GM seeking more rents

General Motors Co. CEO Dan Akerson, who wants higher gas taxes, describes himself as a “Colin Powell Republican”. Actually, Akerson looks more like a crony capitalist beholden to his masters in Washington. GM needs higher gas taxes to make the Chevy Volt and future politically-designed vehicles profitable. Having been rescued from the marketplace once, GM wants future protection.

[Letter to the Editor - The Detroit News. Published 06/28/2011.]

Back to the future

Once a leader in the Industrial Revolution, Detroit now seeks salvation in a return to an agrarian economy. Yet the same bureaucratic mentality of city leaders responsible for driving industry out and producing a sea of vacant land prevents urban farming from taking root. If Detroit’s leadership can’t manage a 19th century economy, how can anyone expect it to handle the 21st?

[Letter to the Editor - Detroit Free Press. Submitted 11/16/2010.]

Levin's big pile of @#%*

Background: Politicians love to deflect blame from themselves onto private corporations. Certainly Wall Street holds some blame for the financial meltdown, but so do politicians who crafted the incentives under which those corporations operated. They created the moral hazard where a bank could make extremely poor investment decisions but be immune to the consequences. Levin, like all the other media whores in Congress, needs to look in the mirror.

In his persecution of Wall Street executives, Senator Carl Levin attempts to exude an air of middle America champion. In reality, Levin emits hypocrisy. While berating financial executives, Levin ignores the $145 billion in taxpayer funds flushed down the toilet by Fannie Mae and Freddie Mac who hold plenty of blame in the mortgage meltdown.

Then to wipe away the government’s role in the financial collapse, Levin voted to eliminate provisions of the Audit the Fed bill which will prevent any real audit of Federal Reserve policies that contributed to the economic bubble.

Levin’s insistence on ignoring government’s role in the financial crisis fails to pass the smell test.

[Letter to the Editor - Detroit Free Press. Submitted 05/12/2010.]

Do as I say. . .

Background: Longtime community organizer and auto industry neophyte, President Obama is taking over GM.

During Rick Wagoner’s tenure, General Motors lost $82 billion. The man responsible for his firing, President Barack Obama, is projected to oversee $3,200 billion in U.S. budget deficits over the next two years. Apparently Obama’s slogans of change and hope have been replaced by "Do as I say, not as I do".

[Letter to the Editor - Detroit Free Press. Published 04/05/2009.]

Built to government specifications

The list of conditions being placed on the auto companies who want to borrow taxpayer money reminds me of an old engineering joke. What’s an elephant? A mouse built to government specifications.

[Letter to the Editor - The Detroit News. Submitted 12/09/2008.]

Thank You Big Oil

According to recent news reports, oil prices have dropped due to weak demand. This can’t be right. Everyone, especially our esteemed senior Senator Carl Levin who routinely conducts highly publicized investigations, knows that oil prices are set by greedy oil executives. With their stock portfolios taking a beating, I would expect prices to soar as they continue to fuel their jet-setting lifestyles.

Certainly it’s not outdated economic theories like supply and demand dictating prices, but rather the whims of corporate fat cats. The drop in price must be because these grinches actually have a heart and decided to spare us poor carbon-spewing-fossil-fuel-guzzling addicts. In that case, thank you ExxonMobil, BP, and Chevron.

Update: According to news reports, ExxonMobil earned record profits this past quarter. Here's a side to the story you won't read in most of the media.

[Letter to the Editor - The Detroit News. Submitted 10/27/2008.]

Who will watch the watchers?

Background: The financial markets are in a tail-spin and the calls for more government interference grows. This tail-spin is not because we lack regulation but is simply a correction to the market after years of interference from the federal government. Deficit spending and money supply manipulation have brought us to the current point where a correction is long overdue.

According to both presidential candidates, Wall Street needs more federal regulation. But, to paraphrase Socrates, who will regulate the regulators? The federal government is running a yearly deficit of $400 billion. Unfunded liabilities in Medicaid, Medicare, and Social Security are nearly $60 trillion. Congress and the White House, under both parties, routinely mask finances with tricks that would make an Enron accountant’s head spin.

And these are the people we trust to watch over the financial markets?

[Letter to the Editor - Detroit Free Press. Published 09/20/2008.]

Be careful what you ask for

Background: Over the past few weeks, some letters have appeared in the Farmington Observer complaining about gas prices and demanding that "someone do something." Someone usually means government and something usually means tax oil companies. That's bad economic policy.

As gas prices climb, the drumbeat for some kind of government action gets louder. Each week seems to bring another letter calling for action with people begging to be saved from greedy oil executives. Unfortunately, politicians are too willing to answer the call. I suggest that before citizens clamor for their elected officials to do "something", they keep in mind past "somethings".

In the seventies, the government did something and price controls were placed on gas. Predictably, this resulted in higher demand than available supplies and motorists faced shortages and long lines at the pump.

In the eighties, the government did something and punitive windfall oil taxes redirected billions of dollars from the oil industry to its own coffers. As expected, American companies shifted their investment and production overseas to avoid the taxes. This short-sighted money grab reduced domestic production and increased our reliance on foreign sources of oil.

