Old Toyota? No, up to $4,500.00!

In the United States, finding a car owner is a pretty easy task.  In fact, according to a 2006 study by the Department of Transportation, there were 250,851,833 registered vehicles in America.  A very large percentage of these owners also vote so it would be a natural connection to draw a line between car owners, voters, and politicians eager to curry their favor.  As such, the Cash for Clunkers bill is making its way through Congress right now.  The bill, if it becomes law, will surely change from its present form but would, in essence, give an owner of a vehicle registered for at least one year up to $4,500.00 from the U.S. government if traded in on a new, more fuel efficient model.  The money to pay for this program, an estimated $7 billion, would come from the already-signed $787 billion stimulus program signed into law by President Obama earlier this year.

Supporters of this bill maintain that it will reduce American’s dependence upon foreign oil by allowing consumers to buy vehicles that get better mileage than their current cars do, will stimulate automobile sales at a time of decreasing sales, and will remove “gross polluting” vehicles from circulation.   “Cash for Clunkers” has already been tried in Germany, in fact, and some of what supporters claim has, in fact, happened.  The plan has boosted car sales in Germany and business for junkyards (cars turned in under the program must be scrapped to qualify for the money).  As a result of the program (in Germany it was more modest adding up to only $3,320.00 in maximum per vehicle) sales in April of 2009 were up 18% versus the year before.

On the negative side, careful study of the program showed that up to 75% of the money went towards people who would have bought a car anyway and, during the same time the program was in force, retail sales dropped 1.5% that German stores blamed on consumers’ shifting their spending from products to vehicles in order to take advantage of the program.

So is this program right for the United States and what side-effects can be expected from it?

As somebody who has worked in automotive sales for the previous six years I know the industry fairly well from an insider’s perspective.  My experience has been that when a special incentive is offered (either by a manufacturer, a bank, or a government) car dealers suffer from the famine-feast-famine syndrome.  What is this?  Basically, when consumers catch wind of a possibly upcoming special program they will delay their purchases (the famine part) and sales dry up.  Once the program is in force there is an orgy of spending as consumers seek to cash in on the free money.  Once the program ends or all of the consumers who could have bought did buy sales taper off to nothing as those customers who would have bought cars over the next 1-6 months are pulled out of the market early.  In short, the side effects of such programs can often be worse than what the condition was before as the normal buying cycle is altered.

One effect of this program which was definitely felt in Germany was where German tax money was going.  Germans build many fine automobiles but most of them are not known for being very fuel efficient (Porsche, BMW, and Mercedes-Benz come to mind).  So when Germans were given their $3,320.00 credit many of them took it to foreign brands such as Ford, Opel, and Renault.  Many economists questioned whether using German tax money to support company’s from other countries was wise.  Many Volkswagen dealers did benefit from the program, but companies like Porsche did not (Porsche said not one of its cars was sold through the program).

In the United States, one of the biggest arguments in favor of this program is the environmental benefits it will have (replacing gas guzzlers with fuel sippers).  Unforuntately, as with any government-developed program, special interests have swooped in to seek maximum benefit for themselves and the Cash for Clunkers bill is getting more and more watered down as regards fuel efficiency standards.  For example, trade in a car and buy a new one that gets only 4mpg more and you get $3,500.00 but for SUVs and trucks you only need to improve your mileage by 2mpg, not a difficult task.

In theory, the program could produce many benefits for consumers, automotive sales people (not the ones at high line dealers generally though), automakers, and junkyard operators but, in reality, this program is more likely to create the famine-feast-famine cycle mentioned above.

 Harrison @ Just Politics..?

The "famous" handshake.

The Obama-Chavez handshake got a lot of press.  The Left seemed pleased, the Right enraged.  Conservatives probably saw all of the “hard work” former President George W. Bush did taking a tough stand against dictators as having been given away so early into a new administration.  If you believe that Bush’s position was a wise one, it is easy to see why Conservatives would feel this way.  After all, people like Chavez are repugnant and, like the leaders of Iran and North Korea, they are not too friendly towards the freedoms that Americans hold dear.  Chavez did, after all, shut down a television station because they didn’t support his policies as well as many other things.

But is Obama’s embracing of these people really so terrible?  The short answer is: we won’t know for many years.

Barack Obama campaigned on bringing a change to American foreign policy and, indeed, he has done so.  George W. Bush’s policy of not talking to people like the Iranian president may have been morally justified but was it wise?  In shutting out people like Iran’s president Bush prevented any sort of progress from happening unless it started on their end first.  These leaders have staked their reputation on opposing America at every turn.  Indeed, it has become the red meat that they base their support on even as their economies crumble, all the while blaming America so as to deflect blame from their own shortcomings.  In embracing these leaders and showing that the United States does not necessarily view them as being evil President Obama does remove some of this power.  This is the good part.  The bad part is that we will not know for several years whether this policy of openness will result in our “enemies” taking advantage of us because they view communication as a sign of weakness.

It seems that critics like to point to President Jimmy Carter’s naive view of engagement as the “Obama model” while holding up President Ronald Reagan’s hardline stance as being the gold standard.  After all, Jimmy Carter didn’t do too well with foreign leaders while he was in office.  The Shah of Iran was deposed and a more brutal regime replaced him and the Soviet Union invaded Afghanistan which led to the Taliban and, not long after, al Qaeda while Ronald Reagan’s “Evil Empire” stance led to the bankruptcy of the Soviet Union in 1989.  But times have changed somewhat.

