People who purchased cars recently under this cash for clunkers program may find out a little something they weren't expecting: that $4,500 rebate from the government taxpayers is taxable.

Not only are you taxed once, but this blogger points out that depending on which state you live in, you could be taxed twice on clunker rebates. "Specifically, you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500!) and what's worse those states that tax income (that would be most of them!) might wind up counting this as income for state income tax purposes too, effectively taxing you twice."

Even when the government tries to kiss you, it is just a prelude to a good screwing.

Well, say AMF to the cash for clunkers. As of Monday the program is history. Unfortunately for Barack Obama and the Democrats, it has left a pretty bad taste in people's mouths. This coincides with a debate over government running our healthcare system. Maybe the administration should have thought about the implications of this program not being a boondoggle, considering its push to run healthcare. Here are just a few of the problems with the cash for clunkers:

--Congress--relying on auto industry forecasts that the program wouldn't have a major effect on moribund sales--deeply underestimated how many people would be lured to dealerships by rebates of up to $4,500. Initially, lawmakers committed just $1 billion, an amount that was burned through in just a few weeks.

--Transportation Department officials, presented with just 30 days to get the program up and running, didn't set aside enough staff or resources and were overwhelmed by the heavy response from consumers. Systems set up to handle and reimburse dealer claims were swamped.

--Government rules to prevent fraud created paperwork requirements that many dealers didn't fully understand.

--Hungry for sales, dealers made Cash for Clunkers deals weeks in advance even though they were advised against it. This created a big backlog the moment the program officially began. And many are still filing bad paperwork that is holding up their claims, despite repeated government attempts to clear up the confusion.

Long story short? The government was ill-prepared and it has little incentive to achieve anything in a timely manner. Take New Mexico, for example. The federal government owes dealers around the state more than $3.6 million. Guess how much it has actually paid? The federal government has only sent three checks totally $14,000. Who knows when or if those dealers will get the money.

Yeah ... and you trust these people to manage your health care.

Things have gotten so bad with this cash for clunkers program that car dealers in New York have withdrawn from the program. They are frustrated by the fact that they have yet to be reimbursed by the federal government. Keep in mind that only 2% of cash for clunkers payments have been doled out. A lot of these auto dealers genuinely believe that they will never be repaid by the government. Others are still holding on to hope, but they can't wait any longer because they don't have any more cash. Imagine that. The government would never understand a concept like this ... how to run a business when you have to meet a bottom line.

Mark Schienberg, president of the Greater New York Automobile Dealers Association says, "The program is a great program in the sense that it's creating a lot of floor traffic that a lot of dealers haven't seen in a long time ... But it's in the hands of this enormous bureaucracy and regulatory agency ... If they don't get out of their own way, this program is going to be a huge failure."

And you think that this same government can run your healthcare.

Well look at what we have here .. a government program that couldn't be properly executed. I'm sure you've been following the giant "oops" that is this "cash for clunkers" deal. The first sign that things were going bad happened when the EPA decided to change which cars were eligible for the program AFTER it had already started. Then the $1 billion allotted to the program quickly disappeared. Then we have government computers that couldn't handle the work. Finally cash-for-clunkers became the clunker.

So what's the logical next step? Let's ask for more money! So the House voted on Friday to give the program another $2 billion. Now it is on to the Senate where it may not be as easy to pass. If it doesn't pass in the Senate, Transportation Secretary Ray Lahood says that the government would probably then kill the program. Meanwhile, car dealerships are left to figure out what to do.

Are you paying attention to this? The whole cash-for-clunkers bit shut down last week because of government bureaucracy and a little problem about running out of money. For generations car salesmen in every corner of this country have been handling the paperwork required to trade in an old car for a new one with ease. After all, how many of you have ever visited a car dealer wanting to trade in a clunker on a new car, only to be told to go away because they just can't process your paperwork.

But ... put government into the equation and what happens? All hell breaks loose, that's what happens. The Imperial Federal Government of the United States interposed federal red tape into the middle of the buyer-used car salesman transaction and everything ground to a screaming halt. How much paper and red tape? Try 130 pages of regulations for a start. How many car salesmen do you think have to deal with a 130-page rule book when they take a car in on trade for a new one.

Now John McCain is likely to filibuster any proposal in the Senate for new money. The Republicans are playing this one up as just another example of government's inability to run anything efficiently. Considering the current healthcare debate, this does not bode well for the Obama administration that wants the government to be in charge of your healthcare. Jim DeMint is one of those Senators who are drawing the comparison. He says, "The federal government went bankrupt in one week in the used-car business, and now they want to run our health care system ... This is crazy to try to rush this thing through again while they're trying to rush through health care, and they want to get on to cap-and-trade electricity tax. We've got to slow this thing down."

OK ... so the government screwed things up royally when politicians inserted government into car sales. Just what in the hell do you think is going to happen when we insert even more government into your relationship with your doctor? If government bureaucracy screws up a car sale, think of what it is going to do for a treatment plan for your cancer.

If you don't understand the trouble that's coming ... please burn your voter registration card.

General Motors just emerged from bankruptcy after receiving billions of dollars in bailout funds. What does it want to do now? Sell perfume. GM will launch the Cadillac fragrance for men this fall to mark its 100th anniversary. The fragrance license is held by a cosmetics company based in Dubai. Retail price will cost you $73 a bottle. Now apparently this isn't the first time GM has licensed fragrances. There are also smells for Hummer, Chevrolet and Corvette. A Beauty Contact director says, "Cadillac, the new fragrance for men is part of the recent Cadillac renaissance: Hot new products and redesigns that capture the mantra of life, liberty and the pursuit."

We're in an economic crisis, and GM is going to sell smelly for $73 a bottle? You let AIG entertain top sales agents and all hell breaks loose. Let some one pay a bonus to an executive for a job well done ... Armageddon. But the government-owned auto company is going to stink up Cadillac drivers and all is fine.

Just for fun, describe what you think the scents for Cadillac, Hummer, Chevrolet and Corvette should be like.Try to keep it clean, mmmkay? --ww 

Here's how the story goes ... Chrysler and GM are forced to the brink of collapse due to declining sales and increased union influence on wages and benefits. The federal government decides that these companies are "too big to fail" and decides to give them billions of taxpayer dollars to keep them afloat. They go bankrupt anyway. They are forced to restructure their business plans. Part of that restructuring includes closing down thousands of dealerships across the country.

This is where politics gets involved. Lawmakers in Congress start to get calls from their constituents. These voters are upset that their local dealership is being closed down. So politicians start to go up to bat to save dealerships in their districts or states from closing. Some politicians, like Rep. Steve LaTourette, a Republican from Ohio, go as far as to propose an amendment forcing the auto companies to reinstate these dealerships and franchise agreements. Chrysler and GM get upset, saying that this would "jeopardize the viability" of their new companies and complicate the emergence from bankruptcy.

This is what you get when politics gets involved in the operation of private businesses. The people charged with the responsibility for the survival of these businesses have to do battle with political hacks who have no business experience. These politicians have one interest: POWER. Their power depends on staying in office. That depends on votes. If their constituents get upset because of a bona fide business decision to shut down a dealership, then the politician steps in. Votes over business sense.

Your government at work, folks.

Despite Obama's warning that blocking the Chrysler deal would have "grave consequences" ... The Supreme Court granted the request to hold the sale of Chrysler to Italy's Fiat. Justice Ruth Bader Ginsburg said that order of the bankruptcy judge allowing the sale "are stayed pending further order of the undersigned or of the court." Fiat can walk away from the sale if it doesn't close by June 15th.

One of the issues here is the brilliant idea to stiff the secured interest of Chrysler bondholders in favor of Obama's union buddies.

Maybe we ought to let Chrysler decide what is best, rather than come to a hasty agreement in the middle of the night in order to comply with the Obama agenda.

