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The Obamaconomy’s private equity boom
Posted by hpayne on March 6, 2013
Democrats claim they’re for Main Street, not Wall Street. Yet only Wall Street has thrived under President Obama’s job-killing policies, freezing unemployment a t 8 percent while Wall Street has soared on corporate earnings. On Tuesday, the bulls were running again to a new high (asObama punished Main Street with his mindless sequester cuts) – but a closer look at the numbers reveals another irony.
The president’s demon private equity industry is making out like bandits in the Obamaconomy.
While the president roasted private equity firms like Mitt Romney’s Bain Capital as evildoers, 2012 brought them a mountain of money. Dividend payments alone topped $100 million apiece for Blackstone, KKR, and Apollo executives.
Why? Because while Obama’s regulatory juggernaut flattened job growth, Ben Bernanke’s Fed has tried to keep the economy alive on a drip feed of low interest rates. Cheap money is honey for private equity which has gone on a debt-fueled buying binge.
“It makes financing leveraged buyouts much less costly,” reports Forbes, “and thus potentially much more lucrative.” For example, Carlyle Group private equity poured $6 billion into takeovers in the third quarter alone, bidding up companies like King Collision Repair Centers, TCW Group, and Getty Images.
The buyout feeding frenzy has driven up stock prices and fattened One Percenter paychecks (KKR’s twin CEOs took home a total of $208 million in dividends last year – up 62 percent from 2011).
Viva La Obama!
The Fed’s extraordinary stimulus, however, has many fearing a financial bubble. In a market driven by debt, what happens when interest rates rise again? “Carlyle and its peers have generated healthy earnings because of the amount of leverage they are able to pile on to the companies they acquire,” continues Forbes. “Make that debt more costly, and the tailwind becomes a headwind.”
Uh-oh. Warren Buffett – an Obama booster – worries, saying markets are on a “hair trigger” because ”an awful lot of people (will) want to get out of a lot of assets” when the Fed has reversed direction. And when that happens – hey, just blame George Bush.
More evidence of Obama’s ‘Chicago Way’
Posted by hpayne on March 6, 2013
From Chrysler creditors (see my column today) to liberal Ron Fournier to conservative National Review, the testimonials continue to come corroborating Bob Woodward’s account of a White House culture of intimidation.
Detroit native – and former Washington AP bureau chief – Fournier is a veteran member of Washington’s media establishment. Yet, like Woodward, he is stunned by the Chicago Way tactics of the Obama administration.
After White House spokes-pitbull Jay Carney accused Woodward of being “willfully wrong” in exposing the White House sequestration fib, “I was struck by the fact that Carney’s target has a particular history with White House attacks,” writes Fournier in The National Journal where he is now editor. “I tweeted: ‘Obama White House: Woodward is “willfully wrong.” Huh – what did Nixon White House have to say about Woodward?’”
“My tweet was not intended to compare Nixon to Obama,” continues Fournier, “but rather to compare the attack to the press strategies of all the presidents’ men.” Fournier should know. He recounts how he too was at the receiving end of similarly abusive language from an Obama official – including phrasing that Woodward complained of from Obama official Gene Sperling: “You will regret staking out that claim.”
Goons do have a way with words.
Over at the conservative National Review, Victor Davis Hansen was the headliner Tuesday with a history of Obama’s brass knuckle tactics.
“There are plenty of reasons to assume that Barack Obama has established the tenor and methodology of press relations from the very outset of his administration, characterized by expectations of unfailing support, coupled with a general vindictiveness toward his few critics among the press corps,” writes Hansen who then goes on to catalog the Obama team’s Nixonian habit of threatening liberal columnist Lanny Davis, leaking opponents’ divorce records, making enemies lists, warning state reps that they would be punished if they criticized the stimulus, and so on.
While much of the D.C. press – see the ever-loyal New York Times – has been quick to throw Woodward under the bus, others have been shaken by the attack on someone of his stature. “It’s a little embarrassing none of the rest of us was as aggressive as he was,” writes liberal Time magazine’s Mark Halperin.
Much of that lapdog journalism is ideological – but it is also the effect of intimidation. And as the lawyer for Chrysler’s bondholders, Tom Lauria says, there is nothing more threatening than Washington’s most powerful office.
The Green Church of Washington
Posted by hpayne on March 5, 2013
The governing class’s obsession with Green religion can seem eccentric were its public policy intentions not so greedy.
This winter – like all winters – is the most brutal on the human condition as the homeless scramble for refuge from frostbite, sudden snow squalls tragically blind drivers, and early freezes cost fruit farmers millions in lost revenue. Yet there was President Obama – he of the gas-guzzling limo fleet and Air Force One – introducing his climate warriors, EPA nominee Gina McCarthy and Energy Dept. nominee Ernest Moniz, in the White House Monday.“They’re going to be making sure,” said the president, that “we’re doing everything we can to combat the threat of climate change.” Outside the coal-heated confines of the East Room, D.C. was shivering in unseasonably cool , 30-something temps.
At a time of 8 percent unemployment, falling incomes, and inner city crime mayhem, claiming dominion over the global thermostat is an odd priority. But then politicians have much to gain if they can regulate carbon dioxide – the essential emission of industrial society. So, like the political necessity of invoking God (whether a churchgoer or not), pols reflexively memorize the Green catechisms.
My Politics colleague Dale Hansen recently compared climate science denial to the denial of evolution. But in almost 30 years of covering environmental issues, I find the better analogy to climate change is creationism. It is faith, not science.
