“Cash for Clunkers” and the Cloward-Piven Strategy to Bankrupt America

The Cloward-Piven Strategy is working as intended, it would seem. Take a look at this AP report:

Popularity, Web Snafus Nearly Broke ‘Clunkers’

Far more drivers signed up for the “cash for clunkers” program than anyone thought, overwhelming showrooms, blowing through the initial $1 billion set aside by Congress and leaving dealers panicked over when or if the government would make good on the hefty rebates.

AP
Saturday, August 01, 2009

NEW YORK – This was one government stimulus plan that yielded quick results. Maybe too quick.

Far more drivers signed up for the “cash for clunkers” program than anyone thought, overwhelming showrooms, blowing through the initial $1 billion set aside by Congress and leaving dealers panicked over when or if the government would make good on the hefty rebates.

Confusion reigned, even as dollars flowed into dealerships starved for business for months.

The government Web site set up to process rebates of up to $4,500 per new car could not keep up with demand. Washington scrambled to come up with more cash and sent mixed signals about how the program would unfold.

“A borderline train wreck,” said Charlie Swenson, general manager at Walser Toyota in Bloomington, Minn. In Glen Burnie, Md., Bob Bell, who owns Ford, Kia and Hyundai dealerships, said his employees were overwhelmed filing for reimbursement from the government’s clunky system.

He compared the program to a military operation: “It is a disaster,” Bell said. “We met our objective, but the losses were terrible.”

The House voted Friday to replenish the program with $2 billion, setting up likely Senate action next week. Sen. Carl Levin, D-Mich., said the administration assured lawmakers that “deals will be honored until otherwise noted by the White House.”

Like a car salesman beckoning from the lot, Levin said “people ought to get in and buy their cars” while the hot deals last. The White House joined in the pitch, telling consumers the program is solid through “this weekend.” That left unclear what happens after that, until more money is approved for it.

The Car Allowance Rebate System offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle, in exchange for scrapping their old vehicle. Congress last month approved the plan to boost auto sales and remove some inefficient cars and trucks from the roads.

It was unclear how many cars had been sold under the program on Friday, but the number was far higher than anyone had expected. About 40,000 vehicle sales were done through the program but dealers estimated they were trying to complete transactions on an additional 200,000 vehicles, said Sen. Debbie Stabenow, D-Mich.

“I think the general public right now is looking for a bargain in any way to spend their money,” said Kitty Van Bortel, who owns Ford and Subaru dealerships in Victor, N.Y., “and this was perceived as an incredible bargain and people took advantage of it.”

The backlog had been building for weeks. Auto dealers could begin offering the rebate at the beginning of the month, and many began doing so over the July 4 weekend. But it was not until a week ago that dealers could begin filing for reimbursement, leaving them on the hook for as much as $4,500 per car until they get the federal money.

That’s when they ran into difficulties with a federal Web site ill equipped to handle the volume of claims and the multiple documents each submission requires. Some dealers said the process took upward of an hour for each transaction, caused repeated rejections and consumed many hours submitting and resubmitting data.

At Walser Toyota in Bloomington, customers began lining up on Monday before doors opened at 7:30 a.m.. Swenson said. By that afternoon, his dealership had done 150 trade-ins under the program. His salesmen worked overnight to scan and submit forms.

But of the 150, he said, only 30 received responses and all of those were rejections.

Dennis and Marcia Strom hurried into that dealership Friday, fearing the rebates might not last, and filled out paperwork for a new car.

“I might have waited until the truck died,” Dennis Strom said of his 14-year-old Dodge Dakota. “It’s a good vehicle that suits our needs. But it’s not worth $3,500.”

About 100 people were looking to sign deals there but were holding off because of uncertainty over the rebates.

It took three hours Thursday for employees at one of Sam Pack’s Dallas-area Ford dealerships to submit just eight documents. Pack said he feared that many deals made under the program wouldn’t be properly reimbursed.

“The details of processing this is beyond what anybody would think is reasonable,” he said.

Federal officials said they have increased the capacity of the submission system and added staff to work hot lines and process voucher applications.

