I am fed up with General Motors for the obvious reasons any freedom-loving American should be, but the latest irritant is Ed Whitacre touting proudly that he has “paid off the government loans,” as if this is a wonderful turning point for the company which – does anyone still notice – is owned by the government.  So I wrote to Mr. Whitacre.  I’m sure my letter got filed under “B” for “Bumpkins Who Don’t Understand How Good the Government Bailout Was for the Country.”

April 22, 2010

Mr. Ed Whitacre, CEO
General Motors Corporation
P.O. Box 33170
Detroit, MI 48232-5170

Re:  $8 billion loan payoff

Dear Mr. Whitacre:

Over the past few days I have listened to your radio spots and read your newspaper ads touting GM’s early payoff of the $8 billion loan from the federal government.  I can’t imagine who cares that you disposed of an $8 billion loan when the federal government continues to own 60% of General Motors.  Companies get owned by the government in Russia and other basket-case third-world nations, and in the various over-leisured states like France.  Not doing this sort of thing is supposed to be the mark of our shining city on a hill amidst the worldwide debris of socialism.  Will you please stand up for what is left of free market capitalism in this country?  If the pangs of liberty motivate you in the slightest, stop running the asinine ads and devote that money and every spare dime to booting the government out the door of your company.

Sincerely,

Charles G. Brockway, Ph.D., P.E.

“Too big to fail” is an idiotic concept that deserves no place in a free society.  This concept implies that a) poor management, bad decision-making, and excessive risk-taking should not necessarily lead to business failure as the natural and cleansing end; b) the state must decide who is “too big” and who isn’t; and c) the state must swoop to the rescue and underwrite the failure of every behemoth that fits this category.  This raw, arrogant, exercise of power by the state should be anathema to a free people.  And who foots the bill for the rescue?  The producer:  the man who has worked and contributed his sweat and tears to the betterment of his family and society; the man who has had nothing whatever to do with the imprudent decisions that caused the “too big to fail” company to fail.  If it’s not immoral to force one man to pay the consequences for another’s failures, then morality has lost all hint of meaning.

We once visited a church with a very young man as a pastor.  He was probably 26 or 27 but looked about 18.  His ill-fitting suit was too large, as if his mother had bought the larger size at Sears so that he could wear it next year, too.  When he preached he put on an artificially large-sounding manly voice and gestured with exaggerated swoops of the arms, though the oversized suit remained amazingly still.  The suit, the voice, and the arms were supposed to say, “I’m the strong leader of this church,” but everybody knew he was just a boy.  That church visit was years ago, but the image of the boy pretending to be a leader comes vividly to mind whenever Mr. Obama takes the stage.

He displays the insolence of a child when he believes that a few elites (himself included)  in a distant capital can make better decisions for our lives that we can, even though the latest poll shows only 22% of us trust government to do the right thing most or all of the time.

He reveals a childish petulance when he demonizes and vilifies anyone who displays the slightest skepticism of his policies or beliefs.  The latest outbursts are about his attempts to heavily regulate financial firms.  Children have a highly-developed sense of their own rightness but a poorly-developed ability to formulate convincing arguments based on facts and logic.  Hence the need to vilify.

He exhibits the adolescent’s strong desire for control.  Since attaining office, he has indefatigably pushed for more and more control over the economy, over businesses, and over your lives and decisions.  It is an obsession to him.  A mature adult eventually realizes the beauty and freedom in not needing to control your fellow man, even when he does things you find abhorrent.  A mature adult understands that the best protection against oppression is the free market and competition, not governmental control.  Our founding fathers were radicals in this regard.

He doesn’t play well with others.  Republicans have been excluded from every meaningful opportunity for open debate on the stimulus package, the bank and car company bailouts, and the health care bill.  The same course is being taken for the financial regulatory package.  He wants absolutely zero dissent.  The slightest opposing viewpoint makes him bristle with indignation, like a child.

