Obama's Secretary of Transportation

President elect Barack Obama selected former Illinois Republican Representative Ray Lahood to head the Department of Transportation. At first this seemed like a pretty uneventful pick, other than him being one of a handful of Republicans in Obama's cabinet, luckily we have the great John Kass at the Chicago Tribune to fill us in on Lahood's background. According to Kass, Lahood is tight with Bill Cellini, the most powerful Republican in Illinois state politics. Cellini is also the head of the Illinois Asphalt Pavement Association, which I'm sure is an entirely reputable organization, and close to both Chicago Mayor Richard Daley and Gov. Blagojevich. Since Lahood will likely have enormous influence over where the $800 billion plus stimulus package is directed, I'm sure there are some pretty happy people in the Italian restaurants and social clubs of Chicago. Don't expect the mainstream media to delve into Lahood's background, they will be content to mention that he is a Republican, thus proving once again Obama's great commitment to bipartisanship. If the national media had a few more journalists like Kass, we might actually be able to hold a politician accountable once in a while.

Bush Gives $17 Billion to Zombie Automakers

Unsurprisingly, George Bush today gave GM and Chrysler a massive loan to allow them to continue to pay their UAW employees not to work. Even though sales have plummeted, Chrysler is shutting down all plants for 1 month, and GM has a negative $60 billion balance sheet, we are expected to believe that this "lifeline" will allow the companies to restructure and become profitable again.

The fact is these companies are dead, they just refuse to admit it. It may be years before auto sales begin to pick up again, especially now that banks are no longer giving no money down car loans to anyone with a pulse. GM has abandoned plans to build a factory to make the engines for their new electric car/pipe dream the Chevy Volt, which was supposed to somehow reinvigorate the company.

The best thing for the automakers would have been bankruptcy, despite the fearmongering claims that "no one will buy a car from a bankrupt company" and "the country will lose 3 million jobs if they go bankrupt". I don't think being on government life support will exactly inspire confidence in consumers, and massive job cuts are a necessity if these companies want to continue to exist in any form.

I am no business expert, but it seems like eliminating several brands, (Pontiac, Buick) and spinning off more successful ones (Hummer, Jeep) would be the most effective way to restructure. Instead we will hear the usual drivel about making more energy efficient vehicles, despite the fact that oil prices have dropped 60% and there is no market for them.
Meanwhile the automakers are still based in Detroit, a disgusting, corrupt cesspool that no engineer or executive in his right mind would want to live in or around. Other than these issues, they should be back on the right track in no time.

Hopefully this is the last disgrace Bush can thrust on the American people before he hands the reins to Obama, who will most likely be the FDR to Bush's Hoover. And, no I do not mean that as a compliment.

Newspeak Alert

Shoe dodger-in chief Bush today:

"I've abandoned free-market principles to save the free-market system,"

The biggest joke about this is that the vast majority of people, particularly on the left, regard Bush as some kind of free market zealot. In reality he has been no more of a friend of free markets than Nixon, Carter, or Clinton. He also gave a typically articulate justification for his socialist economic policies:

"I feel a sense of obligation to my successor to make sure there is not a, you know, a huge economic crisis. Look, we're in a crisis now. I mean, this is -- we're in a huge recession, but I don't want to make it even worse."

Don't worry Georgie, you already have.

Corn We Can Believe In

Barack Obama will announce former Iowa Governor Tom Vilsack as his Secretary of Agriculture on Wednesday, said a senior Democratic official. Vilsack briefly ran for the Democratic nomination last year, before dropping out and endorsing Hillary Clinton. Vilsack is so dull and unremarkable he makes Tommy Thompson, another ex-governor from the midwest who ran a hopeless primary campaign, seem positively mesmerizing by comparison.
Vilsack is a supporter of ethanol and other farm subsidies, and has been heavily funded by Big Agriculture, including seed and pesticide giant Monsanto.


Some of the more idealistic Obama supporters had held out hope that he would select writer Michael Pollan, a critic of ethanol and industrial agriculture. Instead he has selected another establishment Democrat and Clintonite, who is widely believed to be a shill for Monsanto, a company considered to be pure evil by many on the left . This would seem to be a pretty big slap in the face to environmentalists and progressives, not to mention conservatives and libertarians disgusted by ethanol and other farm subsidies. It will be interesting to see if there is serious opposition to this pick from the left, or if they will fall in line as most antiwar Obama supporters did after he selected Hillary for Secretary of State. I will be hoping for the former, but I wouldn't count on it.