All of the sudden, Congressional Democrats are realizing the implications of this government takeover of GM. Why? Because they are starting to hear from constituents who aren't too happy about the fact that the government is deciding which dealerships will be put out of businesses. So now that these politicians have to worry about votes, they express "growing concern" to Obama about the closure of GM and Chrysler dealerships. Here, for your pleasure, is a letter from House Majority Leader Steny H. Hoyer and Reps. Chris Van Hollen and Daniel Maffei.

Dear President Obama:

We are writing to express our concerns about General Motors' and Chrysler's decision to close profitable automobile dealerships across the country, and urge you to ask GM and Chrysler to delay final action on proposed closures pending further review of the decision to consolidate dealerships and the process by which Chrysler and GM selected the dealerships to close.

Closing these dealerships will put over 100,000 jobs at risk at a time when our country is shedding jobs at an alarming rate. We also question the criteria being used to determine which dealerships should be closed and the fundamental fairness involved in this effort. It is our view that the market rather than leaving it up to the manufacturers whose poor leadership contributed to their demise. Furthermore, we believe car dealers will be key players in any effort to revive the American auto industry.

We believe the dealerships are one of the auto industry's key sources of strength and the manufacturers should continue to honor their agreements and contracts. The dealerships, and their more than 1 million employees, form personal relationships with customers that often contribute to brand loyalty and will be key to General Motors' and Chrysler's recovery following this economic downturn. While we understand the desire to reduce the number of unprofitable dealerships, no one has yet sufficiently explained the need to close profitable dealerships.

We recognize that efforts by your Auto Task Force prevented the total liquidation of General Motors and Chrysler, as well as their dealership networks. We commend your efforts to help these businesses survive these challenging economic times.

However, we are concerned that manufacturers are closing profitable dealerships to circumvent current contracts which could require expensive buy-outs under normal conditions. We are also concerned about allegations that dealers that have previously stood up for their rights against the manufacturers are being targeted by these closures. We believe that the forced closures of profitable dealerships needs to be scrutinized by the Task Force to prevent additional future financial loses to General Motors and Chrysler and job loses across the United States

We may consider legislative proposals to ensure that dealers and their employees are treated fairly, and we look forward to your timely response.

Look, folks. This is just the beginning. Obama is promoting a fascist economic system in the country. OK .. I know you're government educated and you don't really understand economic fascism. Here's your primer:

• An economic system where both industry and business is owned and controlled by the government ..... Socialism.
• An economic system where industry and business is privately owned, but controlled by the government ..... Fascism.
• An economic system where industry and business is privately owned an privately controlled. .... Free enterprise.

See if this is taught in your local government school.

By the time this nuze is posted, GM will have filed for bankruptcy protection. Sadly, there are more Americans that can explain the intimate details of the American Idol finalists, but they cannot explain why GM is going bankrupt or what effect this will have on our economy and the future of American capitalism.

This arranged bankruptcy filing essentially hands GM over to the government. When all is said and done, the government will own 72.5% of General Motors. The United Auto Workers union will own another 17.5% of General Motors. Major bondholders will essentially own 10% of the company. GM stock will probably not be traded for at least six to 18 months. If you are a current GM stockholder, say goodbye to your shares. The taxpayers will make back the $40 billion loaned to GM if shares of the new GM increase dramatically in value. This is change you can believe in.

Sometime this morning, around 11:30 EST, we will be addressed by GM's CEO Barack Obama. The Looter-In-Chief. He will explain why GM's bankruptcy and government ownership will be the best route for this nation. He will do it in a way so that the government educated will understand just enough to nod their heads in agreement and then go back to reading their People magazines. They won't question the Constitutionality of it all. They won't question the free market implications. All they need to know is that their right to watch a big screen TV hasn't been "taken" away from them.

By the way, if we had Mitt Romney in charge right now, GM and Chrysler would have been pushed into bankruptcy months ago. But either way, he says that now the government should immediately turn around and distribute its 72.5% stake to the taxpayers and the UAW should do the same for its members.

How do you like the idea of the Imperial Federal Government of the United States owning ALL of General Motors? Well, it could happen! Yeah, I know ... that's pure socialism. But look who's in the White House! A typical Marxist grad student is running the show. Don't act surprised.

According to Reuters:

General Motors' plan for a bankruptcy filing involves a quick sale of the company's healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.

The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.

The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.

The government's plans include giving stakes in the new company to GM's union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company's plans.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

But when it comes to the unions, UAW president Ron Gettelfinger says that he plans to sell the union's stake in Chrysler and GM in order to raise cash to cover retiree healthcare costs.

I'm looking for the part where the government is required to privatize. If you see it, let me know ... or is General Motors, along with Chrysler, going to be a ward of the state.

By the way ... Yesterday PrezBO announced his plans for a 39-mile-per-gallon corporate fuel economy average by 2016. Not going to happen. Any American automaker who tries to meet this goal is going to have to sell so many tiny and unsafe high-mileage cars that it will be virtually impossible for them to be profitable without adding thousands to the price of the models that people actually want to buy. This is what you get in a government-run economy. Products that people don't want to buy, but that please the snot out of special interest groups like the Sierra Club.

A listener pointed me to this letter from a Dodge dealer down in Florida. Thought you may enjoy ....

My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.

Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.

HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?

THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY

This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.

HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?

I beseech your help, and look forward to your reply. Thank you.

Sincerely,

George C. Joseph
President & Owner
Sunshine Dodge-Isuzu

Barack Obama's auto task force has a difficult choice to make ... will it bend to union demands and require GM to keep more jobs in the US or will it allow GM to expand its operations in countries with cheaper labor?

After pouring billions of OUR CHILDREN'S DOLLARS into GM, the fact of the matter is that it can't survive while it is beholden to the United Auto Workers. This means moving more manufacturing (and therefore jobs) overseas. Needless to say, the unions are less than happy. They feel as they have a right to these jobs! How dare GM try and make money by paying people to do the same job for less money!

The current outline for GM would roughly double the number of cars built in Mexico, China and South Korea. This makes absolute sense. In the United States, GM pays UAW workers about $54 an hour with benefits. However in South Korea, GM would pay its workers less than half of that at $22 an hour. In Mexico, workers could earn about $10 an hour and in China that figure could be as low as $3 an hour.

A UAW official says, "My hope is that the government is like the UAW: protectors of the people." I'm sorry but GM is not in the business of protecting the people. It is in the business of making cars. As for the UAW .. it isn't in the business of protecting people either .. unless they're UAW union members.

When I'm thinking about these autoworkers one image sticks in my mind. When is the last time you saw an autoworker wearing a windbreaker or hat with just a Ford, Chevy or Chrysler logo on it? I'm sure they're out there .. but I haven't seen one. Instead they're always wearing their clothing emblazoned with the UAW logo .. UAW Local this, that and the other thing. Who are they working for? Ask them and they'll point to their union logo. Seems a lot of them forgot that the union doesn't sign their paychecks.

So what is it going to be, Obama? Are you going to let GM survive by allowing it to expand its overseas production with less costs, or are you going to bow to the labor unions and force GM to make cars in the United States?

You knew this one was coming. Chrysler is not going to repay the taxpayers more than $7 billion it received in the form of a bailout. It has been confirmed with the Obama administration that this is included as part of its bankruptcy filing.

So there you go. Not only do secured creditors get the hind teat ... but so do the taxpayers. Who gets the front? The very union workers who helped destroy the American automobile industry. How wonderful. That's $7 billion ... gone. Poof. Never to be seen again by you or your children or grandchildren.

