Every time we turn around these days President Obama is touting the idea that the “future” of America lies in green energy and one of those greenie ideas is an Obama favorite: electric cars. Not to let him down, Government Motors has obliged by pushing the Chevy Volt as the car of the future. But thus far the future looks a lot like GM’s present; a whole lot of failure leaving a whole lot of questions.

While Obama continues to tout his — meaning our — investment in GM others are not so sanguine. For instance, billionaire Warren Buffet has invested in a Chinese electric car company instead of putting his considerable investment acumen to use with the Chevy Volt. Buffet may be a dolt on taxes, but apparently his investing senses haven’t gotten any spark from the Volt.

One of the reasons that Buffet went for the Chinese company is that some of its technology seems superior to various systems of the Chevy Volt. According to Forbes, Buffet has targeted the company because the, “car can travel 186 miles, more than the Nissan Leaf and Chevy Volt, on a single charge with a top speed of 87 miles per hour.”

Naturally, sales of the Chevy Volt are dismal and have been for quite some time. Sadly, some reviewers are saying that the Volt is overly flashy and techy and isn’t a good value for the money, so no help for GMs sales record there.

Even lefty profs at Berkeley could see that the Volt was a horrible investment. Berkeley physicist Leon J. Schipper, for one, was not enamored of the Volt.

Analyzing the Chevy Volt, the new sedan that is supposed to go 40 miles on batteries and then use a gasoline engine, he calculated that because of inefficiencies in electricity generation, its fuel economy was no better than a Toyota Prius hybrid running on gasoline, while its price was roughly double that of the Prius.

“Does the extra $20,000 justify the overall fuel and possible carbon dioxide savings?” he asked. “If two drivers switched to Prius, the overall savings of oil likely would be larger than one driver switching to a Volt, for the same money.”

So, why should the American people sit idly by while GM pumps even more money into the Volt, a car consumers don’t want? Maybe because wealthy environmental activists think it’s wonderful and seem to imagine that sales will grow up from the ground as if by magic.

Great, isn’t it?

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From The New York Times:

Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.

The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating.

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There was a time when Chevy built cars and trucks. The Corvette and Camaro were legendary sports cars, and the Impala offered full size comfort a middle class price. But that was before Change came to town.  The brand that used to compare itself to Baseball, Hot-Dogs, and Apple Pie is no longer content to just make reliable vehicles, it is now as green as a wheatgrass and algae smoothie.

For instance, in the following commercial: Chevy isn’t just building cars anymore, it’s “investing” in windmills, and planting trees.

This is the kind of business model that you get when Leftists take over. Before 2008, GM just tried to make cars that people would buy, for a little more money than they cost to build. Now, they have to plant a forest.

It’s for reasons like this that General Motors is never expected to fully pay back the bailout money. According to the Congressional Oversight Panel, Taxpayers will lose about 19 billion dollars on the General Motors bailout.

That’s a lot of green. You can’t really blame General Motors. When you have an extra 19 billion to play with, why not plant windmills and trees? It seems like the corporate suites, are working on a bigger Buzz than the one they hired to do the voice-over. A more rational voice might ask about the forest that had to be cut down to print all that money.

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From The Hill:

ShoreBank, a Chicago-area community lender praised by Democrats, was taken over by the government Friday and its assets sold.

Chicago-area Democrats pushed hard for regulators to extend bailout money to the bank from the government’s $700 billion aid program. The bank was praised by President Clinton and numerous other lawmakers and industry players. The bank was started in the 1970s.

In a statement late Friday, the Federal Deposit Insurance Corporation (FDIC) said it had taken receivership of the failed bank. Urban Partnership Bank, also in Chicago, will take over the deposits and the 15 branches.

ShoreBank had roughly $2.2 billion in total assets and $1.5 billion in deposits, according to the FDIC.

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Scott Powell, in today’s Investors Business Daily:

‘Atlas Shrugged” — Ayn Rand’s fourth and last novel, published in 1957 — may be second to the Bible as the most influential book read in America, according to a Library of Congress survey. It is required reading in management training at BB&T, the 12th-largest bank in the U.S. and one that resisted taking TARP bailout funds.

Since the Obama administration took office, “Atlas Shrugged” has been enjoying a renaissance with rising sales and library waiting lists, partly because it explains our current economic woes more straightforwardly than most of what we hear from today’s experts.

What happened in Rand’s narrative is coming to pass today, with an anti-business administration reviling private industry and capitalizing on crisis to expand and redirect investment within and between sectors of the economy — setting quotas, prices and compensation.

