The ‘Buy American’ Order: Cynical or Ignorant?

By Kevin D. Williamson

Wednesday, April 19, 2017

Donald J. Trump is nothing if not a consummate entertainer, and the character he plays on television — “Donald J. Trump” — has appeared in all manner of entertainment: the game show he hosted for many years, pornographic films, the 2016 presidential campaign. Now he is taking on a strange new role: that of Debbie Wasserman Schultz.

Trump, who is surrounded by people who fancy themselves “nationalists” (in the cause of what nation, it is not entirely clear), is wading deep into an ancient puddle of stupidity most recently explored by Barack Obama (remember his “nationalist” moment, which lasted for about a month in 2011?) and Debbie Wasserman Schultz, the woman who (accidentally) did more than anyone other than Kellyanne Conway and Hillary Rodham Clinton to put Trump in the White House. To call it “economic nationalism” would be too grand: It is merely a very narrow form of special-interest politics consisting of backdoor handouts to favored corporate interests.

Trump has signed an executive order organized around two themes: “Buy American” and “Hire American.” In sum, the executive order is intended to provide incentives for American businessmen to . . . not act too much like the guy who built Trump Tower with illegal-immigrant labor and who relies on the H-2B visa program to keep Mar-a-Lago stocked with dishwashers and housekeepers. That guy, if we are to take Trump’s rhetoric seriously, is kind of a jerk, one who doesn’t care about the country at all.

The “Buy American” order is, in Trump style, pretty vague, with a lot that will need to be filled in later by people who know what the hell they’re talking about. (Fortunately, he does have a few of those around.) It makes minor administrative changes to existing “Buy American” federal procurement rules, which date back to the “Buy American Act” passed in 1933, a year not renowned for the excellence of its political and economic ideas. Bad call, Herbert Hoover.

The Buy American Act essentially requires that the federal government go to U.S.-based providers both for raw materials such as steel and concrete and for finished goods such as computers and automobiles. Because this is incredibly stupid and fundamentally unworkable, there are waivers: Washington loves a waiver — see the Affordable Care Act. Writing an unreasonable law and including discretionary waivers puts a great deal of power in the hands of politicians, many of whom turn out to be interested in such things as money and power, which introducing a large element of uncertainty and outright capriciousness into the procurement process.

The current waiver options are pretty broad: The Buy American rules can be waived if the desired goods are not available in the United States or if U.S. providers produce goods of insufficient quality; if the cost of U.S. goods is “unreasonable”; if waiving the rules serves “the public interest.” In practice, that means if you have the right friends and make the right donations, the Buy American rules may be used to steer contracts your way. If you don’t, they won’t.

This is how you get perfectly legal corruption.

Another set of relevant rules, dating from 1979, permit the Buy American rules to be waived in favor of companies based in countries that waive their own procurement preferences, if they have them. That gets complicated for Trump, because it includes not only our NAFTA trading partners but all the signatories to the World Trade Organization’s accord on government procurement, a list that includes the European Union, China, Japan, the Republic of Korea, New Zealand, Singapore, Switzerland, Norway, Israel, Canada, and the mighty nation of Liechtenstein, the free-trading capitalistic powerhouse so open to outsourcing that it uses another country’s currency (Go, CHF!) and yet, in spite of leaving itself open to exploitation by wily foreign neo-mercantilists, manages to have the highest personal incomes in all of Europe.

The U.S. Department of Defense, which cares a great deal about having the best stuff, has more than 20 reciprocal procurements of its own. There are further agreements on things like trade in civil aircraft, which means that even Macau gets a nose in under the free-trade tent. (This 2005 GAO report is a pretty good explainer.) That’s a lot of paper, much of which cannot simply be set aside with an executive order.

Trump’s order contains some truly risible feel-good provisions, e.g. moving the sign-off requirements up the chain of command in the agencies and requiring cabinet officers to think good and hard about whether companies are based in countries that have trade practices that Donald J. Trump might consider unfair.

Don’t expect that to have much impact. It’s just another exciting distraction: chum for chumps.

No serious person in Washington takes this Buy American stuff seriously as anything other than what it is: a shakedown. But Washington is not populated exclusively by serious people.

Which brings us to Debbie Wasserman Schultz.

A pig can sniff out a truffle from a mile away, and Schultz can root out a wheedle, no matter how low or dishonorable, in practically any situation. In the wake of the 2008–09 financial crisis, corporate welfare had a big moment, thanks in no small part to Barack Obama, who was willing to throw out the rulebook (and the bankruptcy code) in order to make sure that the GM bailout functioned as a bailout for Michigan Democrats, the most important chapter of which is called the United Auto Workers union. Republicans, who sometimes remember that they are the party of free enterprise, opposed this: GM’s feckless management and its corrupt and useless union bosses were fit for each other, Republicans reasoned, so let ’em hang together. Schultz suddenly discovered economic nationalism. If it were up to the Republicans, she said, “we would be driving foreign cars.”

At the time, she drove an Infiniti FX35, a $50,000 SUV that isn’t made in Detroit.

Schultz went on to say that Republicans who opposed bailing out Democratic interest groups rejected “American exceptionalism,” a favorite conservative idea at the moment.

Economic nationalism and — a plainly fascist term — “economic patriotism” were all the rage in the Obama years. Ted Strickland — the former Ohio governor who upon leaving office was laid so low as to go to work for the Center for American Progress — gave a speech in which he indicted Mitt Romney’s deficit of “economic patriotism.” (Being all class, he later told a laughing and cheering crowd that the death of Antonin Scalia “happened at a good time.”) Barack Obama, complaining that George W. Bush’s economic policies were lining Chinese pockets, denounced him as “unpatriotic.”

