The Bailout

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In Washington, they always try to announce unpleasantness during the off-hours (weekends, holidays and such) so that – hopefully – the stink will be less noticed.GM lead 2

In Detroit, too.

The recent announcement of the accession of Mary Barra as the new CEO of General Motors just happened to be exactly coincident with the announcement that the federal government has divested itself of its remaining partial ownership of GM.

This is good news.

The bad news – according to the Center for Automotive Research – is that $14 billion in taxpayer dollars went up in smoke as a result of the government’s “investment” in GM.

Now, this is supposedly mitigated by the recovery of GM – and the existence of all the associated jobs (and consumer spending and tax revenue) that would have disappeared had GM not been crash-carted by the federal government. That is, had the violence of the state not been used to forcibly compel ordinary Americans to subsidize the failure of a big corporation and thereby immunize it from the moral hazard (having to face up to the consequences of poor decisions) that face them – you and me – in the course of their ordinary, individual lives.

But it’s a false premise.GM 1

Why is it assumed that, had GM not been crash-carted, a zero-sum game would have ensued? Certainly, there were parts of GM that were sound. Had the corporation gone on the block, these worth-something parts would not have been thrown away. Do people throw away machine tools? Physical plants? Of course not. They are sold – and re-used.

Productively.

Consider the analogy of a guy who owns a car he can no longer afford to fix. Perhaps he is not competent to fix it. In any case, he realizes it is time for him to bow out – and hand the keys to someone who can fix it (or who can afford to have it fixed). The car is not thrown away because it needs a brake job (or even a new engine). A free exchange takes place – and both parties are benefited. The in-over-his-head former owner walks away from something he isn’t able to deal with – cash in hand, which he can use for other productive purposes. The new owner has less cash in hand, but holds title to a new (to him) car that he will repair and which, once repaired, will be of more value to him than the cash he parted with.

This analogy is simple, but it scales.GM lead

Had natural market forces been allowed to take their course, there would have been change of a piece with our example above. Some people within the company – in over their heads, perhaps – would have had to get out. But new people would have come in - and made lemon aid out of lemons.

Without squeezing other people to do it.

Perhaps some of the individual brands (and specific car models) subsumed under the GM umbrella would have been sold off – but the viable ones would not have been given the needle.

Ownership changing hands is not the end of the world. Sometimes, in fact, it is a necessary tonic. So also the ebb and flow of success – and failure. The prospect of the latter encourages the former. It is much easier to be flippant about walking a tightrope knowing there’s a safety net below.

It has been observed that America is a mixed economy: Socialism for the rich – “free market” capitalism for the poor and middle class. Though the American economy is far from being free, the fundamental observation is valid. Corporate colossi such as GM are insulated from the poor decisions taken by management, which almost never feels any meaningful personal pain as a result of those decisions. They have “pull.” The small businessman, the individual proprietor does not. The former chuckles it up with congressmen and senators on private jets owned by the corporation. The latter gets auto-penned form letters from his congressman.GM odumbo

GM is making interesting cars again – and making money again. That’s great. But it’s simply not true that GM would not have continued to make cars – some of them, the ones worth making – absent the bailout.

They might not have been called GM cars. Someone else’s name (or some other company’s name) would have been on the fender, perhaps. Different people would probably have been in charge – and working the assembly lines.

So what?

Since when does a for-profit business (and those who run it) have the right to exist in perpetuity?

A business has the right to exist  exactly as long as there are customers willing to support it. Once those customers withdraw their support, a verdict has been rendered. For the state to forcibly interfere – and immunize a mismanaged company from the consequences of its mismanagement is to reward mismanagement.

And thereby, encourage more of it.GM final

Which is just what’s happened. If you’re “too big to fail,” the government will see to it that you cannot fail. Much less have to deal with any real consequences of failure. From car companies to big banks, moral hazard has been transformed into something only the “little people” – as Leona Helmsley put it – need worry about.

The more the “little people” clue in to this, the angrier they’re gonna get – no matter how nice their neighbor’s new Impala or Cadillac happens to be.

Throw it in the Woods?

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  73 comments for “The Bailout

  1. Vjklander
    December 26, 2013 at 2:42 pm

    Good Article. I do prefer to refer to it as the nationalization of GM as opposed to the bailout. Regardless, I will never buy another “GM” or Chrysler product.

  2. eric
    December 16, 2013 at 9:34 am

    test post

  3. Tor Minotaur
    December 14, 2013 at 10:16 am
  4. phelps
    December 14, 2013 at 9:29 am

    GM should have taken an interest in their cars many years ago. Instead their main focus was on their trucks. The Cruze, Impala and Malibu are all nice cars in my opinion. Nissan and Toyota are way ahead in the game, but GM should be able to carve out a large part of the market with the three aforementioned autos. I have said in the past that I would never buy another GM car, but I would buy a Cruze or Malibu.

    My favorite car of all autos on the market is the ’14 Nissan Maxima. Handles great and will do 180 in a heartbeat. It is an engineering masterpiece. I will have one soon, hopefully.

    • eric
      December 14, 2013 at 9:42 am

      Hi Phelps,

      No question, if you leave aside the bad taste left by the bailout, GM currently has a number of appealing vehicles in the inventory (I’d include the new Impala in addition to the ones you mentioned).