Businesses responded by retrenching — ceasing to invest, innovate and expand. Whole industries contracted, closed down or moved offshore, much like the U.S. gas and oil drilling industry is doing today. Then, just as now, management became frustrated, discouraged and reluctant to create jobs in an environment of excessive government meddling.

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From AFP:

Troubled US mortgage firm Freddie Mac reported Monday a second quarter net loss of six billion dollars and sought another 1.8 billion dollars from the Treasury to contain the red ink.

The government-backed company said its strategies to boost business and “sustainable homeownership” were taking hold but cited high unemployment posing “very real challenges” for the already embattled housing market.

Freddie Mac suffered a 6.009 billion dollar net loss attributable to common stockholders in the April-June period from a loss of 7.980 billion dollars in the first quarter and 840 million dollars in the year ago period.

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From today’s New York Times:

With midterm elections near, though, there will be talk aplenty about dealing with the companies precisely because Dodd-Frank didn’t address them. Unfortunately, if past is prologue, this talk is likely to be more political than practical.

Fannie and Freddie amplified the housing boom by buying mortgages from lenders, allowing them to originate even more loans. They grew into behemoths because they lobbied aggressively and played the Washington political game to a T. But after both companies bought boatloads of risky mortgages, they required a federal rescue.

The Treasury’s study on Fannie, Freddie and housing finance must be delivered to Congress by the end of January 2011. In a speech last week, Timothy F. Geithner, the Treasury secretary, told a New York audience that resolving the companies isn’t “rocket science.”

But attaining genuine remedies for our housing finance system could actually be harder than rocket science. That’s because it would require an honest dialogue about the role the federal government should play in housing. It also requires a candid conversation about whether promoting homeownership through tax policy and other federal efforts remains a good idea, given the economic disaster we’ve just lived through.

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Speaker Pelosi is calling the 435 House members to DC next week for the purpose of spending another $26 billion we don’t have. We were on a six week hiatus, and members had scattered to the four corners of the Earth.

Speaker Pelosi and President Obama have already spent $3.6 trillion on “stimulus,” so for them, $26 billion doesn’t rise to the level of a day at the beach, so why bring us all back to DC?

Could it be because their most loyal constituency and political foot soldiers, many of whom could be facing the never before seen horror of a government employee let go due to lack of state and local tax receipts, need to be reminded whose hand quite literally feeds them?

Spending is the least popular item on the public’s mind right now, but it looks to me like this $26 billion has more to do with fully funding the union political action coffers and making sure the left’s political “volunteers” get the message to get out the Democrat vote.

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From James Pethokoukis at Reuters:

Main Street may be about to get its own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. An estimated 15 million U.S. mortgages – one in five – are underwater with negative equity of some $800 billion. Recall that on Christmas Eve 2009, the Treasury Department waived a $400 billion limit on financial assistance to Fannie and Freddie, pledging unlimited help. The actual vehicle for the bailout could be the Bush-era Home Affordable Refinance Program, or HARP, a sister program to Obama’s loan modification effort. HARP was just extended through June 30, 2011.

The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie. A few key points:

1) Republican leaders believe this is going to happen since GOPers and Democratic moderates in the Senate are unwilling to spend more taxpayer money on more stimulus. But such a housing plan would allow the White House to sidestep congressional objections and show voters it is doing something tangible about an economy that seems to be weakening.

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Once again Democrats with the help of a few soft minded Republicans have passed a massive spending bill to help keep state and local governments from having to make the tough decisions it will take to balance their budgets.

According to the Associated Press:

The $26 billion measure would help states ease their severe budget problems and – advocates said – stop the layoffs of nearly 300,000 teachers, firefighters, police and other public employees.

Where have we seen this before? Oh yeah… the Stimulus Bill. Remember that massive spending program that was supposed to stimulate the economy and create jobs? But what it mostly did was plug holes in state and local government budgets.

For example, in California stimulus spending was reported to have saved around 100,000 jobs. But a closer analysis found that 90% of those were government jobs; this at a time when the Golden State has actually increased the number of government jobs.

The sad part is that because the funding was for only one year, many of those jobs are on the chopping block this year. Not so fast! Here come the liberals to the rescue.

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This past week White House Press Secretary, Robert Gibbs, suggested that had the government not bailed out two failing auto manufacturers, “that’s a million more people that would have been on unemployment benefits.” As will be explained herein, this claim of the Press Secretary is wrong and misleading.

Mr. Gibbs also suggested that critics of the auto bailout wanted to walk away from a million jobs. Such talk is unfounded political speak. One would have a hard time finding any serious critic who advocated such a thing.

