Slouching Toward Damascus

December 9, 2012
By Clarice Feldman

This was a week of some surprises and some perfectly foreseeable consequences of forces which have been in play for some time.

The fiscal cliff talks have gone nowhere, to the surprise of only the most daft who do not realize that the President does not want a pragmatic solution. He's fixated on soaking "the rich", stirring up class hatred and trying to drive a wedge between his opposition forces.

Among the surprises is this: Michigan, long seen as the showplace home of America's industrialized unions, has voted to become a right to work state. Its Governor Rick Snyder said -- despite massive union protests -- he could sign the legislation into law as early as next week, after which labor contracts in that state could no longer provide automatic deduction of union payments from employees regardless of whether or not they'd joined unions.

Another surprise to me this week involves the GM bailout, which turned American property law on its head to pay off the UAW, but may well be reversed. Judge Robert Gerber believes that when he approved the sale agreement he was not informed of a "lock-up agreement" by which, on the eve of entering bankruptcy, the company spun off its liabilities to "old GM" , used the multi-billion dollar bailout to create a new company which now had assets and no liabilities. The suit was brought by the "old GM" trustees against the hedge funds at the heart of the agreement.

Accounts of the hearing indicate Judge Gerber was not happy with the secret deal.

He has expressed deep frustration with the company for failing to disclose the deal, leading some to speculate that he may overturn one of President Barack Obama's signature achievements.

"When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all," Gerber said in July.

"The judge has made it very clear that he is greatly dissatisfied with the process," one analyst told the Washington Free Beacon in October. "He's basically implying that GM hid it from him and that reopening the sale is a possibility."

If Gerber takes that course the company could be forced to return the $30 billion taxpayer bailout that it received through the course of bankruptcy, on top of the new liabilities.[snip]

"The Treasury Department, which oversaw the auto bailout, did not return emails for comment.

The company is taking the possibility of a negative ruling from Gerber very seriously. GM attorneys filed court documents saying that the lawsuit "could create a chaotic situation for GM Canada, spawn new litigation in other forums, and potentially provide a windfall to the noteholders."

The bankruptcy expert said if the two sides cannot come to an agreement on Thursday, Gerber could preside over one of the most historic rulings in bankruptcy court history."This has tremendous implications for future of American business and bankruptcy precedent," he said. "It means more than just GM -- this is the rule of law and how creditors are treated in the United States legal system."

Not surprisingly, given its thorough corruption, rotten education system, high unemployment and feckless handling of the public purse, Detroit, home of the UAW and GM, is now considering bankruptcy.

I proposed last year that the almost emptied out city be remade into a national park named after the Italian Marxist whose views so influenced America's intellectuals to work to hollow out existing civil institutions and dominate them.
 

Maybe we should turn Detroit into the first ever urban National Park where people can tour deserted neighborhoods and "feral houses" returning to nature. Detroit's perfectly located along a river and near the Canadian border to make it a lovely spot for summer family vacations. I know feral dog packs now live in the abandoned buildings. Surely wolves and coyotes will follow if they have not already done so. 

Let's call it [Antonio] Gramsci Park in tribute to those who made it what it is today. 

This year the idea looks even better to me.

If the events in the Middle West are sometimes surprising, those in the Middle East, which grow ever more bloody and chaotic, are not. I never shared the view that these countries could go from backward autocratic states to democracies in the time frame the cheerleaders for the "dignity revolution" imagined. I did not see that it was in our interest to unceremoniously dump Mubarak or aid those who were deposing Gaddafi, both of whom, it seemed to me, were cooperating with us as much as could be expected at the time they were deposed.

I think Americans as a general rule, and this administration in particular, vastly underestimate the preconditions necessary for successful democracy, These are, as Matthew R.J. Brodsky writes

"a vibrant civil society, state institutions, a strong middle class, respect for the rule of law, concepts of individual liberty, and an independent judiciary."

To these factors, I'd add the ability to self-organize and take initiative to accomplish general ends for the betterment of society at large, not just one's family or tribe.

A quick review of the state of matters in the Middle East shows that the Arab Spring, the hope of so many, has been a gigantic flop, a diplomatic Solyndra in which for ill-considered ideological reasons we poured a lot into a cause that was hopeless from the outset.