Yahoo! Finance Funnies

The message boards on finance.yahoo.com are always a source of great amusement. Here are some samples from the GM board today.


Andrew Jackson would put a bullet right between harry reid's eyes

In fact he'd lots of ammo because I think he'd shoot the entire congress. Can't you see him dueling nancy pelosi she runnig and crying and he's reloading. At least Hillary would stand up and take it like a man. Oh I wish we had old andy now.

Still got my 1928 Ford, 6 million miles



on it, never in the garage except for oil, lube and tire changes...more than anyone can say for the foreign brands because in 1928 they were still walking.

Blago to become Pontiac car salesman

That's what I heard.


A Little BB Can Really Wreck a Chevy!
I USED TO PUT THEM IN THE CARBS AT THE PLANT BECAUSE I WAS SO PISSED THAT I HAD TO WORK 2ND SHIFT!

A Weak End To Bernie Madoff

Sorry for the horrible pun, but how often do you get a chance to equate massive financial fraud with a classic 80's movie? Also at least I didn't say that Bernie Madoff "made off" with $50 billion. I do have standards for my bad puns.

For those not familiar with the story, Bernie Madoff is the former NASDAQ chairman who was recently charged with fraud for swindling up to $50 billion from wealthy investors in his Bernard L. Madoff Investment Securities LLC. This was a separate business from his huge brokerage, which was one of the largest market makers on NASDAQ. There had been red flags raised in the past as Madoff consistently brought in 1-1.2% every month, even in the current economic recession. Many investors believed that Madoff was using inside information from his market making business to achieve these incredibly steady profits, but were willing to ignore the ethical issues in exchange for a 10-15% yearly return on investment. According to analyst Henry Blodget:

"Many Wall Streeters suspected the wrong rigged game, though: they thought it was insider trading, not a Ponzi scheme," Blodget wrote. "And here's the best part: That's why they invested with him."

It is hard too feel too much sympathy for these people, how many billions in returns did they collect over the years as the fraud spiraled out of control? But many more of his investors could not have known much, if anything, about his "investment strategy". We already have reports of charities being forced to close, family foundations losing half their assets, and small towns pension funds being hit. The greater losses are with hedge funds, banks, and other asset managers, some of whom appear to have lost billions.

I predict that once the shock of the enormity of this theft wears off, we will begin to see the blame placed on the SEC and lack of government regulations. This will inevitably be followed by lawsuits against the government for lack of oversight, and eventually taxpayers will again be forced to foot the bill for greed and stupidity on Wall St. This is why it is always a bad idea to rely on government guarantees of safety and quality, be it the FDA, DHS, or the SEC. Peter Schiff, cutting to heart of the matter as always, had this to say:

"Of course, the fact that the SEC routinely audited Madoff's investment company and found nothing wrong is further proof that government regulation of the securities industry is ineffective and has done more harm than good," he said. "Rather than protecting investors, it merely lulls them into a falls sense of confidence. If government stayed out, private-sector due diligence would do a much better job of ferreting out such massive and poorly conceived scams."

Good luck trying to sell that one in the next few days, Peter. I have a feeling we can expect a lot of talk about "oversight", "better regulation", and "transparency". Perhaps Obama will create a new Cabinet level "Fraud Czar", or merely double the size and budget of the SEC. Either way SOMETHING will have to be done, all the serious people will say.

I can already imagine David Brooks, or Tom Friedman, or Paul Krugman calling for a regulatory Manhattan Project, to finally eliminate fraud and risk from the world of finance. The old Nuclear Option, the last rhetorical resort of intellectuals trying to control the uncontrollable , or otherwise meddle in markets.

The fact is, no amount of oversight or government control could prevent someone with Bernie Madoff's wealth and influence from fleecing his own friends. He used the respect and contacts he gained over half a century as one of the titans of Wall St. to lure in his marks, and steady returns to keep them from questioning his increasingly unbelievable performance. The failures here were ultimately human ones. Bernie Madoff committed an unquestionably evil act, destroying wealth created by generations of thrift, innovation, and sacrifice. Many of his investors were innocent, or guilty only of gullibility, but many were also guilty of greedily ignoring red flags in exchange for easy money.

Evil, ignorance, and greed are not new traits in humanity, they have existed since the dawn of time, and will be around as long as man exists. No religion, philosopher, or king has succeeded in destroying evil, and no government, regulator, or bureaucracy will either. Unfortunately, that will not stop our government from trying just one more time.

Senate Republicans Still Don't Get It

The Senate Republicans who voted against the auto bailout once again failed to offer a real alternative to the Democrats, they were in favor of the bailout in theory, but ultimately killed the bill over wage concessions by the UAW. This strategy was both intellectually muddled and politically hamfisted.