Quoting Mr. Gibbs,

“I’ll let those that sat in the cheap seats a year and a half ago and wanted to walk away from a million, explain to every one of those workers why they made that decision and… whether they thought the decision they made 16 or 18 months ago, different than that of the president of the United States, whether they still stand by it.”

As one who sat in the so-called cheap seats, Mr. Gibbs, I never advocated walking away from a million jobs, but I absolutely do stand by the position that the GM/Chrysler bailout was a terrible thing to do and made no economic sense.

It seems that the President is unable to grasp – or unwilling to accept – some of the most basic economic principles surrounding this issue.

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From the Associated Press:

A House investigative panel has charged California Democratic Rep. Maxine Waters with violating ethics rules.

Waters, a senior member of the House Financial Services Committee, would face a trial in the fall unless she negotiates a settlement.

If the case goes to trial, Democrats would have the political headache of two ethics trials—one for Waters and another for Rep. Charles Rangel of New York.

The specific charges against Waters were not made public in the announcement Monday from the House ethics committee.

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The liberal Democrats in New Hampshire have sunk to a new low. They are smearing a private citizen in the press because he opposes the Obama-Pelosi agenda. I’ve never really seen anything like it, but I fear it is emblematic of what will happen to other small business owners who are suffering from Obama’s policies.

Last Thursday I held a press conference in my race for Congress in New Hampshire’s First Congressional District with a gentleman named Alan Silberberg, whose auto dealership was shut down arbitrarily by Chrysler, Obama’s “car czar” and his “Auto Task Force.” The purpose of the press conference was to demonstrate how Barack Obama, Nancy Pelosi and my Congresswoman Carol Shea-Porter’s policies are destroying our economy.

It’s important to know that Alan wasn’t shut down because his business was failing. He was shut down because the government’s policies put his business on the chopping block without transparency and without accountability. To let people know how he felt, Alan painted a sign on his storefront that reads, “This business now closed because of Obama’s economics.”

Folks don’t need to listen to me or to Alan. They can listen to Neil Barofsky the special inspector general for TARP:

The Obama administration’s push to accelerate General Motors Co. and Chrysler Group LLC dealership closings, aimed at helping the companies compete, may not have been necessary and added to unemployment, a U.S. watchdog said.

The Treasury Department should have considered whether speeding up the closings was worth the potential loss of tens of thousands of jobs, according to a report released yesterday by Neil Barofsky, special inspector general for the Troubled Asset Relief Program. The U.S. had rejected reorganization plans from the carmakers in March 2009, in part citing a “slow pace” for GM to scale back its dealer network.

“Such dramatic and accelerated dealership closings may not have been necessary and underscores the need for Treasury to tread very carefully when considering such decisions in the future,” Barofsky concluded.

The report may prompt congressional criticism of the administration’s handling of the automaker bailouts. Lawmakers have already complained about the job losses in their districts from dealership closings and the process by which retailers were selected for shutdowns.

Of course, the Democrats attacked me in the press for having the guts to stand up to Obama’s policies.  I’m a candidate for Congress. I expected it and I can handle it.

But I didn’t expect them to attack Alan.

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I’m mad as hell, and I’m going to do something about it.

I’ve been to Missouri quite a few times since becoming “Joe the Plumber”: Rolling hills, farmland, beautiful rivers, vibrant cities, honest people. So I’m not in the least surprised that the rural town of Caulfield has produced a true statesman. A statesman that all freedom-loving Americans have searched for since the Reagan years.

I AM surprised and disgusted that these same “conservatives” who have been shouting fiscal conservatism from the mountain tops are now throwing a true statesman under the bus instead of rallying to his side.

Chuck Purgason is a State Senator for a portion of southern Missouri. He’s worked his way up from the House to the Senate ever since his “Tea Party” moment in 1996. He has proven the hard way that you actually can be a man of integrity in a government full of wolves. When liberal U.S. Senator Kit Bond (R) decided to retire, he anointed RINO Congressman Roy Blunt (R) to be his heir apparent. After Roy Blunt’s votes for the TARP Bailout, Cash for Clunkers, No Child Left Behind, taking the most lobbyist money, etc. (I really could go on and on and on . . . ) Chuck said there was no way he was going to let Blunt represent Missouri in the US Senate.

State Senator Chuck Purgason threw his hat into the race for US Senate against mega power broker Roy Blunt.

