Journalists are MIA on Bailouts
Investment analyst John Rutledge on Nov. 22 offered “Forbes on Fox” the most succinct argument in favor of divided government I’ve heard: if a mugger is chasing you, you hope he’s slow. President Obama, the Pelosians and other Dems in full, unchecked control of the White House and both houses of Congress is the equivalent of a very, very speedy mugger closing in on you in a long, narrow alley with no escape in sight.
We are about to experience purportedly
Wouldn’t it be nice of the mainstream media provide the public with some objective, factual information and honest historical perspective on all the economic and tax-tax-tax-the-“rich” schemes planned for us by these dictators?
Such reporting could, for example, deliver the facts about tax revenue increasing or decreasing when capital gains taxes have been lowered or raised, respectively. Or, it could note the changes in revenue when income tax bracket percentages are reduced or increased for all or for some.
Such reporting would have exposed Obama as a dangerous ideologue willing to reduce tax revenues and inflate deficits by increasing taxes with no purpose other than achieving his idea of “fairness.” The functional equivalent would be razing all the nice homes (whose owners pay the largest property taxes) in order to make the landscape look more just to the owners of decrepit homes in nearby poor neighborhoods.
Before Thanksgiving, we narrowly avoided handing over another $25 billion or $50 billion or, really, who knows and who cares how many billions, to the Big Three automakers and the United Auto Workers union. That is, taxpayers were supposed to give billions to a triad of auto company executives too dumb to even consider the public relations ramifications of each flying to the beggar’s table in separate private jets.
They wanted billions when union leaders were unwilling and maybe even unable to ‘fess up that assembling a car door isn’t worth $70 an hour in a competitive marketplace. Or that a for-profit business can’t long operate a pension plan Ponzi scheme virtually identical to the bankrupt Social Security System without itself being bankrupted. Handing billions to this cast of characters is like giving the keys to the liquor store to a group of street corner alcoholics and hoping for the best. Now they're coming back to D.C. to try again.
Wouldn’t it be cool to have the mainstream media provide in-depth, honest historical perspective on an issue as large and important as a federal bailout of GM, Ford and Chrysler? They could re-visit the tale of Rambler/Nash/American Motors and the fact that its disappearance did not end employment in the auto industry, the industry itself or life on this planet as we know it. Some thoughtful reporter might contrast the loan to Chrysler during Iaccoca’s tenure with what is being demanded by the shrinking-three now.
Where is Iaccoca, anyway? Why aren’t other turnaround experts with successful track records being interviewed by the media and called to Congress and even, possibly pressed into service? Al Dunlap comes to mind. Instead of blow-dried pundits with zero business experience, we could be hearing from people with real experience in rescuing troubled companies.
And wouldn’t it be useful to have someone explain Chapter 11 reorganization to the public? People should know that under Chapter 11 preferential payments (like multi-million dollar bonuses and golden parachute payments) get called back in. That’s something niftily circumvented by Paulson & Friends for Wall Street, and now being prevented from taxing the auto executives. (There is still hope of a “pre-packaged” fast tracked bankruptcy for GM. If that occurs, it better include recall of last year’s bonuses, salary excesses, and even require personal re-investment of tens of millions from the executives who wish to remain at helm. Write your congressman. Of course, it should also hold the workforce liable for the massive losses caused by seemingly endless recalls of defective cars – the unspoken, significant factor in the failure.)
Why can’t we get some real journalism about such financial matters? Dave Ramsey commenting about cutting up credit cards and paying your house off is well and good, but taxpayers deserve a lot more information about the billion-dollar limit credit cards being handed out by Paulson and promised by Obama. We could all stand to learn how they’re creating and assuming debt so enormous our great-grandchildren won’t see it paid off.
Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.