Trump told the crowd in Wisconsin that his order will “protect workers and students like you. It’s America First — you better believe it!” Of course, that’s what Obama said when he was stirring the same mess for the same reason. That’s what Debbie Wasserman Schultz says when she wants a handout for her friends in Michigan. That’s what Ted Strickland used to say back when people listened to things said by Ted Strickland. People have been saying the same dumb things back to 1933 and the original Buy American Act. It was said for decades before, going back to the debate over the Corn Laws in England.

But it wasn’t protection from Big Daddy that made the United States the most powerful country in the world and the one with the most dynamic economy in human history. It was innovation, work, and investment, none of which can be managed on a fly-by-wire basis from the White House or from Mar-a-Lago, no matter how excellent the professional performance of all the nefarious foreigners employed there.

A Few Debate Questions for Obama That Won't Be Asked

By Michelle Malkin

Wednesday, October 03, 2012

 

On Wednesday night, left-leaning TV anchor Jim Lehrer of government-supported PBS will moderate the first 90-minute presidential debate in Denver. The forum will focus on domestic policy. Lehrer alone will determine the topics and questions for six 15-minute segments, and then he will control an "open discussion" for each segment.

 

We know the liberal media bias drill: Make the Republican candidate look like a scary extremist on social issues and a greedy capitalist pig on economic issues. Avoid the Democratic incumbent's record of failure. Run out the clock. Thank you and good night.

 

Here's my starter list of domestic policy debate topics and related questions that should be asked, but probably won't be. Lapdog media, please go ahead and prove me wrong:

 

--Border security/homeland security. On Tuesday morning, one Border Patrol agent was gunned down and another wounded at our southern border in Naco, Ariz. The agents were assigned to the station recently named after Brian Terry, the heroic Border Patrol agent shot and killed nearly two years ago by drug cartel thugs wielding weapons tied to the Operation Fast and Furious scandal.

 

After the Obama administration initially denied that U.S. Border Patrol agents were forced to fire on criminal attackers with non-lethal ammo, court records obtained by the Arizona Daily Star showed that Terry and our front-line protectors were indeed under deadly standing orders to use beanbag rounds before using live ammunition.

 

In December, the Department of Homeland Security's Office of the Inspector General reported that Border Patrol agent "training, deployed weapons, and rules of engagement have not kept pace with the increased violence on the border." Over the past five years, the IG found, "(v)iolence has significantly increased against Border Patrol agents. Since 2007, assaults on agents have risen more than 35 percent, including 13 deaths."

 

Is the beanbag order still in place today?

 

Why has the Terry family been forced to file a federal lawsuit to obtain justice?

 

If the buck stops at the top, why does Attorney General Eric Holder still have a job after years of official DOJ obstruction and falsehoods during the Fast and Furious investigations?

 

And as commander in chief, what exactly are you doing to ensure that the men and women currently assigned to protect our borders are adequately armed and fully supported in their mission to defend American sovereignty and homeland security?

 

--Integrity in government. You famously declared, "A democracy requires accountability, and accountability requires transparency." Yet, the very first act of your administration was to violate your transparency pledge to allow full, public viewing of all legislation five days before you signed it.

 

In fact, the White House didn't even post the very first bill you signed -- the 2009 Lilly Ledbetter Act -- until after you signed it.

 

You failed to televise health care negotiations as promised. You cut endless backroom deals protected from public scrutiny. In addition, your administration has routinely evaded disclosure law by meeting with lobbyists off the books at D.C.-area coffee houses and private townhouses, where Secret Service background checks and login routines are abandoned.

 

In August, House GOP investigators unearthed communications at the Department of Energy urging officials to use their personal email accounts instead of government accounts to discuss the massive Solyndra green loan failure -- to protect themselves from subpoenas.

 

And last week, Bloomberg News reported that 19 out of 20 cabinet-level agencies under your administration have failed to follow the requirements of the Freedom of Information Act. "During the first year of the administration," the news service found, "cabinet agencies employed exemptions 466,402 times, a 50 percent jump from the last year of the presidency of George W. Bush." Those exemptions remain at levels higher than Bush.

 

How, exactly, can you claim to have run the most transparent administration ever based on your actual record?

 

--Auto bailout. Your campaign touts the "success" of the government takeover of the auto industry as one of your proudest accomplishments. In 2010, you bragged that "American taxpayers are now positioned to recover more than my administration invested in GM, and that's a good thing."

 

Yet, your Treasury Department won't take up GM's recent offer to repurchase 200 million of the roughly 500 million shares the U.S. holds -- because it would incur a $15 billion loss to taxpayers right before the election. GM still owes nearly $30 billion of the $50 billion it received, and its lending arm still owes nearly $15 billion of the more than $17 billion it received. Foreign workers and overseas plants have soaked up billions of American bailout tax dollars. But some 20,000 Delphi non-union workers saw their pensions eroded and health benefits disappear as part of the deal you cut with United Auto Workers.

 

How are Delphi workers, bondholders, car dealers and taxpayers better off now than they were before the Government Motors bailout given the actual record? If this is your proudest accomplishment, why on earth would reality-based voters want you back in the driver's seat?

