Friday, July 30, 2010

BRITAIN PLANS TO DECENTRALIZE HEALTH CARE

Even as Great Britain's new coalition government said it would make enormous cuts in the public sector, it initially promised to leave the National Health Service (NHS) -- the country's government-run health care scheme -- alone. But in one of its most surprising moves so far, it has done the opposite, proposing what would be the largest reorganization of the NHS since its inception in 1948.

Practical details of the plan are still sketchy. But its aim is clear, says the New York Times:

  • To shift control of England's $160 billion annual health budget from a centralized bureaucracy to doctors at the local level.
  • Under the plan, $100 billion to $125 billion a year would be meted out to general practitioners, who would use the money to buy services from hospitals and other health care providers.
  • The plan would also shrink the bureaucratic apparatus, in keeping with the government's goal to obtain $30 billion in "efficiency savings" in the health budget by 2014 and to reduce administrative costs by 45 percent.
  • Tens of thousands of jobs would be lost because layers of bureaucracy would be abolished.

In a document, or white paper, outlining the plan, the government admitted that the changes would "cause significant disruption and loss of jobs." But it said: "The current architecture of the health system has developed piecemeal, involves duplication and is unwieldy. Liberating the NHS, and putting power in the hands of patients and clinicians, means we will be able to effect a radical simplification, and remove layers of management."

The health secretary, Andrew Lansley, also promised to put more power in the hands of patients:

  • Currently, how and where patients are treated, and by whom, is largely determined by decisions made by 150 entities known as primary care trusts -- all of which would be abolished under the plan, with some of those choices going to patients.
  • It would also abolish many current government-set targets, like limits on how long patients have to wait for treatment.

The plan, with many elements that need legislative approval to be enacted, applies only to England; other parts of Britain have separate systems.

Source: Sarah Lyall, "Britain Plans to Decentralize Health Care," New York Times, July 24, 2010.

For text:

http://www.nytimes.com/2010/07/25/world/europe/25britain.html

For more on Health Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=16

Judd Gregg Will Support The Nomination of Elena Kagan

Surprising, deep down Judd Gregg knows this woman will be an activist judge


boston.com
WASHINGTON -- U.S. Senator Judd Gregg of New Hampshire today became the fifth Republican to announce support for the Supreme Court nomination of former Harvard Law School Dean Elena Kagan.

“Ms. Kagan and I may have different political philosophies, but I believe that the confirmation process should be based on qualifications, not ideological litmus tests or political affiliation," Gregg said in a statement. "I will vote for her confirmation.” Massachusetts Republican Scott Brown has not announced yet how he will vote on Kagan's nomination.
Republicans supporting Kagan:
Lindsey Graham
Susan Collins
Olympia Snowe
Dick Lugar
Judd Gregg

Newt Gingrich Speech

Memo outlines backdoor 'amnesty' plan

Immigration staffers cite tools available without reform

By Stephen Dinan - The Washington Times 8:39 p.m., Thursday, July 29, 2010

With Congress gridlocked on an immigration bill, the Obama administration is considering using a back door to stop deporting many illegal immigrants - what a draft government memo said could be "a non-legislative version of amnesty."

The memo, addressed to U.S. Citizenship and Immigration Services Director Alejandro Mayorkas and written by four agency staffers, lists tools it says the administration has to "reduce the threat of removal" for many illegal immigrants who have run afoul of immigration authorities.

"In the absence of comprehensive immigration reform, USCIS can extend benefits and/or protections to many individuals and groups by issuing new guidance and regulations, exercising discretion with regard to parole-in-place, deferred action and the issuance of Notices to Appear," the staffers wrote in the memo, which was obtained by Sen. Charles E. Grassley, Iowa Republican.

The memo suggests that in-depth discussions have occurred on how to keep many illegal immigrants in the country, which would be at least a temporary alternative to the proposals Democrats in Congress have made to legalize illegal immigrants.

Chris Bentley, a USCIS spokesman, said drafting the memo doesn't mean the agency has embraced the policy and "nobody should mistake deliberation and exchange of ideas for final decisions."

"As a matter of good government, U.S. Citizenship and Immigration Services will discuss just about every issue that comes within the purview of the immigration system," he said in an e-mail statement. "We continue to maintain that comprehensive bipartisan legislation, coupled with smart, effective enforcement, is the only solution to our nation's immigration challenges."

