Obama Was Wrong on GM Bailout

 

The GM bailout was a topic in last night’s debate. What was not said was that Obama allowed very generous terms for his UAW supporters. He did not help GM trim costs, and he reversed the strict conditions imposed by Bush.
Taxpayers are expected to lose a minimum of $23 billion on the bailout of General Motors and Chrysler. According to the Heritage Foundation, “The administration violated basic principles of bankruptcy law and transferred money to the UAW at taxpayer expense. The government could have executed the bailout with no net cost to taxpayers” if it had followed standard Chapter 11 bankruptcy rules.
Instead, the Obama administration granted of preferential creditor status to the UAW which cost an extra $26.5 billion. The Pittsburgh Post-Gazette says “the deal eschewed the typical wage corrections associated with reorganizational bankruptcy and there were no union pay cuts at GM. ”
Had the car companies just gone bankrupt without government interference, they would have had the protection of the courts, and union contracts would have been renegotiated or just torn up. Barack Obama rescued the UAW, not GM and Chrysler. Romney’s December 2008 op-ed article in opposition to the bailout is being criticized. He advocated a structured bankruptcy with no special treatment for the UAW.
A formal bailout failed in the Senate in 2008 because conservatives did not believe the conditions were stringent. Bush deserves credit for setting tough targets for the two companies — a two-thirds cut in debt, a 50% reduction in payments to health care funds for UAW retirees, and proof of net positive value by March 31, 2009. The money Bush lent was repaid in April 2010.
Obama increased the loans to $80 billion and the government still owns GM stock in connection with the company’s June 2009 out-of-court prepackaged bankruptcy. Once again, it was orchestrated by the Obama administration to protect the UAW. Bond holder rights were subordinated to UAW rights.
The bond holders were essentially wiped out. The United Auto Workers, as an unsecured creditor, received a 17.5% ownership interest in General Motors and 55% of Chrysler, while the companies’ bondholders got hosed.
Finally, the government caused part of GM’s problem. For three decades fuel-economy rules ensured that Detroit couldn’t specialize in its most profitable models—pickups, minivans, SUVs—and had to continue making smaller sedans at high-cost UAW-organized factories that it sold at a loss.

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California Fiscal Crisis – Businesses Continue to Flee

California has experienced large budget shortfalls for the last decade and today faces a $16 billion budget gap. Liberal Democrats are in complete control of the state.
As usual, their solution is increased taxes, regulations and more spending. As a result, businesses are continuing to flee the state. This week began their new fiscal year, and what did the California legislature do to address the financial crisis?
The lawmakers are still refusing to make meaningful budget cuts, but new spending is always fine with them. On Thursday, the State Senate passed a bill that would block local law enforcement from referring a detainee to immigration officials for deportation, unless that person has been convicted of a violent or serious felony. California will not be cooperating with federal immigration enforcement in this area. The so-called Trust Act will force local police to release individuals without conducting a thorough background check.
It lets dangerous people slip through the cracks. The Center for Immigration Studies says the Trust Act “benefits illegal aliens who are committing crimes. It makes it much harder for federal and local law enforcement agencies.
“The local law enforcement agency will not know what convictions are on a person’s record unless they hold them long enough for a DHS check.”
The same day, the State Assembly passed $8 billion in funding for high-speed rail and other projects, sending the bill back to the state Senate for final approval. Republicans are united in their opposition to the rail project.
The legislature has also approved “financial aid” for undocumented students, and they voted to reduce impoundment fees of vehicles driven by unlicensed drivers. This means the cost of driving with no insurance in California is greatly reduced.
In January they thought the deficit would be $9.2 billion, but it jumped to $16 billion as tax revenues declined. One reason is that business owners are fleeing the state. The tax base is shrinking, so lawmakers keep raising taxes on everyone else.
The top destinations for the California business departures are Texas, Arizona, Colorado, Nevada and a tie for Utah and Florida. They are all right-to-work states, except Colorado. California has the second highest state unemployment rate in the country, and raising taxes on employers will not reduce the problem.

Public Officials Lease Luxury Autos

President Sebastián Piñera of Chile is shown in the official state car on March 11, 2010.