The Democrats’ GM Fiction

National Review Online

Monday, September 10, 2012

 

The Democrats have decided to run in 2012 as the bailout party. It is an odd choice — the 2008–09 bailouts were deeply unpopular among the general public, and even their backers were notably conflicted about the precedent being set and the ensuing moral hazard. But Democrats have nonetheless made one of the most abusive episodes in the entire bailout era their economic cornerstone: the government takeover of General Motors.

 

The GM bailout was always an odd duck: The Troubled Asset Relief Program (TARP) was created in order to preserve liquidity in the financial markets by heading off the collapse of key financial institutions that had made catastrophically bad bets on real-estate securities — nothing at all to do with cars, really. GM’s financial arm, today known as Ally Financial, was in trouble, but GM’s fundamental problem was that its products were not profitable enough to support its work-force expenses. A single dominant factor — the United Auto Workers union’s extortionate contracts with GM — prevented the carmaker from either reducing its work-force costs or making its products more efficiently. And its hidebound management didn’t help.

 

Admirers of the GM bailout should bear in mind that it was the Bush administration that first decided to intervene at the firm, offering a bridge loan on the condition that it draw up a deeply revised business plan. President Obama’s unique contribution was effectively to nationalize the company, seeing to it that the federal government violated normal bankruptcy processes and legal precedent to protect the defective element at the heart of GM’s troubles: the financial interests of the UAW. It did this by strong-arming GM’s bondholders into taking haircuts in order to sweeten the pot for the UAW. The Obama administration also creatively construed tax law to relieve GM of tens of billions of dollars in obligations — at the same time that Barack Obama & Co. were caterwauling about the supposed lack of patriotism of firms that used legal means rather than political favoritism to reduce their tax bills.

 

Mitt Romney’s proposal for a structured bankruptcy would have necessitated considerable federal involvement, too, but with a key difference: The UAW contracts would have been renegotiated, and GM’s executive suites would have been cleaned out, placing the company on a path toward innovation and self-sufficiency rather than permanent life support. Which is to say, Obama did for GM what he is doing by un-reforming welfare: creating a dependent constituency.

 

The Democrats cling to the ridiculous claim that the bailout of GM and its now-Italian competitor, Chrysler, saved 1.5 million U.S. jobs. This preposterous figure is based on the assumption that if GM and Chrysler had gone into normal bankruptcy proceedings, the entire enterprise of automobile manufacturing in the United States would have collapsed — not only at GM and Chrysler but at Ford and foreign transplants such as Toyota and Honda. Not only that, the Democrats’ argument goes, but practically every parts maker, supplier, warehousing agency, and services firm dedicated to the car industry would have collapsed, too. In fact, it is unlikely that even GM or Chrysler would have stopped production during bankruptcy: The assembly lines would have continued rolling, interest and debt payments would have been cut, and — here’s the problem — union contracts would have been renegotiated. Far from having saved 1.5 million jobs, it is not clear that the GM bailout saved any — only that it preserved the UAW’s unsustainable arrangement.

 

Bill Clinton bizarrely tried to claim that the bailout has been responsible for the addition of 250,000 jobs to the automobile industry since the nadir of the financial crisis. Auto manufacturers and dealerships have indeed added about 236,000 jobs since then, but almost none are at GM, which has added only about 4,500 workers, a number not even close to offsetting the 63,000 workers that its dealerships had to let go when the terms of the bailout unilaterally shut them down.

 

Ugly as the bank bailouts were, the federal government appears set to make its money back on most of them, with the exception of some smaller regional banks and CIT. Even AIG, one of the worst of the financial basket cases, is set to end up being a break-even proposition for U.S. taxpayers. But tens of billions of dollars will be lost on GM. The federal government put up more for a 60 percent interest in the firm than GM is worth today.

 

At their convention, Democrats swore that GM is “thriving,” but the market doesn’t think so: GM shares have lost half their value since January 2011. And while the passing of the Great Recession has meant growing sales for all automakers, GM is seriously lagging behind its competitors: Its sales are up 10 percent, a fraction of the increases at Kia, Toyota, Volkswagen, and Porsche. With its sales weak, its share price crashing, and its business model still a mess, some analysts already are predicting that GM will return to bankruptcy — but not until after the election.

 

The Obama administration talks up all of the “jobs” it saved at GM — but jobs doing what? Manufacturing automobiles that are not competitive without a massive government subsidy? Propping up an economically unviable enterprise just long enough to get Barack Obama reelected? As much as it will pain the hardworking men and women of GM to hear it, it is not worthwhile to save jobs at enterprises that cannot compete on their own merits. So long as the federal government is massively subsidizing the operation, a job at GM is a welfare program with a fairly robust work requirement. (And we all know how the Obama administration feels about work requirements.)

 

We have bankruptcy laws and bankruptcy courts for a reason. It may make sense to expedite the proceedings for very large firms such as GM in order to prevent disruptions in the supply chain that would, as Ford’s executives argued, harm other, healthier firms. But bankrupt is what GM was, and bankrupt is what GM is, a fact that will become blisteringly apparent should the government ever attempt to sell off the shares it owns in the company.

 

The GM bailout was a bad deal for GM’s creditors, for U.S. taxpayers, and, in the long run, for the U.S. automobile industry and our overall national competitiveness. No wonder the Democrats are campaigning on a fictionalized account of it.

From Bad to Worse: Obama’s GM Bailout

By Michael Barone

Thursday, August 23, 2012

 

Readers with long memories may recall that Charles E. Wilson, president of General Motors and nominee for secretary of defense, got into trouble when he told a Senate committee, “What is good for the country is good for General Motors, and what’s good for General Motors is good for the country.”