Now this is where the story begins to get interesting. Just a week or so ago, Democratic Governor Jay Nixon ($170,000+ donations from unions) called for a special session to pass a $150M “tax cut” to Ford Motor Company. Every Republican started lining up like good little bees because tax cuts are good – right? Besides, Missouri has a lot of unions – they wouldn’t win their re-elections if they didn’t vote for this bill.

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Paul Krugman has been on a roll the last two weeks. After announcing that America is in its “Third Depression” last week, he provided an encore last weekend, by blaming U.S. Federal Reserve Chairman Ben Bernanke for his concerns about the evils of deficit spending for failing to increase economic stimulation of the economy. During the Great Depression President Franklin Roosevelt brushed away concerns regarding the wisdom of deficit spending by saying; “If we can boondoggle ourselves out of this depression, that word is going to be enshrined in the hearts of the American people for years to come.” Perhaps Professor Krugman is frustrated that so many Americans have not enshrined the boondoggle of deficit spending in their hearts the same way he has.

Our good Professor just won the Nobel Prize for economics in October 2008, for his theory, that to be economically dominant, industries must concentrate their producers and suppliers into a common metropolitan area near their customers to maximize economies of scale and transportation savings. His model perfectly explained the 1950’s and 1960’s success of the U.S. auto industry’s tight concentration of assembly plants, steel foundries and parts suppliers in and around the city of Detroit; and within one days delivery to the bulk of their big city customers.

But Krugman’s theory of economic dominance through concentration has been rendered meaningless by modern supply chain management revolution that interconnects competitive vendors from across the globe. China has a massive balance of payments surplus because they can competitively ship products 10,000 miles to Detroit and beat local parts manufacturers on price and quality. Just nine months after our Nobel Laureate picked up his $1.8 million check and Norwegian hardware, General Motors, the poster child of the Professor’s industrial policy, filed the largest bankruptcy in the U.S. history in September 2009 with only $82 billion in assets, but $172 billion in debt.

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How do you fix a problem? Well, in Washington, there is a sure-fire solution to any crisis: pass reactionary legislation without knowing what is in it to show you really “care” about the problem. Then, claim the problem is solved. Wait until the next crisis. Repeat.

The current crisis is big, overly exposed financial institutions; some of which have taken enough risks that they are now insolvent. Unfortunately, the regulatory reform (a Democratic metaphor for regulatory expansion) being considered by the House and Senate in response to the recent financial crisis will not solve the problem.  In fact, it may make them worse by cloaking the real issues with new regulations but without addressing root causes. These misguided political ambitions are especially obvious in H.R. 4173, the Restoring American Financial Stability Act of 2010.

Here are just a few examples of why H.R. 4173 is very effective at expanding government regulation but very ineffective at providing for the substantive reform needed to fix the failure points of our financial institutions:

Contrary to claims made by the Democratic majority:

• H.R. 4173 perpetuates financial bailouts. In reality, the bill allows the FDIC to bail out selected creditors.  To pay off the creditors of a “too big to fail” financial institution, the bill gives the FDIC the authority to borrow an amount equal to the value of the firm being liquidated. For some larger institutions this could amount to $2 trillion (of taxpayer money) per institution.  This “solution” actually incentivizes failure, as mismanaged institutions have a taxpayer bailout as a safety net. In contrast, House Republicans have pressed to end taxpayer-funded bailouts by creating an enhanced form of bankruptcy for large non-bank financial institutions, forcing participants to plan for the possibility of failure and face stiff consequences for mismanagement.

• H.R. 4173 Fails to Address the Biggest Single Cause of the Financial Crisis. Mismanagement of Fannie Mae and Freddie Mac were among the root causes of the housing and financial market melt-down, costing American taxpayers more than $145 billion so far.  The Congressional Budget Office (CBO) predicts that the cost could reach $380 billion or more if the Obama Administration continues using Fannie and Freddie as a place to store bad loans made by banks.  And yet, despite this, H.R. 4173 virtually ignores these problem areas – authorizing only a study.  Such a study will only delay reform and limit any opportunity for meaningful recovery in the housing market.

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The American public education system is going the way of the auto companies and just like the $17.4 billion American taxpayers forked over to bail out outrageous employee contracts and spineless spending decisions of management, labor unions are hoping their allies in Congress will throw them a lifeline.

The difference, of course, is that prior to the bailout, those private sector companies could actually go bankrupt – no one was “too big to fail.”  There was an invisible mechanism that prevented labor from pushing too far because while it’s greedy, even the UAW knew that there would be a limit to the pay and bennies it could extract from the auto manufacturers.  In that instance, the parasite knew when to stop sucking.