      The Maxima’s a great car, but unless you’re talking KmH, it won’t do 180!

  5. Brad Smith
    December 13, 2013 at 10:16 pm

    Great article and I agree the government has no business taking my money to keep a business going. I need that money for my own business.

    By the way what they did with a lot of the money was outsource. To create a value for their company they used our money to close six factories in the US and build 6 new larger factories in Mexico and China. This is what allowed them to stay in business. Now I couldn’t care less if they take their own money and invest it in China but it’s a double slap in the face when they take my money that I need to invest in my community and give it to a company that is investing in China.

    We would have been better off if Toyota had bought GM their vehicles are actually made in the US not just assembled in the US.

    • eric
      December 14, 2013 at 7:18 am

      Thanks, Brad –

      And, absolutely.

      I also have no issue – as such – with a company making cars in China (or Mexico). I do have an issue with being forced to subsidize it.

  6. Tor Minotaur
    December 13, 2013 at 6:52 pm

    Nota del autor — A Warning and Disclaimer

    A friend in law enforcement told me that because of this book’s content, I should not let it be published under my own name. Violent events happen in this story, and our country’s current situation is such that these events could indeed come to pass. My friend’s fear was that this book might precipitate such violence.

    He told me to expect to have drugs planted in my car during routine traffic stops, or have other similar miseries befall me and my family. He advised that if I did have this work published, I should use a pseudonym, employ an intermediary for all publisher contact, and in general prevent myself from being linked to the finished work, to avoid reprisals.

    I didn’t do that, not only because of free speech considerations, but because I disagree with my friend’s
    hypothesis. I believe that if the instigators glimpse what may lie ahead, they will alter their behavior before wholesale violence becomes unavoidable. It is my hope that this book will reduce the likelihood of armed conflict in this country.

    History has shown us that government leaders often ignore the fundamental fact that people demand both dignity and freedom. Because of this disregard, these decision-makers then initiate acts that are ultimately self-destructive. To illustrate this point I will remind the reader of the origin of two of modern history’s most destructive events, and of all the warning flags that were frantically waving while the instigators
    rushed headlong towards the abyss.

    In the late 19th and very early 20th centuries, European leaders formed two major alliances. Germany, Austria, and Italy comprised one coalition, and Britain, France, and Russia the other. Belgium remained neutral per an 1839 treaty signed by all of these nations except Italy. The smaller European countries became indirectly involved in the two aforementioned alliances.

    One such example was Serbia, a country Russia had pledged to aid in the event of war between Serbia and Austria. Despite Russia’s presence, Austria annexed a large part of Serbia, a province called Bosnia, in 1908. Few people remain emotionally indifferent when their culture and country are taken over by an aggressor, and the Bosnian Serbs were no exception.

    Many Bosnians despised the government that had chilled their
    independence. In spite of this obvious fact, the Austrian leaders sent an archduke to the capital of Bosnia to
    survey the people Austria now ruled.

    This archduke was resplendent in full military ceremonial dress, festooned with medals and other military decorations, and accompanied by his elegantly-dressed wife. An objective observer might at this point have said, “Stripping motivated people of their dignity and rubbing their noses in it is a very bad idea.”

    Archduke Ferdinand and his wife arrived in Sarajevo in an open vehicle, and the only protection either of them had was their chauffeur. This man was expected to drive the car and at the same time protect the Archduke and his wife with only a six-shot revolver he carried in an enclosed holster, and no spare ammunition. Our theoretical observer might here have said, “This is a recipe for disaster.”

    Almost as soon as the Archduke and his wife arrived in Sarajevo, a Serbian National tossed a bomb under their car. Its fuse was defective and the bomb did not explode. Here, our observer might have advised, “A miracle happened. Go home. Now. Immediately.”

    Despite this obvious wake-up call, the Royal Couple shrugged off the assassination attempt and continued their tour of the Bosnian capital. Later that same day, a second Serbian National shot them with his .32, killing them both. The Austrian leaders blamed the Serbian government for the assassination and demanded a virtual protectorate over Serbia, issuing Serbia a list of demands. Serbia acceded to all but one of Austria’s stipulations.

    Here, our observer might have said to Austria’s leaders, “Russia has pledged to aid Serbia in any war with you, and Russia has both powerful allies and powerful adversaries. Serbia has agreed to almost everything you demanded. Settle, and avoid a world war.”

    Instead, Austria shelled Serbia’s capital with artillery fire.
    Our observer might here have told Russia’s leaders, “Serbia is not worth starting a world war over,” but Russia honored its commitment to Serbia and mobilized its army, sending troops to the Russian-Austrian border.

    Since this left Russia vulnerable to attack from Austria’s ally Germany, the Russian Army mobilized against Germany as well. This forced the German Army to mobilize. Since France was allied with Russia, the Germans feared an attack by France in the west while German troops went east.

    So Germany decided to invade France immediately, VIA Belgium. Here, our observer might have said, “Saying this is your ‘destiny’ is not going to be good enough, Germany. When you invade a neutral country and rape their women and slaughter their livestock and bum their houses, Britain is not going to just look the other way.”

