resources, they must first eliminate hijab." Such comments would be laughable if they were not indicative of the sincere beliefs of a regime that is seeking nuclear weapons.

Taheri's "Persian Night" presents the true nature of the regime in Tehran, its motives, objectives and beliefs. Since the Obama administration seems to think that much can be gained from open dialogue, and Washington think tanks hum with talk of a "grand bargain" with Iran to settle the outstanding issues of the Middle East, we must appreciate the people with whom we are dealing. President Mahmoud Ahmadinejad, elected in June 2005 under the oddly familiar slogan "We Can!" has recently stated, "Our mission in the arena of foreign affairs is to present the idea of Pure Islam as the only path for the salvation of mankind to all nations. We have to smash the existing models in the world."

Taheri concludes that negotiation with the Iranian regime is a waste of time; it would encourage optimism in the West but leave the Khomeinist regime intact and its objectives unchanged. Real progress can only come from regime change from within. Iran is "a heaving volcano, ready to explode," from a variety of internal pressures, and the best role for the United States is to "use its immense bully pulpit" to publicize the cause of the oppressed people of Iran. Can this be effective? The Soviet Union fell, Taheri argues, "so why not Iran, and why not now?"

A nice thought, but given the effectiveness of Tehran's secret police and the general climate of fear in Iran, one wonders who can get the job done.

James S. Robbins is senior fellow for National Security Affairs at the American Foreign Policy Council.

The Persian Night

Iran Under the Khomeinist Revolution

by Amir Taheri

Encounter Books

The Western belief system insists that individual freedom, science, and reason are the natural states of mankind and that any other approach is inferior and destined to failure. Yet history has shown that is not always the case. When one considers the small fraction of the human population that live within the boundaries of nations embracing the ideals upon which the U.S. was founded, one would be foolish to belief that such conditions are either natural or inevitable.

Whether it is Iran, al Qaeda, or the Taliban, one does not reason with a hungry tiger... or those with the only truth and a true cause.

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What Happened To Obama's Change?

SEARCH BLOG: POLITICS

President Obama promise a clean break from the Bush administration. Well, in the area of spending, he has delivered. His domestic policies and plans are making drunken sailors look sober. In one area, he has proven to be a "Bushie" himself: actions aimed at "foreign interests against the U.S." I think most Bushies called them terrorists.

The candidate Obama roundly criticized the Bush administration for the way these foreign interests against the U.S. were detained without their Constitutional rights. Then candidate Obama indicated that he would deal with those foreign interests on a higher moral plane. Then candidate Obama said he would provide transparency in U.S. actions. Now President Obama has the responsibility. Now President Obama is backtracking.

Meanwhile, Speaker of the House Nancy Pelosi has made some claims about what she was told by the CIA and the Bush administration. She claims that she was never informed about the true nature of the interrogation techniques used against the foreign interests against the U.S. Or perhaps she was informed, but misled. Or perhaps she was informed, but not fully. Or perhaps she was informed, but it was the day she had a hair appointment.

Change is easy to talk about when you don't have the responsibility. Change is easy to talk about when you find the facts inconvenient. Change is not so easy to implement when it is more than political rhetoric. Change is not so easy to implement when you have to account for the results.

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Now Is The Time To Reorganize Detroit

SEARCH BLOG: DETROIT

If there was ever a time to re-shape, re-organize, re-model, re-vise, re-make Detroit; this is the time.

Detroit is a hollow city. It has lost most of its industrial base; it has lost most of its population; it has lost most of its economy. This comparison of Detroit to some other urban areas was done by the Detroit Free Press [cited from the City Farmer News]:

Acres of barren blocks offer chance to reinvent Detroit

Linked by Michael Levenston

The map above by Dan Pitera, a professor of architecture at University of Detroit Mercy. About 30% of Detroit is now vacant land — about 40 square miles, by one estimate — as the city’s population has shrunk from a peak of 2 million in the early 1950s to 900,000 today. Abandoned houses dot empty lots that were once blocks of homes and businesses. Farms, forests, hobby gardens and recreation areas are some suggestions urban planners are considering for using the space.

By John Gallagher
Detroit Free Press
December 15, 2008

Compare this to a proposal that I have made several times in the past:

Sunday, April 05, 2009
Detroit Needs Bankruptcy And Reorganization

Sunday, October 26, 2008
Detroit - Same Old Same Old

Thursday, February 17, 2005
Ethnic Divisiveness - Unintended Consequences

The gist was this:

Another radical approach would be to reduce Detroit to a 5 mile radius from the foot of Woodward Ave and then create several new cities along the outer ring or let existing cities annex adjacent areas. This would create a more manageable central area that could focus on high-end businesses and more affluent residents. The outer areas would be more traditional smaller cities that could focus on small business and the needs of its residents.

Do I hear any rational objections?

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Trucks And Highway Damage

SEARCH BLOG: TAXES

The issue of extra heavy trucks and the rapid deterioration of Michigan highways comes up now and then. It probably will surface once more now that additional taxes are proposed to upgrade and maintain highways that are in terrible condition.