How else to explain the change in “scientific ” terminology in just 40 years? During the frigid winters of the 1970′s, a “consensus” of scientists claimed global cooling threatened the world (my favorite solution: “melting the Arctic ice cap by covering it with black soot” – Newsweek, 1975). Just 20 years later , the droughts of the late ’80s inspired a “consensus” on man-made global warming. As that fever cooled, the “consensus” moved to climate change – that any weather extreme is caused by industrial emissions.
Like pagan gods that change depending on unexplained threats to the tribe, the definition of global warming shifts with the political winds. There has never been a consensus on climate (the latest poll of scientists findsonly 36 percent believe in man-made climate catastrophe), other than that we are in a warming period after the Little Ice Age of the mid-1800s – and that the Kyoto international treaty’s draconian emissions cuts, even if achieved, would have no effect on temperature trends. Climategate exploded global cooling-warming-change science in 2009 – revealing that top scientists like Michael Mann had doctored their research, exposing them as the carnival snake-oil salesmen (a lucrative trade that bags millions in government research dollars) that they are.
Yet the media persists in promoting their wares. There was USA Today’s hysterical, front page report last week scaremongering over individual weather events and citing Al Gore’s favorite huckster, James Hansen, as a “leading climate scientist” when Hansen was discredited years ago for advocating vandalism against coal plants and comparing climate change to the Holocaust.
We need a government class that protects the needy – not the phantom victims of Green bogeymen.
The Beltway bubble’s clueless Romney-for-EM punditry
Posted by hpayne on March 4, 2013
This just in from Planet Washington: Mitt Romney ought to be Detroit’s emergency manager.
That wisdom, dispensed by pundits Charles Lane of The Washington Post and David Weigel of Slate show why the D.C. Beltway deserves its reputation as a bubble divorced from the rest of America. This half-baked half-wittery seemed to emerge from the Romney is a Michiganian School of Analysis – that is, since Romney is from Michigan, then he will win Michigan (wrong). Similarly, just because Romney hails from Metro Detroit doesn’t mean he’s the best EM for the City of Detroit.
“His hometown of Detroit, right now, has just been put into state receivership or it’s about to be,” said Lane mindlessly. “I wonder if there is no role for him in the restructuring of Detroit. He’d be the perfect person to do it. He has got the expertise, he’s a hometown guy, and he is a kind of a political free agent at this point.”
“Romney’s ties to the city are tighter than most city emergency managers, roving technocrats who do a few years at a time in troubled metro governments,” added Weigel.
What nonsense.
To begin with, Romney’s native Bloomfield Hills is a long way from Detroit, though it may not look that way from the beltway. And anyone following the EM tale knows that Governor Snyder has been careful to build bridges to Detroit leadership. His appointment as EM of Detroit Public Schools, for example, was Roy Roberts – a high-ranking black executive with GM. His Detroit EM is likely to be a similarly nuanced choice. Why would Snyder roil Detroit’s Democratic political waters with an unpopular Republican who tried to unseat Barack Obama?
But with the big microphones of the MSM’s Washington-centric coverage, such drivel quickly becomes American political currency. So naturally, Snyder had to respond to these beltway emissions first thing Monday morning. No, Snyder predictably told the Paul W. Smith radio show, Romney is not a candidate for EM.
Under Obama, Wall Street thrives, Main Street dives
Posted by hpayne on March 2, 2013
From Barack Obama to Virg Bernero to Big Labor to Nancy Pelosi, the Democratic class war mantra has been that their party looks out for Main Street, not Wall Street.
But the data betray that message. Take this week’s headline stories.
“The Dow Jones Industrial Average added 35.17 points to 14089 to notch its third-highest close of all time,” reported The Wall Street Journal Friday. Meanwhile, “Americans saw their income drop so dramatically in January that it marked the deepest one-month decline in 20 years,” reported CNN Money.
Why? While demon Wall Street has been buoyed by corporate cost efficiencies and the return of the banking sector to health (more irony since banks are Democrat Enemy #1), business growth has suffered under President Obama’s anti-business agenda – from jobs-killing coal regulations to Obamacare mandates chilling new hires.
This disconnect between Democratic rhetoric and reality is nothing new. Since Obama entered the Oval Office, household income has dropped$4,019 in real dollars – down $2,544 since the recession ended in 2009, or nearly 5 percent of Americans’ income.
So while Democrats claim to defend Main Street, the only numbers they can crow about belong to Wall Street.
Woodward, Chrysler, and the Chicago Way
Posted by hpayne on March 1, 2013
Obama White House intimidation of writers like Bob Woodward over sequestration will come as no surprise to Detroit, where the administration’s bullying tactics were legend in the auto bailouts of GM and Chrysler.
Call it the Chicago Way.
I reported for National Review – and Frank Beckmann for his radio show – in 2009 of White House Auto Task Force intimidation of Wall Street bondholders who resisted the administration’s illegal efforts to move its Big Labor allies to the front of the line ahead of secured debt holders.
“One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight,” lawyer Tom Lauria, representing Perella Weindbergtold Beckmann in March, 2009. Lauria later disclosed that the brass knuckles belonged to Auto Task Force leader Steve Rattner.
Take da deal or we break yer legs.
As with Woodward, this White House does not treat kindly those that refuse to give the president his way. In the case of Wall Street bondholders, presidential intervention from a man who controls the IRS and SEC is intimidation enough as Obama unloaded on them publicly, accusing them of being “speculators” out to destroy an American industrial icon.