He said the Homeland Security Department "will not grant deferred action or humanitarian parole to the nation's entire illegal immigrant population."

The memo does talk about targeting specific groups of illegal immigrants.

Mr. Grassley said it confirms his fears that the administration is trying an end-run around Congress.

"This memo gives credence to our concerns that the administration will go to great lengths to circumvent Congress and unilaterally execute a backdoor amnesty plan,"Mr. Grassley said.

The memo acknowledges some of the tools could be costly and might even require asking Congress for more money.

At one point, the authors acknowledge that widespread use of "deferred action" - or using prosecutorial discretion not to deport someone - would be "a non-legislative version of 'amnesty.' "

The authors noted several options for deferred action, including targeting it to students who would be covered by the DREAM Act, a bill that's been introduced in Congress.

In testifying to the Senate Judiciary Committee on May 11, Mr. Mayorkas first said he was unaware of discussions to use these kinds of tools on a categorical basis, then later clarified that officials had talked about expanding the use of those powers.

"I don't know of any plans. I think we have discussed, as we always do, the tools available to us and whether the deployment of any of those tools could achieve a more fair and efficient use or application of the immigration law," he said.

He acknowledged, though, that he was not aware that those powers had ever been used before on a categorical basis.

Sen. John Cornyn, the Texas Republican who queried Mr. Mayorkas on the subject, warned him against pursuing that strategy.

"I think it would be a mistake for the administration to use administrative action, like deferred action on a categorical basis, to deal with a large number of people who are here without proper legal documents to regularize their status without Congress' participation. I will just say that to you for what it's worth," Mr. Cornyn, the ranking Republican on the Senate Judiciary immigration, border security and citizenship subcommittee, told Mr. Mayorkas.

"The American public’s confidence in the federal government’s ability and commitment to enforce our immigration laws is at an all-time low," Mr. Cornyn said in a statement. "This apparent step to circumvent Congress – and avoid a transparent debate on how to fix our broken immigration system – threatens to further erode public confidence in its government and makes it less likely we will ever reach consensus and pass credible border security and immigration reform.”

After reports earlier this year that the agency was working on these sorts of plans, Senate Republicans, led by Mr. Grassley, have sent letters to President Obama and Homeland Security Secretary Janet Napolitano asking for details.

In one letter, the senators warned the president against making an end-run around congressional authority to write immigration rules, and asked for Mr. Obama to promise that he would not use the rules to grant mass pardons.

Rosemary Jenks, government relations manager for NumbersUSA, an organization that advocates for stricter immigration limits, said the memo is "an outrageous usurpation of congressional authority. It is unconstitutional, and a slap in the face to the American people."

She said that the memo could explain why the push for an immigration bill has faltered in Congress.

"This makes sense of the fact that [Senate Majority Leader Harry] Reid and [House Speaker Nancy] Pelosi and Obama are sitting back calmly content with not moving immigration reform this year - because they know Obama is trying to take care of it for them, without Democrats having to be tied down to a vote before the election," she said.

On the other side of the political spectrum, immigrant rights groups have demanded that Mr. Obama halt deportations until he secures a broad legalization bill from Congress - legislation that supporters call "comprehensive immigration reform" because it would tackle enforcement, some aspects of legal immigration and the status of illegal immigrants at the same time.

Two senators earlier this year wrote asking the administration to use its powers to stop deporting students who might be eligible for the DREAM Act, which would allow illegal immigrant college students brought to the U.S. at a young age to gain legal status. The legislation has not been passed by Congress.

Mr. Obama has rejected halting deportations, but his administration has been more careful about whom it pursues.

According to new figures from Immigration and Customs Enforcement, the administration has stepped up its efforts to deport illegal immigrants convicted of crimes, but removal of "non-criminal" illegal immigrants has slowed so far in fiscal 2010.

Glenn Beck Radio Show On Religious Freedom

Glenn Beck Radio Show - July 29, 2010
This is a great segment from Glenn on freedom of religion. The talk is based on a ruling by a federal judge who ruled in favor of a public university that removed a Christian student from its graduate program in school counseling over her belief that homosexuality is morally wrong. Here's a link to the story.

