Category Archives: Economics

Business, Economics, Political Commentary

The GM Bailout

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The losses are going to be massive:

The $23.6 billion represents a 25 percent loss on the feds $60 billion direct “investment” in GM. But that’s not all that taxpayers are on the hook for. As I explained previously, Uncle Sam’s special GM bankruptcy package allowed the company to write off $45 billion in previous losses going forward. This could work out to as much as $15 billion in tax savings that GM wouldn’t have had had it gone through a normal bankruptcy. Why? Because after bankruptcy, the tax liabilities of companies increase since they have no more losses to write off.

This means that the total hit to taxpayers, who still own about a quarter of the company, could add up to $38.6 billion. That’s even more that the $34 billion on the outside I had predicted in May.

But it’s OK, ‘cuz the president’s campaign supporters got paid off.

Business, Economics, Education, Media Criticism, Political Commentary

The Brain-Dead Left

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Thoughts on their intellectual exhaustion and maleducation:

To our mind, that sentence more than anything we’ve read encapsulates the spirit of Obamaville. It originally appeared in a San Francisco Chronicle story about an incident in which “dozens of college students” invaded a Bank of America Branch, “pitching a tent and chanting ‘shame, shame’ until they were arrested.”

On the way to B of A, they paused at Citi to scream at the walls. These are college students, acting like 2-year-olds throwing a tantrum. What does that tell you about their critical thinking skills–and about the standards of American higher education? The likes of the New York Times expect us to take such incoherent spasms of rage seriously as a political “movement.” What does that tell us about the standards of the liberal media?

Pretty much everything we need to know.

Business, Economics, Political Commentary

The News Just Gets Better And Better

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The loss to the taxpayer for the auto bailouts is now up to twenty three billion.

[Update a few minutes later]

And the head of the CBO says that the “stimulus” will be a drag on the economy for years.

[Update a few more minutes later]

Thoughts on the health-care mess:

If the Supreme Court decision goes against the individual mandate, the progressive imagination will be haunted for decades by what historians will consider one of the great legislative and political blunders of all time. A rare perfect storm of political forces brought liberals the most power they have had since 1934 and 1964. If history records that this generation’s progressive leaders threw that moment of power away by an easily correctable mistake in legislative draftmanship, Nancy Pelosi and Harry Reid will be forever remembered as the greatest legislative bunglers in American history. College students in generations yet unborn will rub their eyes in disbelief when they get to this part of the story.

(Indeed, when we consider what future students will think about an era that includes the Lewinsky affair, the Y2K and bird flu panics, the WMD mistake in Iraq, and then, if the Court rules against it, the healthcare fiasco, it is easy to see why the Baby Boom is looking more and more like a generation of clowns.)

I am less worried about the bitter mockery of future generations, however, than I am about what is in the rest of the bill. Even if the Court upholds it, it is clear that sheer arrogance and legislative incompetence led the architects of this massive reform to endanger their own handiwork by clumsy design.

An inescapable question unavoidably follows. If the authors of this historic reform were that careless and clueless about the central pillar of their plan, what else did they get wrong? What other incompetencies and tomfooleries lie hidden in the depths of this bill? How many perverse and unintended consequences will emerge as the consequences of this law unfold? What clever lobbyists managed to get provisions embedded in the text that will make healthcare more expensive and less effective than it could and should have been?

Writing a bill that passes constitutional muster should be easy in a Congress so rich in lawyers and legislation writers. Writing a bill that successfully improves American healthcare delivery while controlling costs, on the other hand, is hard. Very, very hard.

If they did so poorly at the easy part of their task, the part where we can actually measure and monitor their success, what kind of mess have they made of the hard and murky parts that nobody, including the authors of the bill, really understands?

This may be the worst political class in the nation’s history, or at least since the 1850s.