    When the Germans invaded Belgium, Britain honored its commitment to defend Belgian neutrality, and declared war on Germany. Every major country in Europe was now at war.
    Four years later, over thirty million people were dead, half of them killed directly in the war itself, and the rest so weakened through shortage of food and medicines that they succumbed to the influenza epidemic.

    In addition to the lives lost, the war’s monetary cost in 1918 was almost three hundred billion dollars. No sooner had the war ended than the victors demanded their pound of flesh at the Treaty of Versailles.

    The treaty required Germany to accept sole responsibility for causing the war. It dictated that German military leaders were to be tried as war criminals. It prohibited the German army from possessing heavy artillery. It abolished the General Staff and the German air force, and prohibited Germany from producing military aircraft.

    As in 1914, our observer might have said, “Stripping motivated people of their dignity and rubbing their noses in it is a very bad idea.” But if such words were in fact uttered, they fell on deaf ears. A humiliated Germany was ripe for the nationalist message of Adolf Hitler, and in this fertile soil were planted the seeds of the Second World War. Today in America, honest, successful, talented, productive, motivated people are once again being stripped of their freedom and dignity and having their noses rubbed in it.

    The conflict has been building for over half a century, and once again warning flags are frantically waving while the instigators rush headlong towards the abyss, and their doom.
    It is my hope that these people will stop and reverse their course before they reach the point where such reversal is no longer possible.

    Juan Ross Septiembre 1995

    – palabras intemporales de la sabiduría

    el toro loco

  7. ExNuke
    December 13, 2013 at 6:18 pm

    Does he realize that Carter’s 55mph limit was dumped because the numbers said that in man hours it cost more lifetimes than the lives it saved?

  8. JoePA
    December 13, 2013 at 5:29 pm

    I think it’s simply beautiful. I can only imagine the Romans sitting around a campfire (internet 2,000 years ago) asking WTF is going on with our country?….then POOF the Roman empire was no more. 2,000 years from now people will look back and say WTF happened to that country called the USA………

  9. Tom
    December 13, 2013 at 4:54 pm

    How much damage was done when Chrysler was saved in the 80’s? Iacocca and the minivan would have popped upsomewhere else. Autoworker wages would have been lower making the whole industry more competitive. Some of those freed up resources and people might have started a new company.

    In MA, where I used to live, Digital, Wang and Prime computer were allowed to go out of business. As a result 100’s of new companies were started and MA has a relativly low unemployment rate despite the opressive government. My wife still meets with her old Digital co-workers. They are all at companies started after Digital failed. Quote from Ken Olsen, Digital founder, 1977: “There is no reason for any individual to have a computer in his home.” Thank God Digital failed.

  10. Rich
    December 13, 2013 at 1:33 pm

    Hi Eric:

    The analogy of the car you can no longer afford to fix work great, unless you traded it as a “clunker” in the “cash for clunkers” fiasco. Then the government had it destroyed, and along with it any value it still had.

  11. December 13, 2013 at 12:40 pm

    Simply for me.
    I will never, ever, buy another GM product.
    That is all.

    • Tor Minotaur
      December 13, 2013 at 1:52 pm

      Are you going to five dollar farm?
      Laughing composting doing no harm
      Remember her
      A butterfly on a pear
      She once was a true love of mine

      https://plus.google.com/105384161792840692252/videos?gpsrc=gplp0&partnerid=gplp0

      What would you do if you only had one minute to live? What if we’re just torsos and brains in a holographic internet reality? 7.1 billion copies of problem solving source code of some higher beings reality?

  12. Robert
    December 13, 2013 at 12:06 pm

    Great story as usual . Only thing is our government does throw away perfectly good tools,machinery and parts. They also purchase and store until obsolete millions of dollars worth of every type of item you can imagine. They care not as the money grows on trees and if they do not spend their entire budget they risk cuts the next year. The military is some of the worst offenders this way, however beauracracy breeds this behaviour and bailouts buy votes whether it’s GM,Bank America or some foreign country. after all it’s about getting elected and staying in office isn’t it. Governments and business should disolve when those they count as subjects or customers no longer support them.

  13. Henry Bowman
    December 13, 2013 at 9:57 am

    When I did talk radio back in the early “oughts” I told, on the air, how the BATF criminal sociopaths (Remember good ole boy roundup?) were trying to get Unintended Consequences banned. I stated that my copy was in front of me and recommended that all my listeners check it out. It is still my favorite novel. Not sure why. I just read it again all the way through for the fourth time. Luckily found a like-new copy in a thrift store for $6.50 the other day. Gave it to my grandson. Spoke briefly with author, John Ross, at Knob Creek years ago. I agree that the book is a manual and I believe most of our founding fathers would revel in it.

  14. anarchyst
    December 13, 2013 at 7:45 am

    Obtain and read the book “Unintended Consequences” by John Ross. In it, you will find solutions to impose on our dysfunctional “rulers” and their minions. This book is both a historical “lesson” and a “how-to” book on how to take back our freedom.
    Although a bit pricey and out-of-print, it is still available from various sources.
    When this book was in publication, sellers of this book at gun shows were threatened and harassed by ATF and FBI types. Sorta tells you something . . .