 

That was in 1953, and Wilson was trying to make the point that General Motors was such a big company — it sold about half the cars in the U.S. back then — that its interests were inevitably aligned with those of the country as a whole.

 

Things are different now. General Motors’ market share in the U.S. is below 20 percent. It has gone through bankruptcy and exists now thanks to a federal bailout. But Barack Obama seems to think that it’s as closely aligned with the national interest as Wilson did.

 

“When the American auto industry was on the brink of collapse, I said, let’s bet on America’s workers,” Obama told a campaign-event audience in Colorado earlier this month. “And we got management and workers to come together, making cars better than ever, and now GM is No. 1 again, and the American auto industry has come roaring back.”

 

His conclusion: “So now I want to say that what we did with the auto industry, we can do in manufacturing across America. Let’s make sure advanced, high-tech manufacturing jobs take root here, not in China. Let’s have them here in Colorado. And that means supporting investment here.”

 

Was he calling for a federal bailout of other American manufacturing companies? And what does he mean by “supporting investment”? White House reporters have not asked these obvious questions, for the good reason that the president, who has been attending fundraisers on an average of one every 60 hours, has had only one press conference in something like two months.

 

Obama talks about the auto bailout frequently, because it’s one of the few things in his record that gets positive responses in the polls. But he’s probably wise to avoid probing questions, since the GM bailout is not at all the success he claims.

 

GM has been selling cars in the U.S. at deep discount, and while it’s making money in China — and is outsourcing operations there and elsewhere — it’s bleeding losses in Europe. It’s spending billions to ditch its Opel brand there in favor of Chevrolet, including $559 million to put the Chevy logo on Manchester United soccer-team uniforms — and it just fired the marketing exec who cut that deal.

 

It botched the launch of its new Chevrolet Malibu by starting with the green-friendly Eco version, which pleased its government shareholders even though the car got lousy reviews. And it’s selling only about 10,000 electric-powered Chevy Volts a year, a puny contribution toward Obama’s goal of one million electric vehicles on the road by 2015.

 

“GM is going from bad to worse,” reads the headline on the analysis of Automotive News’s editor in chief, Keith Crain. That’s certainly true of its stock price.

 

The government still owns 500 million shares of GM, 26 percent of the total. It needs to sell them for $53 a share to recover its $49.5 billion bailout. But the stock price is around $20 a share, and the Treasury now estimates that the government will lose more than $25 billion if and when it sells.

 

That’s in addition to the revenue lost when the Obama administration permitted GM to continue to deduct previous losses from current profits, even though such deductions are ordinarily wiped out in bankruptcy proceedings.

 

It’s hard to avoid the conclusion that GM is bleeding money because of decisions made by a management eager to please its political masters — and by the terms of the bankruptcy arranged by Obama car czars Ron Bloom and Steven Rattner.

 

Rattner himself admitted late last year, in a speech to the Detroit Economic Club: “We should have asked the UAW [United Auto Workers union] to do a bit more. We did not ask any UAW member to take a cut in their pay.” Non-union employees of GM spin-off Delphi lost their pensions. UAW members didn’t.

 

The UAW got their political payoff. And GM, according to Forbes writer Louis Woodhill, is headed to bankruptcy again.

 

Is this really what Obama wants to do for all manufacturing across America? Let’s hope not.

Meet the Real Workers Obama Screwed Over

By Michelle Malkin
Wednesday, August 08, 2012

Chutzpah overload in full effect: President Obama's sleazy super-PAC, run by his former White House spokesman Bill Burton, just released an ad accusing GOP presidential candidate Mitt Romney of causing the cancer death of a steelworker's wife.

It's not just a slanderous and false attack. It's a foolish attempt to camouflage the administration's massive jobs death toll, politicized pension plundering and Big Labor bailout cronyism. And it will backfire big time because the thousands and thousands of true victims of Obama's economic wreckage are speaking up and fighting back.

Let's dispense with the "Romney = murderer" meme first. The warped Priorities USA ad features the claims of one Joe Soptic, a former employee at the Kansas City-based GST Steel plant. The plant went bankrupt years after Bain Capital acquired it. Soptic blames Romney for the loss of his job and health insurance -- and for the subsequent death of his wife a "short time after" the plant's closure.

But Romney stopped working for Bain in 1999. The plant closed in 2001. And Soptic's wife died in 2006. Oh, and Soptic admitted to CNN on Tuesday afternoon that the family in fact had health insurance at the time of Soptic's wife's death. But it's still all-powerful, time-traveling, omnipresent Darth Romney's fault.

Obama flack turned super-PAC slime-master Burton shrugged off the facts and doubled down on the campaign's class-warfare bloviation. "Families and individuals had to find new jobs, new sources of health insurance and a way to make up for the pensions they lost," he told Politico. "Mitt Romney has had an enduring impact on the lives of thousands of men and women, and for many of them, that impact has been devastating."

Yet, the Soptic story is the best they could scrape together? Stamp this one "EPIC FAIL."

While Team Obama promotes fables to indict Romney, the incontrovertible stories of the current administration's economic malpractice are finally getting out. In 2010, I first reported on how Obama's UAW bailout threw tens of thousands of nonunion autoworkers under the bus. It's the ongoing horror story of some 20,000 white-collar workers at Delphi, a leading auto parts company spun off from GM a decade ago.

