A Hollywood Republican

This blog is for an open discussion on politics. My views will be to the right as will be most of the posters. But, we are willing to post alternative viewpoints as lons as they are well thought out. I started this in response to the Obama election and will continue it as long as it feeds a need.

Mar 30, 2009

Obama Does Something Right????

I really have been having a tough time trying to decide what to write about for the past few weeks. I am back in the states after three months in Thailand in which I made a lot of friends and worked really hard. I miss most of the people I met there, but I am glad to be back. I actually miss one a lot more than the others. But, that’s a whole different story and not necessarily for this column.

Now, onto politics which is now and will always be my passion, besides making movies of course! It seems that President Obama finally did something right this morning. He told the United Auto Workers to: “take a long walk off a short pier.” Well, not in so many words, but in reality, that is what happened. I agree with this wholeheartedly. Although, the implications of the rest of his speech have more far reaching and detrimental effects to the United States and not just its economy.

Obama’s decision this morning that the US Government will not give any more money to Chrysler and/or GM unless they come up with an acceptable restructuring plan in 30 days for Chrysler and 60 days for GM is a direct blow to the auto unions as well as the companies’ other vendors. In the event they both fail to comply within the time periods allotted, both will be put into Chapter 11 proceedings under the US Bankruptcy Code. As I have already discussed in this column, that will give the bankruptcy judge in each instance the ability to void the union contracts in order to make the companies viable when they come out of bankruptcy. It is also gives the judge the ability to void any other obligations as well. The bloated UAW will finally be put into its place.

This is a good thing and I applaud President Obama for having guts to go against one of the Democratic Party’s strongest allies! However, this announcement from the Obama administration is not necessarily as good as it may sound. Another part of the announcement is that the President ordered the firing of the Chairman of GM in the process. The White House demanded that Rick Wagoner, resign before any more federal aid would be forthcoming. This, my friends, is beyond Socialism and represents a very large leap in the direction of Communism.

Is the Obama Administration heading us down the road to Central Planning? Is this what the administration is trying to use the power of the US Government for? Is the man occupying the White House trying to set back Capitalism more than 100 years? It really is beginning to look that way. I thought President Reagan and Bush Sr., had beaten Communism once and for all in the late 1980s.

In the past few weeks, President Obama has started putting limitations on major businesses that really looks like central planning by the federal government. It all started with the limitation on executive pay for companies taking public money about six weeks ago. Then, it got really scary recently when the administration announced it would start regulating and limiting executive pay on companies that were financially sound if they were in an industry that could effect the economy as a whole or if they were too big to fail. Sounds to me like every business out there that is not a ‘mom and pop’ operation is now subject to Federal regulation and control.

Then, there was the brouhaha over the AIG bonuses. Didn’t the Obama administration approve those bonuses in the last bailout arrangement with AIG? That is what the evidence shows. Of course, this was all forgotten when the bonuses became publicized and the Obama administration had to turn its back on the AIG board. Unfortunately, for the Obama administration, it was a no win situation either way. If they agreed with the bonuses, as they initially did, the public was against him. If they came out against the bonuses which is what they ended up doing, it looks more like Central Planning.

I suggest that all of you immediately write your Congressmen and Senators and inform them that you will not allow this extreme regulation to continue. We must get tough now because there will be no turning back once it gets into place. This is a Capitalist country and must remain as such. You should also think about contacting Timothy Geithner since he seems to be the “brain” behind all of this.

However, so that it does not appear that all I do is bash the President, I must state that on foreign affairs, I have to give him a little more credit. He is planning on taking a real hard line with the Taliban. The latest news report shows that the President is planning on increasing troops in Afghanistan and has also told the Pakistani government that they must be actively involved in defeating the Taliban. Also, as of this morning, the US deployed two destroyers towards North Korea to monitor North Korea’s pending missile tests. The destroyers are equipped with the necessary equipment to take down a missile in mid-air.