New best friends?

The Soviet Union was, like the United States, a superpower with many of the same abilities and goals as the United States in terms of needing to project power whereas countries such as North Korea, Iran, and Venezuela do not have the size nor the projection of power that the Soviet Union had.  So the comparisons are not “apples to apples” although certainly all four countries did not have leadership which was inclined towards friendly relations with the United States. 

One thing we have seen under the “Bush Doctrine” of shunning unpleasant regimes is that these leaders have struck up alliances with one another so as to attempt to either counter-balance or make the U.S. believe there is a counter-balance to our friendly relationships.   Bush called this the “Axis of Evil” and, while I believe he was correct, his strategy did not produce any regime change in those countries.  If anything, he allowed those leaders to show that their hardened views of the United States were justified.

Right now President Obama is still in his honeymoon stage with American voters and world leaders.  This period cannot last once he begins to make defining decisions regarding Pakistan, Israel, Iran, and Russia.  President Obama was not, despite his vast amounts of charm, able to secure any real concessions from European leaders during the recent G20 summit which was a telling example of how, even with our “friends” it is not really about “cowboy” diplomacy under Bush versus Obama’s “Apology Tour” as, if it were, then countries like Germany and France would have agreed to put their troops in harm’s way in Afghanistan or accept Gitmo detainees.

So if our “friends” didn’t feel like helping President Obama out how will our “enemies” do better?  This is the central issue in Obama’s approach towards foreign policy.  Relationships take time to blosom and so do results but leaders such as Chavez and Ahmadinejad rule with a different set of responsibilities towards their “voters” than to leaders such as Sarkozy and Merkel.  Indeed, Chavez and Ahmadinejad have less responsibility towards following the wills of their people so it appears unlikely that they will change their behavior.

While it is too early to tell what the results will be of President Obama’s efforts the evidence suggests that not much will really change even if the volume of hate may decrease.

President Obama is rolling the dice on not being seen as a weakling when it comes towards standing up for the interests of the United States but, then again, much could be said of George W. Bush when he cut off many countries from his speed dial.

- Harrison @ Just Politics..?

$152 billion is the total tally in government loans that insurance giant American International Group (AIG) accumulated over the past eight months and 90% the tax that a congressional bill proposes levying on bonuses for employees whose companies received more than $5 billion in federal bailout money.

328-93 was the final vote on that measure in the House of Representatives last Monday, and December 10th was the date that the bill’s catalyst—the story about continued AIG bonuses—broke. Fifteen is the number of weeks that President Obama allowed populist anger at Wall St. spending to mature before he forced Congress into action, and 15% is the amount his national approval rating dropped over that period.

Rick Wagoner is the name of the former General Motors (GM) CEO who was asked to resign by Mr Obama’s automobile task-force during a meeting last Friday—the same day that Mr Obama met with chief-executives from Bank of America, Wells Fargo, and Morgan Stanley, criticizing them for failing to grasp the financial crisis’ magnitude. That day, March 28th—when Mr Obama decidedly took the reins of Detroit and downtown Manhattan—will mark the president’s shift in policy toward bailed-out American companies from financially interventionist to outwardly managerial.

Presidents from Monroe to Obama have used Signing Statements.

For my last article I explored the issue of Executive Orders and the Executive Branch.  The bookend to this subject is something a bit more controversial: Signing Statements.  According to The American Presidency Project, Signing Statements are:

“Often signing statements merely comment on the bill signed, saying that it is good legislation or meets some pressing needs.  The more controversial statements involve claims by presidents that they believe some part of the legislation is unconstitutional and therefore they intend to ignore it or to implement it only in ways they believe is constitutional.”

Just as Executive Orders have not always been known as such, the same is true with Signing Statements.  In 1822 President James Monroe issued what we today call a Signing Statement saying that “he had resolved what he saw as a confusion in the law in a way that the thought was consistent with his constitutional authority.”

Pretty nifty graphic there, eh? I figured with all the talk about “isms” and their misuses and abuses in the media, government, and the blogosphere,  I would cover them here.

If you don’t know what I’m talking about, they are capitalism, communism, fascism, marxism, and socialism. Please note, these are in alphabetical order - so as not to imply favoritism to any of these philosophies.  While everyone I have come across seems to understand the basic principles behind capitalism (whether they agree or disagree) the primary confusion seems to be between the other four.  There are some similarities, but they are distinct philosophies.

The “isms” will be presented in alphabetical order as well.  The way I will lay this out is to first give you the actual definition of the term and I will follow that up with a brief discussion regarding the origins and the individuals instrumental for advancing these philosophies.

I will give you fair warning - this is a fairly lengthy post.  However, it is well worth your time to read it.  I guarantee you will learn more about these “isms” than you ever thought you knew.  I guarantee you will have a clearer understanding of the “isms” and will be able to use them in a more scholarly manner and will have the tools necessary to correct those who only think they understand them.

Capitalism as defined by Merriam-Webster’s is:

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.