The Republicans did not object to the fact that the bailout would have created an unconstitutional "Car Czar" to control the most important business decisions of private corporations, nor did they object to Democrats like Chris Dodd (D-Countrywide) calling for the firing of GM's CEO. Instead they chose to focus on getting the UAW to take pay and benefit cuts, thereby allowing the the media to present the story as one of stereotypical Republican union-busting.

A principled stand against the bailout as unconstitutional and socialistic would have been intellectually and morally sound, instead the Republicans were all too quick to accept the premise of the bailout, and then kill it essentially on a technicality. This left them in the worst possible position, verbally sparring with the UAW over who was to blame, excoriated by the media as anti-American and anti-worker, and standing on the sidelines as the White House and Treasury give in and use the TARP funds for the bailout anyway.

The Republicans started painting themselves into this corner when large percentages of them ended up voting for the TARP bill. When only 15 Republicans voted against the Senate bill, they lost any chance to claim the mantle of opposition, allowing all future government intervention in the economy to be measured against the monstrous TARP expenditure. How can Bob Corker (R-"Harold, call me") make a serious argument against giving $15 billion to Ford, GM, and Chrysler, when he voted for giving $700 billion to Goldman Sachs, Citigroup, and AIG? Richard Shelby (R-AL) voted against the financial bailout, but also represents a state with a massive presence by Toyota, effectively neutering his opposition by equating it with support for foreign manufacturers over American companies.

It is tough to see how the Republicans will benefit from this entire fiasco, they have allowed themselves, fairly or not, to be labeled as obstructionists and union-busters. The auto companies will get their loans, probably from the TARP fund, perhaps with additional assistance coming from the new Congress and Obama administration in January. The government will continue to take a greater role in planning and managing the economy and GM, Ford, and Chrysler will continue their inexorable slide into bankruptcy, only this time all Americans will be left holding the bag.

The Bailout Is Dead, Long Live The Bailout!

The auto bailout/bridge loan/lifeline failed to pass the Senate last night. Some Republicans were trying to get the UAW to make wage concessions, which they unsurprisingly rejected. The Democrat spin is that the evil union busting Republicans don't care about American workers, therefore they will let the economy collapse to help their sinister non union Japanese friends.

The bailout was a bad idea, even if the UAW had agreed to the concessions it would not have made much difference in the long term health of the big three, so I am glad to see it go down. It will be interesting to see who wins the public relations battle that will ensue, I would bet on the Democrats, expect to see a lot of stories about hardworking UAW families struggling to buy the kids Christmas presents.

Any hopes that the Republican party has suddenly regained fiscal sanity should be dashed by this statement from White House Press Secretary Dana Perino:

"Under normal economic conditions we would prefer that markets determine the ultimate state of private firms. However, given the current weakened state of the U.S. economy, we will consider other options if necessary, including use of the TARP (bailout) program to prevent a collapse of troubled automakers."

"A precipitous collapse of this industry would have a severe impact on our economy and it would be irresponsible to further weaken and destabilize our economy at this time,"

Blah, blah, blah, we love free markets, except this time. Irresponsible, collapse, destabilize, etc. It looks like the greedy unions, inept management, and micromanaging bureaucrats will get their cash after all. I'm sure that the Car Czar will be able to turn around decades of horrible business practices and restrictive government standards in no time. I for one am going out and buying a Pontiac Aztek as soon as possible.

Lamestream Media Meme: Blago is crazy

A quickly developing theme among the media about the Blagojevich scandal is the insanity angle. In between expressing their shock and disbelief that a politician would use his power to enrich himself, many pundits have progressed to wondering if Blagojevich is out of his mind. Many talking heads have turned amateur psychologist, wondering if Blago has narcissistic personality disorder, paranoia, or is merely a sociopath. Fox News' Ellen Ratner didn't stop at speculation, declaring:

"having read the transcripts, it is clear to me that Governor Blagojevich has serious mental problems. He is grandiose and does not have much of a clear thought pattern even for someone who might have a criminal mind."

Excellent work Doc, I would love to hear what you think of George W. Bush.

Another theme of the media coverage has been righteous indignation and disbelief, as if they literally could not comprehend a politician selling favors, despite the fact that it happens at every level of government all over the world every day. They have tried to portray Blagojevich as some sort of cartoonish supervillain, a task made easier by some of the more outrageous schemes ( the Children's Hospital funding, talking about shaking down Warren Buffett) he considered.