Glenn Beck Show - July 29, 2010

Radical Blueprint
Glenn Beck Show - July 29, 2010
Tonight: Just remember: The names may have changed, but the philosophy is the same. The goal of the Weather Underground was a "dictatorship" of a "new democracy" that develops into socialism. Tonight, we focus on what a dictatorship is: "An autocratic form of government in which the government is ruled by an individual, the dictator." Well, that could never happen in America, right? I swear, if I hear one more person say that...But you tell me: Are we heading in the direction of individual liberty or an all-powerful government controlled by few?
Part 1

Part 2

Part 3

Part 4

Part 5

Part 6

Our Divisive President

Barack Obama promised a new era of post-partisanship. In office, he's played racial politics and further split the country along class and party lines.




During the election campaign, Barack Obama sought to appeal to the best instincts of the electorate, to a post-partisan sentiment that he said would reinvigorate our democracy. He ran on a platform of reconciliation—of getting beyond "old labels" of right and left, red and blue states, and forging compromises based on shared values.

President Obama's Inaugural was a hopeful day, with an estimated 1.8 million people on the National Mall celebrating the election of America's first African-American president. The level of enthusiasm, the anticipation and the promise of something better could not have been more palpable.

And yet, it has not been realized. Not at all.

Rather than being a unifier, Mr. Obama has divided America on the basis of race, class and partisanship. Moreover, his cynical approach to governance has encouraged his allies to pursue a similar strategy of racially divisive politics on his behalf.

Associated Press

The 'Beer Summit': President Barack Obama, right, and Vice President Joe Biden, left, have a beer with Harvard scholar Henry Louis Gates Jr., second from left, and Cambridge, Mass. police Sgt. James Crowley in the Rose Garden of the White House, July 30, 2009.

We have seen the divisive approach under Republican presidents as well—particularly the administrations of Richard Nixon and George W. Bush. It was wrong then, and it is wrong now. By dividing America, Mr. Obama has brought our government to the brink of a crisis of legitimacy, compromising our ability to address our most important policy issues.

William McGurn discusses the Democrats' novel strategy for the fall elections.

We say this with a heavy heart. Both of us share the president's stated vision of what America can and should be. The struggle for equal rights has animated both of our lives. Both of us were forged politically during the crucible of the civil rights movement. Having worked in the South during the civil rights movement, and on behalf of the ground-breaking elections of African-American mayors such as David Dinkins, Harold Washington and Emanuel Cleaver, we were deeply moved by Mr. Obama's election.

The first hint that as president Mr. Obama would be willing to interject race into the political dialogue came last July, when he jumped to conclusions about the confrontation between Harvard Prof. Henry Louis "Skip" Gates and the Cambridge police.

During a press conference, the president said that the "Cambridge police acted stupidly," and he went on to link the arrest with the "long history in this country of African-Americans and Latinos being stopped by law enforcement disproportionately."

In truth, the Gates incident appears to have had nothing to do with race—a Cambridge review committee that investigated the incident ruled on June 30 that there was fault on both sides.

Sen. Jon Kyl (R., Ariz.) has said the president told him in a closed-door meeting that he would not move to secure the border with Mexico unless and until Congress reached a breakthrough on comprehensive immigration reform. That's another indication Mr. Obama is willing to continue to play politics with hot-button issues.

Add in the lawsuit against the Arizona immigration law and it's clear the Obama administration is willing to run the risk of dividing the American people along racial and ethnic lines to mobilize its supporters—particularly Hispanic voters, whose backing it needs in the fall midterm elections and beyond.

As the Washington Post reported last week, two top White House strategists, speaking on condition of anonymity, have indicated that "the White House plans to use the immigration debate to punish the GOP and aggressively seek the Latino vote in 2012."

On an issue that has gotten much less attention, but is potentially just as divisive, the Justice Department has pointedly refused to prosecute three members of the New Black Panther Party for voter intimidation at the polls on Election Day 2008.

It is the job of the Department of Justice to protect all American voters from voter discrimination and voter intimidation—whether committed by the far right, the far left, or the New Black Panthers. It is unacceptable for the Department of Justice to continue to stonewall on this issue.