In Victor, Van Bortel considered pulling the plug on rebates at the Ford and Subaru dealerships she owns, even though her ads promoting the rebates were locked in for the weekend.

“Honestly, in all my years in the car business, I have never seen such a mess,” she said.

Still, it was a mess created by too much action, instead of not enough.

Officials hoped that when the dust cleared from the confusion, the program would be a tonic for the beleaguered auto industry and a benefit for the environment, with many inefficient cars taken off the road.

President Barack Obama said the program has “succeeded well beyond our expectations” and praised the House for moving quickly to establish new financing.

“This is a test drive,” Rep. Steve Israel, D-N.Y., said of the program, “and people bought it big time.”

Bell, in Glen Burnie, said the rebates have “pulled forward a tremendous market.”

“It’s wonderful to sell them,” he said. “But if you have to pay off a vehicle immediately, you’re going to have a severe cash flow deficit.”

Dealers are used to working with similar incentive programs offered by auto manufacturers, said John McEleney, chairman of the National Automobile Dealers Association. But the rules are much less stringent under those programs, and automakers generally don’t require nearly as much documentation, he said.

His group surveyed dealer franchises using the program and realized the money for it might be getting short. One survey finding: Consumers were opting to use the higher $4,500 rebate over the $3,500 amount by a margin of 2-to-1, eating through the money faster.

“It has been very problematic,” McEleney said. “I don’t believe that anyone anticipated the volume would be this great.”

You don’t think so, Mr. McEleney? You don’t believe that anyone anticipated the volume would be that great?  The “‘Cloward-Piven Strategy’ seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.”

That sounds eerily similar to what is happening with the “cash for clunkers” program to me. Who wouldn’t want a rebate of up to $4,500 for buying a new car?  Of course, there are limitations to the program, but there are lots of resources – like this great article from Cars. com – to help you navigate through the fine print and get the most money from the government you can for your trade-in.

Who doesn’t want “free” money from the government, amirite? Well, the answer is: YOU, IF YOU’RE SMART! You see, the amount of money the government is taking in is finite. There is not an infinite pool of money the government has to just spend on whatever they want. Every time they spend more money than they have, the deficit goes up, which impacts inflation and the value of the U.S. dollar. Visual learners may want to check out the Heritage Foundation’s Federal Revenue and Spending Book of Charts (not for the faint of heart).

So, every time “qualified participants” participate in programs that give them “free money” from the government, that contributes to deficit spending, weakening the U.S. economy and, ultimately, hurting all Americans financially. Be like Ford, and don’t take the government money. Oh, and if you’re going to buy a new car, consider buying a Ford, because Ford is one of the only U.S.-owned and U.S.-manufactured car companies that didn’t take any government money in the big bail-out-bonanza and is still eating into market share previously belonging to GM (Government Motors) and Chrysler.

Be a Constitutional Watchdog for America

After reading this article, please click here (or on the link at the bottom of this post) to visit this article in its original context on GlennBeck.com. Thank you.

August 1, 2009 – 0:09 ET
By Glenn Beck

We need you to keep watch over the most perfect political document ever given to mankind. Heaven knows our politicians aren't doing it.

I’ve been telling you lately I am no longer searching for answers about what is going on with this administration. I believe I now know exactly what they’re doing. They are putting a structure in place, around our existing government.

An exoskeleton is being built around our Republic. And rather than support and protect, as exoskeletons are designed do in the animal kingdom, this one is designed to feed off its host. At the same time, the host is being attacked from every direction, also by design.

The attack agents are cap-and-trade; health care reform; card check; the collapsing dollar; bailouts; stimulus bills; “cash for clunkers”; gigantic, unsustainable debt, and on and on.

Remember, the only thing you need to know about Barack Obama: He is a community organizer. ACORN, SEIU and their 300-plus affiliate organizations, along with AmeriCorp, with the help of Barack Obama, have embedded themselves into the structure of this government. If and when they can overwhelm the system to the point it finally collapses, they already have the new system built, already in place, to restart it and “fundamentally transform the United States of America.”