    • Fred
      December 13, 2013 at 1:02 pm

      Actually, Unintended Consequences can be purchased from the publisher, in paperback form for $30 + $10 shipping. It’s the hardcopy versions that are pricey and out-of-print.

      The publisher’s website is here: https://www.accuratepress.net/

      The book is well worth reading. I’d highly recommend picking up a copy.

      Now that I’ve put in that plug, let me add that I work for a company that was closely associated with GM. I won’t name the company, or use my real name, but I will say that many of my co-workers, who have been big “GM Guys” most of their lives were rooting for this bailout. I was the one guy in the office who said that GM should go into bankruptcy, liquidate, and allow the good parts to be bought up by another company.

      You would not believe the howls of “who would buy cars from a bankrupt company”? that I heard…”think about the jobs lost”, etc. All BS. Look at the number of people who continued to buy GM and Chrysler-built cars during their phony government-managed bankruptcies? I believe that the good parts of GM and Chrysler would have survived just fine going through a regular bankruptcy and/or liquidation. It’s turned out fine with Hostess and that model works in any other industry.

    • Tor Minotaur
      December 13, 2013 at 1:37 pm

      Señor, tu le doy cinco de descuento dedo, por favor propina al propietario del sitio
      http://www.zjstech.net/~ddixson/Unintended_Consequences.pdf

      – el toro loco

      • Inconsistencies
        December 13, 2013 at 4:21 pm

        I just read the “Author’s Note” at the beginning, and I have to say, I’m excited to have been directed to this book and can’t wait to read it. Thanks you for linking to it!

  15. December 13, 2013 at 7:08 am

    Not specifically on topic, but plainly stated nevertheless.

    http://www.strike-the-root.com/wheres-dignity#comment-9769

    -begin-quote-

    “When public employees can stop you at random and take whatever they want without risking prison or legitimately being shot on the spot, you have no rights.”

    That is the correct conclusion, because rights are a fantasy. There is only will. At some point people are going to decide they won’t put up with it any more. The only thing that is stopping them, outside of residual fear that should hardly exist for the older ones among us, is the worry that their fellows will think ill of them for standing up. People do care what others think of them. But I think the fear is overblown. Most people who aren’t completely asleep are by now just waiting for someone else to start the shooting.

    -end-quote-

    Keep em lubed and loaded.

    Throw. It. In. The. Woods.

  16. Garysco
    December 13, 2013 at 4:17 am

    Forget GM, you are the next bail-in.

    The IMF Wants You To Pay 71% Income Tax

    The IMF just dropped another bombshell.
    They’ve singled out the US, suggesting that the US government could maximize its tax revenue by increasing tax brackets to as high as 71%.

    Coming from one of the grand wizards of the global financial system, this might be the clearest sign yet that the whole house of cards is dangerously close to being swept away.

    Think about it– solvent governments with healthy economies don’t go looking to steal 71% of people’s wealth. They’re raising this point because these governments are desperate. And flat broke.

    The ratio of public debt to GDP across advanced economies will reach a historic peak of 110% next year, compared to 75% in 2007.

    Can a person still be considered “free” when 71% of what s/he earns is taken away at the point of a gun by a bankrupt, bullying government? Or are you merely a serf then, existing only to feed the system?

    http://www.zerohedge.com/news/2013-12-12/imf-wants-you-pay-71-income-tax

    • eric
      December 13, 2013 at 6:25 am

      Hi Gary,

      I discovered years ago that only about 25 percent of the American public holds a four-year college degree. Similarly, the net worth of the average American is in the ballpark of $37,000 and family income around $60,000.

      Tens of millions of them have no net worth – and earn no taxable income.

      They will absolutely cheer a “soak the rich” tax of 70 percent – or more.

      • BrentP
        December 13, 2013 at 10:34 am

        What I’ve read of the typical american’s worth and savings paints an even worse picture.

        The thing is they won’t be going after the rich let alone the wealthy. They’ll go after their neighbors who saved. Well the government will and they’ll cheer the government on to do it for 1% or less of the take. And it won’t be the rich they go after or even the wealthy, it will be the savers. The people who make even less a year than they do but saved. It’s a third world mentality that is building up. To steal from anyone who has anything but political power.

        The wealthy and the rich will largely be left alone. But the person who makes three times as much as me but in debt up to his eye balls to have all the stuff I don’t have will have his government steal my savings to bail his ass out. Same with the person who makes a third of what I make. The savers are going to be the target. Anyone who has capital but not enough wealth to politically protect it. They aren’t going to soak their sports and entertainment heros either. No they are going to go after Jim at the end of the block because Jim saved for a rainy day and won’t share.

      • Tomas
        December 14, 2013 at 11:50 am

        Not sure what a college degree has to do with anything. I don’t have one. I do however have a net worth and make a fair amount of coin, and subsequently pay a egregious amount of taxes. IMO, the high income tax rate floated by the IMF isn’t a threat the the rich, or corps, just us average wage earners. It will be sold, if they try it, as the typical drivel; make the rich pay their fair share. As we all know, the rich will never allow a high cap gains tax rate, thus their major income generators are hardly affected. I’d like to see a law that cap gains and income tax are taxed at the same rate. That would stop all the high tax rate discussions in their tracks as the truly rich would not allow their puppets to propose, let alone pass, such a thing. After all, generating wealth can be done by labor, investment, ideas. Since it is all the same output, shouldn’t it be subject to the same taxes? I think gambling is taxed like income, but stock profits aren’t? Just because one plays in a rigged casino, should you be additionally rewarded? Might have the added affect of keeping all taxes much lower as the buffets of the world will not go willingly into a scheme to fork over 25 or 50% of their gains per anum.

