Posted by Steve Markowitz on June 13, 2011
Last week President Barack Obama gave one of his signature teleprompter speeches; eloquent words with little substance. As the video below shows, while trumpeting his auto industry bailouts, the President’s rhetoric included the statement; “ …. and this plant indirectly supports hundreds of other jobs right here in Toledo. After all, without you who’d eat at Chet’s?”
Nice words Mr. President, but not true. Unfortunately nobody is now eating at Chet’s. After 70 years in business they closed their doors just a few days after your speech.
Troubled that you didn’t hear about yet another snafu from your president? Then stop watching the network news. They are but an arm of Obama’s election campaign that is too busy studying Sarah Palin’s 24,000 emails to keep tabs on our President.
Posted in Bailouts, Chrysler, President Obama | Tagged: Automobile Bailout, Chet's, Obama, Ohio, Restaurant, Speech, Telepromter | Leave a Comment »
Posted by Steve Markowitz on May 25, 2011
Somewhat of a sideshow to the U.S. government’s bailout of General Motors, the Obama Administration also bailed out Chrysler in 2009. With much fanfare, Chrysler and the White House announced that the auto company will pay back $5.9 billion of the government loans this week and ahead of schedule. The reality of this repayment story is not as rosy.
Chrysler is giving the U.S. government the $5.9 billion, not from profits, but from refinancing its debt with private offerings. It seems they learned much from their association with Uncle Sam; if you don’t have real money, just print it! In addition, the U.S. government will retain a 6.6 percent stake in Chrysler.
Perhaps the greatest irony of the Chrysler bailout is the government forced marriage of it to Fiat of Italy. Obama’s dream was to have Chrysler sell the small green cars from the Italian manufacturer. Dreams, however, do not cut it in the real world. Consumers choose products based on their own desires, not those of the Progressives in Washington.
Fast forward two years. The small Fiat cars are still not being sold by Chrysler, but it has become profitable. That profit, according to Henry Payne of the Michigan View.com, comes from increased sales of Chrysler’s gas guzzling Jeep Grand Cherokee and Dodge Durango SUV that went up by 17%.
Chrysler has been so successful in selling SUV’s that Fiat plans to offer them in Italy. Hmmmm ….
Posted in Bailouts, Chrysler | Tagged: Bailout, Chrysler, Dodge Durango SUV, Fiat, Jeep Grand Cherokee, Obama | Leave a Comment »
Posted by Steve Markowitz on August 5, 2010
One of President Obama’s favorite political tactics is to declare success for programs, even in the face of conflicting data. With the $787 billion Stimulus Program, Obama promised unemployment would not exceed 8%. Even though the unemployment subsequently went to 10%; he declared victory, remarkably claiming it saved millions of jobs.
Obama is no more shy when it comes to the bailout of General Motors and Chrysler. Last week the President declared that the bailout of the U.S. auto industry was necessary to avoid a “brutal, inevitable shot” to the economy.
Here is a reality check. The Administration claims that the U.S. auto industry gained 55,000 jobs since the bankruptcies, after losing 334,000 in the previous year. Let’s assume these figures to be accurate. With an investment of about $60 billion in eh bailouts, that comes to about $1 million for each new job.
Had the government allowed GM and Chrysler go out of business, the cars that these two have instead sold would have been sold by Ford, Toyota, etc. The bailouts only served it to prop up failed companies. Some success.
Posted in Bailouts, Chrysler, General Motors, Governmental Intervention, President Obama | Tagged: Bailouts, Chrysler, General Motors, GM, Jobs, Obama, Stimulus Plan, Unemployment | Leave a Comment »
Posted by Steve Markowitz on March 10, 2010
We have all heard about the Toyota’s quality problems. Turn one on, put it in gear and it’s pot luck as to what will happen next. Just yesterday a frantic Prius driver had his vehicle go into uncontrolled acceleration near San Diego, California. This event made it on You Tube as a highway patrol car got in front of the runaway Toyota to help bring it to a stop.
With all of this bad publicity you would think Toyota’s sales would be hurt more than other auto companies. Think again. Recently figures show that the public would rather have a defective Toyota than a working Chrysler. Toyota’s sales are down 14% for the first two months of 2010, according to Edmunds.com. During that same period, Chrysler’s sales to consumers (not fleet sales) were down a whopping 44% from last year’s anemic figures.
Chrysler’s problems are a tragedy for that company and its employees. That’s the way capitalism is supposed to work. Good companies are rewarded with profits and bad companies ultimately go out of business. However, the knuckleheads in Washington have expanded this tragedy to include the American taxpayers as well. Beginning with the Bush Administration, the US government decided to bail Chrysler out. Not to be outdone, President Obama substantially increased the “investment” so that by now the America taxpayer is on the hook for over $7 billion. The way things look, Chrysler is unlikely to pay any of this money back or even survive. But heck, what’s a mere $7 billion when you are running trillion dollar deficits?
The Chrysler debacle is one more example that government bailouts do not work. Companies survive because they offer goods or services that consumers want to purchase. No amount of wasted taxpayer money will change the equation of supply and demand. Only the Progressives in Washington that never managed a business do not understand this reality. It’s time to throw the Progressives out!
Posted in Bailouts, Chrysler, Progressives | Tagged: Acceleration, Bailouts, Chrysler, Pius, Progressives, Supply & Demand, Toyota | Leave a Comment »