During the 2008 presidential campaign, Mr. Obama's campaign emphasized repeatedly that his minister, the Rev. Jeremiah Wright, was being unfairly stereotyped because of racially incendiary sound bites that allegedly did not reflect the totality of his views. In the Gates incident and others, Mr. Obama has resorted to similar forms of stereotyping.

Even the former head of the Civil Rights Commission, Mary Frances Berry, acknowledged that the Obama administration has taken to polarizing America around the issue of race as a means of diverting attention away from other issues, saying: "the charge of racism is proving to be an effective strategy for Democrats. . . . Having one's opponent rebut charges of racism is far better than discussing joblessness."

The president had a unique opportunity to focus on overarching issues of importance to whites and blacks. He has failed to address the critical challenges. He has not used his bully pulpit to emphasize the importance of racial unity and the common interest of poor whites and blacks who need training, job opportunities, and the possibility of realizing the American Dream. He hasn't done enough to address youth unemployment—which in the white community is 23.2% and in the black community is 39.9%.

Mr. Obama has also cynically divided the country on class lines. He has taken to playing the populist card time and time again. He bashes Wall Street and insurance companies whenever convenient to advance his programs, yet he has been eager to accept campaign contributions and negotiate with these very same banks and corporations behind closed doors in order to advance his political agenda.

Finally, President Obama also exacerbated partisan division, and he has made it clear that he intends to demonize the Republicans and former President George W. Bush in the fall campaign. In April, the Democratic National Committee released a video in which the president directly addressed his divide-and-conquer campaign strategy, with an appeal to: "young people, African-Americans, Latinos, and women who powered our victory in 2008 [to] stand together once again."

President Obama's divisive approach to governance has weakened us as a people and paralyzed our political culture. Meanwhile, the Republican leadership has failed to put forth an agenda that is more positive, unifying or inclusive. We are stronger when we debate issues and purpose, and we are all weaker when we divide by race and class. We will pay a price for this type of politics.

Mr. Caddell served as a pollster for President Jimmy Carter. Mr. Schoen, who served as a pollster for President Bill Clinton, is the author of "The Political Fix" (Henry Holt, 2010).

Thursday, July 29, 2010

Glenn Beck: The Feds want the ability to seize internet records

Feds are trying to change 4 words of an existing law that would allow the Feds to seize a company’s internet records and would force the company to stay silent on the seizure. For example, he says, if the NRA was labeled a terrorist organization by the government, they could seize his internet records if he had communicated with the NRA and he couldn’t tell a soul.



From The Washington Post
White House proposal would ease FBI access to records of Internet activity

Bret Baier Debunks Howard Dean's Smears Against Fox News

Keynesian Economics

"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and now if I am wrong somebody else can have my job. I want to see this country prosper. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this administration, we have just as much unemployment as when we started. And enormous debt to boot."

Henry Morgenthau, who was Roosevelt's Secretary of Treasury from 1934-1945. Quoted from his diary, May 1939.

On Arizona and Immigration: Judge Ignores Rule of Law | The Foundry: Conservative Policy News.

On Arizona and Immigration: Judge Ignores Rule of Law | The Foundry: Conservative Policy News.

The Cure for Political Dejection

By on 7.29.10 @ 6:09AM

I really don't know what to write. We have a president who is so divisive that two longstanding pollsters of his own party write that "President Obama's divisive approach to governance has weakened us as a people and paralyzed our political culture."

We have columnists for major newspapers who are so nastily partisan that they fail to do even the most basic of investigatory requirements before sliming good, honest, decent Americans such as Justice Department whistleblower J. Christian Adams.

We have congressmen so eager to play gotcha that they try to blame former presidents for failing to do a constitutional duty even when the well-reported facts are that the operatives for the president of the congressman's own party unwittingly were the culprits in the supposed problem at issue. (Yeah, you won't know what I'm talking about; that's why you absolutely must read this link.)

We have a major congressional committee chairman who has conniption fits about not being given a $1 senior-citizen's discount, but who won't apologize for costing taxpayers hundreds of billions of dollars by refusing for years to reform Fannie Mae and Freddie Mac. (He also didn't seem too exercised about his boyfriend running a male prostitution ring out of his own basement, but that's another story.)