Leonard Volpe, a friend of my brother’s forwarded this link to me for review. I suggest that all of you review this at your earliest convenience. http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1 This link makes a strong argument that the Bush Administration and Republicans argued to the Democratically controlled Congress the risks of Fannie Mae and Freddie Mac collapsing long before it became an issue and that the Dems did nothing about it. If this is true, then the majority of the blame for these economic crises should be on the Democratic Party.

The Wall Street Journal published an article on March 13, 2009, entitled “Obama’s Poll Numbers are falling to Earth.” In it, the newspaper makes a strong argument that Obama’s approval ratings are not as high as they appear to be on their face. In fact, it goes on to say that his approval ratings are lower than President Bush’s were at the equivalent time in his presidency in 2001. According to the Article and Rasmussen, Obama has lost all of his Republican support and a good part of his independent support and that the current trend is against him.

Well, that’s about it for now. I wish all of you the best in the coming few days. I will try to make these columns steadier in the weeks ahead as has been requested by a number of my readers.

©2009 by Frank T. DeMartini. Permission to use excerpts will be freely given upon request.

Labels: , ,


Blogger Robert Green said...

opk frank, i'll bite. No, the Obama Administration did not approve the AIG bonuses, that was Paulson and the Bush administration. and it is a bit rich to argue that the UAW needs to renegotiate its contract via government fiat but it is communism if AIG has to do the same with their bonuses.

also, asking rick wagoner to step down is not "beyond socialism". the terms socialism and communism have actual meaning. don't turn them into bromides or right wing talking point cliches. you denude them of meaning and weaken your argument. firing a CEO has nothing to do with marxism or democratic socialism in any form. it's the kind of crazy assertion idiots like michelle bachman make that literally make our discourse and our country stupider.

fannie and freddie happened well after the horse was out of the barn. the 1999 gramm-leach-bliley act was the disaster. it was bipartisan. your link is specious and wrong and makes false assertions....

there is a lot to like on your blog but why the fealty to right wing talking points? what's wrong with independent thinking? here's a hint: if someone tries to tell you that barney frank or poor people or unions were the sole reason for our economic troubles don't ever listen to that person again: they have a political agenda and the facts be damned. i don't know you particularly well but you seem very smart and are a good writer and asked for comments so that's my two cents FWIW.

March 30, 2009 at 7:01 PM  
Anonymous David Allen Jones said...

Frank: I have to agree with the previous comments. Your blog is filled with misinformation false assertions, and reeks of someone trying to push as agenda at any cost.

Have you taken a look around. You keep claiming that the sky is about to fall when is is obvious it has fallen already.

To suggest that by beginning to regulate industries that either A, have taken tax payer (read shareholder) money to bail themselves out of the mess they created or B, if they fail will take taxpayer (read shareholder) money is socialism is at best a hollow argument. In case A, the companies have no option but to come to the government for a bailout (We both know that it hurts both hearts and egos for guys like these to go on government assistance). But when they do, the government is trying to treat these companies as if they were raising money through a stock offering, a bank loan or a bond issue, i.e. 1) there are regulations and 2) and most importantly the government and taxpayers become a part of the free market / capitalist system. In this case, the failing company becomes answerable to taxpayers (same as the loan holder, bond purchaser or shareholder) and the government becomes the shareholder representative and takes on the job of managing the taxpayer's "investment". A key part of this is the government has to create and police regulations relating to the companies activities. In case B, when a company like AIG is involved (meaning a company whose going under will negatively affect not just its stakeholders but also the well being of the entire economy), and it is reveled that the reason for this company's failure is self-regulation, again the taxpayer and government assumes their same roles as shareholders and shareholder reps. Are you arguing that the government should just let these companies spend the money as they choose when it is obvious that they cannot spend their money wisely?

