How's Your Bailout? Automotive Edition

The Wall Street Journal reports that General Motors is getting ready to pay back some of the money it borrowed from the federal government ahead of schedule. That sounds like good news, until you learn that it is paying back the loan with money cash it got from the auto bailout.

General Motors Co. plans to begin paying back a $6.7 billion loan it owes the U.S. government starting late this year, putting it on track to potentially repay the entire note by the middle of 2011, said a person familiar with the matter.

But in a move that could be controversial and risky, the car maker plans to use other money it received from the government to pay back the borrowing.

GAO also discovers that Easter Bunny is a hoax; Santa Claus in doubt

The Governerment Accountability Office has come to the stunning conclusion that taxpayers won't be getting their money back from the automotice bailout.

Taxpayers are unlikely to recover their full investment in General Motors or Chrysler, government investigators said Monday in the latest review to cast doubts that the government will recoup the $80 billion it poured into the two automakers.

The Government Accountability Office concluded that General Motors Co. and Chrysler Group LLC likely won't be valuable enough for the Treasury Department to break even on its investment in the two auto companies that went though bankruptcy earlier this year.

Chaos for Clunkers

Foster's Robert Cook reports on impact that the choatic Cash for Clunkers program has had on at one local dealership:

Hurlbert said he came to the 33-year-old family-owned dealership on Friday morning and told his sales managers they were no longer participating in the federal government program, which was suspended on Thursday after the initial $1 billion in funding was exhausted by consumers nationwide who rushed to take advantage of it.

"Right now, I don't trust the government," Hurlbert said. "I don't think you're going to find any dealership in New Hampshire that has received the cash from the government."

Hurlbert said he initially decided Monday to participate in the federal program that pays consumers up to $4,500 for their used cars if they qualify to purchase a new, fuel efficient vehicle. As the money for the program was exhausted this week, Hurlbert and several other automobile dealers realized they could not make any cash for clunkers deals because they were unsure if they would ever receive any money from the government. (more)

Congress Junks Clunkers Program

USA Today reports that the feds are suspending the newly launched "Cash for Clunkers" program:

Automakers have ordered millions of dollars in television ads. Dealers had the hot dogs, balloons and full-page Sunday ads in the newspapers ready to pounce on sales opportunities. And it is all in vain: the "Cash for Clunkers" program is on hold.

This would have been the first full weekend for the program. It was only last Monday that Transportation Secretary Ray LaHood officially kicked it off. Lots of momentum will be lost from the suspension, confirmed moments ago by sources.

The problem had troubles right from the start. While customers rushed to dealers with their worst-looking vehicles, dealers were trying to navigate 135 pages of rules and lots of red tape. The program will almost certainly begin again after a break -- but it's yet to be seen if the momentum can be regained. (more)

Local coverage in the Concord Monitor and Fosters Daily Democrat.

Congress handed out free money for people who were trading in their cars. People respond to incentives. This extremely short-term blip in auto sales will be absorbed over the next few months, when customers who would have been trading in their old cars aren't coming in. Is that short-term blip worth $1 billion? Sure, if you're raising campaign funds from the auto industry.

We have also lost the value of hundreds of thousands of functional cars that must be scrapped rather than remain on the road. Such destruction hurts our economy. Under Congress's logic, we should start tearing down houses to boost the housing market, burning wheat fields to pump up agriculture, and lighting fires in your closet to help J.C. Penney. Congress is not best suited to decide which cars should be on the road, and which should be in the junkyard. Yet they are taking a billion dollars from our future in order to enforce their preferences.

'Cash for Clunkers' a federal headache for local dealers

Adam Krauss reports in Foster's Daily Democrat that local car dealers are not enjoying their encounter with federal bureaucracy:

he trade-in rebate program — which promises $3,500 or $4,500 rebates on new vehicles in hopes of getting fuel-efficient cars on the road — requires that motorists show proof of insurance and that they have owned the vehicle for at least one year. The problem, lawmakers say, is that New Hamsphire doesn't have a mandatory insurance law.

But that issue only scratches the surface of the program's "chaotic" rollout, as put by Peter McNamara, president of the state's Automobile Dealers Association.

"I don't know of a single dealership who has successfully submitted a claim," he said. "One dealership has 50 deals stacked up" in the office waiting to be processed. (more)

Cash for Clunkers is a Clunker

The Nashua Telegraph doesn't like what the federal government's Cash for Clunkers program has become:

But one thing seems pretty clear even now: that the overly generous guidelines developed by the U.S. Department of Transportation for this program will do little to reduce the national consumption of gasoline or to encourage Americans to purchase smaller, more fuel-efficient vehicles.

What else can you conclude from a program that rewards the owner of a light truck or SUV with a $3,500 rebate for purchasing the exact same model with a miniscule improvement of 2 mpg? (more)

The program was sold as a way to both boost the auto industry by boosting demand, and a way to improve fuel economy by getting people to buy more fuel efficient cars. Congress turned into a mechanism to take money from taxpayers, and our grandchildren, and take credit for their largesse to car dealers and consumers.

Such artificial interference always has benefits, to those receiving government favor, but it rarely outweighs the overall costs.

Where Was The Government With Studebaker?

Reason TV interviews P.J. O'Rourke about bailouts, the auto industry, and why the U.S. is better than Australia.

Free speech, free press, and human rights

Right Blogistan is extremely upset that ABC has basically turned itself into a wholly-owned subsidiary of the Obama Message Machine.