Lauria’s account of private pressure also conveyed White House confidence in its lapdog press corps (“the full force of the White House press corps”) to press the president’s agenda.
Thanks to White House tactics, the UAW ultimately made out like a bandit in the Chrysler deal, winning 55 percent of the company while bondholders were forced to take 29 cents on the dollar – gutting the savings of their police and teacher cpensions clients.
Business Insider reported that its “sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed. One person described the administration as the most shocking ‘end justifies the means’ group they have ever encountered. . . . Both were voters for Obama in the last election.”
The president campaigned on “hope.” He’s governed on “the ends justifies the means.”
Duggan: ‘My car insurance doubled’
Posted by hpayne on February 28, 2013
Mike Duggan has volunteered to save Detroit’s listing ship.
We figured that was going to happen as early as a year ago when the ex-DMC CEO bought a house in Detroit’s upscale Palmer Woods neighborhood. So the mayoral candidate has seen Detroit from the ground floor. Making the media rounds this week, Duggan visited The Detroit News editorial board and we asked him what the biggest shock was when he moved into the city.
“The doubling of my car insurance,” said Duggan without hesitation. He now pays $6000 a year on three cars – two Ford sedans and a PT Cruiser – instead of $3000 when he lived nearby in the ‘burbs. Call it the Detroit insurance tax.
Actually, that’s a bargain in one of the nation’s auto theft capitals. Most Detroiters pay nearly three times the state average in auto insurance. “My wife will be happy to hear it could be worse,” added Duggan.
The would-be mayor also allowed that its’ hard to find a movie theater in the city (the RenCen cineplex is all the 138 square mile city has to offer), a hardware store, or a restaurant outside of downtown. Welcome to Detroit – which is why the middle class has disappeared.
Duggan’s experience will help inform him of Detroit’s challenges. As will city council members living in districts – instead of at large. Finally.
Joe Biden’s black history hypocrisy
Posted by hpayne on February 28, 2013
Wednesday night, Joe Biden hosted a glitzy reception at the vice president’s residence celebrating Black History Month.
Make that Liberal Black History Month.
This is the same Joe Biden who as a chairman of the Senate Judiciary Committee 22 years ago presided over the public humiliation of black Supreme Court nominee Clarence Thomas (which this writer covered) – a process so racist that Thomas called out Biden’s committee for staging a “high-tech lynching.”
But such historical details were conveniently forgotten last night as Biden dined on Peking Duck Crepes and preened before a who’s-who list of Washington’s liberal black establishment. Democratic Rep. John Lewis of the Congressional Black Caucus hailed Biden as “tireless warrior” and a “fighter” for civil rights. Biden aw-shucks’d his way through his own remarks lamenting that he didn’t participate in civil rights marches as a kid and then telling his black guests that “I love you guys.”
Too bad the love doesn’t extend to Justice Thomas who was not in attendance.
Thomas’s remarkable life story brought him from dirt-poor poverty in the segregated south of Pin Point, Georgia to Yale Law School, to Chairman of the Equal Employment Opportunity Commission, to Biden’s committee in 1991 as a nominee to the Supreme Court. But Biden voted against Thomas’s nomination after his committee leaked unsubstantiated claims that Thomas was a sexual predator and porn addict (how’s that for black male stereotyping?), then put him on public trial by hearsay that featured testimony by Anita Hill, a feminist academic once in Thomas’s employ who vehemently opposed the nominee’s legal views.
“This is a circus. It’s a national disgrace,” said Thomas, seething with rage in his statement before Biden’s mob. “And from my standpoint, as a black American, it is a high-tech lynching for uppity blacks who in any way deign to think for themselves, to do for themselves, to have different ideas, and it is a message that unless you kowtow to an old order, this is what will happen to you. You will be lynched, destroyed, caricatured by a committee of the U.S. Senate rather than hung from a tree.” (Video here)
Despite Biden’s efforts, Thomas narrowly won a vote of the full Senate to become only the second black man on the U.S. Supreme Court. Thank you, Vice President Biden, for your contribution to black history.
The proud presidential legacy of Rosa Parks
Posted by hpayne on February 27, 2013
If Barack Obama’s promised hope to be a national unifier was an illusion, his personal significance to this country can never be underestimated. For all of his failings as a leader, Obama’s re-election re-enforced America’s pride in their first black president.
That history was on display in Washington today as Obama unveiled Rosa Parks’ statue.
The first black president honored the first black woman to gain a full-length statue in the Capitol’s Statuary Hall – 58 years after she refused to yield her seat on a segregated Montgomery bus (the bus is on display here in the Henry Ford museum). That’s a powerful and enduring moment for a nation that has bulldozed its segregated past in two generations.
“Rosa Parks’s singular act of disobedience launched a movement,” said Obama. “The tired feet of those who walked the dusty roads of Montgomery helped a nation see that to which it had once been blind. It is because of these men and women that I stand here today. It is because of them that our children grow up in a land more free and more fair; a land truer to its founding creed.”
Powerful stuff. The stuff American dreams are made of.
Washington planting seeds for Detroit-like debt crisis
Posted by hpayne on February 27, 2013
A Detroit Financial Review Team has delivered the grim news that Detroit’s long-term liabilities are unsustainable and that the city’s $14 billion debt
has delivered it to bankruptcy’s doorstep. With 30 percent of Detroit’s budget devoted to fixed costs like paying off long-term pension liabilities, Michigan’s largest metropolis has arrived at a cash crisis that threatens basic services. Washington’s own long-term liabilities bear a remarkable similarity to Motown with non-discretionary federal spending on entitlements and interest payments on $16 trillion in debt eating up nearly 30 percent of the budget.