To argue that what the government is doing is communism is weak. In fact this is the height of the system working. You want our money, there are rules. If you do not, don't take it. If your bad behavior is negatively affecting people that have nothing to do with you, you will be forced to change your behavior if you would like to continue in business, because, you took our money.

The free market system, it has been argued, creates its own checks and balances with (as an example), banks and insurers being regulators of the operating procedures of an industry. These companies work closely with the government in setting operating procedures and in the end, the government gives its stamp of approval on procedures and then insures these procedures. The challenge is today we have companies and even industries who have discovered ways (some have entire departments devoted to this) to get around and even find loopholes in regulations. They have learned to build their businesses on this and this is what we have seen occurring. Hedge Fund operators right out of college who create a trading algorithm that makes them tens of millions of dollars each week and moves so quickly that no one has the time to consider its impact or its legality. This is only a small example. But think back to Enron where it was revealed that one man was in control of billions of dollars in trading with no regulation. It brought down an institution. This is not an isolated story. It is a near daily occurrence being pushed forward because of greed. For too long everyone has looked the other way and it has now collapsed the entire system.

What has been revealed is that all policing mechanisms (most of which were designed to avoid risk) have shown to not only be faulty, but corrupted and in some cases the very institutions (banking and insurance) charged with watching over things have proven complicit with the very companies they were supposed to police. The US government looked to their partners, the bank and the insurers (yes, the federal government has a partnership relationships with these institutions) and found that they were richer from these transactions than the companies they were policing and as a result, when the bubble burst they fell the furthest. Quite a mess.

Your response to this seems to be to just let the market correct. I agree, but to not regulate when we now know that a major cause of these problems is lack of regulation and to not demand that taxpayers (shareholders) have a say in this regulation is only silly, it is not the free market system. The shareholders determine the actions. Please pick a side as you make your arguments because your disdain for Obama is keeping you from thinking clearly.

Regarding Rick Wagoner, he is the height of what is wrong with things, Tis man presided over a company that under his watch lost $82 billion dollars and has continued to lose market share every year he has been at the helm. I have read how his proponents have measured his success, but the true test is has their company improved. Answer: No. Enough with the excuses about union problems and the Japanese. This company has had decades and billions in government assistance to fix itself. I remember when the government gave GM $1 billion dollars to develop an electric car. They created it and then pulled it and now they tout its return after Toyota has shown them that they have to get into the hybrid/electric car business. This company under his and everyone else' s watch over the past few decades has been laughable. GM should and could be a market leader. Instead it makes bad products that people do not want to buy.

The final straw is that General Motors under his watch could not put together a solvency plan for an administration that has already given them money (which at the time was a very unpopular decision) and has repeatedly said they want this company to survive. All they wanted was a plan to show how GM would do it and they get more than $15 billion dollars. Rick Wagoner failed. He is simply the wrong man for the job. Period. (of course he will walk away with his obligatory golden parachute). I point to the best example of where GM is under Rick Wagoner. Since he has been CEO, how many GM cars have you bought or even considered buying? Isn't that a Japanese car in your driveway?

With love and respect and a hope that you will be less nasty and as a result more truthful,

David Allen Jones

March 30, 2009 at 11:56 PM  
Blogger Frank T. DeMartini said...

David: I totally agree with you that he had to go. What I disagree with is the that Predisdent made him go. I feel and have felt all along that GM should be forced into bankryuptcy. That is the only way they will become competitive. I agree with most of the Administration is doing re the car companies. I just don't think the government should be allowed or permitted to make that decision. The Board of Directors should vote him out, not the President of the United States.

March 31, 2009 at 7:29 AM  
Blogger Yella said...

Don't worry, if stronger regulations are put into place the next Republican administration will just dismantel them. So take heart, you say there is no turning back if they are put in place, but not so. Reagan and Bush got rid or just didn't enforce plenty of regulations that were in place when they came into office.

March 31, 2009 at 2:40 PM  

Post a Comment

Subscribe to Post Comments [Atom]

<< Home