Dan Riehl imagines a world in which ABC would treat a Republican President the same way:

Hey, I know. Let's give the Bush White House a few hours on ABC to make a complete presentation from policy advisers and military personnel to go through the run up, execution and corrections regarding the Iraq War. And explain why bringing modernity to the Middle-east actually is a part of the war against terrorism. The media always likes to get behind a war effort, anyway. Oops, sorry, too late for that. Bet they wish they had thought of it then.

Not likely. Disney already owns Fantasyland.

At NRO, Dana Perino has praise for ABC News, but not for this decision:

Perhaps ABC will help provide more clarity and “select” people who will ask tough questions; however, no matter how tough the questions are, President Obama will have home-field advantage. And it’s hard not to look like you’re in the tank when you’re anchoring from the Blue Room.

I understand what all the fuss is about. We're used to the mainstream media pretending to be objective. They never have been, of course. Nor should they be. The First Amendment was written long before the Columbia School of Journalism came around to promote the Myth of the Monastic Reporter. Under this fantasy, reporters and editors exist above the political fray, dispensing dispassionate truth from their lofty and ethical perch. While the romantic view makes reporters seem so much better than common folk, or at least the politicians they cover, it isn't true. Reporters are just as fair and as biased, just as hard-working and as lazy, just as ethical and as sleazy, as the rest of us. We can't expect them to ignore who they are and what they believe as they report the news.

Nor should we. The First Amendment isn't premised on an artificially objective press corps providing fair and balanced coverage. It relies on a cacophony of voices fighting for time and attention with the strength of their ideas. Sure, ABC News lacks any credibility when it comes to covering the Obama Health Care Takeover, but they didn't lose it yesterday. They lost it last summer, and Hillary Clinton supporters might say sooner than that.

Which is fine, as long as ABC isn't given monopoly protection along with its Mainstream Media cohorts. The Obama Administration has shown a remarkable ability to close itself off from criticism, and only allow access to Washington Press Corps Softball Team. And if his ideas are so weak that they can't withstand criticism, they should be rejected.

But ABC News confirming what we already knew about their agenda doesn't weaken the press in America. We could be living under an oppressive regime that stifles all criticism, and uses the power of the state to prosecute people who express unpopular ideas. We could live in Canada:

Who will mourn for the beleaguered Canadian censors? Jennifer Lynch, the Chief Commissioner of the Canadian Human Rights Commission, is oddly insecure in the face of criticism. In Canada's popular Globe & Mail newspaper, Lynch defends her Commission's mandate to punish Internet speech that could "expose an individual or a group of individuals to hatred or contempt" and responds to critics.

From Lynch's article, we learn that "Section 13 prohibits the repeated electronic transmission of messages that are likely to expose an individual or a group of individuals to hatred or contempt." Please allow me to express my contempt for Jennifer Lynch and her repeated attacks on free expression in the land of my ancestors. I hope to escape prosecution the next time I visit Montreal or Toronto.

We've mentioned Canada's quest to stamp out free speech before. But at least we'll never see anything like that in New Hampshire.

The House has already approved a bill to weaken due process protections if you're ever brought before the Commission on Human Rights. Under current law, either party could remove a dispute from this quasi-judicial body to Superior Court. If this legislation passes, defendants wouldn't get their day in court until after the Human Rights Commission is through with them. This would change the Commission from providing voluntary mediation and arbitration into a one-sided prosecutorial weapon, under which anyone accused of discrimination would have to clear his or her name twice.

Fortunately, the New Hampshire Commission on Human Rights has limited itself to cases of illegal discrimination in employment and housing, and has not become a Star Chamber for politically motivated prosecutions. If it did, this is a much more significant threat to free expression than ABC News turning the keys to the Newsroom over to the Obama White House.

For a great example of free speech in action, just look at the Letterman-Palin Kerfuffle.

Why doesn't Toyota need a bailout?

We've been told that U.S. automakers need help from the Federal government to survive. Well, Ford doesn't, and will now be at a severe competitive disadvantage to its dometic rivals. But what makes Chrysler an "American" car company in the first place? After all, Toyota has been building a "more American" car for a while now, according to this chart at Carpe Diem:

Supreme Court Blocks Chrysler's arranged marriage with Fiat

The U.S. Supreme Court beat a 4pm deadline to review the Obama Administration's shotgun wedding of Chrysler and Fiat, at least temporarily delaying a deal that rewards the UAW at the expense of secured creditors:

Chrysler claims the agreement with Fiat is the best deal it can get for its assets and is critical to the company's plan to emerge from Chapter 11 bankruptcy protection.

But a trio of Indiana state pension and construction funds, which hold a small part of Chrysler's debt, have been fighting the sale, claiming that it unfairly favors Chrysler's unsecured stakeholders ahead of secured debtholders like themselves.

As part of Chrysler's restructuring plan, the automaker's secured debtholders will receive $2 billion, or about 29 cents on the dollar, for their combined $6.9 billion in debt. The Indiana funds bought their $42.5 million in debt in July 2008 for 43 cents on the dollar.

The Administration's heavy-handed interference in the auto industry, and its willingness to tear up contracts for political reasons, endangers further investment not only in U.S. automakers, but all U.S. companies. America owes its economic strength to many things, including our educated workforce, our entrepreneurial spirit, and our relatively business friendly climate. But in troubled economic times, investors come to the U.S. for safety. They know that their assets in American companies won't be confiscated or wiped out at the whim of the ruling class.

We tinker with the rule of law at our own peril.