It began in Tunisian towns. As William Jacobson notes, those in the West who supported the uprising, like Roger Cohen of the New York Times, asserted the phrase "the Arab street" was no longer relevant and hailed the country's multiple advantages as the harbinger of a democratic Arab society:

Tunisia has a lot going for it in this quest: high levels of education, emancipated women encouraged over decades to use birth control, manageable size, and an Islamist movement that Michael Willis, a North Africa expert at St. Antony's College, Oxford, described as "perhaps the mildest and most pragmatic around." Their exiled leader, Rached Ghannouchi, has been multiplying conciliatory statements. A democratic Tunisia can do the Turkish thing. There will, in coming weeks, be agents provocateurs bent on the worst, and the usual Muslim-hating naysayers. Arab democracy is threatening to a host of vested interests and glib clichés.

Today, as Jacobson observes, the country is an Islamist nightmare. It is undemocratic. It no longer has a thriving tourist industry; there is no improved constitution, where once the economy was corrupt, at this point it is simply tanking. What human and women's rights once existed are now in jeopardy. The citizens are worse off than before, they are jobless and angry and out of patience.

In Libya, the attack on our facilities in Benghazi and murder of our ambassador and three other Americans in an event about which our own government has been serially lying, doesn't inspire confidence that the Islamists will fail to take over. This week the New York Times awoke from its dream world long enough to note that some of the weapons we provided to the Libyan rebels have, in fact, fallen into the hands of Al Qaeda.

And then there is Egypt and Syria about which Dan Greenfield at FrontPage paints a grim, but I think accurate, picture:

In Egypt, protests followed by elections were enough to allow the Salafis, a category that includes the Muslim Brotherhood, to take over. That was also true in Tunisia. In Libya, a new American client, the government put up a fight, little realizing that Obama wasn't Putin. Instead of getting American backing, Gaddafi got American bombs, and the Islamist militias, armed and funded by Qatar with Obama's blessing, got Libya. In Benghazi they repaid the help they received from Obama and Stevens by humiliating the former and murdering the latter.

In Syria, the Muslim Brotherhood's militias are racing the Al-Qaeda linked militias to the finish line in Damascus, while Western pundits prattle reassuringly about a moderate and secular Syrian opposition, which is as moderate and secular as Egypt's Morsi.

Declining empires want stability without war and they are willing to cut a deal with anyone on the way up who has a large enough army and will promise to keep the peace. It's hard to imagine a more decadent strategy than trying to outsource your defense policy to the least evil of your enemies, but variations on that theme have been the American defense strategy since the Salafi terror attacks of September 11.[snip]

After a decade of trying to divide the Islamist sheep from the Islamist goats, feeding billions to Pakistan to fight terror, extraditing Gitmo terrorists to revolving door rehabilitation programs run by Saudi Arabia, setting up a Palestinian state, making nice to Muslim Brotherhood front groups at home and then setting up the Muslim Brotherhood with a few choice countries of their own in the Middle East; the United States is less secure than ever for trying to appease its way out of the Salafi crusade.

This week Egypt's Morsi was forced out of his palace by crowds infuriated at his effort to geld the judiciary and grant himself and his Islamist backers ever-greater sway over his countrymen. In Syria it appears that Assad's forces may be about to use chemical weapons (apparently shipped him by Saddam Hussein as Iraq was being invaded) against his own people. He's been forced out of the capital. Anna Wintour, the Vogue editor and Obama campaign bundler who did so much to soften Assad's image, is reputedly in line to be nominated for an ambassadorship. Presumably not to Syria

American Thinker

GM Wins, America Loses

November 24, 2012 
By Jeremy Egerer

Having already heard Obama praised, repeatedly, for saving GM, and having witnessed both presidential candidates show support for the company, I've decided that it's time to explain -- not in emotional terms or statistics, but in simple philosophical truths -- what exactly it was that Obama saved.  For when the matter is closely examined without national prejudice, it turns out that what Obama did by "saving" GM was actually quite sinister.

To fully explain my position, it's necessary to start at the very bottom of the matter: the existence of businesses and production in general.  We must look at the business not as the politician sees it -- not as a series of intertwined careers, benefits, and retirement plans -- but as an idea, beginning in the mind of a single man, to benefit himself by benefiting another person.  We must envision the entrepreneur looking about and applying his intellect to his surroundings, seeking to produce not simply something, but rather something another person wants or needs.  Supposing that his assumption is correct, and another person does want the goods for the set price, an exchange is made, and the entrepreneur profits.  He gives, and another gives something else back; in essence, everyone wins in a moral exchange.