In the movie “Contact,” a space-travel machine was built using alien technology. Everyone knew they would face widespread public opposition to the plan: It was wildly expensive and no one even knew if it would work. So, when the machine was destroyed, it was revealed to the nation and the world, that there just happened to be a second machine, already built and ready to go, that no one knew about:

(BEGIN VIDEO CLIP)

ACTOR JOHN HURT AS S.R. HADDEN: First rule in government spending: Why build one when you can have two at twice the price? Only, this one can be kept secret.

(END VIDEO CLIP)

We need to stop that machine from being put into place.

The question I am asked more than anything else — well, other than, “when the studio lights get really hot, do you actually sweat gravy?” And by the way, the answer is yes — that’s why I always keep a gravy boat handy under the desk here at FOX. But the second most-asked question is: “Glenn, what can I do?”

You can be a “Constitutional Watchdog” for America. I’m shifting my focus to another project: I’ll still be here, doing my shows on TV and radio, but our attention will be on something else, which I’ll tell you about when I can.

So we need you to keep watch over the most perfect political document ever given to mankind. Heaven knows our politicians aren’t doing it. Go to my Web site — GlennBeck.com — and look for the shield you see here at the bottom of the screen for more details.

Briefly here it is: Don’t try to pay attention to everything — it’s impossible. As we’ve discussed, they’re throwing so much at us at once — again, by design — that it’s just too much to assimilate. Find something that you know about or have interest in. Watch what Congress is doing on that. If it’s cap-and-trade, look for everything you can find on that issue. Whatever it is, when something comes up that doesn’t sound right, start barking loudly, like the Constitutional Watchdog you are.

Send me an e-mail or tweet and we’ll highlight the story you’ve uncovered. When you see the Watchdog Shield, you’ll know that it wasn’t us who found the story — it was one of our Watchdogs.

I am more optimistic — more hopeful — now than I’ve been in a long time, that, together, we can wake up enough Americans to stop what I firmly believe is an attempt to “fundamentally transform America.”

— Watch Glenn Beck weekdays at 5p & 2a ET on FOX News Channel

Here’s that link I mentioned at the beginning of this article.

Bailout Costs vs Big Historical Events

By Barry Ritholtz – June 18th, 2009, 7:00AM

It is exceedingly difficult to convey exactly how much we are spending on all these bailouts. Whenever I start talking trillions (versus mere billions), I get puzzled looks from people. Humans have a hard time conceptualizing any number that large.  I wanted a graphic way to clearly show how astonishingly ginormous the amounts involved were.

So I once again went to Jess Bachman at Wallstats. I gave him my list of expenditures (inflation adjusted of course!) and he went to work. This early Bailout Nation graphic shows the the total costs to the taxpayer of all the monies spent, lent, consumed, borrowed, printed, guaranteed, assumed or  otherwise committed.

It is nothing short of astonishing.

It includes the total outlay for all the bailouts to date. In just about one short year (March 2008 -  March 2009), the bailouts managed to spend far in excess of nearly every major one time expenditure of the USA, including WW1&2 (omitted from graphic), the moon shot, the New Deal, total NASA budgets (omitted from graphic), Iraq, Viet Nam and Korean wars — COMBINED.

206 years versus 12 months. Total cost: ~$15 trillion and counting . . .

Previously:
Big Bailouts, Bigger Bucks (November 25th, 2008)

http://www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/

Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy
Wiley (May 26, 2009)

http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpictu09-20

BAILING OUT THE MEDIA

By Noel Bagwell
May 13, 2009

The first steps down the slippery slope of government-funded, government-controlled media have been taken… but we’re not here for a history lesson on the CPB (funded by the Federal government), PBS (funded by CPB and, by extension, the Federal goverment) and NPR (funded by memberstations, but notably liberal and often partisan in favor of a secular-progressive, Democratic, socialist agenda).

No, what I’d like to discuss is the potential future control of major, hitherto commercial, media outlets by the government. The Seattle Times reports that Washington’s governor, Chris Gregoire, “has approved a tax break for the state’s troubled newspaper industry.”

Newspapers are simply not crucial to 21^st century information distribution, and this bailout is, therefore, a wasteful payoff to an antiquated industry that, by and large, backs a partisan agenda. That seems very suspicious to me.