        • BrentP
          December 14, 2013 at 3:01 pm

          What I am seeing floated by the IMF is a “wealth tax” or a tax on capital. The IMF document from October I found is saying 10% wealth tax. Then over on zero hedge it’s a 71% wealth tax but then it wonders into an income tax. I can’t follow it exactly.

          Once they start taxing the wealth of the living this will become a third world country practically over night. Nobody will save. Practically nobody will work harder than it takes to survive or maintain. Everything will go to shit. Third world countries are third world countries because nobody can accumulate wealth, capital, without someone stealing it or destroying it. It’s not because the people are uneducated, or stupid, or lazy, or primitive, or anything else, it is because productivity and long time preferences, building capital is punished.

          • Garysco
            December 15, 2013 at 1:07 am

            @BrentP – I give you bank “bail-in”. Past, present and future. And coming to a western economy near you.

        • Jean
          December 14, 2013 at 9:25 pm

          Well, I work at a location which buys and sells 10,000 shares of stock – PER ORDER.
          That sort of transaction will alter the prices in and of itself.

          Now make 1,000 orders per batch, with 50+ PER DAY….

          You can screw the entire market with a day’s worth of transactions, and no one even notices that the “little people” are enriching the truly Wealthy (1% types).
          THAT is where the college degree comes in: Many people have never been exposed to actual concepts of math, history, economic theory, or philosophy.
          And these days, with College being 13th grade – 16th grade…

          We’re worthless as a nation, making the colleges and universities adult day care.
          We can pay the price now – or we can pay it with interest when someone else has to come help us….

  17. Devlin
    December 13, 2013 at 3:54 am

    The final price tag is not yet in on the bailout. If memory serves me, the total amount of money put up for GM was around 80 billion. 6 billion was a direct loan and the rest was set up like a line of credit. The original loan was repayed by using the line of credit to back the underfunded pensions and then they were allowed to quit making payments into the pensions in order to “repay” the loan. This means the taxpayers will most likely be making the pension payments at some point in the future.

    • Michael Price
      December 13, 2013 at 8:36 am

      Yeah and they repaid the original loan so they could get a _cheaper_ government loan for developing solar cars or something.
      So what was the estimated cost of topping up the pension funds? Anyone know?

    • BrentP
      December 13, 2013 at 10:41 am

      But don’t try unraveling the accounting tricks to the average american. The TV told them GM paid everything back. Fascism works! TV said it all worked out wonderfully.

  18. Brandonjin
    December 12, 2013 at 8:35 pm

    Ahh, Socialism for the rich, “capitalism” for the poor. I’ll be using that at some point. Instead of arguing myself with people over this matter, I’ll just give them the link to this article.

    The Hostess/Twinkie example Darien provides is superb, and exactly what should have happened if GM went through a normal bankruptcy. People will argue this, though, saying no one in the trying times of 2008/2009 would have given GM a loan, or something like that.

    I’m guessing hostess wasn’t bailed out because the unions that made twinkies weren’t as valuable to the progressives as the UAW, and not worth the negative PR.

    Now all GM has to do is use their profits to pay taxpayers back over time. (I’m not even sure how they’d do this, pay the treasury department?) If they did this, I would have one less reason to not buy from them. I don’t think this will happen though. Besides, we must keep in mind that any purchase of a new GM product today is still supporting the Canadian Govt (7.2%) and the UAW (9.2%).

    So, what this event has taught us is that, it doesn’t matter if you don’t adapt, it doesn’t matter if you don’t make a competitive product, one that enough people want to buy. When you finally need a reorganization, you’ll be given free money from others. Hell, we’ll even give you a tax break for your first ~20 billion in profits after the reorganization.

  19. Mike in Spotsy
    December 12, 2013 at 7:59 pm

    The GM fiasco was more of a bailout of the unions than the company. As you correctly point out, the valuable parts of GM would have been purchased by people who would have continued operating them. Even some under-performing assets would likely have been snapped up by enterprising folks who expected to manage them better and make them profitable.

    However, in the normal course of bankruptcy proceedings, the gold-plated benefits of the unions would have been subject to being scaled back. The corrupt officials in DC couldn’t have that. The unions had already paid the whores, so they had to perform.

    • Tomas
      December 14, 2013 at 11:38 am

      It would have resulted in the voiding of all associated union contracts, and you can’t have that. Reward for unions supporting Obama. The only explanation for there being no prosecutions for the multiple illegal acts is systemic corruption across the board. The proles really lap it up when they feel government is sticking it to the rich (even though a lot of the “rich” who got screwed were normal folks). Hostess went under uncontested probably because there weren’t enough union votes there to risk the potential outrage of the average idiot. I still don’t think the average American understands what the fiasco that was GM’ theft of tax money really was all about. Fascism for the rich, a bastardized version of capitalism for the rest of us.