He wants his candy NOW.  In the stimulus package debacle we found the perfect example of a man willing to impose massive, unsustainable burdens on future Americans so that he could spend and control as he wished right now, this moment.  The mature adult forgoes immediate gratification, recognizing from experience that a short-term focus is almost always misguided.

He is unable to deal appropriately with setbacks.  A child, when circumstances are not gratifying his desires, gets mad and blames others.  This trait is on full display in our President.  Every time — and I mean every time — he has not gotten his way, it was the Republicans fault, the media’s fault, talk radio’s fault, the American public’s fault for not understanding him, Wall Street’s fault, the banks’ fault, insurance companies’ fault, and so on ad nauseum.  In contrast, true leaders become even more optimistic and inspiring when faced with a setback, not petty and accusatory.

Mr. Obama needs to realize that he is the President of all Americans, including the grown-up ones.  We can only hope that he himself will grow up very soon.

And [God] will make boys their princes, and infants shall rule over them.  And the people will oppress one another, everyone his fellow and everyone his neighbor; the youth will be insolent to the elder, and the despised to the honorable.

Isaiah 3:4-5.

I have also written in these pages that recent electoral and legislative successes have emboldened the true-blue leftists in Congress to splay open their worldview, unconcealed by the vaguely centrist rhetoric that until now they have been obliged to employ.

The latest example is Senator Max Baucus:

This is also an income shift.  It’s a shift; it’s a leveling, to help lower income, middle income Americans.  Too often, of late, the last couple three years, the maldistribution of income in America has gone up way too much.  The wealthy are getting way, way, too wealthy and the middle income class is left behind.  Wages have not kept up with the increase in income of the highest-income Americans.  This legislation will have the effect of addressing that maldistribution of income in America, because health care is now a right for all Americans and because health care is now affordable for all Americans.

I have written in these pages that man’s thirst for power over other men is without limit.  Hypberole, you say; but the statists in Congress continue to demonstrate this truth on a daily basis.

Within a week after passage of the health care law, Caterpillar, Verizon, AT&T, John Deere, Valero Energy, AK Steel, and 3M announced massive write-downs due to new taxes and regulatory burdens.  This is rather basic accounting stuff:  taxes go up, regulations increase, company costs go up.  In fact, disclosures such as these are required of public companies by the SEC.

But Henry Waxman, bless his heart, is concerned.  The Chairman of the House Committee on Energy and Commerce wrote ominously to the CEOs:  “The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern.”  Apparently because Congress “designed” it that way, it shall be so.

Waxman has ordered the companies to explain their inconvenient defiance at an April 21 hearing.  He has also demanded internal e-mails and other documents related to the companys’ public statements regarding health care costs.  The message is clear:  Do not make Lord Waxman concerned.

Read additional stories here and here.

Once again, Serfdom brings you another installment of “Pushing Back the Frontiers of Constitutional Ignorance. ” Today’s uninformed person in need of correction is Governor Ed Rendell of Pennsylvania, who said this today on CBS’s This Week:

Look, the commerce clause says you can not only regulate interstate activity, you can regulate intrastate activity when it’s part of a broad scheme and it’s necessary to do so.

Let’s go to the Actual Constitution, which says in Article 8:

The Congress shall have Power…To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

That’s it.  Nothing about “intrastate commerce” or “broad schemes” when “necessary to do so.”  Secondly, “regulation” certainly cannot be extended to mean “forcing a private citizen to purchase a product.”  As Governor Haley Barbour of Mississippi suggested, why not force every citizen to buy a gun in the name of homeland security?

Charles Schumer, senator from New York, opining this morning on NBC’s Meet the Press, said this:

Right now as we speak, there’s some salesman talking to a doctor and saying, ‘Hey, if you buy this machine for a million dollars, my company will finance it, we’ll then show you how to fill it up 100% of the time with patients, and you’ll make $200,000 more a year.’  And even though there’s another machine a couple of miles away and the machine’s not needed.  Right now, there’s no check on that kind of waste.  Our bill does it.  Doctors who go overboard and provide tons of quantity and no quality will be disciplined here.