Yesterday I gave you a Boortz economic lesson in an attempt to explain what the Barack Obama administration is trying to pull in this Chrysler bankruptcy. The latest on this story ... Thomas Lauria, a lawyer for top creditors, has officially filed a motion to stop the Chrysler bankruptcy. Lauria claims that the Obama administration has violated the Constitution by trying to devalue the senior creditors' holdings on behalf of junior creditors. What does Lauria base this on? Something called the 5th Amendment. Maybe you have heard of it. Just in case, here is a little reminder:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

But wait ... as they say ... there's more! Lauria, who represents the group referred to as the non-TARP lenders, is going to ask that the bankruptcy court keep the names of his client confidential. Why would that be? Because they have been receiving threats. You can bet that some of the threats are coming from union members. These union goons like the idea of their pension debts being given priority to Chrysler's secured lenders, and I think we all know what union goons do when something happens they don't like. There was a time not too long ago when the Bureau of Alcohol, Tobacco and Firearms noted that the number one illegal use of explosives in the United States came at the hands of union members engaged in work actions.

But there's another group threatening the secured non-TARP creditors. That would be the White House. Lauria and others have claimed that people within the Obama administration have made it clear that if any of these secured lenders get in the way of Obama's gift to the unions the White House will work to destroy their reputation. Now the White House denies this. What would you expect? But listen to the language ... Obama has attacked these people in public as being "vultures" and has painted them as evil capitalists who don't want to stand by the families of Chrysler workers. If he'll do this in public, what do you think his attack dogs will do in private?

Even if you think Obama hung the moon; even if you're now calling him the best president this country ever had; you just have to recognize the danger in the precedent that's been set here. The United Auto Workers are getting priority for their unsecured Chrysler debt simply because they are political powerful. Now just how is that going to work out for us in the future? Do you want to live in a financial world where lenders base lending decision in part on the political prominence of the borrower?

Giving unsecured creditors priority over secured lenders in bankruptcy proceedings .. now that's change you can believe in.

You've read, no doubt, about the Chrysler bankruptcy. Have you read, though, of how Obama used his power as president to demonize and browbeat some of the people to whom Chrysler owed money? I've been saying for years that despotic politicians depend on the ignorance of the American people to work their schemes and protect their positions of privilege and power. The behind the scenes goings-on are a brilliant case in point.

Now I'm not trying to insult anyone here, but permit me to couch this bit in terms that the victims (though they aren't aware of their victimhood) of our government education system can grasp. Getting down to basics is necessary for as many people as possible to understand how our anti-capitalist president has possibly turned business lending on its ear. If you think I'm stating the case wrongly here you're welcome to chime in with a comment. (You do see the "comments" link, don't you?)

There are two kinds of people in the world: People who divide the people in this world into two types, and those who don't. There are also two types of loans. You have secured loans, and unsecured loans. The terms under which you borrow or lend the money will depend on large part whether the loan is secured or unsecured. The difference: With a secured loan the borrower has put up something of value that he owns as security to ensure his payment. If he doesn't pay, the lender can perfect his security interest on that item of value. The most common examples would be real estate loans and car loans. You put up either the car or your house as security for the loan, and if you don't pay the lender sends out some huge tattooed menace to repossess your car or a pot bellied Sheriff with aviator sunglasses to foreclose on your home.

If you put up nothing but your good reputation and credit history as security for the loan, well that would make your loan unsecured.  Good reputations and credit histories tend to be worthless when economic times get rough. 

When you're lending other people's money and you owe those people a  duty to do everything you can to make sure the loan is paid back, with interest.  In many cases the lender is actually a corporation and the corporate officers loaning the corporate money have a responsibility to corporate shareholders to keep their investments safe. 

Loans, like talk show hosts, have a pecking order. (I'm one of the smaller peckers out there). When a borrower goes Tango Uniform the lenders line up to get their money out of the carcass ... usually through a bankruptcy procedure. The secured lenders go first. The unsecured creditors go last. This is as it should be. What good is getting security for your loan if you know that when you get to a liquidation of your borrower through bankruptcy you're going to have to wait until some unsecured lenders get made whole. Let's expand this a bit. Let's say a corporation or business comes to you for a loan. It doesn't matter for what: Maybe they want to expand, add jobs, develop a new product. Doesn't matter. They want money; you have money ... and you're trying to make a deal. You, the lender, have a responsibility to your shareholders, so you're going to insist on security for the loan. No security - no loan. You're also going to want to know that in the event of a meltdown you loan is going to be given priority over all of the unsecured loans your borrow may have. Without that assurance you're not likely to make the loan.

OK .. why all of these basics? That would be because they all come into play in this Chrysler bankruptcy. The two warring parties here were bondholders and unions. Chrysler owes money to bondholders. Those loans are secured. Chrysler also owns money to union pension funds. Those obligations are not secured. Enter, politics. Unions are a lot more important to a Democrat president than are bondholders. After all, bondholders are mere investors ... and they are more likely to be wealthy than the retired union members. That, of course, makes them evil.

So ... this appears to be how the Chrysler bankruptcy is going to shake out. The union pension funds are going to get priority over the bondholders. In other words, unsecured creditors will get preference over secured lenders. Cats and dogs sleeping together. Not only will the unsecured union pension plans get priority, Obama and his minions did no small amount of demonizing the secured lenders in the process.

Some of the secured lenders - those not under the thumb of the Obama administration because they took TARP funds - balked at Obama's plan. They were secured Chrysler lenders, and secured lenders they wished to remain. Obama demagogued these secured lenders by saying "I stand with Chrysler's employees and their families and communities" and not "those who held out when everybody else is making sacrifices." So there you go. If you want to enforce your security interest - if you want your money back -- you're against Chrysler's employees and families. Everyone else is making sacrifices and you don't want to. Hey ... wait a minute here. Are we forgetting that these people have obligations to their shareholders?

OppenheimerFunds is one of those secured creditors. They issued a statement saying "Our holdings in secured Chrysler debt are entitled to priority in long-established U.S. Bankruptcy law, and we are obligated to our fund shareholders to support agreements that respect these laws." How do you go to your shareholders and tell them that you've just flushed a bunch of their money down the crapper because you wanted to stand by Chrysler's families and communities? Other liberals also have a name for the secured creditors. They call them "vultures." You'll also hear the word "greedy" Obama called them "speculators," a word that doesn't carry a positive image with the dumb masses. That's Obama for you. Investors are evil. They're "speculators!" They're greedy because they want their loans repaid. Only in the anti-capitalist mind of a liberal moonbat would you hear such asinine language.

Yesterday afternoon we got news that the Obama White House threatened to destroy the reputation of a particular investment bank if they didn't cave in and go along with Obama's bankruptcy plan for Chrysler. How? By calling them traitors and vultures? That's been done already.

OK ... so what's going to happen now? Two things:

First: Some of Chrysler's secured creditors are going to object to the Obama-negotiated bankruptcy plan. They will fulfill their obligation to their shareholders, as they should, and try to get the favored treatment from the bankruptcy court usually reserved for secured creditors; and for standing by the rule-of-law they will be called every but Children of God. The anti-capitalist crowd will use these creditor hold-outs to demonize the financial sector in general and to promote the cause of even more government control.

Second: Lenders are going to be very careful in their lending decisions. What lender, for instance, will want to buy any bonds in any company that might end up a protectorate of the federal government? Who would want to loan that company any money? You want security for your loan, and you don't want political hacks demagoguing you if you actually try to foreclose on your security interest. Under this standard businesses - especially businesses in a wee bit of trouble - are going to have a rougher time getting needed financing.