It was revealed today that the Chairman of the DC City Council violated regulations when he signed a one year lease for a Lincoln Navigator at over $2000/month. The Chairman rejected the first Lincoln because he did not like the color of its interior, and now the city is stuck paying for two leases. The violation was because the Lincoln receives less than 22 mpg, not because it was too expensive. Continue reading

Ford Finally Beats Toyota Camry and the Honda Accord by Gregory Hilton


It has taken decades, but the United States has finally beaten Toyota Camry and the Honda Accord in the all important reliability category. The data comes from Consumer Reports which gives its highest possible distinction, the Excellent Rating, to the Ford Fusion.
They describe Fusion as a car that performs 60% better than its peers, and will last for 200,000 miles. It is the Motor Trend Car of the Year and its hybrid version won the 2010 North American Car of the Year Award. Continue reading

Ralph Lauren’s Classic Cars

 

Ralph Lauren at the wheel of his $3.1 million Bugatti Veyron. It has a top speed of 268 miles per hour. It is named after French racing driver Pierre Veyron, who won the 1939 24 hours of Le Mans while racing for Bugatti. The BBC picked the Veyron as its Car of the Decade (2000–2009).

Two decades ago Ralph Lauren moved to Bedford, New York. His multiple vintage Bugattis, Ferraris and Rolls Royces immediately appeared, and the collection began to grow. So did Lauren’s real estate holdings and he purchased the adjoining homes. He has so far acquired eight of them and has created a 300 acre estate. The houses remain empty but the garages are filled.

When an auto does appear it is either Lauren, a servant, or one his famous car enthusiast pals. Lauren is a friendly neighbor who always waves, and it is hard not to notice the classic cars he is driving. The fashion designer has a schedule which calls for driving one of the cars every six weeks.  The exotic fleet is so fabulous that it is now the subject of the book Speed, Style, and Beauty: Cars from the Ralph Lauren Collection.

Recent Bedford guests have included comedian Jerry Seinfeld, who collects Porsches, and Wall Street investor Jim Glickenhaus who covets Ferraris. He spent $3.2 million just to refurbish a Ferrari Enzo. Last week’s guest was U.K. television host Chris Evans and his 1961 Ferrari 250 GT California Spyder.

It was once owned by actor James Coburn, and Evans paid $10.9 million for it in 2008. Jay Leno owns 110 vintage cars and 90 motorcycles. He keeps them in three former airplane hangars, and tends to buy broken-down classics which can be restored.

Lauren keeps over 70 cars at his east coast homes in Bedford, the Hamptons and Jamaica, as well as another 20 at his place in Telluride, Colorado. Construction is now going on in both Bedford and Long Island for huge garages that can store over 100 cars in climate controlled conditions.

No One Has Ever Paid More For A Car

Ralph Lauren’s 1938 Bugatti Type 57SC Atlantic Coupe. The EXK6 at the rear is the original London license plate.
It is considered the most beautiful pre-World War II automobile. Only three were made, and just two have survived. Lauren owns this black one which is frequently on display at the Museum of Modern Art. The finest models in the Lauren Collection were shown in 2005 at Boston’s Museum of Fine Arts, and photos are at:http://rides.webshots.com/album/287089662XwIkBz?start=0

All of Lauren’s Bugattis are painted black. The twin of his Atlantic Coupe was sold this year for between $30 million and $40 million. Because the sale was private, exact figures weren’t released. The same Bugatti sold in 1971 for $59,000, which was a world record at the time.

The previous record for a car sale was for a 1957 Ferrari 250 Testarossa which was sold for $12.2 million in 2009. The price of a new Ferrari 330 in 1967 was approximately $8000, and one just sold at auction for $11.5 million.

Bugattis are the mainstay of the Lauren Collection. Ettore Bugatti began manufacturing cars a century ago in Molsheim, France, and was far ahead of his time. His handcrafted cars had innovations such as the use of lightweight magnesium, aluminium and aerodynamics.

The fashion designer provides personal tours of his collection for major donors to the Ralph Lauren Pink Pony Fund (a breast cancer-fighting charity organization). Every tour includes a ride in one of his autos.

Erroll Southers Rejected as Director of the Transportation Security Administration by Gregory Hilton

The Obama Administration has now nominated retired Gen. Robert Harding to serve as the new Director of the Transportation Security Administration. The previous nominee, Erroll Southers, was rejected when questions were raised about two background checks he requested on men who were daing his ex-wife. He also wanted to establish a public employee union at the TSA.
Republicans have highly praised many Obama nominees in the national security area including the Secretary of Defense, the Secretary of the Army, the Director of National Intelligence and the National Security Adviser. When Obama named Gen. James Jones as National Security Adviser, I wrote the following:
“I just finished reading Jones’ excellent January 2008 report ‘Saving Afghanistan: An Appeal and Plan for Urgent Action’, which was prepared for the Senate Armed Services Committee, and I would recommend it.
“I will miss Steve Hadley, but Jones has the right focus. His work in the West Bank city of Jenin involved the transfer of security to Palestinian officials, and now the suicide bombers are gone. Let us hope Jenin’s success will be a road map for Afghanistan.
“The price of oil today declined to $48/barrel and this will put energy issues on the back burner. That would be a mistake, and the comprehensive approach outlined by General Jones is admirable. The task force he headed for the U.S. Chamber of Commerce recommended immediate expansion of domestic oil and gas production, nuclear energy and clean-coal technology.”

