The government system is broken …

First, where is all of this openness and transparency that was widely touted by Congress and the Treasury Department when they were selling the $700 Billion Bailout Package. The required reports have not been filed, the oversight committee not fully staffed and a widely-advertised public  transparency website is non-existent.

Second, we have already seen Treasury Secretary Paulson openly admit that the TARP (Troubled Assets Relief Program) initiative, which was designed to allow the government to purchase toxic loans from financial institutions, was not having the desired effect on the economy and that the remaining funds should be used in a somewhat different manner than that originally anticipated by Congress.

As if Congress really cared; as they larded the original bailout legislation with pork and tax incentives for their democrat special interests.

Third, we now have the possibility of the Administration potentially telling financial institutions (aka the Wall Street Wizards) to create some securities which can be purchased by the United States Government – and further rewards these financial evildoers with additional commissions.

Fourth, in two instances, Ford and Chrysler, we would also be bailing out the Ford Family (40% of Ford) and private hedge fund Cerberus Capital (Chrysler). Cerberus is headed by former Treasury Secretary Snow and former Vice President Dan Quayle. 

Fifth, in the last bailout program aimed specifically at the automakers, there was no notice of the previous pledged $25 BILLION Department of Energy appropriation for energy-efficient car research etc. which has yet to be disbursed and the fact that the bailout included funds for government organizations (municipalities and agencies) who sold government transportation assets to private investors (with assurances from now-nationalized AIG) in return for unrestricted funds that could be used for other purposes. They then leased-back the assets to provide the mandated service to the public. Due to revenue shortfalls, they are having trouble paying their private investors – and that money was included in the legislation.

And sixth, this current bailout of the automakers appears to be a democrat appeasement of one of their largest constituencies: the unions. The unions who, along with a fat and complacent management, have milked the system dry and are now stumbling about as they await a rescue which would effectively reward their corrupt and complacent leadership for their previous poor judgment and lack of action.

Bankruptcy is a good thing …

Consider the wisdom of pouring good money after the bad money that was consumed under a flawed business model?

Cars are piling up at dealerships and people are concentrating on keeping their vehicles longer. Consumer money is more likely to be spent on repairs than on new vehicles. Dealerships are closing nationwide. The definition of insanity that is jokingly applied is: continuing to do the same thing and hoping for a better outcome.

The Court would force a large degree of transparency on the automakers and would be able to discard union and vendor agreements which no longer serve any purpose.

There is very little downside – except for the incompetent members of management which will be eliminated without golden parachutes.

THE BUSINESS MODEL IS BROKEN!

Chapter 11 (Reorganization) bankruptcy would force the automakers to revamp their business model or face Chapter 7 bankruptcy (liquidation).

No more paying workers to show up and play crossword puzzles. No more onerous work rules that stifle innovation and increased productivity.

Perhaps even breaching state franchise laws to allow for a lower cost distribution system that bypasses the auto dealerships (still used for delivery and repair). You build your dream vehicle on the Internet, make a downpayment, it is scheduled for production and/or delivery and you cut out a large chunk of the vehicle cost. Before you feel sorry for owners of car dealerships, check out the disproportionate number of yachts owned by those who own the dealerships.

Allowing the automakers to devolve into bankruptcy will not affect all of their workers and, in many cases, ongoing operations can proceed without interference. If the unions balk, perhaps it is time to investigate the ways they spend their members money on personal perks and self-interest deals.

What can YOU do?

Realize that it is now a given that the great majority of our elected Congressional officials are corrupt and are pandering to the special interests. It is also a given that the same is true for an Administration which has hyper-politicized its Agencies and has appointed incompetent cronies to positions of great power.

Further realize that the Obama Administration will probably no different that the Clinton Administration – or perhaps, at worst, the Carter Administration. As the countdown towards the inauguration proceeds, many people surrounding President-elect Obama are of the corrupt Chicago Machine (as is the President-elect himself) and are associated with past and present wrongdoing.

Our treasury is being looted by a financial crisis that is not abating. In essence, we are creating Russian-style Oligarchs that will ultimately influence all governmental organizations. It’s not that Obama is moving towards the political center – and towards the majority of Americans – but the Bush Administration has moved the government so far left, it only appears that Obama is moving toward the center.

We need to stop incentivising bad behavior with our bailouts lest we encourage more of the same.We need to resist the temptation to bailout everyone who has the political clout and connections to jump aboard the gravy train. Demand that the government end their bailout efforts and use the funds as intended: to promote lending liquidity. If the automakers are worthy of a loan, let them apply to a consortium of financial institutions without the necessity of guarantees. Personally, I see no reason for bailing out a private hedge fund or preserving the wealth of a single family at the expense of the American taxpayer.

We need to curtail the "tin cup" mentality which shells out money to everybody that asks.

We need to take back our government by electing more honest politicians (if there is such a thing), rotating them out of office sooner rather than later, and re-calling those who do not meet our standards.

We need also to reform the legislative process to remove the lawyers and hyper-technical language that allows for loopholes. The system is broken and we need to fix it before we become Russia with a nicer climate and more personal amenities.

-- steve

Quote of the day: "Crime is contagious. If the government becomes a law breaker, it breeds contempt for the law, it invites every man to become a law unto himself; it invites anarchy."                           -Justice Louis D. Brandeis: Olmstead v. U.S.

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…

The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius

Reference Links:

U.S. to use bank bailout to aid automakers - International Herald Tribune