But there's another side of the coin entirely.  Supposing the man builds things that nobody wants; supposing he gives himself unsustainably high wages; supposing he even charitably promises that employee wages will be so high, that he cannot price competitively any longer, what happens is that he begins to consume instead of produce.  Instead of producing for the happiness of consumers, he produces solely for his and his compatriots' own happiness; instead of thinking about exchange, he becomes more concerned with getting. 

Though he promised the world to himself and his neighbors, he cannot deliver it; his wealth dissipates like a passing dream, the illusion of prosperity melts before his very eyes, and whatever cloud he believed himself to stand upon appears upon every further second more like fog upon the pavement.  Then, there he is: not in heaven, but in the gutter.

Money, as Mises noted, has the miraculous ability to declare in relative precision what humans cannot perfectly discern: the benefit provided to others through exchange.  Perhaps man may be able to trade three sheep for a mule and gauge subjective value in that way.  But business cannot run on any serious scale in sheep and mules.  When a man looks at his ledger and finds that his monetary income exceeds his expenditures, he adequately gauges his contributions to society and contrasts them with the benefit he receives.  The ledger tells him with red ink whether he's being too selfish, or whether he seeks out the needs of others effectively, and whether or not he's being efficient.  Profit shows him that other people value his contributions -- that he takes, but gives adequately -- or else they wouldn't have exchanged.

But supposing he were to promise all his friends a golden medallion, and tell them their children would be fed for life, and then, expending more than his income, became a burden upon society instead of a benefit, the laws of nature -- enforced by man's right to not buy -- would stop his madness before he impoverished society at large.  Immaterial dreams grace both the successful and the unsuccessful entrepreneur; and almost like the difference between the sane and the insane, reality corresponds accordingly to the mind's projections.  This is the world of business -- a world of need and imagination and risk which appears as speculation but which forms the basis of every market economy.  In essence, men must condition their minds to the reality with which they are presented -- and if they do not, then they suffer the effects of delusion.

But consider that if the opposite were true, that men could make ridiculous promises under the pretense of generosity -- pensions, bonuses, whatever -- but then, having hit the brick wall of reality, the boundary which marks the line between production and consumption, they were to force their neighbors to perpetuate an essentially selfish dream.  What would we say of such a thing?  That it benefits everyone involved?  Certainly, it benefits some, but at the forced expense of the rest.  Would we say that coercion at the point of government bayonets  -- viz, taxation for the propagation of failed businesses -- is somehow a greater moral duty than sustainable production?  Does society really have a responsibility to make good the promises of the imprudent?

Certain men argue that GM was too large and iconic to fail -- that by its failure we would fail.  Surely, the fewer delusional citizens America possesses, the better, and likewise, the more sizable the imprudence, the greater the resulting suffering.  But supposing the great majority of people make promises too large to fulfill and then fail miserably, we cannot really say that fulfilling their promises at a loss benefits the majority.  We may promise every neighbor a golden car -- but whose savings, whose earnings, what sensibly productive person's livelihood will we have to encumber to fulfill that promise?  When the failures of other men are the burdens of the successful, what is encouraged is not success, not sensibility, not wealth, but failure.  We do not call a man insane for failing in business, but we may call men insane for forcefully propagating his losses.

Let us consider the matter soberly: the American auto industry would not have disappeared forever upon GM's failure.  The company's means of production would have been purchased at an affordable price by another entrepreneur, he would have promised his laborers and executives realistic wages and benefits, and the United States of America would have a new industry giant.  Our cars would be more affordable, they would be more internationally competitive, and the worst president in American history would have lost an emotionally powerful talking point during a crucial election.  In short, when GM survived, America lost.

Our politicians -- shame on them, both left and right -- tout job growth as though consumers are negligible, as though production is a secondary concern, as though the market isn't run by individual givers with materialized dreams, but rather bolstered by America's most wasteful, destructive, confiscatory state since King George III's England.  If coercion is the way Americans enjoy enterprise, then so be it.  But should they continue to believe the fanciful -- that the greater the insanity, the greater the social duty to reward it, like a deluded man's friends pretending in his presence that he actually is Napoleon Bonaparte -- they will suffer greater and greater poverty until poverty results in sobriety, or until it finally results in socialist tyranny.

Jeremy Egerer is a convert to biblical conservatism from radical liberalism and the editor of the Seattle website www.americanclarity.com.  American Clarity welcomes friend requests on Facebook.