Let’s dissect this statement in light of rudimentary economic principles.  Schumer paints a picture of a dim-witted but greedy doctor being manipulated by the maker of a medical machine.  Suppose this doctor decides to go ahead and finance the million dollar machine and offer the service to the public.  Only two outcomes are possible:

  1. Sufficient demand exists for the service and the doctor is able to keep the machine busy and make his finance payments.  In this case, the doctor has made a good decision.
  2. Insufficient demand exists for the service, the doctor cannot make his payments, and the machine is either repossessed or the doctor goes belly-up.  In this case, the doctor has made a bad decision.

In either case, it is the market which decides whether or not the service is warranted.  If outcome #1 occurs, we know the service was needed.  The additional supply of that service (in conjunction with the machine down the street) will tend to drive costs down, not up.  The fact that that doctor makes additional money is not just a good thing but an indispensable thing – that’s how the market says “right decision.”  If outcome #2 occurs, we know that there was insufficient need for that service, and the market will remove the service from the supply chain.  The fact that the doctor loses money is also a good and indispensable thing – that’s how the market says “stupid decision, don’t do that again.”  In either case, the most efficient outcome is automatically determined by the market, without consulting Chuck Schumer.

This type of market decision is not theoretical; it happens millions of times every year in a free economy, in the medical industry and every other industry.  Resources are allocated most efficiently this way.  If Schumer had his way, he would, by the force of the state, prevent the doctor from purchasing the new machine.  How in the name of Pete does Chuck Schumer, senator from New York, know that this particular machine in Ottumwa, Iowa or wherever, wasn’t needed?  Is he omniscient?  If the additional machine was in fact needed, the Schumer solution would result in a shortage of the service and drive costs up, not down.  It would stifle innovation and remove the incentive to provide the service at a lower cost because competition would be prohibited by the government as “wasteful.”  Competition is never wasteful.  It always results in lower costs, better service, and a more efficient allocation of resources than government planners could ever hope to achieve. It’s government planning that leads to 6-month waits for cat scans and women giving birth on the mop-room floor.

And the degree of government planning that Schumer is advocating is astonishing.  I run an engineering firm, and the firm owns a full-color Size D plotter.  It’s an expensive piece of equipment.  Guess what?  Another engineering firm – less than one mile away – also owns a full-color plotter!   Is Chuck Schumer going to declare my plotter to be wasteful, and send his thugs over to take it away?  We use our plotter almost every day to provide services to our clients.  I’d rather he declare my competitor’s plotter to be wasteful.  There are two newspapers in Chicago.  Is that really necessary?  What city really needs two newspapers?  Think of the waste:  twice as many computers, printers, typesetters, printing presses, and newsboys than are really needed.  Chuck Schumer should crack down on this waste.  He should declare that Chicago only needs one newspaper and shut one down so that we can all reap the benefits of the cost savings.

So who is safe?  Who doesn’t get their plotter confiscated or their newspaper shut down?  Well, whoever ingratiates themselves to Chuck Schumer and his merry band of statists, of course.

Finally, there is the disturbing use of the word “discipline.”  Think long and hard about that:  the government, by force, is going to “discipline” a private citizen because he is about to make an economic decision with which it disagrees.  A doctor is about to freely purchase an item that Chuck Schumer thinks he oughtn’t, and the state will forcibly see that he doesn’t.  This kind of thinking is indistinguishable from that which held sway in 1930s Germany and the former Soviet Union, and in fact is precisely the view advocated by the antecedent of those two monstrous regimes, Karl Marx.  It has no place in the United States of America.  We were founded on principles unalterably opposed to those advocated by Chuck Schumer.  Mr. Schumer should take his views elsewhere, where they are more in line with the culture of the nation.  North Korea would be an excellent fit.