As Washington rushed to nationalize the U.S. auto industry with $80 billion in taxpayer "rescue" funds and avoid contested court termination proceedings, the White House auto team and the Treasury Department schemed with Big Labor bosses to preserve UAW members' costly pension funds by shafting their nonunion counterparts.

In addition, the nonunion pensioners lost all of their health and life insurance benefits. The abused workers -- most from hard-hit northeast Ohio, Michigan and neighboring states -- had devoted decades of their lives as secretaries, technicians, engineers and sales employees at Delphi/GM. Some workers have watched up to 70 percent of their pensions vanish.

"I worked for 34 years at GM/Delphi Corp. When Delphi went bankrupt, we lost everything," Dana Strickland of Michigan wrote me. "Because I was salaried (middle management), we lost our pension and health insurance. I did not belong to the union, so GM/Delphi could have cared less. I have never felt so betrayed. We never hear this brought to the public's attention. People need to know how we were screwed, while the Obama administration kissed up to the union."

"I'm one of the Delphi Salaried Retirees that lost the health care, life insurance and 67 percent of the pension I was promised in retirement after working hard for 40 years," Charles Stone of Michigan e-mailed. "Words cannot describe the frustration and let down these events have thrust on my family's lives, and to have GM's rescue all sugar-coated in the current political environment is like putting lipstick on a pig. ... We will continue to fight to right this grievous wrong."

Tom Rose of Ohio added: "I am one of the 20,000 salaried retirees that lost all of my health care and -- in my case -- a 40 percent pension cut. So I am now paying increased health care costs with fewer pension dollars and contributing what is left to our lawsuit to correct this injustice. Meanwhile, the politically connected union has their full pension and 90-plus percent of their health care. You have hit upon the key question: How can our own federal government pick winners and losers amongst its own citizens?"

Through two costly years of litigation and investigation, the Delphi workers have exposed how the stacked White House Auto Task Force schemed with union bosses to "cherry pick" (one Obama official's own words) which financial obligations the new Government Motors company would assume and which they would abandon based on their political expedience. Obama's own former auto czar Steve Rattner admitted in his recent memoir that "attacking the union's sacred cow" could "jeopardize" the auto bailout deal.

In June, 20 months after a federal judge first ordered the government to cooperate, the Delphi Salaried Retirees Association broke through the administration's information stonewall and dislodged 62,000 pages of documents in their lawsuit to right the administration's wrongs. As The Daily Caller reported on Tuesday, the documents included "internal government emails (that contradicted) sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts ... and that administration figures violated federal law."

Meanwhile, the Delphi workers who got shafted are getting in the faces of the administration and the public with a new web ad produced by conservative advocacy group Let Freedom Ring. They are asking, "Why, Mr. President? Why?" They -- and America -- deserve answers and justice, not more Bizarro World smears and fantastical bedtime stories.

Chevy Volt, Perfect Car for the One Percent, Suspends Production

By John Ransom
Saturday, March 03, 2012

General Motors reached another Obama milestone when they announced late on a Friday afternoon that they were suspending production of the Obama-inspired Chevy Volt for five weeks due to lack of demand.

Presumably the Volt was an attempt by GM to help Obama with his pledge to put 1 million electric cars on the road in return for the tens of billions of dollars in forgivable “loans” that the company got from the Obama administration from the TARP bailout.

The hybrid gas-electric vehicle gets 25 miles on a full, overnight charge and costs around $40,000. To date, GM has sold around 10,000 vehicles. To put it in perspective, the Chevy Corvette has a sticker price of $49,600.

If the Volt’s not in the federal witness protection program, it ought to be.

“Sales also took a hit last fall when the National Highway Traffic Safety Administration opened a probe into why two Volts burst into flames days or weeks after severe NHTSA crash testing,” reports USA Today. Leaks from the cooling system were caused by shortages in the electrical system that prompted the fires. But the discovery came only after weeks of bad press for GM. Eventually the car company offered to buy back every single Volt for any consumer who was unhappy.

But lack of sales- and production- hasn’t stopped the government-owned car company from mapping out a marketing strategy that might have been fashioned by the marketing geniuses of the IRS and the United States Postal Service combined: “The Volt’s technology and its recent accolade from Consumer Reports make the Volt a marketing tool for Chevy,” said Alan Batey, vice president for Chevrolet U.S. sales, at the beginning of December according to Bloomberg. “This vehicle is about more than how many we sell,” Batey said. “This vehicle is a magnet around everything we are trying to do to showcase our brand.”

If that’s the case, it looks like a poor magnet and a poor tool. And taxpayers, who are still owed billions by the company, are about to get screwed even worse in the coming months.

The website ExtremeTech calculates that the car costs about 6.3 cents per mile when running on electricity at 13 cents per kilowatt hour. But that rate ignores depreciating the cost of a replacement battery ($8,000) over the life of the battery warranty.

When you add in the cost of the battery depreciation, you get a calculation of about 14.3 cents per mile for the Volt. As the tech site notes: “A compact car getting 35 mpg would cost 10 cents per mile using $3.50-a-gallon gasoline.” So in other words, the Volt, in addition to the high cost to purchase, costs 43% more to operate than a conventional car.

That’s why the Volt is the perfect car for the Occupy Wall Street crowd: It makes no economic sense no matter how convoluted its supporters make the economic argument or how much taxpayer support it’s given. The Volt relied heavily on $7,500 federal government subsidies- and even then couldn’t make a go of it.