Here's a scenario from you. A manufacturing concern is in trouble. If they don't get some financial help to make it through a rough spot they're going to tank, and about 2000 workers are going to lose their jobs. The manufacturing company goes to an investment bank and seeks a loan. As security for the loan the manufacturing company offers a lien on its buildings, corporate aircraft and manufacturing equipment. The lender, though, says no. The company is in trouble and there is a possibility that the loan might not be repaid. Under the new Obama scenario the government might step in and prevent the lender from foreclosing on its security interest in land, buildings and equipment. The government might decide that all of the company's assets should be sold in bankruptcy and the funds dedicated to the unsecured pension obligations to the 2000 workers. Result? Since the normal rules about secured and unsecured credit don't really apply any more, the lender declines the loan. We'll be in a situation where the best way for a company to get a loan is to prove to the lender that they don't need the money. This will all work out well for Obama, of course, because if the ailing company can't get the private sector financing ... where is there to go? Why, to the government, of course!

OK ... a bit wordy. But you need to know just how having a dedicated anti-capitalist in office works. Good for those who love government. For those who don't ... not so good.

Barack Obama has decided to help out the auto industry by having the government purchase 17,600 new US-made fuel-efficient cars. These are cars that the government more than likely doesn't need. But they will be purchased in order to boost the auto industry. Is this a long term boost? A true economic stimulus? Absolutely not. It is nothing but a government gimmick. The government is not really buying these cars. The government doesn't have the money. The government is borrowing the money and sticking you, the taxpayers, for the payments. All this to make some sort of a political point about green cars.

Imagine what the American taxpayers could do with $285 million. You could spend it on cars that you will actually want! Not cars that the government wants you to want. Buying what you want is a free market exercise. Buying what the government wants you to buy - or the government buying it in your name --- well, that's certainly not free enterprise.

The government decides what you want. More change you can believe in.

You are going to love this. We've known for a while now that Barack Obama has had a vision for the auto companies long before he'd be able to use this economic crisis as an excuse to execute his plan. And that vision is to require the auto industry to build cars that would please the environmentalists, if not the consumers.

The White House has released a report of General Motors that says the company's restructuring plan will not lead to a stronger company. And why is this? Because GM's proposal relies heavily on advanced, fuel-efficient cars, which are not commercially viable. Cars like the Chevy Volt, which is too expensive to be commercially successful.

So Obama's Auto Task Force comes out and says that GM's restructuring plan isn't viable because they are doing what President Obama wants them to do: build a "green" auto industry. According to this task force, the plan is based on economic assumptions are leave little room for error.

And even if GM succeeds in making and selling "green" cars ... the task force says that "it will not lead to a viable company because it will not be able to make enough money to weather future economic slowdowns ... Even if the projected plan is achieved, the cash flow forecast is quite modest, leaving the company little margin for error in what will be a very difficult turnaround."

Suspiciously missing from the task force's report is the crushing costs of GM's labor force. Keep in mind that GM was required, under the original terms of the bailout, to modify labor contracts. And the task force acknowledges that GM has failed to successfully renegotiate these contracts, but does not cite it as a reason as to why GM's plan is not viable.

Either way, there is one simple way to renegotiate these union contracts. Bankruptcy. Obama is using the term "structured bankruptcy." What would you like to wager that any Obama-approved "structured bankruptcy" contains some pretty strong protections for the unions. Democrats aren't quite ready to eat their own.

Starting today the United States government will stand behind your warranty. That means that the United States taxpayers are guaranteeing your warranty. Excuse me, but doesn't this take some type of legislation? How does the president suddenly decide that all GM, Ford and Chrysler warranties are to be guaranteed by taxpayers?

Excuse me .. and I know that this is old fashioned thinking ... but I don't seem to remember the congress passing a law saying that the taxpayers could guarantee automobile warranties for a select number of owners. Maybe Herman Cain was doing my show that day. But .. Barack is King right now .. and all he really has to do is say it, and it's law.

Wait! There's more! Aren't we going to have to establish a grand new government bureaucracy to handle all of these warranties? And once that government bureaucracy is established, how many of you think it will ever be dissolved? How many of you think that we will ever reach the point where warranties on cars manufactured in America aren't guaranteed by the taxpayers? Who is going to set the warranty terms? The government or the automakers? Will we have politicians campaigning on the promise to extend and expand car warranties? How about "If you vote for so-and-so, you're going to have to pay to repair your own car."

We are seeing the beginning of a grand new entitlement program here.

Yesterday we got Obama's official plan for the auto industry. Step #1: Fire the CEO of General Motors. Step #2: Push Chrysler toward a merger with an Italian car company. Step #3: Threaten bankruptcy for both companies.

Wall Street didn't seem to like the administration's response. The Dow responded remarkably ... sinking nearly 4%. I guess I would have lost confidence too, if I realized that the government could oust any CEO at will if the president thinks it is the right thing to do. In fact, some experts are saying that this is the most significant presidential intervention in the private sector since 1952 and Harry Truman with the steel industry.

So it is clearly Obama's goal to re-make the auto industry the way he wants it to be, not based on profitability or the demand of the market place. He says, "I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars ... our auto industry is not moving in the right direction fast enough to succeed." In other words .. Obama gets to decide the right direction. Instead of making cars that the consumers want, Obama will decree that the automakers will make cars that HE wants. If they don't move in that direction fast enough he'll just fire one team and hire another.

Well it turns out that this is a direction that Barack Obama has envisioned for a while .. and like his chief of staff says, "never let a good crisis go to waste." In Obama's 2006 autobiography, The Audacity Of Hope, here's what he had to say about his vision for the auto industry:

The bottom line is that fuel-efficient cars and alternative fuels like E85, a fuel formulated with 85 percent ethanol, represent the future of the auto industry. It is a future American car companies can attain if we start making some tough choices now. For years U.S. automakers and the UAW have resisted higher fuel-efficiency standards because retooling costs money, and Detroit is already struggling under huge retiree health-care costs and stiff competition. So during my first year in the Senate I proposed legislation I called "Health Care for Hybrids." The bill makes a deal with U.S. automakers: In exchange for federal financial assistance in meeting the health-care costs of retired autoworkers, the Big Three would reinvest these savings into developing more fuel-efficient vehicles.

Aggressively investing in alternative fuel sources can also lead to the creation of thousands of new jobs. Ten or twenty years down the road, that old Maytag plant in Galesburg could reopen its doors as a cellulosic ethanol refinery. Down the street, scientists might be busy in a research lab working on a new hydrogen cell. And across the way, a new auto company could be busy churning out hybrid cars. The new jobs created could be filled by American workers trained with new skills and a world-class education, from elementary school to college.

It seems as though Obama is doing a real good job of selling a crisis as a means to institute his vision of the automotive industry. Are you comfortable with this? In fact .. are you comfortable with this level of government enterprise in the marketplace?

I'm think that there's a nagging thought with many of you that this has gone entirely too far .. and that our markets might have self-corrected if the government had let this crisis run its course. And .. if you've been paying attention you should know that this crisis wouldn't have happened .. and it certainly would have been less severe if Barney Frank hadn't stood in the way of efforts of people like George Bush and John McCain to intervene in Fannie Mae and Freddie Mac years ago.

This is something, isn't it? Obama replaces the GM boss, but Barney Frank - the one individual who carries more of the responsibility for this mess than any other single living human being -- seems to be untouchable.

Chrysler .. $4 billion bailout recipient .. is raising some eyebrows. Why? Because the company is spending an average of $5,600 per vehicle in incentives to get people to buy. And now, Chrysler sales are increasing .. and people are upset because they believe that bailout money is being used to offer larger incentives to buyers.

Apparently Chrysler has always been one to give steep incentives, but those deals have only increased from a year ago. According to the Detroit News, "In February, Chrysler spent an average of $5,608 per vehicle on incentives, according to Edmunds.com. That compares with $3,681 from General Motors Corp.; $3,384 at Ford Motor Co.; $2,572 at Nissan Motor Co.; $1,682 at Toyota Motor Corp.; and $1,249 from Honda Motor Co."

So now, people are questioning the spending levels of Chrysler, asking whether taxpayer money is being used to subsidize incentives that other auto companies that didn't receive a bailout can't offer. In other words, is the government bailout giving Chrysler an edge in the market place.