As the Detroit Free Press reports:

Higher gas tax may pave way for better Mich. roads

By CHRIS CHRISTOFF and MATT HELMS FREE PRESS STAFF WRITERS Michigan motorists should pay more in gas taxes and car registration fees to fix the state’s roads, creating jobs and making the state more attrac­tive for new business, an influential co­alition said Thursday, as it unveiled a plan to overhaul road funding. It would replace the state’s 19- cents-per-gallon gas tax with a 16% tax on the wholesale price of gas, capped at 34 cents per gallon. Also, annual car registration fees would nearly double in five years to pay for better roads. Owners of older cars would pay less. The changes would cost the aver­age Michigan driver $13 more monthly by 2014, according to the group. “The money’s got to come from somewhere,” but a big gas tax increase will hurt families, said Jeff Adams, a construction project manager from Harrison Township. The House Transportation Com­mittee began hearings on the 13-bill plan Thursday.

Michigan is the only state I am aware of that allows 11-axle trucks to routinely operate on its highways. The argument is that these trucks are more economical to operate versus the standard semi-tractor-trailer combination and save highway damage by spreading the load across more axles... although they do more damage to bridges from the greater absolute weight.

A Michigan State University study showed that these extra-heavy trucks caused more rutting of the surface, but less cracking.

While there is no doubt that heavy trucks, regardless of the number of axles, do more damage than passenger cars... about 10,000:1... the issue of road deterioration seems more related to the climate which sees frequent thawing and freezing during the winter. Furthermore, it is likely that the past low-cost bidding approach has contributed to sub-standard design and construction.

The State does now require warranties, but it is for materials and workmanship... not design which is the responsibility of the state. Strangely, design seems to be set in concrete... so to speak. And like the old saw says: If you do what you always did, you'll get what you always got.

So, it appears that Michigan can expect higher taxes for roads and roads that continue to deteriorate at remarkably fast rates when compared with other states' experiences... and every summer the same freeways will be shut down for road rehabilitation.


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Obama Demands Cheaper Health Care

Oh, Canada, we love your health care ways. Everyone is covered. You just wait for hundreds of days.

Oh, Canada we think your ways are great. The only nit we'll pick. You will die... while you wait.

President Obama loves the Canadian system of health care and is working diligently to implement it in the United States. Now the president who is hard pressed to come up with $17 billion in "savings" from a federal budget he has expanded by a thousand billion or so is demanding that the private health care system cut its costs by $2,000 billion.

Tax hikes may pay for health care

Senators discuss increasing fees on alcohol, tobacco, soda

BY RICARDO ALONSO-ZALDIVAR Associated Press Washington — Senators are con­sidering limiting — but not eliminat­ing — the tax-free status of employer­provided health benefits to help pay for President Barack Obama’s plan to provide coverage to 50 million unin­sured Americans. Finance Committee Chairman Max Baucus, D-Mont., said Tuesday that there are no easy options. Sen­ators began grappling with how to fi­nance guaranteed coverage, a corner­stone of Obama’s plan to overhaul the health care system. Independent ex­perts put the costs at $1.5 trillion over 10 years. Obama sees a world in which doc­tors and hospitals compete to offer quality service at lower costs, and the savings help cover the uninsured. Turning that vision into reality re- mains the biggest challenge for the president and his backers, because hard cash — not just ideas — is re­quired to cover upfront costs of ex­panding coverage. The president put health care in­dustry leaders on notice Tuesday that he expects them to fulfill their dra­matic offer of $2 trillion in savings over 10 years. “I will hold you to your pledge to get this done,” Obama said in a letter released by the White House that went to groups representing in­surers, hospitals, doctors, drug mak­ers and others. But those savings — even if the in­dustry delivers every penny — won’t all accrue to the government. So the fi­nancing package for Obama’s plan is likely to include a mix of tax increases and spending cuts in federal health programs. Among the possibilities: tax in­creases on alcoholic beverages, tobac­co products and sugary soft drinks, and restrictions on other health care­related tax breaks, such as flexible spending accounts. But some taxes don’t seem to be on the table, such as a federal sales levy to pay for health care or a new payroll tax. Congressional leaders say they want to pass legislation in the Senate and House this summer. On the controversial question of taxing health benefits, Baucus is stak­ing out a position that could put him at odds with Obama. The president adamantly opposed such taxes during the campaign, argu­ing they would undermine job-based coverage. Obama’s aides now say he’s open to suggestions from Congress, even if he criticized Republican presi­dential rival John Mc Cain for propos­ing a sweeping version of the same ba­sic idea. Baucus said he wants to modify the tax break, not abolish it. “We are not going to repeal it,” he said. Baucus suggested that the benefit could be limited by taxing health in­surance provided to high-income in­dividuals, although he did not specify at what income levels. He also said that plans offering rich benefits — for example, no co-payments or deducti­bles — might be taxed once their value exceeded a yet-to-be-determined threshold. Employer-provided health insur­ance is considered part of workers’ compensation, but unlike wages, it is not taxed. The forgone revenue to the federal government amounts to about $250 billion a year. “IWILL HOLD YOU TO YOUR PLEDGE TO GET THIS DONE.” President Obama, to health care industry on offer to save $2trillion

Pablo Martinez Monsivais /Associated Press Senate Finance Committee chairman Sen. Max Baucus, D-Mont., center, and Sen. Charles Grassley, R-Iowa, right, discuss overhauling the health care system.

So, let's get this straight... the president who has never actually run anything is telling the world's most dynamic health care system that it should destroy itself because he thinks it should be run his way... and we'll be taxed for that benefit.

IDIOCY: something notably stupid or foolish

That pretty much sums it up.