So what might a federal financial review team say about Washington’s current fiscal structure? Actually, Washington got a similar review — if largely unreported in the media — just this January from the General Accounting Office. The verdict?
“Absent policy changes,” writes the GAO, “the federal government continues to face an unsustainable fiscal path. Under current policy (U.S. debt is) projected to grow to 78 percent in 2022, 145 percent in 2042, and 395 percent in 2087.”
Unsustainable. Detroit, meet Washington.
Like Motown decades ago, Washington is planting the seeds for Greece-like insolvency in the future. Yet while Detroit’s top pol, Dave Bing, at least recognizes his city’s disease, President Barack Obama blithely ignores the cliff on the horizon, scaremongering that a mere 2 percent sequester cut in federal fat would devastate the economy, starve children, create chaos in our airports and leave America defenseless.
The president’s denial is irresponsible in light of the GAO’s warnings.
America’s debt-to-GDP ratio in 2012 was a stunning 73 percent, a post-World War II record, and closing in on the Eurozone average of 88 percent. That is still well shy of Greece’s on-the-verge-of-default 160 percent, but Greece and Detroit are reminders of the dangers of kicking the can down the road. Currently, U.S. interest on its debt consumes “only” 6 percent of the budget (at $220 billion a year, that amounts to one-third of the defense budget) thanks to low interest rates. But, the GAO warns, the longer Washington ignores its spending crisis the higher that cost will go.
Indeed, in just 30 years, the U.S. will face debt-to-GDP ratios like Detroit/Greece, which means that U.S. debt will likely incur corresponding debt downgrades. Short-term debt in Greece today costs a stunning 23 percent in interest. In Detroit, few are willing to loan to the city at all. Who will loan the U.S. money in 2045?
“We’ll be spending over $1 trillion a year on interest by 2020. That’s $1 trillion we can’t spend to educate our kids or to replace our badly worn-out infrastructure,” says Erskine Bowles, Democratic co-chair of the deficit-reduction commission the president commissioned — and now ignores.
How deep is Washington’s hole? The GAO reports that just sustaining our current debt-to-GDP ratio will require that the government average surpluses equal to 2.7 percent of GDP over each of the next 75 years. To put that in perspective, the federal government has only run surpluses in four years — 1998-2001 — since 1970. This year, the deficit is 7 percent of GDP, down from record post-WW2 levels of 10 percent in 2010.
“This 75-year fiscal gap has important implications for the well-being of future generations,” warns the GAO in its typically sterile prose. “It is estimated that the magnitude of reforms necessary to close the 75-year fiscal gap increases by nearly 20 percent if action is delayed by 10 years and for more than 50 percent if action is delayed 20 years.”
Detroiters may wonder whyits leadership put the city on its current, unsustainablepath. In putting politics over fiscal sanity, the current White House is giving them a good example.
Obama: ‘Imagine if a CEO ran his business this way’
Posted by hpayne on February 25, 2013
With just four days before a federal meat cleaver is due to bring $85 billion in cuts that Democrats claim will cause untold damage to lives, children, and the economy . . . President Obama was on the campaign trial.
Is this how serious CEOs manage when threats loom? No, but Barack Obama is not a serious manager. He is a serious pol.
Faced with such economic calamity, an executive would be huddling with his board, his top managers, and trying to work out a fixable solution. Obama, on the other hand, hadn’t spoken “in weeks to top Republicans in Congress” until a single phone call last week. Indeed, Senate Minority Leader Mitch McConnell said the president’s brief “outreach was Obama’s first since New Year’s Eve.”
Today, Obama was back on the trail in Virginia, predicting catastrophe and bashing the GOPers he should be home negotiating with. If it looks like the president wants to inflict pain on the American people, you would be right. Pain means gain for this president and an opportunity to advance his 2014 mid-term campaign theme that Republicans cause it.
The president’s remarks in Newport News Shipbuilding were breathtaking in their dishonesty.
“Keep in mind, nobody is asking (Republicans) to raise income tax rates,” said the president one month after Republicans agreed to raise tax rates. “All we’re asking is to consider closing tax loopholes and deductions that the Speaker of the House, John Boehner, said he was willing to do just a few months ago.”
But, despite GOP offers at tax reform, Obama has refused to close those loopholes – indeed, his tax breaks for rich corporations in last month’s cliff deal were worth billions.
“We’ve got to . . . to stop having these crises manufactured every month,” said the president who is manufacturing these crises every month. “I mean, think about if (Newport News CEO) Mike Peters ran his business this way.”
Yes, imagine if Peters ran his business like Barack Obama. He’d be fired.
Media Chicken Little cries sequester
Posted by hpayne on February 24, 2013
For years Americans have read about billions in government waste like the pork barrel Bridge to Nowhere, taxpayer-funded green companies like Solyndra and Ener1, the V-22 Osprey, the F-35 Joint Strike Fighter, Medicare reimbursement fraud, university grants to fund the development of robo-squirrels, and so on.
Yet as Washington faces a 2 percent of federal spending sequester on March 1, President Obama and his media disciples tell us they can’t find a single program to cut that won’t cripple America.
Politicians do what politicians do to retain power, and President Obama is all politician. But the sequester freak-out is also about a partisan American media that can’t see past White House press releases to the reams of investigative work detailing the federal government’s epic waste.