In reality, Blagojevich is neither a deranged lunatic nor some sort of black hatted archcriminal, he is just another crooked pol who tried to sell his influence to the highest bidder. When ordinary people are given power over money and resources that are not their own, the vast majority will abuse that power. The worst thing about the Blagojevich case is not that it was extraordinary, but that it was all too common.

Yes We Can Nuke Iran!

If his appointment of Hillary Clinton to Secretary of State wasn't enough of a slap in the face to his antiwar supporters, President Elect Obama apparently intends to retaliate with nuclear weapons if Iran were to use nukes against Israel. Israeli newspaper Haaretz talked to a source close to the new administration, who said that the threat of retaliation would be part of a "nuclear umbrella" along with a missile defense system. In a sure sign of the apocalypse, a senior Bush administration official showed some common sense by saying:

"Who will convince the citizen in Kansas that the U.S. needs to get mixed up in a nuclear war because Haifa was bombed? And what is the point of an American response, after Israel's cities are destroyed in an Iranian nuclear strike?"

Iran does not yet have nuclear weapons, and is most likely years from developing them, which should render the matter moot for the time being. However it has to be disturbing to those who believed that Obama represented a new kind of foreign policy. I certainly didn't support Obama, but I did hold out some small hope that he would be slightly less likely than John McCain to start another war, it is now beginning to seem as if even my modest hopes were too much.

USA Number 11!

An international study showed fourth and eighth grade students in the USA trailed several foreign countries in math and science proficiency. The study did show significant gains in math for U.S. students, and lesser gains in science, but a closer look reveals some disturbing numbers.

For example U.S. 4th graders came in 8th in science, trailing not only Singapore, Hong Kong, and Japan, but also Latvia and the Russian Federation. 8th graders did worse, coming in 11th behind the aforementioned Asian countries as well as such intellectual strongholds as Slovenia, Hungary, and the Czech Republic.

The math numbers were equally disappointing. 4th graders came in 11th behind Hong Kong, Taiwan, Japan, and Singapore, but also trailed Russia, Latvia, Lithuania, and Kazakhstan.

Yes, that Kazakhstan.

Even worse was the lack of students scoring at advanced levels. In math, only 10% of 4th graders and 6% of 8th graders scored at advanced levels. Compare this to Singapore, which hit 40% for both grades, Kazakhstan, which hit 19% for 4th graders, and Russia, which scored 16% and 8% respectively.

I don't expect the U.S. as a whole to compete with highly developed city-states like Hong Kong and Singapore, our population is far too large and diverse to compare with them. But it is certainly troubling to lag behind third world hells like Kazakhstan.

The Greatest Legislative Body in the World.....

On a day when a new multi-billion dollar bailout is likely to be passed, it would seem almost impossible for Congress to do anything more infuriating. Fortunately we have Texas Rep. Joe Barton to restore our faith in government. Barton, along with Illinois Democrat Bobby Rush, and Texas Republican Michael McCaul, have introduced a bill that would force college football to adopt a playoff system.

"In some years the sport's national championship winner was left unsettled, and at least one school was left out of the many millions of dollars in revenue that accompany the title," "Despite repeated efforts to improve the system, the controversy rages on."

Indeed it does, I can think of no issue more divisive among Americans. The war in Iraq, taxes, nationalization of the auto industry, these are all mere trifles distracting us from whats really important: Did undefeated Auburn get screwed out of a title shot in 2004?

To call this a disgrace to the legislative process would suggest that the majority of bills introduced actually serve a necessary purpose. It is however, an especially stupid piece of legislation. This will probably not be a surprise but Joe Barton has this to say about the auto bailout:

"I have come to the conclusion that we will all be dramatically better off if we can resuscitate the American auto industry."

"The Big Three now build some of the best vehicles ever made."

"A little help now, I think, will pay all of us large dividends later in happiness and opportunity, not to mention lower prices on better cars."

Rep. Joe Barton, earning every penny of his $169,300 per year salary.

Bridge Loan to Nowhere

The House and Senate both appear close to finalizing a $15 billion dollar bridge loan to GM and Chrysler. Two different versions are in the works, with the House version requiring the auto companies to comply with all state emission requirements. This would include California's tough emissions standards, which are fiercely opposed by the automakers. The bills are both packed with all sorts of "oversight" and "taxpayer protection" including the creation of a "Car Czar" who would have oversight and significant control over the companies. All the usual feel good stuff is in there, limits on executive pay, no "golden parachutes", "firm deadlines" for action(adjustable, of course), etc.