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You Won In Iraq, But You Are Fired

SEARCH BLOG: IRAQ

The New York Times just can't get itself to admit that the U.S. military campaign in Iraq was a success and that the Obama administration's anti-military bent is setting up the U.S. for serious military problems in the future. In case you didn't notice, a large target of President Obama's so-called "cost savings" has been the development of military systems. Now, Obama's Secretary of Defense is targeting top military men as they seek to convert the U.S. military to a United Nations squadron of "peace keepers."

In Personnel Moves, Gates Sets Direction of Pentagon

By MARK MAZZETTI and ERIC SCHMITT

Published: May 12, 2009

WASHINGTON — The ouster of Gen. David D. McKiernan from his post as senior American military commander in Afghanistan is just the latest high-level firing by Robert M. Gates, a defense secretary who has shown little tolerance for missteps by the Pentagon’s civilian and military brass.

Mr. Gates had previously shown impatience for generals in charge of failing military strategies in both Iraq and Afghanistan. During the summer of 2007, Mr. Gates chose not to recommend reappointment of either Gen. Peter Pace as chairman of the Joint Chiefs of Staff or Gen. John P. Abizaid as head of Central Command.

Both men were closely associated with an Iraq campaign that had experienced years of military failures.

Read more....

The biggest military "failures" were trying to follow the dictates of the U.S. Congress. Still, you can't fire congressmen/women, so....

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General Motors Now Approaching Zero

SEARCH BLOG: AUTOMOBILES

Get out your straightedge and do a projection all by yourself. Note that this is logarithmic scale.

This is what it looks like to investors wallets...

You're right. It is hard to tell the difference.

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Economic Reality Check

SEARCH BLOG: ECONOMY

Just some observations:

• Unemployment has not peaked and the "hunker down" mentality is increasing which will have a suppressing effect on the economy
  
• The economy has yet to feel the impact of General Motors and Chrysler declaring bankruptcy... and the bankruptcy court decisions that will ripple through the supplier base and have a suppressing effect on the economy
  
• Oil prices have gone up over $15 per barrel from their lows and that will have a suppressing effect on the economy
• The federal government's deficit spending increases will lead to either or both tax increases and higher inflation which will prompt the Federal Reserve to raise interest rates... all of which will have a suppressing effect on the economy
• Federal energy policies are being pushed by Energy and Commerce Chairman Henry Waxman that will dramatically increase the cost of energy and create burdens on domestic manufacturers which will have a suppressing effect on the economy

I'm still not sure what hope I am to have from all of this change. But don't worry; China will buy our debt and continue to subsidize us... or will they?

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Automotive Lemonade Or Connecting Strangely Different Dots

SEARCH BLOG: AUTOMOBILES and ECONOMY

It's all over the news, U.S. automotive manufacturers are going to force thousands of dealerships out of business. As this article states:

Dealer demise an economic tsunami for communities
AFTERSHOCKS TO BE FELT IN LOST JOBS, ADS, SPONSORSHIPS

By GREG GARDNER and BRENT SNAVELY FREE PRESS BUSINESS WRITERS More than 3,000 Chrys­ler LLC and General Motors Corp. dealers could be forced to close or merge with competing showrooms in the next few months — triggering economic aftershocks in com­munities across the United States. ... What’s more, closed dealerships change the landscape of communities, leaving behind thousands of empty stores and sprawling parking lots in an already struggling real estate market.

Michigan governor Jennifer Granholm has been looking for something... anything... to hold up as a beacon of hope and change in this state. She has pinned her hopes on renewable energy as this states in her official site:

Granholm Says Windspire Manufacturing Facility is Creating Jobs as Part of Comprehensive Plan to Grow State's Renewable Energy Sector

Contact: Liz Boyd 517-335-6397

April 20, 2009

Mariah Power, MasTech Manufacturing to make revolutionary turbine in Manistee

LANSING - Governor Jennifer M. Granholm today said the $4 million Windspire manufacturing facility in Manistee that will create up to 140 jobs is in keeping with Michigan's plan to grow the renewable energy sector, create jobs and reduce the nation's dependence on foreign oil in the process. The partnership between Nevada-based Mariah Power and Michigan-based MasTech puts an underused auto plant to work as a factory for the Windspire, a wind-power system for homes and businesses.

"Michigan is proud to be the place where these two companies are partnering to create jobs making these easy-to-use turbines that can generate energy at a home or business," said Granholm during grand opening ceremonies at the facility. "Demand for wind-energy products will continue to grow as federal initiatives to reduce our nation's dependence on foreign oil advance. The Windspire, manufactured by Michigan workers using Michigan materials, will help Americans rely on energy made, literally, in our own backyards."

That's about 1/10%... more or less... of the automotive jobs exiting the state, but it's a little better than nothing.

But how is this for "out of the box" thinking? The governor has been advancing the plan to build "wind turbine farms" on expensive and fertile agricultural land along Lake Huron. Rather than that, why not convert some of those "empty stores and sprawling parking lots" into mini "wind farms" with two or three turbines connected to the local power grids? Or, if there simply is not enough wind in the area, how about mini "solar farms?"

Michigan has to have 10% of its electric power from alternative energy in about 5 years... and there is no way to do that unless the power is generated locally. Otherwise, an expensive and time-consuming effort will be required to create new transmission facilities from the "wind farms" to the electrical grid.