Take the New York Times and Detroit Free Press newspapers on your doorstep Sunday warning of Armageddon if Washington cuts a mere $85 billion from its $3.6 trillion budget. Freep Washington bureau reporter Todd Spangler wails that military cutbacks will throw out of work “people with disabilities or other barriers to employment (who operate) call centers for the State Department or sewing cold-weather gear for American soldiers” (remember when military spending was busting the budget?), that harbors won’t get dredged by the Army Corps of Engineers (remember the Corps’ program waste in Iraq?), that the EPA won’t be able to certify emissions standards (remember Washington’s $3 billion in aid to foreign countries to fight global warming?), and on and on. This journalism is cynically calculated to scare readers (the so-called Washington Monument method in which pols protect their pet special interest boondoggles by threatening to maximize voter pain by shutting down public tourist icons).
It is lazy reporting.
And it is a disservice to Americans whose president has put this country in record debt the last four years, piled up historic 10-percent-of-GDP deficits in peacetime, and provoked a first-ever downgrade in U.S. bonds. More taxes have only fed the addiction with Congress spending $1.17 for every $1 of new revenue according to a Joint Economic Committee study for Congress. NONE of this information is mentioned in the Freep-NYT Chicken Little stories.
The sequester is an opportunity, not a panic. It is a chance to cut fat from an out-of-control Washington spending diet.
Payne: Obama’s non-union, right-to-work manufacturing model
Posted by hpayne on February 19, 2013
Obama visits non-union Linamar power-train plant in North Carolina. (AP Photo)
On the eve of the Michigan Legislature’s historic right-to-work vote last December, President Obama came to a unionized Michigan diesel power-train plant to denounce right-to-work laws as a threat to America’s middle class that will “take away your rights to bargain for better wages and working conditions.”
Last Wednesday, the same president made a non-union, diesel power-train plant in right-to-work North Carolina the first stop in his post-State of the Union tour touting American manufacturing. Not surprisingly, the White House made no mention of these inconvenient facts.
Indeed, the Canadian-owned Linamar facility outside of Asheville contradicts the entire industrial policy that Obama has made the cornerstone of his second term.
“I believe we attract new jobs to America by investing in new sources of energy and new infrastructure and the next generation of high-wage, high-tech American manufacturing,” said the president, echoing his State of the Union themes to 160 workers. “And that’s why I wanted to come down here to Asheville, because there’s a good story to tell here.”
But Linamar didn’t open in an abandoned Volvo plant two years ago because of Obama’s policies. It opened here because North Carolina is a right-to-work state with low energy costs driven by traditional fuels like coal, nuclear, and natural gas.
That is, North Carolina is leading America’s resurgence in manufacturing for reasons that Obama and his union and green allies vehemently oppose. “The U.S. will have an export cost advantage of 5-25 percent” over its competitors, concluded Boston Consulting Group last year. “Among the biggest drivers of this advantage will be the costs of labor, natural gas, and electricity.”
Take right to work. Union-puppet Obama has not only fought this national trend in Michigan, but his National Labor Relations Board has opposed firms like Boeing from moving to right-to-work southern states. Linamar’s biggest customer is North Carolina-based, Big Labor-enemy #1 Caterpillar Corp. which has brought a steady parade of manufacturing jobs to the right-to-work south (part of a “southern strategy” that unions loath) — and away from Obama’s Big Labor Illinois. That should be a lesson not only to Washington but also to Michiganians who shy from marketing the advantages of their new right-to-work status.
“Right to work is something we talk about in our marketing,” says Ben Teague, a spokesman for the Asheville Chamber of Commerce who says both Caterpillar and Linamark find North Carolina’s labor climate attractive. “We feel it is a competitive edge. It means you get workers that want to work at a reasonable wage.”
The White House ignores this reality.
“Caterpillar, which I know you guys supply, they’re bringing jobs back from Japan,” the president told the Linamark crowd. “We’re seeing this trend of what we call insourcing, not just outsourcing. And the reason is because America has got outstanding workers.”
Another big factor driving insourcing is that manufacturing firms are fleeing Obama’s green, European energy model of high-cost alternatives for America’s more competitive energy prices driven by its vast reserves of coal and natural gas.
North Carolina, which gets over half its electricity from coal and another 34 percent from nuclear, has 8.6 cents per kilowatt hour electricity costs, which are more than four times cheaper than Germany. Michigan’s cost is 10.6 cents/kWh).
The president joked at his Asheville plant stop that he and Michelle may want to retire one day to its Smoky Mountain beauty. At least he understands North Carolina’s tourism attraction. But better understanding North Carolina’s attraction to industry is crucial for this country’s manufacturing future.
King Obama’s warming edict
Posted by hpayne on February 13, 2013
President Obama’s court jester, Jon Stewart of The Daily Show, has taken lately to mocking opponents for claiming Obama is a “dictator.”
His liege isn’t making it any easier on him.
Consider this line from Tuesday’s State of the Union address:
I urge this Congress to pursue a bipartisan, market-based solution to climate change. . . . But if Congress won’t act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution.
Executive edicts that bypass the will of the legislature? Not good. The president has already been slapped for unconstitutional Labor Board recess appointments – and Appalachia is riddled with the jobs victims of his EPA greenhouse gas edicts. Obama is a long way from King George – but surely Stewart can find something there to satirize?
Obama touts right-to-work NC manufacturing?