We have writers for publications respected by the "mainstream" media who are so vicious and dishonest that they would suggest randomly throwing around charges of racism without a shred of evidence -- a charge made the more despicable because one of the named victims of the smear happens to be one of the nicest, most decent people in all of Washington punditry or politics.

We have a national debt exploding so rapidly, by deliberate design of the president, that one almost believes he is trying to implement the Cloward-Piven strategy of manufactured crisis. Cause a political and economic cataclysm; use it as an excuse for radical executive orders and proto-martial law; that sort of thing. Again, I did say "almost." But we are getting to a point where it almost doesn't matter what the motivations are; the reality being created could have the same effect whether by intention or by autocratic reaction to the fruits of the leader's own incompetence.

We have a president who may as well have declared war on my home state. Or on the whole central Gulf Coast.

We have a speaker of the House so cynical (or batty) that she says we must pass a bill first in order to know what's in it, and a majority leader so accustomed to railroad jobs and internal autocracy that he actually makes fun of the idea of requiring that congressmen be allowed at least 72 hours to examine bills before voting on them.

We have Supreme Court nominees sailing through despite saying that genetic differences might make Latinas better judges (Sotomayor) and despite openly flouting the law to harm military recruiting in a time of war (Kagan), and despite wanting to rule that the Constitution forbids states from keeping currently incarcerated rapists and murderers from voting (Sotomayor) and despite manipulating both science and the law in order to keep the barbaric practice of partial birth abortion legal for another decade (Kagan). (Sorry, readers: I'm tired of providing links, but Google these things at the Washington Times and you'll find them.)

I could go on with other bad news, but I'm tired. I'm dejected. I'm disgusted. I'm furious. I'm disheartened and disillusioned.

I want fair play and integrity and intellectual consistency and common decency from all points on the political spectrum. But those attributes are not as prevalent on the right as they should be, and it seems they are almost nonexistent on the left. I don't mind honest and respectful disagreements; I am sickened by vicious attacks without substance.

And, dear reader, I assume you agree. I hate writing all these "I" sentences (yikes: I almost sound like Obama!), so let's make this about you. What are you going to do about all this? What do you want to see happen? How much do you care about your country and your community?

If you are reading this, the answer to the questions in the last sentence is probably "one heck of a lot." You care. You have aspirations for communities of freedom and comity. You want to stop all of these political horrors, and you want to stop cultural horrors not even touched upon here but that could take pages and pages of exposition. You want to believe in America. And, dare we say it without sounding too pie-in-the-sky, you want to do what Ronald Reagan said all good Americans want to do: "to dream heroic dreams." And to work to make them reality.

So get to it. Keep up your activism. Talk to your neighbors. Volunteer at campaign headquarters. Contribute financially to candidates. Make phone calls. Go to rallies. Write thoughtful and concise letters to the editor. Help register like-minded voters. Drive elderly or infirm like-minded voters to the polls in November.

Get involved and stay involved. For the sake of your country, your loved ones, your future. Our future. Together. As Americans. Go do it. Now.

Quin Hillyer is a senior editorial writer for The Washington Times and a senior editor of The American Spectator. He can be reached at Qhillyer@gmail.com.

Wednesday, July 28, 2010

New Chart Reveals the Impossible Complexity of Obamacare

An Excerpt From The Tempting Of America By Robert Bork

"Those who drafted, proposed, and ratified the Constitution meant it to be law... This Constitution, not one they make up themselves, is to bind federal judges, and they are bound to the same thing that Senators and Representatives are bound to, along with all state officers, legislators, and judges. It would be extremely odd if all of these functionaries are equally bound but one set of them, the federal judges, is authorized to keep changing what it is everybody is bound to. That would mean, contrary to the text, that federal judges are not bound and all other classes of persons mentioned are bound to the judges and not to 'this Constitution.'" Page 174

Bradley A. Smith: Democrats mount last-ditch P.R. campaign to spin DISCLOSE Act | Washington Examiner

Bradley A. Smith: Democrats mount last-ditch P.R. campaign to spin DISCLOSE Act | Washington Examiner

SEC Says New FinReg Law Exempts It From Public Disclosure

The DISCLOSE Act

Democracy Is Strengthened by Casting Light on Spending in Elections Act
Here's A Link To The Bill

Video From The President From July 26, 2010


First, let's start with the factual errors made by the President.