This could be accomplished by 1) quick action by local government to rezone these properties, 2) quick action by the state government to assist in the development of these facilities and connecting them to the local grid, and 3) accessing the federal funds available for alternative energy projects.

Or maybe the answer is simply not blowing in the wind.

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Automotive $ Sign Of The Times

SEARCH BLOG: AUTOMOBILES

This was an ad run in the Sunday edition of the Detroit newspapers:

That's just a hair better than a 75% discount off list price... a red tag sale if there ever was one. Note that includes a voucher from the buyout program.

General Motors is in trouble. Hummer is going the way of the Edsel. GM employees are going that way, too. Combine all of that and you get 75% discounts. But what if $9,500 is too much? Not to worry.


Price does not equal quality; price equals what the seller can get for the product... in this case, very little.

It's a shame to see General Motors... and Chrysler... fall on these hard times. Without the housing credit mess that led to the banking mess, the likelihood was that both General Motors and Chrysler would have survived a recession without government intervention. But it is what it is. And now Hummers are selling for less than $8,000.

Wait a few weeks and you may be able to pick one up and get $1,000 for your troubles. Still, I suspect that those GM employees may select something other than these Hummers... especially if they are concerned about insurance and operating costs... and their own uncertain financial futures.

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Fear Of Flying Or No Place To Go

SEARCH BLOG: ECONOMY

Friday morning around 8:00 am, I dropped off my wife at the Detroit Metropolitan Airport. This is usually prime time for travelers. Consequently, I was stunned at the scene.



Perhaps no one is leaving because they are afraid that there will be nothing left when they return.

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GMAC, Make It So

SEARCH BLOG: AUTOMOBILES and GOVERNMENT

Make it so!
Make it so!
Make it so!

Feds Order GMAC to Raise $13.1 Billion to Shore Up Finances

By Steven Mufson and David Cho

Washington Post Staff Writers
Thursday, May 7, 2009; 4:21 PM

The federal government has ordered the financing arm of General Motors to raise $13.1 billion in new capital to ensure the firm's stability in the face of heavy losses in mortgage and auto lending and costs related to taking over new loans for Chrysler dealers and customers, said sources familiar with talks between government and industry officials.

The sum is among the biggest required for any U.S. financial institution, and could prove difficult for GMAC to raise because of the limited nature of its business and poor quality of its loans. The firm has struggled in the past to raise money from private investors and has already received $5 billion in federal assistance. It is likely that the federal government would end up providing much, if not all, of the needed capital, but it remained unclear where that money would come from.

About $4 billion of the total would be needed to cover the cost of assuming Chrysler Financial's dealer and retail auto loans, said one senior financial industry executive.

The bulk of the new capital needed -- $9.1 billion -- would be designed to bolster the existing GMAC against the adverse scenario included in the federal government's recent "stress test" of major financial institutions. The government is expected to release the official results of the stress tests today after the markets close.

Regulators said that GMAC faced substantial risks of new defaults, particularly in mortgage and consumer automobile lending. GMAC's focus on those areas of business has made the firm more vulnerable to losses during the economic downturn than more diversified banks, said the executive.

The restructuring of GM would also result in substantial losses for the closing of hundreds of dealerships and lower values for repossessed, leased or trade-in vehicles. GMAC is a separate company from GM.

GMAC is critical to the success of both GM and Chrysler because it provides money to dealers to acquire inventory and to consumers purchasing vehicles. Part of Chrysler's restructuring plan was that GMAC would assume the role of Chrysler's financial arm.

Indeed! Make it so! Your Federation Government has spoken.

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$17 Billion Not As Much As It Used To Be

SEARCH BLOG: ECONOMY

Millions... billions... trillions. All of those "illions" are confusing because we normally don't deal with such large numbers. You hear a number like 500 million and that seems like a lot. And you hear 17 billion and that seems pretty big, too. And then someone talks about 1.94 trillion and that could be big, as well.

We don't process the fact that 17 billion is 34 times larger than 500 million. And we glaze over at the idea that 1.94 trillion is 114 times as much as 17 billion and 3,880 times as much as 500 million. That "1.94" kind of masks the issue.

So when President Obama talks about savings of $17 billion... which isn't chump change... we need to put that into perspective.

Image from CNN.com

The scary part is that the $1.94 trillion is halfway through the 2009 fiscal year. Hopefully, the rate of spending will decrease, but hoping that will change may not yield the change we hoped for.

There are more charts and data in the article below, but here is one to keep in mind as you plow through all of the rest. It's good perspective when you hear about how much the President is doing to control spending.

From CNN:

Obama will slice budget by $17 billion

White House will propose cutting or reducing funding for more than 100 federal programs in latest salvo in 2010 budget fight.

By Jeanne Sahadi, CNNMoney.com senior writer

May 6, 2009: 8:00 PM ET

ROAD TO RESCUE

• Obama will slice budget by $17 billion
• Will Obama tax plan really save jobs?
• AIG: Hoping to stem the bleeding
• Stress test day arrives at last
• Millionaires don't feel so rich: survey

Story of 2 downturns

See how the Great Depression and the 'Great Recession' measure up against one another.

NEW YORK (CNNMoney.com) -- The White House on Thursday will detail a proposal to save $17 billion next year by eliminating or reducing 121 federal programs, according to a senior administration official.

Roughly $11.5 billion of the savings would come from the discretionary side of the fiscal 2010 budget -- that is, for programs whose funding is not automatic. And roughly half of the savings would come from non-defense programs, the official said Wednesday.