  20. December 12, 2013 at 6:21 pm

    Some months back, Hostess went out of business. An American icon! (Union) jobs! Twinkies and Wonder bread! Our lives will never be the same, since the heartless government refused to help us all keep such an important fixture running. O cruél fate! O woe is me!

    There was a Hostess outlet in Wasilla, and Hostess was the bread supplier for my restaurant. The market, absent intervention from Comrade Hopnchange, worked efficiently enough that the outlet was sold to another bakery (Franz) and operations resumed so quickly that we missed only one bread delivery — and this is in rural Alaska. Twinkies were unavailable for six months, but the brand has been acquired by another company and they’re back on the shelves. Is there any reason to believe that the GM failure would have worked any differently? Dealerships reorganise and reopen very soon, valuable brands are sold to other companies and your Corvettes and such return to the market following a brief hiatus.

    Indeed, that’s exactly what happened anyway, even *with* the government bailout. The only difference is who gets left holding the bag: the people who messed it up to begin with, or the people who didn’t.

  21. Old Hickory Switch
    December 12, 2013 at 2:29 pm

    CloverIf the federal governemnt were serious about saving lives, they should have given GM the bailout on the condition that they limit the speed of all thier cars to 65 mph and not one smidge faster. And all cars on our roads not limited to 65 mph should phased out over a 5-year period. that would certainly cut down on the carnage.

    • Me2
      December 12, 2013 at 3:26 pm

      65 mph?

      You irresponsible sociopath. Don’t you know 63.4 mph is the safe maximum speed. You are a dangerous maniac if you drive faster than that.

      facepalm.

    • eric
      December 12, 2013 at 3:37 pm

      Well, Old Hickory, if 65 is “safe” then why not 45?

      Wouldn’t that be even safer?

      Maybe you’ll reply that 65 is “reasonable” – but according to whom? You? Why do you get to arbitrarily decree thus fast – and no faster?

      Do you not see the logical problem?

      I could shriek with just as much validity (which of course, is no validity) that 45 is “safer” and 65 ought to be criminalized as “reckless” driving.

      And someone else could then shriek that 45 is “too fast” – and “dangerous.”

      The speed limit should be 25 mph.

      Etc.

      Now, like Greg, you may accuse me of “hysteria.” But the logic is inexorable. I challenge you to demonstrate otherwise.

      • Old Hickory Switch
        December 12, 2013 at 6:59 pm

        Wow, inexorable, what a big word for a whiny petulant millennial like you. I never said you were hysterical but i do think your demented. maybe its because i dont have wild go-speed racer fantasy’s of running my car over kids in the playground like you do.Clover

        • eric
          December 12, 2013 at 7:44 pm

          Gen X, actually. Though what age has to do with the validity of one’s argument escapes me.

          And at least I can spell “inexorable.” Whereas you, apparently, haven’t learned the distinction between “you’re” and “your.”

          Nor that the plural of “fantasy” is “fantasies” – not “fantasy’s.”

          But rather than discuss our respective mastery of grammar/usage, why not respond to the points raised?

          Why, if 65 is the “safe” speed (according to you) wouldn’t 60 – or 40 – be even safer? In fact, why not walking speed? Think of the lives that could be saved!

          Please, tell us!

          I don’t expect you will, of course. Because that would force you to admit the absurdity of your position or (once again) to display your absurdity by attempting to defend it yet again.

          I also note for the peanut gallery your typically Cloveritic projections of mayhem upon others. Apparently, the only tool you have in your little kit is preposterous, hysterical, over-the-top imputations such as “gospeed racer fantasy’s (sic) of running over kids on the playground.”

          • Old Hickory Switch
            December 12, 2013 at 9:16 pm

            65 is just fine, you can get to where you need to go in a decent amount of time. Anything less just takes too long, and 65 isn’t the kind of maniac speeds you advocate driving. So you’re Gen X, huh?? now I know why your so angry. You miss the go-go care-free days of the 1980’s. Sorry, time to grow up. too bad your birthright for the american dream has been taken away and given to illegal immigrants. no wonder your such a peach. Also, you wont be getting any social security money at all, but as of recently I now do. i appreciate all you do, keep the money coming partner! and please stop encouraging the youth of america to drive like maniacs and wrap themselves around trees. it diminishes the number of people who contribute to my VERY MUCH EARNED entitlement.

            • eric
              December 12, 2013 at 9:32 pm

              “65 is “just fine” and “gets you were you need to go in ‘decent’ time.”

              Are you capable of understanding that these are your subjective value judgments? And as such, no more valid than another person’s subjective value judgment that 45 is “just fine” and “gets you were you need to go in ‘decent’ time”?

              So, you’re collecting Social Security? That means you’re a parasite, too!

          • BrentP
            December 12, 2013 at 10:00 pm

            65 is just fine, you can get to where you need to go in a decent amount of time.

            I can get where I am going in a decent amount of time just fine on my bicycle. I average about 17mph. How about a universal speed limit of 17mph then? It is as supportable as such as your 65mph.

            Then on the other hand I really enjoyed cruising speeds of 90-100mph in Germany. Anything less just took too long and in that environment it wasn’t the kind of maniac speeds you advocate driving.