As one economist pointed out in the USA Today:

"The fact that GM is now facing an oversupply of Volts suggests that consumer demand is just not that strong for these vehicles," comments Dr. Lacey Plache, chief economist for auto research site Edmunds.com. "The price premium on the Volt just doesn't make economic sense for the average consumer when there are so many fuel-efficient gasoline-powered cars available, typically for thousands of dollars less."

Even GM employees aren’t buying them: Eldon Renaud, president of United Auto Workers Local 2164 at the Bowling Green, Kentucky plant noted that his members were going “to use their [$7,000] profit sharing checks to put a down payment on the” Corvettes they manufacture.

Conversely, what does it tell you when GM won’t see a bump in production on a model they sell less than 2,000 of during a month when they pay record $7,000 bonuses to 47,500 workers?

USA Today goes on to point out that the Volt’s “average buyer has a $170,000 household income and doesn't need to have a new-car purchase subsidized” by the federal government.

But that’s how The One takes care of the One Percent and an iconic car company goes from “Like a Rock” to “The Perfect Company for the One Percent.”

Obama Builds the Wrong Car

By Marita Noon
Sunday, January 29, 2012

Mr. President, you are building the wrong car.

In a May 2007 speech before the Detroit Economic Club, Candidate Obama chastised American automakers for building the wrong cars—while they were building “bigger, faster cars,” “foreign competitors were investing in more fuel-efficient technology.” He stated that “it’s not enough to only build cars that use less oil—we also have to move away from that dirty dwindling fuel altogether.” He noted that “the transformation of the cars we drive and the fuels we use would be the most ambitious energy project in decades.” He promised “generous tax incentives” and “more tax credits” to make this happen. He believed that the additional costs are “the price we pay as citizens committed to a cause bigger than ourselves.” He claimed to be a leader who could make this happen as he intoned, “Believe me, we can do it if we really try.”

While that speech did not mention the Chevy Volt, or even electric cars, it surely laid out his ideology. For the most part, these are campaign promises he has kept. He has driven Detroit to “move away from that dirty fuel altogether.” He has offered “generous tax incentives” and “more tax credits.” To see “the most ambitious energy project in decades” become a reality his administration has handed out loans to virtually every strata in the electric car’s foundation.

He’s bailed out GM—which allowed government manipulation of the market to produce the Volt in the first place.

He’s given billions of taxpayer dollars to “green” energy companies who promised to deliver the electricity—Solyndra is just the one of the myriad of failures in his “ambitious energy project.”

Beacon Power Company received $39 million of its government-guaranteed loan before it filed for bankruptcy. Beacon Power developed new technology that supposedly provides energy storage designed to help the intermittent solar and wind power be used by power grids, which need stable power to remain reliable.

Just this week, another Obama backed company filed for bankruptcy. EnerDel made lithium-ion batteries for electric cars. It received more than $100 million in government funding from the Obama administration, as part of the economic stimulus package and green energy push. One year before EnerDel filed for bankruptcy, Vice President Biden visited the plant and crowed: “A year and a half ago, this administration made a judgment. We decided it’s not sufficient to create new jobs—we have to create whole new industries.” The reason for EnerDel’s demise? “The company suffered when demand for the batteries dropped as fewer Americans than expected opted for electric cars.”

Yes, the Obama administration has worked hard to line up the dominos to insure a “transformation of the cars we drive and the fuels we use.” They have provided “generous tax incentives” and “more tax credits.” But to what end?

The dominos have fallen, one right after the other—all the way up to the Chevy Volt and beyond.

Last week GM launched “national and television print ads” to try to bolster the slumping sales for the Volt. (Every time you see an ad for an electric car, think of President Obama and your tax dollars.) Dealer orders are down. They report: “We just haven’t been seeing the interest. The cost definitely has something to do with it.” GM is considering slowing production due to the less-than-expected demand and has temporarily laid-off 1,200 workers.

In 2011, instead of the forecasted 10,000, 7,671 Volts were sold—which comes out to three-hundredths of 1 percent of US carmakers unit sales. Analysts say there has been a “slow initial uptake of the first models to come on the market.” Many of the Volts that were sold were to government. New York City bought 50. The city of DeLand, FL used part of a $1.2 million federal grant to buy five. Perhaps in effort to save his “ambitious energy project,” President Obama has committed the fed to buying 100+. He’s even pushed his Jobs Council leader, Jeffery Immelt, to buy them. GE will purchase 3000 through the year 2015.

Of course GE is one of the leading suppliers of the charging stations needed to power the Volt—much like those removed by Costco, due to lack of use. After investing a lot of time and money on recharging stations, GE has to do what they can to not let the market slip further away.

But, remember, “we can do it if we really try.” From the first domino to the last, the administration has really tried. The Volt, says the Financial Times, was “fast-tracked through development in a process it likened to a ‘moonshot.’” Adam Jones, an analyst with Morgan Stanley, believes that they are “not yet ready for prime time.” Addressing the removal of charging stations at Costco, general manager for northern California, Dennis Hoover said: “Why should we have anybody spend money on a program nobody’s thought through?” Calum MacRae of PWC’s Autofacts states that electric vehicles “are flawed in terms of convenience.”

Citing statistics for the Nissin Leaf, Forbes Magazine counts the cost of an electric vehicle (EV): “At $0.11/KWH for electricity and $4.00/gallon for gasoline, you would have to drive the Leaf 164,000 miles to recover its additional purchase cost. Counting interest, the miles to payback is 197,000 miles. Because it is almost impossible to drive a Leaf more than 60 miles a day, the payback with interest would take more than nine years.” But, they state: “The cost is not the biggest problem.” “The biggest drawback is not, range, but refueling time. A few minutes spent at a gas station will give a conventional car 300 to 400 miles of range. In contrast, it takes 20 hours to completely recharge a Nissan Leaf from 110V house current. An extra-cost 240V charger shortens this time to 8 hours. There are expensive 480V chargers that can cut this time to 4 hours, but Nissan cautions that using them very often will shorten the life of the car’s batteries.”