American Thinker

You Will Not Hear About the Real General Motors Tonight at the Democrat Convention

6 Sep 2012
By Seton Motley  

 We’ve heard a great deal this week from members of President Obama’s protected Crony Socialist auto bailout class.  Many were showcased last night in the maudlin propaganda flick "An Economy Built to Last: Auto-Industry."  The film was followed by speaker Bob King, President of the Democrat appartchik-union United Auto Workers (UAW).  A “saved” General Motors (GM) employee will be speaking (in Mandarin?) this evening.  And the uber-failed “success” of the $82 billion auto bailout has been repeatedly flogged throughout the festivities.

We will hear about the “more than one million jobs saved.” 

But this is the Administration that claimed the $1 trillion so-called “Stimulus” bill “created or saved” jobs - in non-existent Congressional districts.

So there is, yet again, an Obama Math problem.  Some more Numerical Issues about which you will not hear in Charlotte:

We’re going to lose over $42 billion on the $82 billion auto bailout.  Obama in late 2009 said we would make money on it.

$26.5 billion of the loss was a straight payoff to the...UAW....

President Obama illegally carried forward through the bankruptcy the ridiculously exorbitant UAW contracts.  Which were a hay-yuge contributing factor to GM going under in the first place - and are again, predictably, helping to wreck the bottom line.....

During the bankruptcy process, President Obama illegally paid off the UAW first and in full - before secured bondholders who should have been made whole before anyone else got a dime.  Which was incredibly disruptive and destructive of the entire bond market.  Economic uncertainty, anyone?

We heard from illegally over-rewarded UAW President King.  Will we be hearing from any of these Obama-victim bondholders?  Or any bond market experts to explain just how cataclysmically damaging this was to the economy?  Ummm, no.

We will not be hearing from any of the 100,000 or so GM and Chrysler dealership employees who Obama summarily fired...

(B)ecause (these) Joe and Jane SixPacks were guilty of working at auto dealerships that were owned by Republicans....  (N)othing like crushing innocent middle class Americans to mete out a little political payback.

We will not be hearing from any of the 20,000 or so non-union GM-subsidiary Delphi employees - whose pensions President Obama slashed by up to 70%.
With all of these President Obama American Job Kills, we will not hear that...

(China is) where GM is doing most of its hiring - along with funding celebratory movies of the Communist Revolution.

Or...

GM (is) to Invest $1 billion in Russia Within 5 years

Or...

General Motors (is) to Invest $150m in Indonesia Plant

The bailout may not have saved one million jobs - but the jobs it did save are in...Moscow and West Java.

We will not be hearing anything about the myriad inanities in which GM is engaging.

90+% of GM auto loans are now of the Freddie Mac-Fannie Mae-esque subprime variety - made to people whom GM and everyone else know can’t pay them back.

GM in 2010 launched a venture capital division which is investing in fabulously successful things like...solar panel companies.

In fact, no company registered more (non-)green (non-)energy patents than GM in 2010.

We will not be hearing these inconvenient facts about the Eco-Fantasy Chevy Volt.

Chevy Volts cost $41,000 to make, and sell for $41,000.  It is a non-profit vehicle, yet GM has spent millions advertising it.... 

Even more inane, GM just spent $10.4 million to build a Chevy Volt-ville - an Obama Candy Land Potemkin village. 

And lest we forget - there was the Chevy Volt song...and dance.

And yet Volt sales remain, as always, pathetic.  Perhaps because it only gets 35 miles to a 12-hour charge, and costs twice as much as a similar-sized regular gasoline mobile.

As of November of last year, the total Chevy Volt subsidy Taxpayer cost was $250,000 per Volt sold.

Another contributing factor to the Volt’s non-sales: Obama and GM admit to only one Volt fire - dangerously rabbit-holing at least five fires and a whole host of attending Volt charging problems that have not yet been adequately explained.

All of which explains how GM is actually doing - about which we won’t be hearing.

The Taxpayers are still stuck with 500+ million shares of GM stock.  For us to break even, they must be sold at $54 per. They debuted post-bankruptcy at $33 per share and are now around $22 per share.  This sets us up for a more than $16 billion loss – just on the stock.

This week’s downsized Fantasy Land Dystopia will be marked far more by what is not said than what is said.

Please, enjoy tonight’s last dollop of Leftist ephemera.

Big Government