According to The Seattle Times article:

“The new law gives newspaper printers and publishers a 40 percent cut in the state’s main business tax. The discounted rate mirrors breaks given in years past to the Boeing Co. and the timber industry.

Newspapers across the country have resorted to layoffs and other cost-cutting moves to deal with a wounded business model and a recession-fueled drop in advertising.

The Seattle Post-Intelligencer printed its final edition earlier this year and was converted to an Internet-only publication with a much-reduced staff.”

Well, boooooo-hooo! You can almost here the whining as you read that. Why do newspaper printers and publishers deserve a 40% cut in business taxes? Do suffering consumers get a 40% cut in their taxes? Will the prices of newspapers drop, because newspaper printers now have lower operating expenses?

Newspapers like The Seattle Post-Intelligencer are the way of the future. Expensive, top-heavy newspapers like The New York Times need to understand that their day is past. As has been previously reported, The New York Times is tanking so badly, they had to take a loan-shark interest rate on a loan from Mexican Billionaire, Carlos Slim. Apparently, they’ll do anything to stop the bleeding.

How long before the Federal government uses Washington’s new precedent to determine that The New York Times and other liberal news outlets that are hurting (because people are turning away from them, because they offer ideology instead of solutions to our problems) are “too big to fail?” How long before the Fed moves in and does to the NYT what it did to Citi and Chrysler? How long before Hollywood studios start clambering for Federal bailout money? How could the Fed deny bailout money to one type of media outlet while giving relief to another?

The difference may seem subtle, between voluntary propaganda and government-owned-and-operated propaganda, but it is an important nuance to which we should be paying attention. Right now, Americans can do something about the voluntary propagandists at the NYT, MSNBC, NBC, CBS, ABC, CNN, etc., et al. 

Right now, Americans can change the channel or just not subscribe to or purchase materials that these corrupt news outlets are selling. Right now, Americans can boycott G.E. Right now, Americans can boycott the sponsors that advertise on these corrupt channels and in newspapers that print ideological propaganda, rather than objective news. Right now, that would make a difference.

What happens, though, when the Federal government gets involved? What happens, even, when state governments get involved? You can’t refuse to pay your taxes, just because the government uses your money to bail out so-called “news outlets” that serve as little more than a secondary mouthpiece for government propaganda, which is what would happen, because the government would control the funding for the news. If you don’t pay your taxes, you do time in a federal facility – you go to jail.

Bailing out the media is a horrible idea. Giving state or federal funds or tax relief to failing businesses is anti-capitalist and it causes all kinds of problems in the economy. It’s like playing whack-a-mole: you smash one problem down, and two more pop up. But the media is more than just another business or industry. The media have special Constitutional protectiosn, because they are supposed to keep an eye on the government. Those in the media are supposed to be the whistleblowers, the Devil’s advocates, the ones who keep the government on their toes. They’re supposed to be objective and non-partisan. They’re supposed to uphold Americans’ freedoms and values, and speak for us, even as they speak to us.

To give money to the media – in any form – from the government weakens the motivation for the press to fulfill its primary function, and leads inexorably to corruption. The main motivation to do this is so the government can have even more control – not just over laws and policies, but over thought and opinion. This is exceedingly dangerous, and any government official that fails to recognize this is either incompetant or corrupt. In either case, they should be removed from office, post-haste.

White House Staffers Profiteering from Bailed-out Banks

From the Drudge Report, today:

WEST WING AIDES MADE MILLIONS FROM BAILED-OUT BANKS…

Millions for Axelrod in sale of firm…

In another headline from the Drudge Report last Friday, WEEKLY POLLS FOR OBAMA WHITE HOUSE: MESSAGE-TESTING SHAPES ‘RECOVERY,’ ‘STIMULUS’ LANGUAGE… *, David Axelrod’s polling efforts were were brought to light.

Given Mr. Axelrod’s and other White House aids’ profiting from their political success and their connections to various groups that profited from the bailout (more so the aides, in this case, than Mr. Axelrod) it seems that an ethics scandal could be brewing.

I believe that David Axelrod is, for the time being, the real “brains” behind the Obama administration’s policies. Obama’s TelePrompter crutch is a much-discussed and oft-written-about  topic. One might wonder if the “approved script” on the TelePrompter amounts to puppet strings. Who would hold these strings, though? That is the question, isn’t it? I believe it is, primarily, David Axelrod.