"In many cases we have multiple programs that do the same things," the official said in a briefing call with reporters. "Duplication can be the enemy of efficiency."

In other cases, the results of the targeted programs didn't justify the expense, the official said.

Among the programs on the president's chopping block:

• A long-range navigation system now made obsolete by the GPS. Cost: $35 million.
• An early education program called Even Start, the performance of which had been poor. Cost: $66 million.
• A Department of Education attaché position in Paris. Cost: $632,000.
• The Christopher Columbus Fellowship Foundation, which only pays out 20% of its funds in awards every year. Cost: $1 million.
• A program that pays states to clean out abandoned mines even after the mines have been cleaned out. Cost: $142 million.

The proposed program eliminations and reductions will be part of the release Thursday of the president's 2010 budget request.

The cuts are likely to be the first of many to come, the official said. "This is an important step, but it's just the first step. We will continue to search for additional savings and efficiencies."

A few weeks ago, the president announced that he had asked his cabinet members to cut $100 million from their agencies' expenses, a number budget analysts characterized as symbolic at best.

Whether or not lawmakers adopt the president's recommended cuts is unclear. They are likely, however, to come up with their own cost-saving proposals. House Speaker Nancy Pelosi, D-Calif., for instance, has given her House committee chairmen until June 2 to provide a list of ways they can reduce expenses.

Deficit on the horizon

Fiscal discipline is among the pillars of the new economic foundation Obama has said he wants to build.

But it was unclear Wednesday whether the $17 billion in savings in 2010 would be used to fund other federal programs or to reduce the country's growing deficit.

The House and Senate have agreed to amore than $3.5 trillion budget outline for fiscal 2010, which begins Oct. 1. That's roughly the size of the president's budget request. The proposals Congress and the president are making, however, would push long-term deficits significantly higher.

While few suggest the government retract its spending largesse while the economy is still struggling, deficit hawks caution that lawmakers must do more than pay lip service to the long-term debts situation.

Thanks to the financial crisis, tax receipts are down sharply this year while spending demands have grown to record levels. Forecasts of a slow recovery and estimates of a large price tag for Obama's proposed health care, energy and education initiatives have worsened somewhat the already tough fiscal outlook.

The Government Accountability Office estimates that all federal revenue will be eaten up by government costs for Medicare, Medicaid, Social Security and public debt interest by 2025. Last year, the estimate was 2030, said Charles Konigsberg, an expert on the federal budget at deficit watchdog group the Concord Coalition.

The official reiterated the administration's position that the biggest deficit-cutting efforts will come from curbing the growth in health care costs.

The White House budget office's cost-saving proposals are part of a two-stage release on the final details of Obama's budget request. Next week, the OMB will release more analysis on the country's fiscal policies, along with "minor updates and changes" to the administration's summary tables of budget forecasts, first put out in February.

Detroit Votes Change

SEARCH BLOG: POLITICS

ANDRE J. JACKSON/Detroit Free Press
Mayor-elect Dave Bing celebrates with his wife, Yvette Bing, and supporters Tuesday night at the Doubletree Fort Shelby.

The City of Detroit held a special election to elect a mayor and the winner was Dave Bing, former basketball professional with the Detroit Pistons and area businessman. His opponent was Kenneth Cockrel who was the interim mayor and former president of the City Council.

One can look at Mayor Bing's position as enviable or hopeless. Detroit is at its nadir. One in four Detroiters are unemployed. The city is literally falling apart. After nearly three decades of black racial politics, a large portion of the city's intellectual and civic leaders... both black and white... have left. One conniving, unethical character after another has risen to positions of power throughout the city's government. It's hard to imagine that things could be worse... but with the reality of a Chrysler bankruptcy and the strong possibility of a General Motors bankruptcy, it is likely that things will get worse for the city. But Mayor Bing may be able to take credit if there are any improvements.

Mayor Bing has the opportunity to be a rallying point for the city. He brings back memories of a time when the name "Detroit" was associated with winning and excitement. Nevertheless, old glories don't necessarily translate into future hope. Detroit is and will remain a city that will be living on hand-outs to continue as an entity. The first thing that Mayor Bing must do is restore a long-lost sense of ethical government by cleaning Detroit's political house.

If people do not perceive a fundamental change in Detroit politics beyond the mayor's office, nothing will change for the better. Mayor Bing has a challenge much bigger than winning a basketball championship. Don't expect him to turn Detroit into a winner; expect him to begin the process of stopping Detroit from being such a loser.

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Summer Run-Up In Gasoline Prices

SEARCH BLOG: GASOLINE and ECONOMY

Today, gasoline prices jumped about 20 cents per gallon in our area. No particular reason except that with the warmer weather comes the government-mandated "boutique blends" that are supposed to save us from all sorts of foul pollutants.

Strangely, the government-mandated vehicle requirements were supposed to do that as well. The hundreds or thousands of extra dollars for sophisticated fuel combustion controls and tailpipe emission limits apparently don't work, so the government mandates double-dip the consumer with special gasoline blends that for some reason don't seem to go beyond limited geographies... each geography having its own special blend.

Now lets add in the individual state CAFE and emission standards that are proposed and, wallah!, we have pandemonium... and a bureaucrat's orgasmic fantasy.