Posted by hpayne on February 13, 2013
On his first post-State of the Union whistle stop, pro-union, anti-right-to-work President Obama came to Linamar Corporation outside Asheville, North Carolina. Somehow Obama’s advance team missed this: Linamar is a non-union shop in a right-to-work state.
“I believe we attract new jobs to America by investing in new sources of energy and new infrastructure and the next generation of high-wage, high-tech American manufacturing,” said the president to Canadian-owned Linamar’s 160 workers. “And that’s why I wanted to come down here to Asheville, because there’s a good story to tell here.”
But Linamar didn’t open in an abandoned Volvo plant two years ago because of Obama’s federal spending initiatives. It opened here because North Carolina is a right-to-work state – a fact that union puppet Obama and his party vehemently oppose. Indeed, Obama’s National Labor Relations Board has fought manufacturing firms like Boeing from moving to right-to-work South Carolina.
Linamar’s biggest North Carolina customer is Big Labor-enemy #1 Caterpillar Corporation which has brought a steady drumbeat of manufacturing jobs to the right-to-work south (part of a “southern strategy”that unions loath) – and away from Obama’s Big Labor Illinois Midwest. That should be a lesson not only to President Obama – but also to Michiganians who recently made their state more competitive with right-to-work legislation.
“Right to work is something we talk about in our marketing,” says Ben Teague, a spokesman for the Asheville Chamber of Commerce who confirms that both Caterpillar and Linamark officials like North Carolina’s labor climate. “We fell it is a competitive edge. It means you get workers that want to work at a reasonable wage.”
The president seems remarkably ignorant of this reality.
“I mentioned this last night — Caterpillar, which I know you guys supply, they’re bringing jobs back from Japan,” the president told the non-union Linamark crowd. “We’re seeing this trend of what we call insourcing, not just outsourcing. And the reason is because America has got outstanding workers. ”
Yes, outstanding workers – but in particular, outstanding NON-UNION workers in right-to-work states like North Carolina. That’s what’s driving insourcing.
Payne: Expand Michigan Medicaid … or else
Posted by hpayne on February 12, 2013
“The federal government isn’t going to protect the states that didn’t expand,” said Michigan Budget Director John Nixon last week in explaining before incredulous Michigan lawmakers why a Republican administration was partnering with the Obama White House to voluntarily expand the voracious Medicaid program to 133 percent of the poverty line.
The Snyder administration? The same nerds that made corralling long-term state liabilities their No. 1 budget priority have now embraced Medicaid expansion, the mother of all long-term liability threats?
But while Gov. Rick Snyder’s plan faces opposition from his own party, it is also a rational decision given the raw political power that Obamacare wields. That coercion is already on display in Washington’s forced insurance mandate on individuals and forced contraceptive mandate on religious institutions. Nixon’s candor exposes the further threat of nationalized health care to the bottom lines of state governments and businesses — and the staggering bill to the federal taxpayer as those entities offload their costs to Washington.
“This makes sense for the physical and fiscal health of Michigan,” said the relentlessly positive governor in announcing Medicaid expansion to 470,000 Michiganians. “Expansion will create more access to primary care providers, reduce the burden on hospitals and small businesses, and save precious tax dollars.” In truth, Snyder’s expansion is a political calculation to transfer costs to Washington (where money apparently grows on trees) and position the state for the inevitable cost overruns of the future.
Medicaid has long given states spending discretion, but nationalization is narrowing those options. For example, Michigan has opted to provide mental health coverage for Medicaid recipients even as it has only covered citizens up to 50 percent of the federal poverty line. By agreeing to Obamacare’s Medicaid expansion, Michigan has negotiated to offload all mental health costs to Washington at a savings of $200 million a year (which Snyder would put in a savings account to cover its estimated $1.3 billion-by-2022 Medicaid expansion costs).
Furthermore, Washington will cover 100 percent of the costs of Michigan’s expansion of Medicaid to 133 percent of the federal poverty line for the first few years, but the state will have to pick up 10 percent of the costs by 2020. But that still leaves a “gap,” as state Medicaid analyst Farah Hanley puts it, of 250,000 residents caught between Michigan’s 50 percent of poverty coverage and the feds’ 100-plus percent.
No sweat. Washington picks up that tab, too — bringing the federal commitment for covering just Michigan’s expansion to a breathtaking $2.5 billion a year in perpetuity (and that’s assuming correct estimates in a program notorious for cost overruns. Example: In 1987, Medicaid’s bill for hospital relief program was projected at $1 billion by 1992. Actual cost: $17 billion).
Isn’t Snyder cautious about hooking up with such an unreliable business partner? After all, the White House has already floated the idea of welching on its 90 percent-by-2020 match for a “blended” share instead. The Heritage Foundation calculates that this would balloon Michigan’s commitment to $2.8 billion a year by 2022 instead of the anticipated $1.3 billion. Goodbye, Michigan savings account.
That’s where Nixon’s comment about the feds only protecting states that expand comes in. If and when costs explode, Michigan will need protection.
“Expansion will create more access to primary care providers, (reducing) the burden on hospitals,” says Snyder. But he surely knows that is unlikely. Indeed, Massachusetts has seen hospital visits increase since Romneycare brought a similar state Medicaid expansion. Why? Chronic doctor shortages — caused by Medicaid only reimbursing doctors at 60 cents on the dollar — force patients to emergency rooms for treatment.
Significantly, Snyder made his expansion announcement flanked by hospital and business representatives. Big Hospital was one of the primary lobbies behind Obamacare because — you guessed it — health care reform sends them more federal dollars. And Michigan businesses, like the state, are badly exposed to Obamacare’s mandates. If the state doesn’t expand Medicaid to 133 percent of poverty, businesses will be mandated to cover the costs.