Plus, the cost of electricity keeps going up. According to the Energy Information Administration, residential electricity rates have risen from 11.26 cents per kWh in 2008, to 11.51 cents in 2009, to 11.54 cents in 2010. With the increasing regulation on cost-effective coal-fueled generation, and the proposed plant closures, that trend is likely to get even more dramatic.

No wonder initial “uptake” has been slow. Meanwhile, impressive advances in the technology for the traditional internal combustion engine are being made—with some outperforming hybrids. A gasoline powered Ford Focus costs about half of its electric version sibling. Remove the $7,500 US government tax credit and the EV is even less desirable.

Despite Obama telling Detroit that they are building the wrong cars, Americans don’t want what Obama is selling. Washington has poured billions of dollars in making cars that people have to be paid to buy. Meanwhile, Chrysler is enjoying a resurgence thanks to Jeeps. Chrylser is adding more than a thousand jobs to build gas-guzzling vehicles like the Dodge Durango and Jeep Cherokee.

Mr. President, you are building the wrong car.

But this was before his now-public, election-year conversion experience, as expressed in the State of the Union Address. Now, leaving many in his eco-friendly base “more than a little unhappy,” he’s touting fossil fuels—particularly natural gas (even though Nancy Pelosi doesn’t think natural gas is a fossil fuel). In the SOTU, the President said: “The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”

Imagine if he’d had this revelation in 2007. While I oppose federal tinkering with the markets, since the Obama administration was hell-bent on spending—a so-called “stimulus,” what might the world would look like today if the $2.4 billion spent subsidizing electric cars and their various components had been spent on infrastructure to support vehicles powered by natural gas?

Instead, industry, like Chesapeake Energy, and investors, like T. Boone Pickens, are using their own money and are building the needed fueling stations to allow for compressed natural gas (CNG) powered trucks to crisscross the nation. Without government pressure, and without having to retool, Honda is adapting the Civic to make a CNG-fueled car with a 250 mile range that can be refueled in the same time as a gasoline-fueled automobile (rather than the hours needed for an EV). While prices at the pump have doubled since President Obama took office, and electricity rates are “necessarily” skyrocketing, natural gas’ abundance has dropped prices to the lowest in more than a decade.

On its own, the free market is going to create the “transformation of the cars we drive and the fuels we use,” without any help from the White House. Perhaps it is time to stop throwing good money after bad and allow the Volt to go the way of Baker Electrics’ cars—or keep them for the rich who will buy them even without “generous tax incentives.”
Now that President Obama has had his oil-and-gas-conversion experience and angered his green base, maybe he could go ahead and approve the pipeline. Then we’d know his conversion is real and not just an election-year transformation.

Low Volt-age

Jonah Goldberg
Friday, August 06, 2010

Let us compare the Volkswagen and the "Voltswagen."

The original Volkswagen was intended as the "people's car" (that's what Volkswagen means). The idea of a cheap, safe, reliable car for the working man was popular before Adolf Hitler embraced it, but as a self-proclaimed man of the people, he made the idea his own. Whereas industrialists and aristocrats didn't think the common man needed a car ("the people's car is a bus" was their refrain), Hitler sided with one of his heroes, Henry Ford, arguing that everyone deserved his own ride. He ordered the German Labor Front, the union arm of the Nazi Party, to start building a people's car. When it looked like the car might be too expensive, the Labor Front created a savings program that promised a car for even the poorest workers.

At the 1934 Berlin Motor Show, Hitler proclaimed: "It is a bitter thought that millions of good and industrious people are excluded from the use of a means of transport that, especially on Sundays and holidays, could become for them a source of unknown joy."

And then there's the electric-gas hybrid Chevy Volt, aka the "Voltswagen." At $41,000, about as much as the average American makes in a year, this is no people's car. GM, owned by the government and the labor unions, is pitching it to affluent hipsters who don't need a lot of space for a family. Deloitte Consulting says that the demand for such cars is from "young, very high income individuals" from households that make more than $200,000 a year, which is why the Volt will be rolled out in upscale, trendy urban markets. (Meanwhile the Chevy Cruze, the gas-only version of the Volt, has more room inside and is a mere $17,000.)

Because the Volt's sticker price might be too high for even that crowd, the government is offering a federal subsidy of up to $7,500 (Californians have a state subsidy, too), which means that working-class people will be helping to pay for playthings for upper-income people.

"Like the EV1 that GM tried to peddle in the California market," Kenneth Green, an environmental scientist at the American Enterprise Institute, says, "the Volt is a vanity car for the well-off that will be subsidized by less well-off taxpayers at all stages, from R&D to sales and to the construction of charging stations."

Indeed, the Volt's price is $41,000, but the cost is much higher. "Government Motors" is already selling the car at a loss. According to the blogger Doctor Zero, if you apply the subsidies that have gone directly into the car to just the first 10,000 vehicles, the cost is more like $81,000 per car.

Of course, electric-car boosters say this sort of thing is necessary to get the industry up and running (To which Green responds: "Supporters claim that electric cars need subsidies because they're still in their infancy. Electric cars have been around for over 100 years. That's some infancy.")