Here we are in a state that's in a state of depression and the only people driving seem to be leaving the state... and gasoline prices are going up... again. Is there not one lick of common sense in our government? This is not a supply-demand issue; this is a government muck-up issue. One politician has the right idea, but because he is a Republican, nothing will happen.

If our Democratic Party President and our Democratic Party Congress really want to do something for our economy, pass the damn bill and save consumers billions of dollars... or don't and blame the Republicans for not caring about the "little guy."

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Don't Hate The Rich, Be One Of Them

SEARCH BLOG: ECONOMY

Don't hate the rich, be one of them. Who said that? 1,000 guesses and you won't get it right. Where was it said. 10 guesses and you probably will get it right. We'll get back to this shortly.

Meanwhile, if we look back a couple of months, here is what was written in The New York Times:

By JACKIE CALMES and ROBERT PEAR

Published: February 25, 2009

WASHINGTON — President Obama will propose further tax increases on the affluent to help pay for his promise to make health care more accessible and affordable, calling for stricter limits on the benefits of itemized deductions taken by the wealthiest households, administration officials said Wednesday.

And CNN just reported the following:

By Jeanne Sahadi, CNNMoney.com senior writer

Last Updated: May 4, 2009: 2:10 PM ET

NEW YORK (CNNMoney.com) -- President Obama on Monday spelled out his proposals to close corporate tax loopholes on U.S. multinational corporations and crack down on overseas tax havens.

The goal is to help create new jobs in the United States and make the tax code fairer. All told, the administration said the changes would raise $210 billion in tax revenue over 10 years.

"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," Obama said in a White House announcement.

But tax policy experts and corporate lobbyists say such measures, unless accompanied by a reduction in the corporate tax rate, will push more companies to move their operations -- and jobs -- overseas to more tax friendly countries.

All right, we all know that President Obama believes people and corporations that earn more should pay more than the rest of the population... which they are already doing.... He means increase the differential in the tax rates. Our history has shown that this is a self-defeating effort. While it levels the playing field, it lowers the playing field. It does not create new jobs... except perhaps in government agencies... and it does not make the government bring in more taxes in the long run.

But this is consistent with the political posturing from the Obama Democrats. I say posturing because behind the scenes many Democrats, including President Obama, are somehow becoming quite wealthy despite the restrictions on their government earnings... or getting the wealth close to home.

Regardless, lets go back to the beginning of this post. Here is the answer:

By Li Hongmei People's Daily Online

Despite the turmoil in financial markets and global economic downtrend, the Chinese rich will go on accumulating wealth faster than ever anticipated. According to the private wealth report released some time ago that the number of China's high net worth individuals is growing by leaps and bounds on a year-on-year basis. The concept of so-called high net worth individuals refers to those with net assets of at least US$1m excluding their main home.

The survey conducted by China Merchants Bank and Consultancy Bain & Company indicates that as many as 320,000 Chinese individuals will possess at a minimum 10 million yuan (US$1.46m) each in disposal assets as of the end of 2009. A total of 8.8 trillion yuan in disposable assets held in the happy few rich hands is already tantamount to the 29 percent share of the country's GDP total of 30 trillion yuan.

The upward revision in the wealth forecast not only reflects China's generally effective fiscal and monetary policy in recent years, but also showcases that the Chinese wealthy, the enterprising minority of the population allowed by the policy of reform and opening up to get rich first, have now become more adept at shifting their funds out of troubled markets into more profitable areas. Additionally, wealth creation in China, meanwhile, has benefited from the country's closer integration into the global economy.

Admittedly, in a still developing nation like China, the general public seems to grudge accepting the fact that a rising number of high net worth individuals have emerged and the wealth they controlled has been dramatically expanded. Influenced by the decades-long planned economy, the Chinese have been accustomed to the Chinese-style egalitarianism, shaping the stereotyped mindset of 'eating from the same big pot.' Hence, a great many people cannot rub off the deeply ingrained prejudice against wealth, as they were taught that there was something wrong inherently with being rich.

If viewed through the prism of social development, one can easily understand why wealth used to be so despised in traditional Chinese society. China is typically an agricultural country, and in its time-honored history, the theory of 'attaching great importance to agriculture but restraining commerce' has been hammered into the people's mind, well and truly. With time, 'poverty mentality' would come into being, which encourages the thinking that if you have more, then I must have less. Even worse, now that many of the Chinese have grown up exposed to similar thinking and similar teachings, they tend to form an abnormal psyche of 'hating the rich.'

Misconducts of some affluent people as well as the illicit channels they used to accumulate their wealth will undoubtedly add a further irritant to the discontent of the less fortunate. Such terms as 'corrupt rich,' 'stinking rich' and other much harsher things are often used by ordinary Chinese to describe those 'wealthy but bad guys' in their eyes.

More often than not, many of the newly emerged rich people are still magpies, good at hoarding but poor in management. And they have little sense of charity, donation and social commitments, this being yet another reason to make them scorned by the public. Some even believe that the rich got that way by stepping on the poor. The rich, however, can hardly convince the less fortunate majority that it isn't wrong to be wealthy. So in a society with the rapid economic growth and increasingly enlarged circle of affluent individuals, it is quite desirable to cultivate a wealth culture, which can, for one thing, gradually change people's thought process and make them believe everybody can escape poverty and get rich through efforts.

Secondly, a sound atmosphere in which wealth creation is encouraged will also help people retrain their mind, pushing out the old 'poverty mentality,' and replacing it with a 'wealth mentality.' If more people are devising ways to create wealth, in a long run, it will contribute to building a harmonious and mass affluent society, as more people will have the ability to help the less fortunate.