So ... let's recap. You can't use bailout money to reward extraordinary employee performance, and you can't use bailout money to encourage people to buy your product. Oh ... wait! I get it! The only acceptable thing you can use this bailout money for is building electric cars.

The more government gets involved in our businesses and marketplace, the more screwed up things are going to become. Capitalism is under assault. The left, with full cooperation of the media, has done a wonderful job of convincing the American people that it was capitalism, not government, which failed here. The people are wrong - but not educated to the point that they can see it. A big thanks to the wonderful voters for putting the Democrats - and this Obama guy - in charge.

Yesterday Barack Obama decided that he wanted to throw more money at another problem. So he unveiled his plan to spend $2.4 billion for electric vehicle development. The plan also gives a $7,500 tax credit to people who buy plug-in hybrid vehicles.

So what's the problem? The problem is that there isn't a market for these vehicles. As of right now, hybrid cars only represent 2% of US vehicle sales, and it is deeply unprofitable for car companies. Just wait until the people buying those hybrids (and I have one myself) have to replace the batteries. You're going to hear howls of outrage then. My guess? The government will come in with some taxpayer-funded program to help people replace batteries in their hybrids. What fun.

In short .. Obama wants to give them money anyway to make cars that people don't want to buy. According to the LA Times:

Last month, only 15,144 hybrids sold nationwide, down almost two-thirds from April, when the segment's sales peaked and gas averaged $3.57 a gallon. That's far larger than the drop in industry sales for the period and scarcely a better showing than January, when hybrid sales were at their lowest since early 2005.

Yet automakers believe they have little choice but to make more hybrids. Though car buyers are losing interest, politicians are pushing them as key to reducing U.S. dependence on foreign oil and limiting the global-warming gases that cars emit into the atmosphere.

Did you know that the auto parts industry is also getting a bailout? Just another $5 billion of your tax dollars. No matter what happens to the recipient car company, the money will be paid. The payment of new bailout money to auto parts manufacturers is your sure sign that more bailout money is on its way to GM and others. BOHICA

We're going back to the days before 1986 again. Many of you don't remember this, but before the tax reform act of 1986 you were allowed to deduct the interest you paid on a car loan - or any loan, for that manner - from your taxable income. You could also deduct the sales tax. Well those deductions are coming back! Yup ... it looks like the Democrats - with some Republican help -- are going to bring back these deductions to get automobile sales moving again.

But wait! Would this tax deduction apply to everyone? Are you kidding to me? Have you forgotten that it's the Democrats in charge right now? Nope. The deductions would only exist for people making under around $125,000 a year. Forget this nonsense about equal protection under the law ... and remember the goal of the Democrat party. People likely to vote Democrat must have all federal tax liabilities of any type eliminated. This is how you create good loyal Democrat voters.

As I've said before, hopefully you aren't surprised.

We were told that we had to bailout the auto companies (aka. auto workers union) so that we could save an industry that provides a lot of jobs to American workers. In fact, that auto companies went as far as to say that our country would be sent into a depression if we didn't save their companies.

So the taxpayers gave them a bailout. And guess what? They are coming back for more. Billions more. And guess where that money is going?

GM investments in Brazil.

Yep, you read that correctly. An article from the Latin American Herald Tribune reports that GM is going to invest $1 billion in Brazil "to avoid the kind of problems the U.S. automaker is facing in its home market." And according to the president of GM in Brazil, this funding will be coming from the bailout money from the US taxpayers.

I wonder what kind of problems they're talking about avoiding? Probably union problems .. but do the GM officials have the cajones to say that?

That's it, folks. I have decided that we do need to use our tax dollars to bailout the Big Three. And it's because if we don't, Canadians are going to lose jobs. Lord knows we want to keep the Canadians employed ... if not, they could become a threat!

Yeah, right. Moving right along ...

After the auto bailout failed in the Senate ... true colors are starting to shine. The unions are livid at one group of people for blocking their chances at getting a bailout (for now), and that group would be senators from the South. Yup, the evil, anti-union South rears its ugly head. The evil Southern Senators are Mitch McConnell, Bob Corker and Richard Shelby. The UAW has gone as far to say that these senators are "representing the foreign brands" because their southern states are home to foreign automakers such as BMW, Honda and others. UAW President Ron Gettelfinger said, "They thought perhaps they could have a twofer here maybe: Pierce the heart of organized labor while representing the foreign brands." A local UAW president at a GM factory in TN said, "What this is, is the Southern conservative senators trying to destroy the United Auto Workers, trying to destroy unions ... It's a sad day in America when the senators turn their back on Main Street." Well last Friday was a sad day as well ... a day when the UAW turned its back on the automakers.

The real deal here is that the unions are concerned that if they don't get their auto bailout, it will look really bad for the organized labor movement. More and more people are realizing that a huge part of the problem with the Big Three is their unions. What possible excuse is there for paying people not to work? Google "jobs bank" and see what I'm talking about. If the union movement is undermined, they won't get their ultimate prize they have been waiting for: The Employee Free Choice Act. Now wouldn't that be a crying shame.

Meanwhile, I want you to check out this picture: 22 Pounds of UAW Rules and Regulations. If you really want to see what is wrong with the Big Three ... just look into these contracts.

One of the problems here is that so often it looks like these auto workers don't really know or appreciate who they're working for. Visit a Big Three assembly plant just around quitting time. Do you see workers streaming out of those plants with Ford, Chevrolet or Dodge jackets and ball caps on? Hardly any. What you do see is workers heading for their cars with jackets and hats emblazoned with the UAW logo and the name of their local. The union is paramount to them. Their actual employer? The enemy.

Oh .. and let's put this idea to rest that nobody wants to buy a car right now because these automakers might go bankrupt. I did. I bought a brand new Chevy Equinox last Friday. I needed a car that I didn't mind driving in the schmutz and could load up with stuff. I'll leave the other one under a cover until the sun shines and I can put the top down. Just doing my bit to help the economy. You see, it was I who picked the winner (my Chevy dealer) last week with my money, not the government. This is as it should be.

Wow! We could have written that headline at the beginning of this mess. Unions seem to take great delight in standing in the way of reform that could possibly save their jobs. Remember when the airline pilot's unions killed Eastern Airlines?

All the unions had to do in order to get the Republicans to go for this $15 billion bailout was to promise to reduce union wages to the level paid to automakers in the Toyota and Nissan plants by the end of 2009. No way. They weren't going for it. So now GM has hired bankruptcy council.

(By the way ... in answer to the question of who would buy a car from an automaker that was going bankrupt? I would -- I did -- Just yesterday. At this place. There are some pretty amazing deals out there. Trust me.)

Did you hear about the riots? Yeah .. the riots. Senator Jim DeMint of South Carolina knows that a vast majority of Americans used to be absolutely opposed to the idea .. as time has dragged on, that number has gone down slightly. But the point is that this auto bailout - which is really a union bailout - still has many of you upset. You are tired of the government picking winners and losers. You are tired of the unions dictating business practices. You are thinking about your grandchildren who are really going to bear the brunt of this massive spending spree.

DeMint, and he brought up an excellent point. GM is in a better financial situation than the government that wants to bail it out. The only difference between these two failing entities (GM and the government) is that the government can print the money. GM can't.

So where does this lead us? DeMint says that if a bailout passes we are going to see riots: "We're going to have riots. There are already people rioting because they're losing their jobs when everybody else is being bailed out. The fairness of it becomes more and more evident as we go along. The auto companies may be hurting ... but there are very few companies that aren't hurting and they're going to hurt. We don't have enough money to bail everyone out." He's absolutely right .. we don't have the money. Government politicians who are drunk with power think that they will be able to bailout the people that support their power. This auto bailout is no exception. Riots? No ... I don't really think so. Take the dubs off the market, and maybe so.