Under Obamacare’s protection racket, states and businesses — which must balance their budgets — shift their costs to Washington. At least until 2045 when, Heritage calculates, entitlements consume all federal revenue. Then what?
State of warmed-over Obamanomics
Posted by hpayne on February 12, 2013
President Obama’s State of the Union address was billed as an economic call to arms, but the economic portion was curiously flat, lacking inspiration. Only when he addressed social issues – immigration, women in the military, gun control – did his voice gain feeling.
True to his activist roots, this is a president passionate about social justice – and cold to job growth.
Though America is in pain, suffering the worst recovery since WW2, stubbornly high unemployment, and record gas prices, Obama’s economic solutions lacked conviction – they felt rote, a re-warmed serving of four years of leftovers. He talked about more green money for his crony capitalist friends, about the upper class religion of global warming. Nowhere in his speech did he talk of the unemployed coal miner, or the Teamster driver who would benefit from the Keystone pipeline, or the small businessman crushed by Obamacare regulations (indeed, GOP Senator Marco Rubio did a much better job at connecting to the working man and the immigrant laborer who comes to America to escape big government).
Obama saved that compassion for the grieving family of a Chicago teen, killed in a drive-by gang shooting. That passion is important, as is his call for inner city fathers to step up to parenthood, and for better education.
But those are issues best addressed locally. Before all else, America needs Washington leadership on job-killing regulations and debt issues that are hurting the middle class to the tune of $4000 in lost wages since Obama became president.
President Flim Flam’s defining weekend
Posted by hpayne on February 2, 2013
A brief look in the rearview mirror, please.
It will forever be known as the weekend that President Obama played golf with Tiger Woods. But the jarring incongruity between President Hope vs. President Flim Flam will always define February 15-16 for this writer.
On Friday, February 15th, the president gave a speech in Chicago – three days after his State of the Union Address – in which he championed a 24 percent hike in the minimum wage to $9 an hour. The initiative was roundly panned by economists as the Minority Youth Unemployment Act (to borrow the Wall Street Journal’s memorable headline). Such is the experience of minimum wage hikes – it destroys opportunities for youth, especially teens in competitive labor markets like Chicago and Detroit.
Linda Gobler, President of the Michigan Grocers Association, says the president’s plan would be devastating to young people.
“Minimum wage hikes always hit our industry hardest,” she told me that week. “The retail food industry is a huge employer of young people. But it is an industry with 1 percent profit margins, so government wage hikes do a particular disservice to youth job opportunities. Grocers are the first employers of young people in school. We cringe when we see these increases in the minimum wage.”
No matter. President Obama surely knows these facts. The last such mandate in 2009 has led to record teen unemployment. But he wants the minimum wage as a political issue (62 percent of the public supports it and Big Labor demands it as a collective bargaining floor), not an employment issue.
Having thrown youth under the bus, Obama then jetted off to Florida to play golf with his One Percent cronies. Of course, that’s not how the media reported it. The White House press pool was in a snit over not getting celebrity pics of Obama’s golf date with Tiger Woods.
But as TCPalm.com reported, it was the White House that asked to use the exclusive Floridian golf resport in Palm Beach. Obama wanted some private vacation time to play with his rich pals – including Eric Whitaker of Chicago; Tony Chase, a Houston businessman and fundraiser for Obama; and Milton Carroll, a Houston energy exec who is also an Obama donor.
“We got a call a week or so ago and asked if we’d be receptive to having him there,” said Jim Crane, owner of the Floridian and the Houston Astros, told Major League Baseball.com. “And we said, ‘Certainly, it would be an honor to have him there.’” And who is Jim Crane? He is the founder of a private equity firm named Crane Capital.
Rhymes with Bain Capital.
From job-killing minimum wage advocacy to golfing at a resort owned by a private equity tycoon – a profession Obama demonized during the 2012 campaign. Forty-eight hours that define a cynical presidency.
– See more at: http://blogs.detroitnews.com/politics/2013/02/26/president-flim-flams-defining-weekend/#sthash.N8LgKs1s.dpuf
Detroit to Appalachia: Obama’s incomplete journey
Posted by hpayne on January 29, 2013
“Our journey is not complete until all our children, from the streets of Detroit to the hills of Appalachia, to the quiet lanes of Newtown, know that they are cared for and cherished and always safe from harm.”
— President Barack Obama, second Inaugural address, Jan. 21, 2013
That line, delivered a week ago by President Obama at the emotional height of his speech has stuck with me.It was powerful; it was a nod on Martin Luther King Day to MLK’s iconic “I have a Dream” speech (“Let freedom ring from the heightening Alleghenies of Pennsylvania. . . “); it was a call to help the needy among us.
And it was totally empty.
The president’s tenure has been notable for his avoidance of the nation’s most pressing problems — the economy, inner-city violence — while forcing political goals —- national health care, global warming regulations. The “streets of Detroit” line is typical of this president’s rhetorical window-dressing fronting for a political machine hell-bent on consolidating Democratic power. Where has he been on violent inner cities? On coal families?
At its best, his administration has ignored these problems — at worst it has declared war on the coal miners of Appalachia.
The president couched his re-election campaign as important so “that the wealthiest corporations and individuals can’t take advantage of loopholes and deductions that aren’t available to most Americans.”