          • rare and infrequent
            December 13, 2013 at 1:31 am

            eric:
            leave the hickory bitch in the ditch. he cannot conjugate the verb to be. subject, predicate, object, an heroic leap for this clown. you are not going to win spelling bees issuing admonitions for his spelling breach. stay within your circle of competence.

            • eric
              December 13, 2013 at 6:27 am

              Agreed, Rare – he’s been “thrown in the woods”!

        • Jinxthinks
          December 13, 2013 at 5:16 pm

          As a typical libtard you demonstrate you lack of a cohesive, valid point by insulting the opposition. I was born in 1950 and lived through the Jimmy Carter 55 mph years. I drove high power 442s capable of 125+ mph. I crashed my cars several times and lived through the accidents. Here is the problem with liberals. It is not just OK for you to drive in a manner you feel is correct but liberals insist in demanding other do as you say. I am sure you agree with the ban on large soft drinks, firearms ect. All liberals want is to control others, if your life is perfect sit back and enjoy but don’t demand I live in the way you deem proper.

          • Patriot1
            December 13, 2013 at 9:23 pm

            I once rolled a car into a ditch at 60 MPH. It was at night. I hit a patch of black ice, slid to my left across the road like a hockey puck going across an ice rink, hit the embankment, and went airborne end over end, landing upside down in the ditch. By the grace of God, the ditch was filled five feet deep with snow, so the damage to my car was minimal and I walked away without a scratch. Obviously these libtards don’t know anything about black ice. Whether I was going 55 or 60 would have made no difference, black ice is black ice, it doesn’t matter how fast you are driving or what kind of vehicle you have, the stuff can jump up and bite anybody. Black ice is one of those things you can’t control. The libtards need to get this through their thick skulls. Their obsession with controlling everything has given them a warped view of reality.

        • Tomas
          December 14, 2013 at 11:30 am

          Switch: huh? You feel that others (not your elected rulers of course) have fantasies of running over kids in the playground? Such a low opinion of your fellow tax slaves. Methinks you may have higher opinions of those who actually kill children, and others across the globe in the quest of illusions of “democracy” and “freedom”. I bet you are the guy who hated Bush’s wars, but approve of Obama’s. who thinks the patriot act was a travesty on 2002, but approved when your thug renewed and strengthened it. Guns: bad when its the other guy, very necessary for your side. Citizens should be unarmed, police need every tool at their disposal? Btw, how come weapons are tools when gov uses them, tragic instruments of death when private citizens have them? Grow a brain and use it please.

    • Inconsistencies
      December 12, 2013 at 5:20 pm

      OHS, I hope you are joking or just stirring the pot. You must know it’s not the federal government’s job to save lives. It’s only job is to safeguard our natural inalienable right to life, liberty, and property. “Safety” legislation only creates criminals. Drug laws, prostitution laws, seat belt and helmet laws, they all create criminals so that the enforcers have something to do.

      Instead of relying on the government to make you safe, you should consider maybe becoming responsible for your own well being. It’s never too late to morph from a mouse to a man.

    • liberranter
      December 12, 2013 at 5:20 pm

      Y’know, Hickory Stick-up-the-ass, it has occurred to me that your obssessive fixation with speeding cars can be the result of only one of two things:

      1. In your wild youth, back when the Edsel was fresh off the assembly line, you, in a burst of youthful wrecklessness, went on a wild high-speed chase that resulted in your 1) totalling the vehicle, 2) killing a paasenger or the driver of another vehicle or seriously injuring yourself or someone else. As a result, you either 1) did jail time for vehicular manslaughter, 2) got fined and/or sued LITERALLY into the next century and are only just now, in your old age, seeing your bank balance maintain a consistant three-digit figure, OR

      2. You’re a former traffic cop of the Barney Fife variety who had his ass repeatedly handed to him both by drivers who knew how to outdrive, outmaneuver, and ourun him; AND by his porcine bosses for repeatedly failing to meet his ticket quota.

      Heck, given the abysmally rock-bottom hiring standards of the average PD, both my theories just might be true.

      Whatever the reality, give it a rest, bub. The one-note song you sing whenever you pollute this blog with your verbal vomitus is getting REALLY tiresome.

      • Old Hickory Switch
        December 12, 2013 at 7:02 pm

        Editor’s Note: Post purged due to puerility.

        Clover

        • Old Hickory Switch
          December 12, 2013 at 9:19 pm

          Clover“puerility”. Congrats!! another big word for your angry, reckless Gen X mind!!

          • eric
            December 12, 2013 at 9:29 pm

            Angry?

            Certainly. With cause. Because I have a mind.

            People who emote in lieu of thinking annoy me. People who cannot engage in a coherent discussion premised (there’s another one for you) on mutual agreement to acknowledge facts irritate me – because such people are not capable of human interaction but rather bark like dogs (or quack like ducks).

            But whenever I get mad at such as you, I remind myself that my dick still works and my prostate doesn’t leak, I have my hair and it’s not gray (and I don’t have hair sprouting out of my ears and nose) and that I have no less than five motorcycles (one of them capable of getting within spitting distance of 180 MPH) regularly used to their full law-breaking potential.