That leads us to the unions. For months, politicians have been creeping around the real source of this auto bailout: the unions. They know the UAW is the problem but they are too afraid to say it. Why? Because of exactly what I said before: power. But Jim DeMint says, "The primary driver behind this is the unions, because bankruptcy allows the auto companies to basically restructure all their contracts in a way that a bankruptcy judge says will make them sustainable ... And if they do that, then essentially the unions lose all their leverage. It's the unions that have brought them to the brink. So definitely, I think the reason they want a political solution and a car czar is because a car czar can protect the unions through this whole process at the expense of the taxpayer." Makes sense ... so why did the UAW stand in the way of this $15 billion? I'll tell you why. Because they know they can get the full deal as soon as the Democrats take over, without any strong wage concessions. They're betting that GM doesn't pull the bankruptcy lever before PEBO gets sworn in.

Now back to these riots. Do I think there will be riots? No. And that's because I don't believe that the people of this country really care all that much. They may think they do, but when was the last time they contacted their Congressman or Senator to tell him? When was the last time they turned off Entertainment Tonight and picked up a history book? Sure the phone lines on talk radio shows will ring for a while, but that will die out quickly. You have Christmas to worry about. I don't blame you. But just know that when you return from your vacation, and Barack Obama is sworn in, and the new Congress is ready to enact its agenda .. that is just the beginning, folks. There's a lot of work to be done, and I'm afraid I don't have the faith that the people are willing to fight for it.

Did you know that Harry Reid has decided to slip a little something extra into this auto bailout for the Big Three? What auto bailout, you ask? Oh ... there will be an auto bailout. The unions demand it. We just have to wait to get rid of a few more evil Republicans in the congress and one in the White House. Anyway ... Harry wants to include something in an auto bailout. What might that be? Well, how about a pay raise for federal judges.

Tricky, huh? Before we go any further, let's address one thing. Did you know that your Senators and your Congressmen are getting a $5,000 raise on January 1st? That must be for all of the great work that they have done spending your tax dollars and putting your grandchildren on the hook for trillions and trillions of dollars. Now this federal judge raise is a COLA - cost of living adjustment - but let me ask you this .. how many of you out there who own your own business are giving $5,000 cost of living adjustments to your employees right now? How many of you have worked for years without a raise that won't even keep up with inflation? Or a raise at all?

But Congress is getting one. And if this bailout bill passes, these US District court judges will be getting an "adjustment" to their pay .. all thanks to your tax dollars. That this would be on top of the 2.8% raise that the judges are "expected" to be rewarded next year.

Government. How are we going to rein these people in?

You know that you are dealing with someone really intelligent when they use the word "bashing" in their first sentence. That is why I thought you would enjoy this article by Marie Cocco. You see, Marie is upset that people are criticizing her precious unions in conjunction with this auto bailout. That is because, according to Marie, "No one should be allowed to cast blame on workers who want nothing more than to maintain a middle-class life." In fact, Marie believes that unions aren't the problem ... they are actually the answer to our problems!

Go ahead and read it for yourself. Be sure to check out the bashing, corporate greed and wealth envy.

Again .. the definition of Socialism? That's when the government not only controls but OWNS the means of production. Today we read that the government is thinking about taking part ownership in the Big Three automakers in return for bailout cash. When would these government shares in these companies ever be returned to the private sector? My guess is that would not happen so long as Barack Obama is in office. Government ownership of major industries is really his cup of tea.

The Democrats and unions hate it that George Bush is so involved in the discussions over a Big Three bailout plan. After all, haven't the people said they want Barack Obama to be their president? What is Bush doing hanging around for so long? Now what really ticks off the Democrat-union crowd is that the Bush Administration is insisting that the bailout money only go to automakers who show that they have a restructuring plan that would actually work. In other words, if the automaker is doomed .. why throw good taxpayer money at them? What's happening here is that the president is looking for a plan to actually make Ford, Chrysler and GM viable industries again, while the Democrats are mainly interesting in keeping the United Auto Workers strong. Different goals, different strategies. The UAW needs to go away ... they've done their damage, they should now just sit back and let the grownups try to fix things.

This $15 billion loan package for the automakers is just something to tide them over. Barney Frank says that he is just waiting for the Obama administration in order to get a real long-term bailout for the automakers next March. Barney says, "We don't think the $15 billion is enough to get them into March, but given the administration's insistence ... that's where we are now."

But there is one sure thing right now. No matter what, there will be some sort of "Car Czar." I've even heard reports that this person could be included in the presidential cabinet. So if we are going to have a government bureaucrat in charge of re-tooling the auto industry ... and you just know its coming ... let's make it a good one. My vote is for Mitt Romney.

Not that anyone cares, but where is it written that some bureaucrat chosen by politicians has any better of an idea how to run the auto companies than some private businessmen do?

But in the end, what we are getting from this proposal is still nothing but fluff. Like a requirement that these CEOs sell their corporate jets. Don't you think that Congress has more important things to worry about when it comes to the viability of these companies? Let's start with these horrendous union contracts.

For those of you who want to read this proposal for yourself ... have at it. [pdf]

If the people had it their way .. there wouldn't be a bailout. Thanks to you, Congress will probably not support the bailout ... at least not the full Monte. Although that is very disappointing to some like Nancy Pelosi, Carl Levin, Diane Feinstein. But the White House is currently working with Congress to give the Big Three up to $17 billion in emergency loans. Along with that loan would come a "car czar." Oh boy. Another czar. This would be a government bureaucrat who would be in charge of any bailout for the auto makers. There is a better person to oversee the bailout: a bankruptcy judge. At least a bankruptcy judge would allow the businesses to restructure themselves, rather than having a government appointed bureaucrat making those decisions. And I guarantee you that if we give these automakers a bailout now ... they WILL be back in a few years if not months ... maybe weeks. You just wait.

Meanwhile, Obama says that if top auto executives don't agree to drastic reforms, they should be fired. He said, "If this management team that's currently in place doesn't understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances then they should go." Did Obama mention the need for the UAW leaders and union members to come to the reform table? Are you nuts? Of course he didn't. Oh that's right, Obama got elected thanks to the unions and these CEOs are evil and greedy. I keep forgetting that.

Argentina is battling its own auto crisis. So here is the government's solution. Are you ready?

Automakers in Argentina will sell basic models of their cars AT COST. Meanwhile, they will receive government subsidized loans in order to keep their companies afloat and keep people in their jobs. Each automaker is required to offer two of its most basic models for this plan. They can choose from one of three financing packages. These packages will be financed .. are you ready for this .. by the social security system.

The Argentinean Industry Secretary says, "We have agreed with the plants that these cars will be offered without a profit margin and the dealerships will also reduce their profit margin."

Don't you love this "we have agreed" stuff? That means "We have instructed the automakers ...."

So first Argentina moves to seize private pension plans and blend them into their social security system. They suddenly they're talking about their social security system financing the automakers. Argentina is headed for disaster. Let's hope they crash in time for us to lean some lessons.

The clown cars have rolled into Washington.  The Big Three CEOs drove their vehicles all the way from Detroit.  All except one.  GM CEO Rick Wagoner did drive a 2009 Chevy Malibu Hybrid most of the way to Washington.  But then, once he got close to the Capitol he hopped out of his Malibu and drove the last 25 miles or so in a 2011 Chevy Volt.  How did the Chevy Volt get to the pick-up point in Washington?  Well someone had to ship it there.

I mean, this really has turned into one huge PR stunt.  It's a sales pitch .. let me drive a prototype of this new electric car (that won't be available for another 2 years and will probably cost around $50,000) and people will see the future of our company.  The good news for Rick Wagoner is that you didn't need to ship a car to Washington to impress Nancy Pelosi .. she's already on your bandwagon.  It's the people of this country that you need to impress.  And I have a clue for you .. the American people have a very short attention span.  They may see your Chevy Volt now, but if you can't give it to them tomorrow .. you are still SOL.