In truth, he has given disproportionate attention to big special interests. His signature health care law was written by the Big Hospital and Big Pharma lobbies. He has extended billions to politically-connected, green, mega-corporations such as LGChem and Solyndra, and so on.
This is indeed a historically significant president — not in the service of the “the little guy” but in uniting Big Government and Big Business to alter the country’s political balance of power.
Take Detroit and Appalachia.
To Obama, Motown meant Big Labor and a key to securing Michigan and Ohio electoral votes. Meanwhile, he has ignored a metropolis that in 2012 recorded a staggering 52 murders per 100,000 citizens.
Underlying Detroit’s slaughter is a child illegitimacy crisis exacerbated by federal welfare programs. These programs also afflict Appalachia (this writer’s backyard). After a visit to rural Kentucky (where illegitimacy birthrates hover at 50 percent), liberal New York Times columnist Nicholas Kristof observed:
“Antipoverty programs . . . discourage marriage: In a means-tested program like (Supplemental Security Income), a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. Yet marriage is one of the best forces to blunt poverty. In married couple households only one child in 10 grows up in poverty, while almost half do in single-mother households.”
From left to right, public policy activists tell me they dream that Obama, a model husband, would use his celebrity status to celebrate marriage. At a White House event honoring the NBA champion Miami Heat this week, the president made an off-hand comment about basketball stars like LeBron James and Dwayne Wade, who take “their roles as fathers seriously.” What if that was the basis of a public service campaign rather than a throw-away line at a Washington photo-op? Unaddressed, the illegitimacy crisis dooms another generation of children to poverty.
Worse for Appalachia, his administration has declared a War on Coal that is crippling working families. Thousands of miners have lost their jobs thanks to EPA anti-global warming regulations that all but eliminate future coal plant construction.
The tragedy of the Obama presidency has been that one of the most inspiring individuals in U.S. history has used that capital for political ends — not for addressing America’s most urgent problems.
Detroit Auto Show, Detroit Irony Show
Posted by hpayne on January 22, 2013
Call it the Most Ironic Car in Show.
In the north lobby of Cobo Hall, visitors to The Detroit Auto Show this week will find the VL Destino, a Fisker Karma with its electric motor guts ripped out. . . and a gas-guzzling, supercharged, 638 HP Corvette ZR1 engine bolted in its place. Silicon Valley’s green carmakers have boasted that they are the future — and Detroit automakers are dinosaurs. So the fact that successful Detroit industrialist Gilbert Villareal would take the politically correct Fisker — at a time when the overdesigned, overweight Karma is struggling with production — and make it MORE competitive in the four-door sports car market against the likes of the Porsche Panamera and Aston Martin Rapide is rich in irony.
Even more delicious is that the “L” in VL is for Villareal’s partner Bob Lutz, iconic Detroit car guy and father of GM’s Chevy Volt plug-in electric car. Like the Karma, the sales-challenged Volt was hailed as the future. Is the Destino Lutz’s mea culpa? Is the notorious global warming critic (Lutz once called warming a “crock of s***”) thumbing his nose at coastal elites who have poured millions into electric startups like Fisker?
But the Karma-turned-Destino is just the tip of the irony iceberg.
The auto show’s opening also marks the first week of President Obama’s second term, a term gained in part on Obama’s class warfare against America’s upper class. In staring down the GOP at the fiscal cliff earlier this month, the president reiterated his campaign promise to bring “reforms to our tax code so that the wealthiest corporations and individuals can’t take advantage of loopholes.”
Yet the auto show reveals a Robin Hood presidency that has taken from the middle class and given to the rich.
Begin with Fisker founder Henrik Fisker, designer of chariots for the well-to-do, who, despite the struggles of the $100,000 Karma, gained a $529 million loan from Obama’s Energy Department to build the Fisker Nina, a $50,000 electric sedan aimed at consumers of the BMW 5-series. Buyers will get a further $7,500 subsidy for their new toy, just as wealthy celebrities like Leo DiCaprio and Justin Bieber did when they bought their six-figure Karmas.
The Volt’s wealthy consumer demographic, including Michigan’s own millionaire Senator Carl Levin, also get the $7,500 lollypop. The Volt shares a platform with the cheaper, 42-mpg, $20,000 Chevy Cruze Eco. But middle-class Eco buyers get no tax break for their fuel-sipping purchase.
Another electric carmaker, Tesla, occupies prime real estate at the Detroit show. Most show-goers won’t be able to afford its products but they are financing them nonetheless. Billionaire Tesla founder Elon Musk, number 190 on Forbes list of wealthiest Americans with an estimated net worth of $2.4 billion, received a $465 million federal loan to build his $60,000 Model S luxury sedan.
The show floor is also littered with NASCAR models. NASCAR’s International Speedway Corp., which owns tracks including Michigan International Speedway, is a favorite of Obamacrats such as Michigan’s Senator Debbie Stabenow who snuck in a $78 million tax break for it in the fiscal cliff legislation. Indeed, the $68 billion in cliff tax breaks Obama helped shepherd to Big Businesses such as NASCAR, GE and Goldman Sachs will spend all of the $62 billion raised in 2013 by hiking taxes on incomes over $400,000.
The final irony? In 2007, candidate Obama came to Cobo Hall and predicted he would transform the automobile if elected president. “The auto industry is on a path that is unacceptable and unsustainable,” the Harvard lawyer lectured a roomful of auto executives. Five years later, and his expensive, taxpayer-funded electrics are struggling while the industry has ridden gas-powered SUVs and sedans back to profitability.
And Corvette engines are powering Fiskers.