            I’ll be thinking of you next time I hit 160 on the straight stretch just before the turnoff to our place.

          • Garysco
            December 12, 2013 at 11:01 pm

            Duck Eric. Old Troll is blindly striking out because his favorite politicians took his SS money and he just woke up.

            • eric
              December 13, 2013 at 6:40 am

              He thrashes and snaps like a just-landed grouper!

              And of course, he doesn’t see the irony of accusing me of being an “angry” person!

              It does get tiresome dealing with people who argue by denouncing the age of their opponent and who haven’t yet mastered elementary school-level grammar.

          • phil
            December 13, 2013 at 10:40 am

            I occasionally dream of the future when baby boomers are no longer a majority of the voting block, that the rest of us are awake enough to cut of the social security and leave them to eating cat food or being dependent on the children whom they saddled with ruinous debt.

          • BrentP
            December 13, 2013 at 10:54 am

            Phil, it won’t happen.
            I go out into the intellectual wilderness from time to time. The real majority of americans of all ages are well conditioned and of the same authoritarian childlike mind. Even ones who are smart enough not to be.

            I just hope I have the guts to blow my savings out on fun stuff before it gets really bad.

          • liberranter
            December 13, 2013 at 6:27 pm

            ‘Smatta, Pop? Is that a big, new, long word they didn’t teach you ‘fore you dropped out of high school? (I guess asking you to grab a dictionary, orGooglit, is too much to expect.)

        • liberranter
          December 12, 2013 at 9:20 pm

          “Puerility,” from one of our elders who makes a point of harping on OUR lack of maturity/experience in the “grownup” world? Oh, please say it ain’t SO! I don’t think I can bear the irony.

        • GW
          December 13, 2013 at 7:58 am

          ERIC – Let the old goat put in his 2 cents worth (every once in a while)and then we should just simply all SHUN HIM.

          Don’t Anyone Respond – PERIOD.

          He will writhe in agony when no one responds to his jibberish – just like the salted snail on the sidewalk that he is.

          • eric
            December 13, 2013 at 9:23 am

            Morning, GW!

            Taken under advisement. I will review each of his eructations (I enjoy hipping ‘Ol Hickory to bright new words he never encountered before) and if there’s anything to them beyond imprecations (there’s another one!) I will consider letting them slide through.

      • Jean
        December 14, 2013 at 9:14 pm

        Just nit-picking, Lib, but – I think you mean Roscoe P. Coltrane, not Barney Fife.
        ;-)

        • eric
          December 15, 2013 at 6:58 am

          I prefer the Roscoe type cop over the Fife type.

          Roscoe was corrupt – and knew it. Fife was the worst type: A self-righteous little bully who expected deference to his authoritay. All he needed was a course of steroids and six months of pounding weights at the gym.

          • Jean
            December 15, 2013 at 12:36 pm

            True – hindsight is 20/20.
            Lib’s references made em think Dukes of Hazzard instead of Mayberry, though.

            ;-)

    • BrentP
      December 12, 2013 at 7:28 pm

      OHS…. 65mph is reckless.

      8mph! That’s the way to go. 15mph tops!
      Think of the children.

      http://www.wired.com/science/discoveries/news/2008/05/dayintech_0521

      • Eightsouthman
        December 13, 2013 at 5:33 am

        BrentP, 8mph? Are you insane? I hit a tree once at 8mph. What a hit, what damage it did. I”m lucky to be alive. Now 3 mph, you’re starting to make sense even though I dented my front bumper at less than 1 mph but I suppose that’s nitpicking. We did all walk away.

        • GW
          December 13, 2013 at 7:49 am

          Was that bumper made in China by chance?

      • Jason Calley
        December 13, 2013 at 10:13 am

        Eight miles per hour makes a lot of sense, but it is still too high. I think that the Americans with Disabilities Act mandates that no one may drive faster than the slowest among us may walk. Now THAT makes sense, right?

        Right?

        :)

    • Michael Price
      December 13, 2013 at 8:34 am

      Except that most drivers are actually driving TOO SLOW. The safest speed is at the 85th percentile. That is to say 84% of people are driving too slow, and 35% are driving too slow AND SPEEDING.

      • Jean
        December 14, 2013 at 9:15 pm

        What are you, a performance engineer? ;-)

  22. mikehell
    December 12, 2013 at 1:43 pm

    Nice piece, Eric. Once it is conceded that the state has a legitimate right to forcibly reallocate private wealth in order to “create jobs” and “improve” people’s lives, then there is no principled stance whatsoever against any state program because the state will always claim to promote human welfare, one way or the other. Thus, liberals opposed to feel-good wars but in favor of feel-good welfare, and conservatives in favor of the reverse, do not see the internal contraction in their position (and few would care even if they did).

    • eric
      December 12, 2013 at 3:18 pm

      Thanks, Mike!

      I live near the Blue Ridge Parkway – which is a beautiful, scenic road through the mountains. But to create it, the federal government forcibly evicted the people who’d lived on the land for generations; you can still see the ruins of their homes along the walking paths in the woods.

      With government, one person’s benefit always comes at someone else’s expense.

    • December 12, 2013 at 6:23 pm

      Laxatives may help if you have internal contractions.

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