Saying Goodbye to the S.S. United States

The slow death of America’s flagship, the S.S. United States, appears to be at hand. This passenger liner was the fastest ship in the world from 1952 to 1969, and it was the queen of America’s merchant marine. It is also the largest passenger vessel ever constructed in the USA.
Both the S.S. United States and its sister ship, S.S. America, sailed at over 90% capacity throughout the 1950’s, but they became victims of the jet age and labor unrest in the maritime industry. Few people wanted to remain on board for four days when an aircraft could arrive in Europe in seven hours at a considerable cost savings.
After sitting dockside for 40 years, the ship is expected to be sold for scrap in the next few weeks. The bids have already been received. All efforts to convert the ship to other uses have failed. The proposals included a nautical museum, a riverside hotel and convention center, and a humanitarian-relief vessel similar to the S.S. Hope.
The late CBS-TV anchor Walter Cronkite was a 1953 passenger and said looking at the “perfect design” of the ship in her heyday “could thrill you with pride and wonder.” Rumors of the ship’s scrapping were heard in Cronkite’s final years and he called them “a crime against history.”
On its maiden voyage, the S.S. United States smashed the North Atlantic speed record by over 10 hours. “Sorry, old girl,” the then new liner radioed to its defeated rival. The previous record was set in 1938 by the HMS Queen Mary which is now a hotel permanently docked in Long Beach, California.
To this day, the crossing records of the S.S. United States remain unbroken and her top speed was 41 mph, or 35.6 knots. Unlike today’s top-heavy cruise ships, which retreat to the nearest port at the slightest hint of foul weather, the S.S. United States was constructed to press onward at full speed while being lashed by North Atlantic gales.
She carried four U.S. presidents and her passenger logs are filled with the names of mid-century celebrities. The Duke and Duchess of Windsor were on board in 1957 along with Princess Grace and Prince Rainier of Monaco. They were photographed together around the ship’s first-class kidney-shaped bar, which is now part of a restaurant in Nags Head, N.C. The Duke, a Navy veteran, later wrote a letter marveling at the ability of this 990 foot vessel to be docked without the use of tugboats. This was necessary because tugs in the NYC harbor were out on strike.
The 1952 construction cost was $78 million and the ship benefited from a massive U.S. government subsidy, with the understanding the liner could be requisitioned as a troop transport at a time of war. That happened to the S.S. America during World War II. Along with the Queen Mary and the Queen Elizabeth, they were the biggest troopships the world has ever known. The United States could have been refitted to hold as many as 50,000 troops.
The S.S. United States was built to military standards and the ship’s hull design and engines were classified military secrets due to her status as a stand-by troopship. Because it was designed for both navy and commercial use, the United States was a radical departure from every other liner. Her low superstructure and finned smokestacks were designed to minimize wind resistance as she sliced through fierce Atlantic gales.
The ship is bigger than HMS Titanic, but they both had the same class structure. The 2,000 passengers were divided into first, cabin and tourist classes. Each class had its own public rooms and deck spaces. This practice was particularly rigid on British liners but it is no longer used on today’s cruise ships.
This Victorian era holdover was based on the belief that various social classes should not interact with each other. The S.S United States was one of the last three class liners to be constructed. By the 1950s this elitist arrangement was outdated, and was later seen as being socially repugnant.
The elegant ocean liners are almost extinct on the transatlantic routes, but until 1960s they were the primary way Americans went overseas. They were an integral part of high society, and for many years this type of travel was the exclusive province of the elite. Their arrival or departures in Liverpool, Southampton or New York was considered a significant event.
The advantages of jet aircraft are obvious but there is also something to be said for a slower pace which allowed people to make new friendships at a time when cell phones and text messages were not known. No one would turn the clock back on technology, but there were benefits to this bygone era. The Queen Mary 2 is likely to be the last of the great ocean liners, and it is thought the trans-Atlantic market can support no more than one vessel — if that.
A special screening of the award-winning PBS-TV documentary, “SS United States: Lady in Waiting”, will be held at the National Academy Museum (1083 Fifth Avenue, at 89th Street in Manhattan) on Thursday, March 11th, 7 p.m., which will followed by a reception and brief remarks by Walter Cronkite IV.