A society without producing wealthy people is never progressing on the healthy track. Indeed, even the Bible says 'money is the root of all evils.' In this light, a highly commercialized society is not a noble one, either. But it is noteworthy that wealth in itself has nothing to do with guilt or innocence, and what matters most is how to manage it. Nevertheless, it will be beneficial to the general good of a society that, instead of bitterly envying the rich, more people are learning to become one of them.

I'm having a hard time wrapping my mind around the fact that China has now joined the Cato Institute.

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Economic Anticipation

SEARCH BLOG: ECONOMY

In recent weeks, there has been nearly an 1,800 point recovery in the Dow Jones Industrial Average from 6547 to over 8200... going over 8300 this morning... 26%. At the same time, the price of oil has gone from about $46 per barrel to $53 per barrel... 15%.

When you compare that with other economic indicators such as national unemployment which rose from 7.6% to 8.5% [Jan. through Mar.] or ...

Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession

The number of persons who were marginally attached to the labor force increased sharply during the current recession.
Read more »

you begin to appreciate that, as a nation, we are hoping for change... and willing to bet our remaining dollars that it will be positive change.

History may be on our side. Despite the fact that industrial icons such as General Motors and Chrysler may be in deep financial distress which may lead to a partial collapse of the domestic auto industry, there is confidence by Wall Street and oil traders that there will be plenty of cars and trucks being sold and driven to warrant their optimism.

Nevertheless, it may be prudent to recognize what can happen when the rug is pulled out. Gary Indiana was a thriving area until the domestic steel industry collapsed.



Detroit Michigan is collapsing as the automotive industry collapses.



But when the basis of a country's economy becomes porous and deficient... banks collapse, investments collapse, savings disappear... even whole countries can run into more than a "recesssion"...



There are tipping points. The U.S. economy has not reached a tipping point, but there are large "wobbles" in several sectors. Growth in health care services is not a future saver, it is more like a snake eating its tail... as is greater and greater national debt. Sooner or later payment comes due. When the Garys and Detroits fail, the economic infection can spread.

Rather than increasing the difficulty of doing business in the U.S., our local, state, and federal governments need to address the regulatory, tax, and policy burdens that lead to the destruction of the Garys and Detroits. Iceland is an example of a nation that looked to financial manipulation as its future... and got the future that comes with it.



Our country is putting more and more of its eggs into the federal government basket with the hope that the economy will respond well to the dictates of that government... or the fear that the dictate will be to go into bankruptcy.

The question is whether this rise in the DJIA and oil prices portends a better future or is simply irrational optimism. Let's hope it is the former. Regionally, in Michigan, it is the latter.

Oil prices ease after rally

Futures fall below $53 a barrel as positive economic news vies with weak demand and supply concerns.

By Ben Rooney, CNNMoney.com staff writer

May 4, 2009: 8:33 AM ET

NEW YORK (CNNMoney.com) -- Oil prices fell Monday morning, after a big rally in the previous session, as investors weighed positive economic signs against ongoing concerns about weak demand and record-high inventories.

Light, sweet crude for June delivery was down 49 cents to $52.71 a barrel in pre-market, electronic trading. The contract jumped more than $2 a barrel Friday.

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Celebration

SEARCH BLOG: EDUCATION


Our nephew, along with about 1,000 of his fellow engineering students, celebrated his graduation at the University of Michigan yesterday. The speaker was Keith Cooley, CEO of NextEnergy who gave a marvelous speech around four words: gunpowder, hyperspace, Lydia, and cheese. Well, you had to be there.

These young people represent the brightest prospects for our future. As I was waiting for the ceremony to begin, I read through the part of the program that listed the Ph.D. recipients and the titles of their dissertations. Some were exotic and esoteric while others had some very straightforward implications.

As the students crossed the stage to be greeted by the faculty, it was obvious that this was not a chore for either group. They met at center stage with hand shakes, fist taps, chest bumps... yes, I'm not kidding..., hugs... lots of hugs, and even a do-si-do. This was a very happy time for everyone.

Congratulations, class of 2009!

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New Justice To Share Obama's View Of The Constitution

SEARCH BLOG: POLITICS

From The New York Times:

Promising to nominate a replacement with “a sharp and independent mind and a record of excellence and integrity,” Mr. Obama, who startled reporters by walking to the lectern for a cameo appearance in the middle of the daily White House press briefing, said that he would look for a candidate “who understands that justice isn’t about some abstract legal theory or footnote in a case book.”

“I will seek somebody who shares my respect for constitutional values on which this nation was founded, and who brings a thoughtful understanding of how to apply them in our time,” Mr. Obama said.

Let's see if we can state that just a little more clearly. How about:

I want someone who shares my feelings that law isn't about what is written, but rather about how we want things to be. We should not feel bound by what the Constitution says, although we should say we respect it. This is a new day, a new time, and we have to interpret justice in a new way.

Yeah, that about sums it up.

This is how it will work. Just because you have a contract protected by written law doesn't mean that you will be protected by the law... if you are preventing "justice" from happening.

Frank Beckmann talks with Tom Lauria, who represents a group of lenders that object to the Chrysler sale

(May 1) - Frank talks with Tom Lauria, bankruptcy attorney at White & Case, who represents a group of lenders that object to the Chrysler sale.