Over the past three or four decades, the government has done something and passed numerous regulations which increasingly closed off additional sources of oil and other energy supplies. Vast areas of the country are closed to oil exploration due to environmental hysteria. While France generates nearly 80 percent of its electricity needs from nuclear energy, the United States generates less than 20 percent due to onerous regulations. Tight restrictions on oil refineries have lowered domestic gasoline production, requiring us to import gas to meet our needs

Politicians and environmentalists like to praise alternative energy sources such as ethanol and bio-fuels, wind power, and solar energy. However, science shows these sources are incapable of generating the energy necessary to meet our needs given current and foreseeable technology. Unfortunately, this doesn’t stop our representatives from spending tax dollars to subsidize these alternatives. These subsidies hide the true cost of alternative energy production and distort markets. One such distortion is found in higher food prices and shortages in third world countries. So while smug politicians pander to the public and pat themselves on the back for "doing something" about the high cost of oil, the cost of bread and milk rises and food riots occur in other countries.

Anyone with a basic understanding of economics understands that profits do not determine gas prices. Supply and demand determine price. If you want lower prices, cut demand or increase supply. Try as they might, politicians cannot suspend the basic laws of economics.

To those who demand action from our government, I offer the adage "be careful what you ask for, because you may get it."

[Letter to the Editor - Farmington Observer. Published 06/05/2008.]

Evil Bastards

Background: Friend of mine has a friend who hates Wal-Mart. Whenever I see something positive about Wal-Mart, I pass it to my friend who passes it WMB (Wal-Mart Basher). A couple days ago I passed along a PR release announcing WM's expansion of their $4 prescription program. In return, WMB sent a story from NPR. My email response:

Here's the part about Wal-Mart from the written portion of the article. I didn't listen to the audio:

"Almost everybody closed because of too much competition," he says. "What happened? Wal-Mart came along and closed them down. The consumer made a choice to choose Wal-Mart. The prices were lower, the stores were bigger...."

Too much competition? I wonder what the right amount is. Anyone have a clue? Maybe we could vote on it. I've got an idea! Everyone gets to vote on how much competition there should be. Hmmm....that might be a logistical nightmare trying to conduct that election. Wait, I got it. We'll distribute ballots to everyone. We'll make them green and print numbers on them (like 1, 5, 10, 20, 50, 100). Voters can take them to the store they want to vote for and give them to the store. Then at the end of the election, the stores can tally up their votes and see who gets to stay in business.

"Wal-Mart came along and closed them down", yet "the consumer made a choice to choose WalMart". Okay so did Wal-Mart come along and ordered the competition to close or did Wal-Mart open a store and consumers took their business to Wal-Mart instead of the other place? Because if WalMart walked up to it's competition and pulled a gun or something and threatened them to shutdown, something needs to be done! On the other hand, if consumers CHOSE Wal-Mart, then maybe the Wal-Mart haters ought to be yelling at the consumers.

Oh and can you believe Wal-Mart's stores were bigger and the prices lower? What a bunch of greedy corporate bastards offering lower prices and a bigger selection. Enticing us mindless sheep (aka consumers). Leading us to slaughter. Someone needs to do something!

:o) <-- not a Wal-Mart smiley face

[Online Rant. Posted 05/07/2008.]

Do as I say, not as I do

In “Enron’s Last Victim: American Markets” (January 3), William Niskanen clearly exposes the harm imposed by the Sarbanes-Oxley Act on our economy. Allow me to add insult to injury.

Last month the Treasury Department issued “The Fiscal Year 2006 Financial Report of the United States Government”, a comprehensive view of the Federal Government’s finances. For the tenth straight year, the GAO has refused to sign-off on the report because “sufficient information was not available for the auditors to determine whether the information was reliable.”

Meanwhile, CEOs of publicly-traded corporations are required to personally sign off on their financial reports at the risk of being held criminally liable if the reports are not accurate.

Too bad we don’t apply the same standards to politicians and bureaucrats. Perhaps the threat of jail would make them think twice before passing costly regulations.

[Letter to the Editor - The New York Times. Submitted 01/05/2007.]

That's a pretty nice company you got there

Perhaps in the future, Senators Rockefeller and Snowe could conserve resources by simply summarizing their point to a couple sentences: “That’s a pretty nice company you got there. Be a shame if something were to happen to it.”

[Letter to the Editor - OpinionJournal.com. Submitted 12/04/2006.]

Fair is not free

In his column “Big Three drive on E”, Jack Lessenberry points to unfair competition and currency manipulation, among other reasons, for hurting GM and Ford. Subsequent quotes from automotive journalist Jerry Flint imply that the U.S. government should do something about it. This would be the wrong approach.

Frequently, international trade is wrongly demonized as a source of our economic woes. Populist politicians call for fair trade rather than free trade because “fair” sounds appealing. After all, who wants to be opposed to something fair? Unfortunately, the word lacks an objective definition. Is it fair that the U.S. imposes its labor and environmental standards on foreign countries whose economies lag ours? Is it fair, or even proper, for the U.S. to involve itself in the internal policies of other countries? Fair trade is spin for protectionist policies that favor narrow interest groups. On the other hand free trade, meaning trade without barriers, benefits all consumers.

For example Flint points out that currency manipulation hurts Ford and GM, but fails to emphasize how it benefits consumers. In order to manipulate the exchange rate, Japan must purchase excess dollars (with tax revenue from its citizens) and hold them in reserve. This results in lower prices for all Americans purchasing their goods. Although Ford and GM are adversely affected, this is outweighed by the overall benefit to everyone else. If Japan wants to subsidize my next car purchase, that sounds like a fairly good deal to me.

[Letter to the Editor - Metro Times. Published 12/06/2006.]