Senate Republicans seem willing to filibuster to prevent the bill's passage, with varying levels of enthusiasm. Although I am against the bailout, as anyone who actually thinks the plan through should be, it is hard to be happy about being on the same side as such statesmen as David "whoremonger" Vitter (R-LA), and Mitch McConnell (R-KY). President Bush and President Elect Obama both support the bailout, so I think we can expect it to pass after a few more days of grandstanding from both parties.

Jesse Jackson Jr. Senate Candidate #5?

ABC News is reporting that federal law enforcement sources have identified Chicago Congressman Jesse Jackson Jr. (D-IL) as "Senate Candidate #5", whose representatives allegedly offered up to $1,000,000 to Gov. Rod Blagojevich in exchange for an appointment to Barack Obama's U.S. Senate seat. Jackson has said that he has spoken to the FBI and that he is "not a target". Even if nothing comes of this legally, the suggestion of corruption should be enough to take him out of the running for the open seat. It is unclear how this will reflect on President Elect Obama. He can make a decent claim to not being close to Blagojevich, (didn't back him for Gov., he didn't back Obama for State Senate) but JJ Jr. will be a harder sell. He was a National Campaign Co-Chair for Obama, and gave a speech at the Democratic Convention. If it comes out that he was involved in negotiations for the Senate seat, Obama may have to warm up the same bus he threw Jeremiah Wright under.

Obama and Blagojevich

Barack Obama today:

"I had no contact with the governor or his office, and so I was not aware of what was happening," Mr. Obama said. "And as I said it is a sad day for Illinois. Beyond that I don't it's appropriate to comment."

Rod Blagojevich on tape:

"Unless I get something real good for [Senate Candidate 1], shit, I'll just send myself, you know what I'm saying. I'm going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain. You hear what I'm saying.

"And if I don't get what I want and I'm not satisfied with it, then I'll just take the Senate seat myself. [The Senate seat] "is a fucking valuable thing, you just don't give
it away for nothing."

It is now widely believed that Senate Candidate 1 is Obama adviser Valerie Jarrett. If so, Obama may have some explaining to do. Although it appears that whoever spoke to Blagojevich was unwilling to offer any cash or political appointments for the seat, it certainly seems as if someone from the Obama camp was in contact with Blagojevich. This would contradict both Obama's statement today, and the retraction of David Axelrod's claim that:

"I know he has talked to the governor and there are a whole range of names many of which have surfaced, and I think he has a fondness for a lot of them."

Again, there could be a perfectly good explanation for all of this, however it seems likely that at the very least Obama may have to elaborate further on his contact with Blagojevich, or lack thereof. Hopefully this will at least slow down the media's anointment of Obama as the new FDR/Lincoln/Jesus for a few days.

This just in: Rod Blagojevich isn't very smart

I am a little late to the game with this post, but figured I might as well chime in. Illinois Governor Rod Blagojevich was arrested by the FBI today on federal corruption charges, for allegedly trying to sell President Elect Obama's Senate seat, which he appoints. He was caught on wiretaps in various expletive laden conversations with his chief of staff, John Harris, who was also indicted. The transcripts are utterly hilarious, containing such gems as

“ (the senate seat) is a f—-ing valuable thing, you just don’t give it away for nothing,”

and referring to President Elect Obama as a "motherfucker".

This cornucopia of corruption and stupidity also contained plans to extort the Tribune Co. into removing members of its editorial board who were critical of Blagojevich by holding up the sale of Wrigley Field, owned by the Tribune Co. Blagojevich also threatened to rescind state funding for the Children's Hospital of Chicago, because an executive there had not came through with an expected $50,000 contribution. Even by the subterranean standards of Illinois politics, this is some pretty vile stuff.

It doesn't seem likely that any of this will stick to Obama, who investigators have cleared of any wrongdoing. Still, Obama strategist/Daley mouthpiece David Axelrod has already had to backtrack on a statement he made claiming that

"I know he's talked to the governor and there are a whole range of names many of which have surfaced, and I think he has a fondness for a lot of them."

Obama has released a statement claiming that Axelrod "misspoke". I guess when he said "I know he's talked to the governor..." he actually meant that he had never spoken to the governor about the vacancy. Right. Uncharacteristically sloppy for Axelrod, an old school Chicago fixer and long time ally of the Daley machine. There is plenty of dirt in the transcripts, and I am sure there is a lot of scrambling and ass-covering going on in the Windy City tonight. I for one cannot wait for Gov. Blagojevich to start naming names, because something tells me he is not exactly a standup guy.

Here is Axelrod on FoxNews on 11-23-08