A player is required to hear this interview.

This is the same process that Hugo Chavez used to destroy Venezuelan democracy in the name of democracy.

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Fiat Accompli

SEARCH BLOG: AUTOMOBILES

The following article from the Wall Street Journal sums up the mess at Chrysler. The last sentence sums up Fiat's proposed contribution... and why I'm so skeptical about the success of this new relationship. After all, if Mercedes couldn't pull it off with Chrysler, what makes anyone think that Fiat can do better?

These are desperate times at Chrysler and one is left with the impression that Fiat is the last grasping at straws. I hope there is more to it than the obvious.

By NEIL KING JR. and JEFFREY MCCRACKEN

President Barack Obama pledged to give Chrysler LLC "a new lease on life" by ushering the storied auto maker into a bankruptcy reorganization that will empower its union and put Italy's Fiat SpA in charge while elbowing aside its creditors.

Administration officials said the bankruptcy could last a relatively short two months and lead to a healthier Chrysler. But the intervention Thursday to preserve the 84-year-old company is far from certain and could stall in court, especially if aggrieved parties such as creditors and dealers mount a legal challenge.

Associated Press

Gina Russo, second from left, and her father Gus, third from left, the owners of Lochmoor Chrysler Jeep in Detroit, watched President Obama announce Chrysler's bankruptcy filing.

The move also could disrupt the country's already-fragile automotive suppliers and scare away Chrysler's already-scarce customers.

The plan envisions a partnership between Fiat and the United Auto Workers union, one of the more peculiar ownership structures in Chrysler's tortured history. The filing may pave a path for General Motors Corp., whose own U.S.-imposed deadline for reorganization is a month away.

Chrysler's Chapter 11 filing -- the sixth-largest ever -- is designed to arrest the decline of a company that popularized the Jeep and the minivan. It marks the latest in a series of government interventions. Earlier, Washington took stakes in troubled banks and insurance giant American International Group Inc.

The administration is determined to protect UAW jobs and salvage the third-largest domestic auto maker, even at the expense of Chrysler's secured lenders. Critics among the lender group charged that the deal would upend established bankruptcy practice by putting junior creditors on par with secured ones.

The filing, made in New York's Southern District, was the culmination of months of wrangling that started last year when Chrysler and GM appealed to Washington for a bailout. It ended with an agreement that eventually could see Fiat taking over Chrysler, a new union pact covering about 150,000 workers and retirees, and a contentious, multibillion-dollar debt-for-cash swap.

The Treasury will contribute $3.3 billion to the plan: $2 billion to pay off Chrysler's lenders and the rest to pay the company's bills during bankruptcy. It said it is prepared to pitch in $4.76 billion more to keep Chrysler running for several years. That's on top of $4 billion the government lent Chrysler in previous months, a debt forgiven as part of negotiations with the UAW and lenders.

President Obama, in a noon speech at the White House, had to explain why he planned to save Chrysler and its workers by forcing the company into bankruptcy. A partnership with Fiat, he said, would give Chrysler "a chance not only to survive, but to thrive in a global auto industry."

Mr. Obama and his auto task force had long seen the merits of washing away some of Chrysler's liabilities through bankruptcy. Fiat can now pick the operations it desires while more easily shedding hundreds of dealer franchise agreements and other obligations it doesn't want.

At the same time, in an echo of the tensions that have run high between Washington and Wall Street, the president and his aides blamed the filing squarely on about 20 smaller investment firms and hedge funds. This group voted against the government's last offer to eliminate $6.9 billion in debt owed them.

They "decided to hold out for the prospect of an unjustified, taxpayer-funded bailout," Mr. Obama charged. Rep. John Dingell, a Michigan Democrat, called the holdouts "rogue hedge funds" and "vultures" and said in a statement that they "will now be dealt with accordingly in court."

The smaller lenders and funds pose some threat to the process of restructuring Chrysler, said attorneys and bankers involved in the matter. They'll likely argue in court the U.S. is overriding contract law, bankruptcy law and constitutional protections against the seizure of private property.

The group, calling itself the "non-TARP lenders," a reference to the Troubled Asset Relief Program that's aided banks, said in a statement that it has "a fiduciary responsibility to all those teachers, pensioners, retirees and others who have entrusted their money to us." The most compliant of Chrysler's big creditors -- among them J.P. Morgan Chase & Co and Citigroup Inc. -- have received hundreds of billions of dollars in TARP aid.

Fiat will contribute no money to the alliance. It has committed what it says are billions of dollars in technologies and designs for fuel-efficient vehicles.

This is Fiat's latest mini-car "winner." I see a very small market for this in the U.S. [pardon the pun].

[source]

Chrysler is capable of making good, small vehicles. That may be the market envisioned by the Obama regime, but it represents the far left of the U.S. consumer tastes in automobiles. Given the choice of that and this small vehicle that Ford is bringing out soon, you pick which one will find more consumer favor.


Let's hope that Chrysler designers can make a silk purse out of Fiat's ugly sow's ear.

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Michigan Weather April 2009

SEARCH BLOG: WEATHER

Temperatures in the area near Detroit averaged almost exactly "normal." This included, however, wide variations from normal and almost 2" more rain than normal. With the exception of the last week, April weather was a generally miserable [data from The Weather Channel].



Since February 2008, the average temperature in this area has been 2.5°F below normal. A large portion of that can be attributed to two very cold winters.


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