Thursday, May 24, 2012

Capitalists Pigs vs Socialist PIIGS

The problem with business today is that it's all about making money.  At least that seems to be the view of Obama and much of the left.  As we knew he would Obama has rehashed the attack on Bain Capitol that so enraged conservatives when Gingrich did it.
With Romney and Bain Capital the objective was to make money.
Those guys were all rich, they all had more money than they will ever spend, yet they didn't have the money to take care of the very people who made the money for them.
This is a stark contrast on two totally different views on what the function of business is.  Obama  recently said in his defense of this attack that maximizing profits is "not always going to be good for communities or businesses or workers,"  According to this view a company should exist to benefit the proletariat and if the bourgeoisie loose money in the process then that is to the common good, from each according to his ability, to each according to his needs.  Romney had the money and the workers needed their jobs and benefits.  Or in simpler terms, spread the wealth. 
I'm Barack Obama and I approved this message. 

We saw this attitude play out when Obama stepped in to the Chrysler bailout.  Bourgeoisie bond holders in the bailout, many of whom were average Americans with I.R.A.s or 401Ks, were forced to take 29 cents on the dollar, a 71% loss on their investments, but the proletariat United Auto Workers got equity in the company and Chrysler still has to pay the full amount owed to the UAW's Retiree Medical Benefit's Trust.  That's ironic since the biggest factor that put Chrysler into bankruptcy was the huge union pensions that they are encumbered with.  Those are encumbrances that could have been removed through bankruptcy.

Transition to this weekend when Greece will decide if they should abandoning the euro and reintroduce its own currency.  Greece is the most socialist of the PIIGS; Portugal, Italy, Ireland, Greece, and Spain, the group of countries that are dragging down the E.U. because of massive deficit spending.  The E.U. is racing towards a breakdown rivaling the dissolution of the Soviet Union, the last failed spread the wealth conglomerate.  Europe’s banks are facing a wave of losses if Greece abandons the euro.  Should Greece default, which will be decided by the voters in June, confidence in the rest of the PIIGS ability to repay their $1.19-trillion U.S. dollars of debt will plummet.  This is the model that Obama wants the United States to embrace at the same time that Europe is about to descend into chaos.  To add to that chaos France has just decided to become a member of the PIIGS with its election of a socialist as head of the Senate.  Jean-Pierre Bel has pledged to increase stimulus spending and raise taxes on the rich.  Sound familiar?

One doesn't have to travel to Europe to see the effects of socialism on economic conditions, there are plenty of examples here at home.  A look at states run by conservatives verses states run by liberals shows a stark contrasts between the economic health under each philosophy.  Generally the bluer a state is, the worse its financial and economic numbers are.  The number one blue state is California.  California is the worst state to do business in and therefore business activity is contracting resulting in lower revenues.  High taxes and intrusive government policies are also driving productive individuals away, California is the number one looser of people to other states, followed by New York, Illinois, and Michigan, all blue.  The one blue state that actually gained a congressional seat in the recent Census was Washington which has no income tax.  Standard and Poors credit ratings for the 50 states has California and Illinois as the only ones lower than AA and of the AAA rated states only 4 are blue, 1 purple, and 9 red.  You might think that the state with the best economic health is Texas, but North Dakota, Wyoming, Alaska, and Iowa all have their champions for the number one position.  All are red states.  Of the nine major cities with the most underfunded pensions 7 are blue and two are purple.  

Failure is supposed to be a risk of our capitalist system.  Bad companies need to fail, that’s how good companies are rewarded.  Bain would buy companies that were already failing and try and make them competitive again so one would expect a high rate of failure.  However of 77 companies that Bain was involved in only 17 filed for bankruptcy protection, only 5 of those were still controlled by Bain at the time of the filing.  Romney had been gone two years before GST Steel went under. (Although Jonathan Lavine, a top Obama bundler, was still a managing director.)  Bain used its own money in gambling on those companies, Obama on the other hand is using taxpayer money to bet on green energy companies, 80% of which went to Obama backers.  So how is Obama's record compared to Bain's?  Heritage Action for America has a rundown.
For those who only hear about these failing companies one by one, the following is a list of all the clean energy companies supported by President Obama’s stimulus that are now failing or have filed for bankruptcy. The liberal media hopes you’ve forgotten about all of them except Solyndra, but we haven’t.
  • Evergreen Solar
  • SpectraWatt
  • Solyndra (received $535 million)
  • Beacon Power (received $43 million)
  • AES’ subsidiary Eastern Energy
  • Nevada Geothermal (received $98.5 million)
  • SunPower (received $1.5 billion)
  • First Solar (received $1.46 billion)
  •  Babcock & Brown (an Australian company which received $178 million)
  • Ener1 (subsidiary EnerDel received $118.5 million)
  • Amonix (received 5.9 million)
  • The National Renewable Energy Lab
  • Fisker Automotive
  • Abound Solar (received $400 million)
  • Chevy Volt (taxpayers basically own GM)
  • Solar Trust of America
  • A123 Systems (received $279 million)
  • Willard & Kelsey Solar Group (received $6 million)
  • Johnson Controls (received $299 million)
  • Schneider Electric (received $86 million)
That's not a complete list, there are ten updates in the article.  While these companies were going under their executives were  receiving huge cash bonuses.

What's Obama's record on firing people?  Remember how Obama's auto task force pressed General Motors and Chrysler to close scores of dealerships?  In an audit of the process special inspector general for TARP Neil M. Barofsky states:
“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,”
Obama is the first president I can remember to ever attack capitalism in such a way, maybe the first in history.  It’s a tactic that plays well with his socialist base but I doubt many independents are comfortable with such a stance.  Even some staunch Democrats are uncomfortable with it. Former Pennsylvania Governor Ed Rendell, Steven Rattner, Obama's former "car czar," and Newark Mayor Cory Booker, have come out against the unfair attack.  (Booker got sent to the woodshed and had to make a humiliating mea culpa.)


Anonymous said...

The difference is intentions. President Obama has good intentions, Romney only cares for making money. So the record is not as important as who looks out for us.

Rancher said...

The road to hell is paved with good intentions.