Public schools, largely a monopolistic system not held accountable by competition, don’t have that same invisible force keeping labor in check.  Therefore, if the outrageous demands of labor and current spending practices of school districts outpace the money coming into the coffers, they’ll go out and wring their hands, tell sob stories about Johnny having to sit on Georgie’s lap in class because of a lack of desks and demand more “revenue.”  From you, the taxpayer.

This should be a huge issue for the Tea Party movement.  This has been a problem for far too long and we’ve allowed the tax eaters, that is, teachers unions, to fleece the American public into thinking that more spending, which ultimately ends up in their members’ pockets, somehow equates to better outcomes.

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Allan Meltzer dissects Obama’s economic policy in today’s Wall Street Journal:

The administration’s stimulus program has failed. Growth is slow and unemployment remains high. The president, his friends and advisers talk endlessly about the circumstances they inherited as a way of avoiding responsibility for the 18 months for which they are responsible.

But they want new stimulus measures—which is convincing evidence that they too recognize that the earlier measures failed. And so the U.S. was odd-man out at the G-20 meeting over the weekend, continuing to call for more government spending in the face of European resistance.

The contrast with President Reagan’s antirecession and pro-growth measures in 1981 is striking. Reagan reduced marginal and corporate tax rates and slowed the growth of nondefense spending. Recovery began about a year later. After 18 months, the economy grew more than 9% and it continued to expand above trend rates.

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Representative Tom McClintock  delivered the following remarks in the House of Representatives in opposition to H.R. 5297.  The bill will be voted on by the House.

House Chamber, Washington, D.C.  M. Speaker:

The proponents tell us that this bill will increase lending to small businesses.  To do so they are creating a $30 billion slush fund to make loans to smaller banks, therefore encouraging smaller banks to make loans to small businesses.  Or so they say.

It is a splendid example of what I like to call McClintock’s Second Law of Political Physics: the more we invest in our mistakes, the less willing we are to correct them.

It’s apparently escaped the proponents’ attention that we are already doing precisely what the proposed new small business lending fund would do through the TARP’s existing Capital Purchase Program.

That’s the conclusion of the Special Inspector General of TARP, Neil Barofsky. He wrote to the Financial Services Committee on May 17th and said: “in terms of its basic design, its participants, its application process, and perhaps, its funding source from an oversight perspective, the (Small Business Lending Fund) would essentially be an extension of TARP’s (Capital Purchase Program).”

So if this scheme actually worked, we wouldn’t need this bill – banks would already be lending like crazy.  The problem is, it doesn’t work.  But some members can’t bear to face the American people and admit that they’ve squandered billions of dollars of working families’ hard-earned money.  So instead they bring us more of the same.

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Remember all of those bold statements that the so called “Troubled Assets Relief Program” (TARP), the Bailout of Wall Street Bill, was a one time deal and our federal government should and will never do it again.  Secretary of the Treasury Tim Geithner testified in January of this year before the House Committee on Oversight and Government Reform:

Many Americans look at what happened with AIG, and the rest of the financial rescue, and simply ask:  Why was it necessary?  Why was it fair for the government to take taxpayer money and put it into an institution that had mismanaged itself to the edge of collapse?  The answer is that it was not fair, and it was not something our government should ever have to do.  But those Americans, those families and business owners who played by the rules and played no role in giving rise to this recession, should understand that if the government had failed to act, that failure would have unleashed substantially greater damage upon them.

If TARP “was not fair” and not “something our government should ever have to do,” then why is Congress trying to impose the TARP model on small business?  Congress will consider legislation this week to establish TARP, Jr. for small businesses to be administered and run by none other than Secretary of the Treasury Tim Geithner. The House is considering H.R. 5297, the Small Business Lending Fund Act that provides “temporary authority to the Secretary of the Treasury to make capital investments to eligible institutions in order to increase the availability of credit for small businesses.”

The legislation creates a federally run new bureaucracy called the “Small Business Lending Fund. ”  To qualify a financial institution has to have less than $10 billion in assets and the new creation would have up to $30 billion in new investment authority.  This allegedly temporary program is set up “without further appropriation of fiscal year limitation,” i.e. not temporary, to purchase “preferred stock and other financial instruments” from small business as a means to infuse money into local banks with the condition that they lend to failing small business.  Local banks will be lending in exchange for equity small business, therefore these banks will be using federal monies to buy equity in companies.  This is an idea born from socialism and one that will harm the free market for small business, because failure will be rewarded by federal subsidies while success will be punished.

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