Meanwhile in Great Britain, the sale of electric cars has fallen by more than half.  While the Government's climate change advisory body predicted that electric cars would sell like hot cakes .. they were proven very wrong by that silly little thing called the free market.  Only 156 electric cars were sold in Great Britain so far this year.

Oh .. by the way, we learned yesterday why the consumers should pick the winners and losers in the marketplace and not the politicians.  California Senator Diane Feinstein sent a little letter to some of her colleagues on Capitol Hill demanding that a share of any bailout money be spent on an upstart manufacturer of electric cars in San Jose.  That would be Tesla Motors, and they haven't sold a single electric car at retail yet.  Seems there are some cost overrun problems.  Anyone want to buy an electric sports car for about $140,000?  Electric cars may be a reality one day, but let the consumers pick the companies that make it ... not the politicians.  The decision should be made on the basis of consumer appeal, value and cost - not on the basis of political power. 

By who?  That would be General Motors.  GM comes to Washington with absolutely no plan to weather the economic storm other than to grovel for taxpayer money.  Do you get that?  No plan!  Nada!  It's either hand over taxpayer funds or we're going to bail .. and if we bail we're taking the rest of the country with us. 

What arrogance!

The Big Three returned to Washington in their hybrid cars.  They presented their plans in hopes that this will be enough to get them a government bailout.  But guess what?  There doesn't seem to be any really drastic changes.  Their business models haven't really changed.  Their adhesion contracts with the unions are still in place.  There aren't any secure plans to pay back the taxpayers other than creating a government oversight board.  Oh yeah ... that makes me feel so good; a government oversight board.  I feel better already.

There is some talk about symbolic cuts.  The CEO of GM and the CEO of Ford say that they will work for $1 a year if it means their companies get a taxpayer bailout.  That's great.  The problem isn't solved by paying CEOs a buck a year.  The problem is solved by bring in some management talent that will make extremely difficult decisions and them paying them a gazillion dollars if they can pull their companies out of the fire without raping the taxpayers.    

There is already a provision under our laws to take care of this mess.  It's called Bankruptcy.  Chapter 11 bankruptcy, to be more exact.  Reorganization.  The magic of bankruptcy is that all outstanding contracts that are making it difficult for these automakers to compete and survive would or could be cancelled --- and that includes the contracts with the United Auto Workers.  Nancy Pelosi is saying that bankruptcy is not an option.  Why not?  For the very reason I just set forth.  Bankruptcy would not work well for the unions.

The capitalist system - free enterprise - has lifted more people out of poverty than any other economic system ever devised by man.  Freedom works.  And freedom means the freedom to fail if you don't live up to consumer expectations or if you allowed yourself to be drug into unprofitability by asinine union agreements and products the consumers just don't want.

My guess is that the only way these auto companies survive is if they have to fight their way through this without taxpayer help.  A bailout is the easy way out for them.  What a stupid idea it is to throw tens of billions of dollars at these companies only to have them declare bankruptcy down the road. 

There's another idea floating around out there.  Let's just take Ford, GM and Chrysler and combine them into one large auto company. Oh yeah .. that ought to work.  Nothing like good old-fashioned competition to spruce up the marketplace. 

And speaking of competition ... there is no way the Big Three can survive under their current agreement with the unions.  These unions cannot be allowed to bring these automakers down.  Get rid of them.

We got dozens of emails yesterday to Nealz Nuze saying that I must see this video about a Ford plant. Okay you are probably thinking "big deal, Boortz." But if you watch the video it explains how Ford has created a new, innovative manufacturing plant that streamlines production and makes operations much more efficient. They can make 5 different types of vehicles at this plant. It does this by allowing Ford suppliers to be integrated into the assembly line process. So the suppliers making the seats, the dashboards, the fuel systems ... they have assembly lines right inside the Ford factory. Makes sense, rather than relying on shipments of parts. No waiting. No shipment costs or delays.

Oh but there is one thing I forgot to tell you. This Ford plant is in Brazil.

Yep. And do you know why it is in Brazil? Unions. The UAW is opposed to this type of innovative manufacturing. They are opposed to innovation that would actually help their employer because they stand the risk of losing jobs. And if they lose jobs, they lose power.

I'm sure another reason, although it doesn't say it in the video, is tax rates. But that's a whole other issue.

Alright so this auto bailout bill is in a holding pattern. But just remember that it doesn't mean it is dead. So here are some facts that should keep you seething ...

The Big Three currently pay 85% of union benefits to UAW members ... who aren't even working. Yep. Remember how I told you about the Job Banks for union workers? If a union worker is employed at a plant that closes, the auto makers still pay 85% of their union benefits. Rick Wagoner, CEO of General Motors, says that his company must reduce operating costs ... but his company must continue paying for union employee benefits for employees NOT to work. Does this sound like a smart business plan for you? As a business owner, this asinine agreement to pay for the benefits of people who aren't currently working should be the first to go.

I've talked about this idea of a "right" to a job where you live. It seems that the unions have already done their part to make that a reality. Let's say that you work at a plant in Detroit and it closes. Meanwhile, a new plant is opening in Missouri. You don't have to move to Missouri to keep your job. But guess what, you also won't be fired! You can opt to go on Job Banks where you can sit on your butt in Detroit, do crossword puzzles for eight hours a day, and collect 95% of pay for the rest of your life.

That business model is the one asking for your tax dollars. And you are telling me that these union contracts, these Job Banks, have nothing to do with the Big Three's current situation?

Meanwhile, the legislative director of the UAW says that the problems with the auto industry are because of a series of bad trade and healthcare policies, along with the current credit crisis.

At least someone at GM learned a lesson ... GM will be returning two of its leased corporate jets.

Short and sweet: Send these automakers into bankruptcy if for no other reason than to give them the means to bust the unions.

"If we give you this money, just how are you going to spend it?"
"Well, we're not actually sure."
"Go get in your private jet and get the hell out of here."

The bad news is that one the Execs may be back in Washington in just a few weeks. Congress says that auto execs have failed to show the American people that this bailout would be the last. But there will be another chance. They are being given time to re-group and come up with a business plan to prove that this bailout will work.

Question: Do you think they'll fly commercial when they come back to Washington for their second bite at the apple?

Here's the plan: break the UAW contracts. These unions are crippling your business and you know it. You know that you are adding thousands of dollars to the cost of your cars because of outlandish union contracts. If you really want to prove to the American people ... after all, it is our money you are asking for ... that you mean business, do what you need to do to emasculate the unions. Stop allowing them to dictate your business model. If you can't even manage to do that, then there is no reason for any American, much less Congress, to believe that you are serious about restructuring your businesses.

Congress plans to reconvene in December to tackle the issue again. There are a few things that could happen. Congressional Democrats could be relying on the American people to lose interest. By December, you will be focused on Christmas and stuffed from Thanksgiving. At that point, will you still be as adamant about this auto bailout as you are now? I sure as hell hope so. Because unless these auto execs return to Washington (on freaking commercials airlines) and say that unions will no longer be dictating their business models, then let them fail.

Have you heard the excuses? Something about CEO security, I believe. Right! Just give me a break here. These CEOs are just so conditioned to their perks that it never occurred to them to take a (yuck) commercial flight to go on their begging mission. Welcome to the real world guys.

At least Barney Frank is being honest about this bailout. He has admitted, it is not about the auto industry, it is about the unions. And he doesn't think that $25 billion is enough to save them. In fact, he doesn't think that number is "fair" because companies like AIG have been given more of your tax dollars in the form of a bailout. And this is "biased" towards white collar workers.

