Oct
28
The Money Pit
Filed Under American Politics | 2 Comments
GMAC, the financial wing of General Motors is seeking a third bailout from the Federal government:
GMAC Financial Services is seeking a third round of bailout funds from the U.S. Treasury Department, according to a report in the Wall Street Journal.
Talks over a fresh lifeline are at an advanced stage and the U.S. government could provide an additional $2.8 billion to $5.6 billion to the lender, the report said, citing people familiar with the matter.
The U.S. has already injected $13.4 billion in the lender since December 2008 and owns a 35.4% stake in the firm, which is the primary lender to customers of General Motors and Chrysler.
If GMAC receives the additional taxpayer money, it would likely be in the form of preferred stock, the Journal said.
Isn’t there an economic law about the futility of throwing bad money after bad money? Of course, propping up General Motors is not an economic decision but a political one. When companies, trade unions Democratic Party donors are too big to fail.
Oct
2
Money Down The Drain
Filed Under American Politics | 7 Comments
Obama’s $50 billion bailout of General Motors hasn’t had the desired effect. From Mickey Kaus:
GM’s sales are down 45% from last September (when sales were already bad enough to drive the company into bankruptcy). Chrysler is down 42%. Ford is only down 5%. Car buyers are clearly punishing the two bailout recipients brutally. Robert Farago of Truth About Cars predicts that GM and Chrysler will both “go down by the end of next year” without a second, new federal bailout.
I struggle to see a political environment that will allow a second bailout of General Motors, particularly if the first one is shown to be the disaster this one appears to be.
What stands out from those figures, is how well Ford, left alone by government, has done in comparison. Ford make good cars, the others, less so. Just giving taxpayers money to already failing companies is not a recipe for success.
Jul
16
This is not meant as a leading question requiring a negative answer, it is a question I found myself asking after looking at a recent Gallup poll.
The poll looks into the reasons why people either approve or disapprove of Obama. For approval and disapproval, one reason for each stands out significantly.
Approval:
54% of those who approve of Obama’s performance so far do so because of the leadership that he has shown in handling America’s problems whereas only 17% are approving mainly because of his policies.
Thirty-one percent of Obama’s approvers say they approve because he is doing a good job or “the best he can under difficult circumstances”; 15% say he is trying new things; and 8% credit him for taking on numerous issues. Thus, a combined 54% cite some aspect of the president’s leadership in solving the nation’s problems.
Disapproval
For those that disapprove of Obama, his policies are way out in front as the reason driving their disapproval:
Members of the smaller group of Americans who disapprove of Obama’s job performance are most likely to attribute their views to the president’s policies. Just over half of the combined 65% mentions in this category involve government spending: 24% say they disapprove because Obama is spending too much government money, 10% say it’s because the economic stimulus plan is not working or wasteful and 4% say it’s because Obama is borrowing too much.
I think it’s interesting to get some confirmation as to what is driving the American voter. The partisan in me sees his approval being soft, leadership is in the eye of the beholder and subject to the vagaries of the economy, and more likely foreign affairs. It was noticeable that in the week following the dramatic events in Iran, Obama’s approval dropped suddenly in the Gallup poll just as questions about his handling of the issue were being asked. He rebounded after Iran dropped off the news, but a similarly perceived hesitance in response to a more serious global event would likely affect negatively the perception of him as a good leader.
On the other hand, policy differences are likely to be much more permanent as a complaint about Obama. If you don’t like his spending, potential tax increases or foreign policy approach now, there is little that Obama will be able to do to address that (although an improving economy might de-prioritise those differences).
But what really interested me about the poll is this:
Only six months into the job, it is natural that the president has little in the way of specific accomplishments driving his approval rating.
Yes it has only been six months, but it is hard to think of a signature achievement that Obama can call his own.The passing of the stimulus would have filled that role, but, even as his most partisan supporters must admit, the success of it is far from certain. There are tonal differences that his supporters will consider a success: the promise to close Guantanamo within a year, the Egypt address and his engagement with foreign leaders. But there are no tangible successes from any of these. At the G20, Obama failed to get agreement on a global stimulus or on getting extra troops for Afghanistan. He is no closer on getting a decision on what happens to the Guantanamo inmates and any benefits accruing from an improved relationship with the Middle East are a long way off, particularly following the kerfuffle in Iran.
There are some things that Obama and his supporters can confidently place on the achievement side of the ledger: the signing of the Lily Leadbetter Fair Pay act, the progress of the Matthew Shepard hate-crime legislation, the saving of GM and the selling off of Chrysler. But these are either controversial (GM) or not earth shatteringly significant (Lily Leadbetter, Matthew Shepard).
This is not really meant as a criticism (yet). There are some significant potential successes in the pipeline, Sotomayors confirmation for example, or the passing of Obamacare. And I’m well aware that much of Obama’s plans are long-term, especially in foreign affairs, but I still think it striking that Obama is not really in a position to stand before the American people and say “This is what I have achieved”.
And all this is a very long-winded way of getting you to discuss Obama’s achievements or failures to date.
Jun
4
Open Thread
Filed Under American Politics | 15 Comments
Now that General Motors has become Government Motors, here is the car that the Democratic Party hopes will revitalise the fortunes of GM. Designed by government and built by trade unionists. What could possibly go wrong?!?
Jun
3
The Obama Disconnect
Filed Under American Politics | 34 Comments
President Obama’s approval ratings have stayed high (averaging in the low 60’s) with little recent change despite an early fall in support. However, there seems to be a disconnect between this popularity and the popularity of some of his actions. On a number of issues, Americans are decidedly against Obama policies. Some of the polls:
Guantanamo (Rasmussen)
49% oppose closing Guantanamo
38% agree
—————————
25% agree with Obama that Guantanamo weakens national security
51% disagree
————————–
57% oppose moving inmates to American prisons
28% favour the move
On The GM Bailout
21% favour GM Bailout plan
67% oppose it
Cap And Trade (with personal costs factored in) (IBD/TIPP)
23% support Obama’s Cap and Trade Plan
63% Oppose it.
NB There are polls which show support for Cap and Trade but they don’t factor in how much Cap and Trade will cost each consumer.
O.K., those are only three polls and no doubt there will be polls showing support for some of Obama’s policies. However, those three polls are fundamental planks of Obama’s direction and with some of them, the disparity between Obama’s position and that of the public is stark.
So the question is, why is there this disconnect? I think that it is largely about Obama not being Bush, that Americans are hopeful about an Obama Presidency and that they are willing to give him a chance. the recession is still Bush’s recession, the wars are still Bush’s wars, the stimulus is still in it’s early days and Cap and Trade and healthcare reform are still not on the statute books. As for the growing deficits, their full impact is not yet apparent.
But Obama will eventually be seen to have ownership of the recession and the wars, Bush will fade into a distant memory and the excitement and novelty value of Obama’s historic Presidency will start to wane. It may be then that the disconnect between Obama’s personal popularity and the unpopularity of some of his policies start to become more connected.
Jun
2
Oh Dear…
Filed Under American Politics | 1 Comment
By Ronnie
I wonder, is this good news for the Obamites and bad news for the Obamaphobes?’
http://www.guardian.co.uk/business/marketforceslive/2009/jun/01/1