1) "Big corporations, even foreign controlled ones..." is factually incorrect. Go to the bottom of this blog and READ THE LAW! It states "It shall be unlawful for a partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country." The LAW already prohibits foreign companies from making any contributions!

2) "Corporate lobyists will be able to tell members of Congress, if they don't vote the right way, they will face an onslaught of negative ads in there next campaign." I guess kind of like how the unions put an "onslaught" of negative campaign ads against Blanche Lincoln of Arkansas when she didn't vote the way they wanted her to.

3) "So the House has already passed a bi-partison bill..." Take a look at the vote tally below! Only 2 Republicans voted for the bill and 36 Democrats voted against it! Is that bi-partison?

Here's the problem with this law. The "special interest" groups who will be able to influence politicians will be the unions and other groups carved out by the politicians. Why don't companies have a right to air t.v. ads? Do you want some bureaucrat in Washington picking and choosing who has the right to free speech? Don't forget what the Constitution says "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

Audio From Mark Levin On The DISCLOSE Act



AyesNoesPRESNV
Democratic21736
2
Republican2170
6
Independent



TOTALS219206
8


FINAL VOTE RESULTS FOR ROLL CALL 391

§ 441e. Contributions and donations by foreign nationals1


(a) Prohibition. It shall be unlawful for—

(1) a foreign national, directly or indirectly, to make—

(A) a contribution or donation of money or other thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State, or local election;

(B) a contribution or donation to a committee of a political party; or

(C) an expenditure, independent expenditure, or disbursement for an electioneering communication (within the meaning of section 304(f)(3)) (2 U.S.C. § 434(f)(3)); or

(2) a person to solicit, accept, or receive a contribution or donation described in subparagraph (A) or (B) of paragraph (1) from a foreign national.

(b) As used in this section, the term "foreign national" means—

(1) a foreign principal, as such term is defined by section 611(b) of title 22,2 except that the term "foreign national" shall not include any individual who is a citizen of the United States; or

(2) an individual who is not a citizen of the United States or a national of the United States (as defined in section 101(a)(22) of the Immigration and Nationality Act)3 and who is not lawfully admitted for permanent residence, as defined by section 1101(a)(20) of title 8.1

1Section 303 of the Bipartisan Campaign Reform Act of 2002 (BCRA), Pub. L. No. 107-155, amended section 441e by revising the title of the section and the wording of subsection (a). This amendment is effective as of November 6, 2002.

222 U.S.C. § 611(b) provides:
"(b) The term "foreign principal" includes—

(1) a government of a foreign country and a foreign political party;

(2) a person outside of the United States, unless it is established that such person is an individual and a citizen of and domiciled within the United States, or that such person is not an individual and is organized under or created by the laws of the United States or of any State or other place subject to the jurisdiction of the United States and has its principal place of business within the United States; and

(3) a partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country."

3Section 317 of the Bipartisan Campaign Reform Act of 2002 (BCRA), Pub. L. No. 107-155, amended section 441e(b)(2) to insert a cross reference to the Immigration and Nationality Act. This amendment is effective as of November 6, 2002.


From FEDERAL ELECTION CAMPAIGN LAWS Compiled by THE FEDERAL ELECTION COMMISSION

Saturday, July 24, 2010

To Get More of Something (e.g., Unemployment), Subsidize It

By Robert Higgs on Nov 21, 2008

Ronald Reagan was no economist, but his economic logic was impeccable when he declared, “If you want more of something, subsidize it; if you want less of something, tax it.”

So, as the current recession deepens and the rate of unemployment rises, we might have confidently predicted that Congress, in its infinite compassion for the little guy, would extend the period during which the unemployed may collect unemployment-insurance benefits. President Bush signed a bill today that will provide as many as 13 weeks of additional benefits, on top of the additional 13 weeks of benefits approved last June, which was on top of the 26 weeks the basic program provides.

The Associated Press notes that “Congress has enacted federally funded extensions seven times in the past 50 years during economic slumps – in 1958, 1961, 1972, 1975, 1982, 1991 and 2002.” Thus, this particular sort of counterproductive economic policy is almost as predictable as the sun’s rising in the east.