But would it be a good thing if we all switched to electric cars? The point is to reduce CO2 emissions, right? But in some regions, we get our electricity from CO2-spewing coal. The more electricity pulled from the grid, the more coal is burned, essentially replacing dirty oil with dirtier coal (which is why some coal backers see much promise in electric cars). Studies confirm that China -- which is allegedly "beating us" in the race to a green economy -- would produce vastly more greenhouse emissions if it switched to electric vehicles.

The expected response to that is that we need stuff like CO2-free windmills to generate electricity. Don't get me started on the Volkspropeller.

Regardless, no matter how you crunch the numbers or the science, there's no disputing that this is a political car, designed to meet the demands not of an economic market but of an ideological one, directed by the collusion of big business and big government. In this sense, the Volkswagen and the Voltswagen have a lot in common.

If the government wasn't taking taxpayer money and spending it on toys for upscale urban liberals (Obama's strongest base of support outside of black voters and labor unions), there'd be no reason to care about the Volt. If rich people want to be "early adopters" and buy expensive gadgets that help them preen the plumage of their political sanctimony, that's great. It's not so great when the government gets involved in wealth redistribution, and it's outrageous when it involves redistributing wealth upwards.

"Hope," "Change," And Lawsuits: Obama's Battle For American Collectivism

Austin Hill
Sunday, May 24, 2009

It’s not about you.

It doesn’t matter who “you” are. It’s no longer about your rights as an individual, or the on-going need to safeguard the rights of all individuals. No, at this stage in the American story, It is now about Barack Obama’s need to save everybody, and, thus, it is the “collective good” that matters.

It is now clear that President Obama is on a mission to convert the U.S. to “collectivism.” This, presumably, was part of what he was conveying during his campaign, when he promised “change” for America.

And rest assured that a “change” in America’s governing philosophy is well underway, because collectivism is a philosophy that emphasizes human “interdependence” over the traditionally American notion of “independence,” and the “wellbeing of everybody” over the ‘wellbeing of the individual person.”

So if the rights of a few hundred thousand individual investors get trampled on in the process of Barack Obama ushering-in the “American collectivist era,” well, that’s no big deal. Such sacrifices are worthwhile, as long as the greater good - the ‘collective good” - is enhanced.

Two weeks ago in this column I wrote about the President inserting himself in between the Chrysler Corporation, and some of Chrysler’s secured creditors. I pointed out that the status of being a “secured creditor” (as opposed to being an “unsecured creditor”) implies some specific legal rights. For example, in the event that a borrower - in this case, the Chrysler Corporation - declares bankruptcy, a “secured creditor” has the right to full payment of what the borrower owes, before the borrower goes about “negotiating” reduced ‘settlements” with the unsecured creditors. In the case of Chrysler, there are a handful of hedge funds that loaned money to the company, and, thus, these hedge funds are legally entitled to 100% repayment.

The legal rights of secured creditors are grounded in constitutional law, and the constitutional rights of individuals to make contractual commitments with each other. It’s also a very serious legal problem for an individual or group to disrupt other peoples‘ contractual relationships- in legal-speak, it’s called “tortious interference” - and until now, it has been unthinkable that the President of the United States would do such a thing, while in the process trample upon these very sacred Constitutional rights of private U.S. citizens.

But things are different now. We’re on a journey towards “collectivism,” and in “saving” Chrysler, Obama will serve the “collective good” and save us all.

So when the hedge fund managers refused Obama’s “offer” of 29 cents on the dollar as “payment” of Chrysler’s debt, and instead insisted on exercising their legal rights and demanded 100% payment from Chrysler, Obama threw a fit. Legal rights be damned, the President began accusing the hedge fund managers of being unpatriotic and selfish.

That was two weeks ago. And this past week, managers of two Indiana state pension funds, which were among the roster of Chrysler’s secured creditors, went to court to try to block Barack Obama’s forced “settlement.” The pension funds represent private retirement accounts of school teachers, and police officers, and the manager of one of the funds claimed that Obama’s plan would force the teachers and police officers invested with him to lose $4.6 million.

So let’s be very clear about what’s happening here: teachers and police officers, presumably people of modest economic means, who have assumed the personal responsibility of saving and investing for their individual futures, have invested in certain funds, with the assumption that the money they “put in” to a fund will produce a “return.”

And now, Barack Obama, in defiance of investment law, contract law, and basic accounting practices, is seeking to force these teachers and cops - along with lots of others who in good faith invested in the Chrysler Corporation - to abandon their hope of a “return on investment,” and instead, accept a 70% loss of their savings.

This is to say that, by insisting on their individual, legal right of 100% repayment from Chrysler, these teachers and cops have gotten in the way of Obama’s plans to “transform Chrysler,” and his goal of serving the ‘collective good.”

“That’s an outrageous accusation” the Obama fans will tell me. “Obama wants to help people, not hurt them.”

But individuals who plan for their own retirement and take personal responsibility for their lives can be a problem for a political leader who is intent on saving everybody. And damage wrought to even a few hundred thousand school teachers and cops is a small price to pay, if the “collective good” can be served.

Now that President Obama’s philosophical leanings have been revealed, America needs to know where the rest of the Congress stands. Do the members of Obama’s Democratic Party - the party “in charge” - share in the President’s collectivist vision? Are Pelosi, Reid, and the Democratic leadership willing to cast aside the freedom of the individual person, so one man can fulfill his hopes and aspirations for what he believes America should look like?