Here's Barney Frank on NPR:

"Well, AIG, which I don't think anyone would think was as important to the American economy as the auto industry ... got $40 billion just now to make it up over $100 billion. To some extent, let's not have a white-collar/blue-collar bias in our public policy. You know, those who say, hey, go bankrupt so you can cut back on what the unions have won -- the unions have already made some concessions. But, you know, we've had enough anti-union activity, and enough increase in income inequality in this country. I don't want to set a precedent that bankruptcy now is a way in which you undo what gains unions have been able to hold on to."

Wow, he really hits on all the high points here. Wealth envy. Income inequality. Anti-union activity.

Then we have Senator Carl Levin. He says that it would be "unthinkable" for Congress to let a "dispute over the source of the funds" be the reason not to bailout the auto industry. A dispute over the source of funds? Those funds don't just magically appear, Mr. Senator. Those funds are the tax dollars of your constituents. That's the issue here .. not just an ancillary dispute.

And finally, we have GOP Rep. from Michigan Joe Knollenberg. He says that the money funding the auto bailout "isn't your money." Do you hear that? It's not your money. Someone needs to remind this guy, who thankfully lost his bid for reelection, that the government is not independently wealthy but funded by the taxpayers.

A listener Rose from Orlando says that she logged on to AOL yesterday and was greeted by an ad from GM asking people to support the auto bailout. Yep. GM has launched a campaign ad saying that our national security is at risk if we don't bail them out. Rose brings up a good point: They could be using their time and money bailing themselves out. Apparently this ad links you to a website gmfactsandfiction.com where you can see about a 3 minute video on why the Big 3 need to be bailed out. Also note that the video was put on YouTube by GM Blogs, which happens to be General Motors' home for corporate blogs.

We'll keep a sharp lookout today as the Senate votes on the automaker's bailout to see who is next to the taxpayer trough. My guess? Airlines.

... and 70% of the American people do not.

Democrats are insisting on bringing an auto bailout to the table, even though the Bush administration says that the $700 billion bailout was not intended for this purpose ... and even though it is going to be a very tough fight for Harry Reid in the Senate. But fight they will and this week on Capitol Hill we will hear from auto executives and the United Auto Workers.

Nancy Pelosi came up with a plan that she believes will be enticing enough to get enough Republican support. This plan includes adding certain strings to the auto bailout: new fuel-efficiency standards, development of new technology "to compete in the domestic and global market" and restructuring company finances. The Democrats also want to include limiting executive pay. In other words ... the Democrats feel that they, rather than the consumers, are the ones who know just what kind of cars the manufacturers build. All this is going to do is force the automakers to build cars that the American people have already shown that they just do not want to buy.

The Democrats also want to limit executive pay ... but what about the over-inflated pay of the workers at these auto companies, thanks to union contracts. I've told you this statistic before, but $1,600 of every GM car you buy goes toward the healthcare costs of union workers. For companies like Toyota that aren't unionized - that cost is only $200 per car. GM also spends another $1,000 per vehicle on holiday pay, work rules, plant-shutdown-pay and line-relief to UAW workers. Those are costs that auto makers such as Toyota don't have to worry about. The average Ford, GM or Chrysler union worker makes about $71.00 or more per hour. For Toyota, Nissan and the rest ... about $48.00 per year. Do you detect a small problem here?

If the Democrats are truly concerned about "restructuring company finances" they should start with union contracts. What is clear from this situation is that these companies can no longer handle the burden of unionization ... so why should the Democrats allow this practice to continue if they succeed with their bailout? It will be the taxpayers funding the system that broke these auto companies to begin with.

Of course, this is not how United Auto Workers President Ron Gettelfinger see things. He said over the weekend that union contracts are not the problem. He says the problem is out of his control because these auto makers are suffering from the housing slump, credit crisis, etc. He says, "The focus has to be on the economy as a whole as opposed to a UAW contract ... We're here not because of what the auto industry has done ... We're here because of what has happened to the economy."

Nonsense. The bailout would only delay the inevitable.. and unless something is done right now about the union stranglehold on the auto industry the inevitable is bankruptcy. Let them go bankrupt. That doesn't mean they go out of business ... it means that union contracts can be voided unilaterally by the auto manufacturers and they can then get about restructuring their businesses based on consumer wants rather than political mandates.

By the way ... have you heard of the auto worker's "Job Banks Program?" Well, click here, read this, and then tell me how much you support a bailout.

Barack Obama wants Congress to approve $50 billion for the auto industry. He also wants to appoint a czar or board to "oversee the companies." This would be the person or committee in charge of restructuring the auto industry.

I can't make this any more clear: it is not the government's job to restructure the auto industry. The auto industry got itself into this mess, and it doesn't need government or the tax payers to get it out of this mess. And besides, what makes the auto makers believe that government could do a better job of restructuring their industry? Politicians aren't in the industry ... let the companies that once enjoyed such great success build on the ingenuity that made them great. The only guarantee you will have from government is mediocrity.

With Obama and Democrats it's all about government. What is he going to do, set up a Department of Automobiles? Who will he name to be the Secretary of Cars? Will there be an Undersecretary of Trucks? What's next? How about a homebuilding czar? Is it too late to appoint a steel czar? Come on my friends, get in the game here! Every industry is going to have its own czar in Washington to oversee operations! My God! Could this guy possibly love government any more?

Do you remember the words of one of Obama's transition czars? Obama will be ready to "take power and rule from day one." Rule? I guess we're beginning to see what this person meant.

If you'll notice, the Democrats are suddenly so focused and so worried about this auto industry bailout. That can be explained by two words: unions and votes. If they are the heroes of the auto industry, they can guarantee a win in Michigan, Ohio, Indiana, Illinois for years to come. The line will be "we saved your job at a time when the Republicans wanted to let your employers fail."

Yesterday we talked at length about the auto industry and how it is completely drowning because of unions. Here's a small scale union story for you ...

Detroit is trying to clean up its image. In efforts to do so, the city council wants to give a $200,000 contract to a non-profit organization dedicated to the reforestation of the city. It's being called The Greening of Detroit. The group made up of volunteers would plant 2,000 saplings in neighborhoods that have been plagued by some invasive species.

Enter the local union: AFSCME Local 542. This union has now stalled the City Council from authorizing this agreement for The Greening of Detroit. Why? Because the local union sees this as competition for the city's 50 forestry workers and they believe that the city is outsourcing THEIR jobs by allowing this non-profit organization to plant trees. Instead, this union would rather the government spend the $200,000 on trees and then pay the union workers to do the labor on top of that ... rather than allowing these volunteers to plant the trees for free.

Nancy Pelosi says that she wants "immediate action" to give the auto industry additional help with taxpayer money. And as the United States gets closer to bailing out the auto industry ... here's an interesting piece of news. Australia has given a $6.2 billion industry assistance package. American owners of local Ford and Holden (a subsidiary of General Motors) plants in Australia will be "laughing at the Australian 'suckers'" who gave them a bailout package, according to former car company executives.

Veterans in Australia's auto industry say that the money will ultimately end up in Detroit, rather than bailing out their own local industry. Melbourne Business School professor Paul Kerin says that car makers "were masters at playing off naive governments around the world." Kerin says that there are two theories as to why Australia was willing to shell out so much taxpayer money to the auto industry. The first reason is that the government is naive. The second reason is that the government is pandering to the unions because the auto industry is a highly unionized sector.

The newly empowered Democrats seem eager to comply. If the request is granted, it would expand the federal government's role in private enterprise far beyond what we have seen in the financial sector. Obama's transition team says they are working on "policy options to help the auto industry adjust, weather the financial crisis and succeed in producing fuel-efficient cars." They will do this under existing laws or by passing "additional legislation."

And you'll love this ... don't forget that Congress has already voted to give $25 billion in low-interest loans to the auto industry to help them produce fuel-efficient cars and meet emissions standards. But in typical government fashion, this money "has been hung up by red tape."