The availability of unemployment benefits reduces the cost of remaining unemployed, and therefore increases the amount of unemployment that workers choose. They more readily turn down existing job offers, in hopes that with additional time to search, they will find better ones. Or they simply take life easy for a while, not searching seriously at all. More people are happy to do nothing if they can collect a payment for doing nothing.

The Associated Press report also states: “The measure is estimated to cost about $5.7 billion, although economists put the positive impact at $1.64 for every dollar spent on jobless benefits because the money helps sustain other jobs and restores consumer confidence.” It’s good that the economists responsible for this estimate remain anonymous, because the nonsense it expresses brings no credit to their professional reputation.

Think about it: according to this claim, every time the government takes a dollar from earners and hands it to someone for not working, there’s a net gain of 64 cents. (In a spirit of professional generosity, I am ignoring the large costs of processing this transfer as well as the large deadweight cost associated with any tax.) So, why don’t we insist that the government tax more and more money away from those who earn it, and hand the loot over to those who are not working—after all, that net gain of 64 cents per dollar continues to beckon, does it not?

In a word, no, because a nasty little consequence will certainly ensue. As the tax increases, fewer people will choose to earn income; and as the handouts increase, more people will choose to stop working and collect the dole. Before long — yes, you guessed it—nobody will be working and everybody will be collecting a government payment for not working. It’s the paradise of which every social democrat has always dreamed.

Well, okay, maybe this scheme will run into some problems before it reaches nirvana. Maybe the problem will turn out to be the pesky fact that before the recipeints can consume (which requires getting something of value in exchange for their unemployment-benefit dollars), somebody must have worked to produce those goods and services. Little things like the need to produce (hence the need to save, invest, and work) before consuming and the need to provide incentives to the savers, entrepreneurs, and workers tend to get lost in the shuffle of modern mainstream economics, especially macroeconomics, where the narrow focus on the short run leads analysts to take for granted the economy’s potential to produce.

In any event, we may expect unemployment to increase as the recession grows worse, and we may confidently understand that a portion of the unemployment that exists at any particular time will be attributable to the availability of unemployment-insurance benefits. Congress will blame the market for the unemployment and take credit for, in effect, helping to increase and extend it.

Friday, July 23, 2010

General Motors to Buy AmeriCredit for $3.5 Billion

Published: Thursday, 22 Jul 2010 | 7:09 PM ET
By: CNBC.com with wires
General Motors said it will acquire auto financing company AmeriCredit so it can increase leasing and make more loans to buyers with low credit scores.

General Motors logo

The Detroit automaker said it will pay $3.5 billion to buy all of AmeriCredit's [ACF 24.01 0.10 (+0.42%) ] stock at $24.50 per share — a 24 percent premium over Wednesday's close.

It expects the deal to close in the fourth quarter.

GM CEO Ed Whitacre said Wednesday — the deal will make GM more competitive in auto financing. GM executives have said their sales have been hurt by a lack of subprime and lease financing.

"It's good for customers, it's good for dealers and good for us. It's good for our customers because it gives them more choice, more competition," Chris Liddell, the company's chief financial officer, told CNBC Thursday. "It's good for dealers for the same reason."

Subprime auto financing represents between 10 percent and 25 percent of auto loans depending on the market in the United States, according to dealers.

That form of financing for less credit-worthy borrowers is especially important for brands such as Chevrolet—GM's mass-market brand and one of four that it has kept in the United States as part of its restructuring.

The acquisition is raising eyebrows on Capitol Hill, however, with some senators mindful of the fact that GM received a major government bailout last year.

Senator Chuck Grassley late on Thursday asked the Special Inspector General for TARP to investigate GM's purchase of the auto loan company and the Treasury Department's involvement in the acquisition.

Also late Thursday, credit-rating agency Moody's announced that it placed the ratings of Americredit under review for a possible upgrade.

Step Toward IPO

The acquisition is also another step in the company's move to file for an IPO, Liddell said.

"It's useful, it's another helpful building block is the way that I'd put it, and we've been putting in place all the necessary building blocks during the course of this year for the IPO and this is another useful step in that direction," said Liddell.