To what ends is the puppet being directed, though? Are Mr. Axelrod’s motivations largely financial or are they more ideological? These are all questions we should be asking as we watch events unfold in politics in the next couple of years, because if our government officials – especially the President – and their aides and advisors cannot be counted on to work for the people they serve – the American people – instead of just themselves, they should be voted out of office in the next election cycles.

General Electric: The Worst Bailout in the World

By Phil Kerpen
Policy Director, Americans for Prosperity

We’ve been hearing over and over again about the astonishing $182.5 billion in bailout funds that the federal government has been pouring into AIG, but you might be surprised to learn that a close runner up to AIG in the bailout sweepstakes is General Electric, which got its own $139 billion bailout in November. So with Congress and the media in a frenzy over AIG bonuses, where’s the GE outrage?

In a wild rant on MSNBC—owned by General Electric–Keith Olbermann denounced Citigroup CEO Vikram Pandit’s salary, AIG, Northern Trust, and other bailouts recipients, which he called “vast engorged gluttonous multinational corporations whose sneezes can be fatal to our jobs, whose mistakes can turn us into the homeless, whose accounting errors can be so panoramic that they can make our economy tremble and force us to hand them billions after billions in a blackmail scheme that has come to be known as ‘bailout.’”

That’s great stuff, but somehow, in his righteous indignation, he forgot to mention his own employer’s massive bailout or his own hefty salary on the list of horribles that followed. That’s a heck of an oversight, because even though GE CEO Jeff Immelt decided to forego his 2008 bonus (which the board granted to him even though he missed every one of his performance measures) other GE executives are receiving their bonuses– in some cases millions of dollars.

Chief Financial Officer Keith Sherin and Vice Chairman Michael Neal were given 2008 bonuses of $5.2 million and $5.8 million, and chose to return only half. The average GE executive bonus only dropped 19 percent from 2007, even thought GE stock lost 53 percent of its value.

Then there’s Olbermann himself. In November, with GE already in the depths of crisis and just two days before its $139 billion bailout deal was announced, Olbermann signed a lucrative new contract just two years into his then four-year deal, with a hefty raise from $4 million a year up to $7.5 million a year. It’s unknown whether he also got a bonus, but either way that’s a heck of a raise to be paid using freshly given taxpayer bailout dollars.

MSNBC’s other leading light, Chris Matthews, who’s been bashing AIG bonuses nightly, just signed a new contract this week that reportedly pays him over $5 million per year. This is the same Chris Matthews who said his job at MSNBC is to do everything he can to “help” President Obama succeed.

It actually gets worse. My friend Tim Carney has brilliantly described how General Electric (with its MSNBC unit cheering every step of the way, I’ll add) has been one of the prime movers behind the push for the cap-and-trade energy tax, one of the major pieces of President Obama’s budget and economic agenda. In 2008, while GE stock was losing more than half its value, the company spent upwards of $18 million on federal lobbying — the majority of it pushing for cap-and-trade. GE is positioned to make a fortune on a cap-and-trade scheme, rebooting its failed financial derivatives business for every aspect of carbon trading that the Wall Street wizards can dream up.

None of this is to say that Congress should step in and block GE bonuses or tax them away as they’re considering doing to AIG. The rule of law matters, and contracts should be honored (even though Olbermann himself said contracts should be torn up — and overpaid employees of bailout companies should be fired — an idea MSNBC should consider taking him up on). The real problem is the bailouts themselves, which create impossible choices. We’ forced to decide between tax dollars being spent on unpopular things and Congress micromanaging businesses after bailing them out — in essence substituting political decisions for market decisions and greatly damaging our economy and capitalist system.

Is MSNBC taking a hard left-stance to keep the federal bailout dollars flowing from an appreciative Obama administration? It’s impossible to say, but that there could even be the appearance of such a thing is un-American. I’ll be consistent–if GE can’t survive without taxpayer bailouts, it belongs the same place AIG does: bankruptcy court.

Mr. Kerpen is director of policy for Americans for Prosperity.