Despite the company's optimism that the subprime lender will help spur GM's business, there remains the lingering question as to whether or not a company that cost $50 billion to save and is still 61-percent owned by the American government should go into the subprime business.

Liddell, however, said owning the subprime lender will help the company repay its debt to the American government.

"Not everything associated with non-prime is necessarily bad. We think these are important people who are responsible with the way they deal with their loans and there's an opportunity to market to them," said Liddell. "In terms of the IPO and getting the government back its investment, if anything we think this enhances it because it actually allows us to sell more vehicles in a responsible way and a profitable way."

Mike Jackson, chairman and CEO of AutoNation [AN 23.14 0.60 (+2.66%) ], who reported earnings Thursday, told CNBC he too sees the purchase of the finance arm as a positive move towards repaying the government.

"As far as this deal, I'm all smiles, it's a plus on every level for us and for General Motors and for the shareholders of General Motors that eventually have to be paid back, namely the U.S. government," said Jackson.

GM said that Ally Financial—formerly known as GMAC—will continue to finance GM's dealer inventory and make loans to buyers with good credit.

GM said it is not considering a purchase of Ally's auto financing unit.

GM said that AmeriCredit, which has assets of about $10 billion, would become the "core" of a new captive finance arm.

The automaker said it did not expect the deal would hurt its balance sheet and had not altered its goal of returning to an investment-grade credit rating.

GM said the management team of Fort Worth, Texas-based AmeriCredit would remain in place after the acquisition. AmeriCredit already has financing agreements in place with about 4,000 GM dealers.

The Associated Press and Reuters contributed to this report.

© 2010 CNBC



GM Drops $3.5b On Subprime Lender AmeriCredit

By Edward Niedermeyer on July 22, 2010

After months of speculation about GM’s re-entry into the subprime lending market, The General has announced a deal in which it will purchase the lender AmeriCredit for $3.5b. Founded in 1992, and managing assets worth $10b, AmeriCredit has been pursued by GM for the last month, according to GM CFO Chris Liddell in the WSJ [sub]. GM paid AmeriCredit stockholders $24.50 per share for a controlling interest in the firm, a 24 percent premium over its $19.70 closing price yesterday. Still, GM insists that acquiring AmeriCredit will have “a minimal impact” on its balance sheet, although no explanation is given as to how. $3.5b is at least ten percent of GM’s cash pile at this point, and it’s not clear if that qualifies it as a “minimal impact” or if GM is using some kind of financial instrument to purchase the firm. AmeriCredit says it will “expand its offerings” to support GM, likely in the area of lease deals, but it will also continue to offer loans to non-GM-brand car deals.

Meanwhile, the debate over GM’s re-entry into the subprime market will likely to continue generating controversy. Subprime lending has long been a preferred method of maintaining sales growth through periods of slow demand, but analysts warn that there’s very little that automakers can do to turn around the soft underlying demand for cars. GM’s response [via AP/Google]:

Liddell said that customers could now expect more lease deals from GM. Only 7 percent of its sales are from leases, compared with 21 percent for the industry, he said. Only 4 percent of GM’s sales come from subprime buyers, which the company hopes to expand with its AmeriCredit acquisition.

With 40 percent of the new car market estimated to have a credit score of 620 or under (the definition of subprime), there’s no doubt that GM can move some metal with the help of AmeriCredit. But what if the overall economy and unemployment in particular stay low? If GM signs a load of new subprime loans, default risks could start piling on. And though GM has room to grow its leasing business (particularly at Cadillac), it’s led the industry in cash incentives for most of this year, suggesting that no amount of financial wizardry will restore demand to the levels its looking for. If this deal helps GM wean itself off its incentive addiction, it will have been worth it. If the idea is to pile on incentives, lease deals and subprime loans in order to redline demand for its vehicles ahead of an IPO, GM could be setting itself up for a big fall. And with plenty of demands on its cash already, one big stumble could become a big problem on short notice.

Official recovery.gov Funding Paid Out


Just an update, the Government has paid out 62% of the American Recovery and Reinvestment Act funds.

Saturday, July 3, 2010

Official recovery.gov Funding Paid Out


Just an update, the Government has still only paid out 53% of the American Recovery and Reinvestment Act funds.