As People See The Results Of Democrat Policies, They Begin To Wake Up

CNS News posted an article today about California’s vanishing middle class. Being middle class in California is not a successful long-term plan.

The article reports:

A survey recently released by the Public Policy Institute of California found that President Donald Trump is more popular in the deep blue state than the Democratic legislature.

Democratic consultant Steve Maviglio recently told the Los Angeles Times, “All they hear from Sacramento are proposals for more taxes and more spending for everyone except the middle class. And they rightfully wonder where the high taxes they already are paying are going.”

While the president’s approval ratings are underwater with only 38 percent of Californians approving of his job, this pales in comparison to the state legislature having only 34 percent among likely voters having confidence in them.

With voters still anxious about a gas tax hike pushed through last year, recent suggestions of a $2 billion tax hike on everything from water to phones by California Gov. Gavin Newsom hasn’t eased that apprehension.

Newsom holds a job approval rating of 45 percent among likely voters with 29 percent disapproving and a 26 percent responding “don’t know.”

California’s fiscal policies are going to result in bankruptcy at some time in the not-so-distant future. The bad news is that the rest of the country will be required to bail them out. The major cities in California, San Francisco and Los Angeles, have areas that look like third-world countries–unsanitary conditions, homeless people living in tents, and needle-strewn streets. Diseases that America has not seen for decades are cropping up in these areas. Meanwhile, the state government continues raising taxes and doing business as usual. There will be a tipping point fairly soon. People are leaving the state in droves. The only thing keeping the population stable is the flow of illegal immigrants who are generally not contributing to the economic well being of the state.

Avoiding Responsibility As A Way Of Life

Hot Air posted an article today about General Motors’ return to bankruptcy court. Yes, you read that right. General Motors has returned to bankruptcy court to request that Judge Gerber enforce the liability shield it constructed during its 2009 Chapter 11 bankruptcy proceedings. What General Motors wants is to insure that any lawsuits dealing with the ignition switch defect can only be brought against the Old GM shell.

The article reports:

There are at least 59 potential class-action lawsuits in the works seeking economic loss damages, but to get them, they will have to unwind the liability shield somehow.

One way to do that would be to demonstrate that GM had committed fraud by concealing the ignition switch defect before the bankruptcy. Another potential avenue would be to establish that the bankruptcy shield had denied the plaintiffs due process by depriving them of their day in court now that the ignition switch defect has been made public.

The court proceedings mark the sixth ongoing probe of GM, following investigations launched by Congress, an undisclosed state attorney general, the U.S. Attorney’s office, the SEC, and the NHTSA. GM also has an internal probe trying to determine who knew or should have known about the problem that has claimed at least 13 lives and cost GM car owners millions of dollars.

There are some real questions about who knew about the ignition problem and when they knew, but the bankruptcy proceedings of General Motors were not your ordinary bankruptcy proceedings from the beginning. Taxpayers lost nearly $10 billion in the bailout (see rightwinggranny.com). The rules of bankruptcy were not followed, and essentially the company was turned over to the unions. Evidently the unions had no more regard for the safety of the average American than did the corporate executives.

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Detroit Goes Under

The Washington Examiner is reporting today that the city of Detroit is filing for Chapter 9 bankruptcy.

The article reports:

According to the bankruptcy filing, Detroit now has more than $18 billion in unfunded liabilities. The city’s population has dwindled from 1.85 million in 1950 to under 700,000 today, and its tax revenues have shrunk accordingly even as the average tax burden has risen to the highest level of any town in the state. A deficit estimated at $237 million in June was too much for the once-mighty industrial town to handle.

A website called Pensions & Investments posted the following on July 11:

Mr. Orr (Kevyn Orr, the city’s emergency fiscal manager) has proposed that city employees with less than 10 years of vested service be taken out of the defined benefit plan and be moved to 401(k)-style savings plans.

There’s no way employees or unions will bargain away pension benefits, said Michael VanOverbeke, a lawyer for the general employees retirement system, after the meeting. Michigan‘s constitution prohibits changes in accrued pension benefits, Mr. VanOverbeke said. Mr. Orr has said that a bankruptcy filing would negate the state protection.

This is a problem a lot of cities, states, and municipalities are going to be faced with in the very near future. For years unions have negotiated contracts that included retirement plans that were totally funded by taxpayer money. As private companies have converted to 401k plans where employees contribute to their retirement, public employee unions have not followed suit. The bankruptcy of Detroit is not really a surprise to anyone. You can’t continue to spend more than you take in without running out of money at some point. As the jobs left Detroit, the city had no way to make up the lost income. It attempted to raise taxes to generate income, but that simply drove people out of the city.  It’s just a shame that the leadership of the city couldn’t have done more to avoid the problem.

 

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Would You Trust These People With Your Investment Portfolio ?

Yesterday the Daily Caller posted an article about the investments the Obama Administration has made in alternative energy companies.

The article reports:

The Romney campaign later clarified that he was talking about the DOE’s 1705 loan program which doled out $16.1 billion to green energy companies, accordingto the Washington Post. Of the 33 companies that received 1705 loan guarantees, only three have declared bankruptcy.

The article further reports:

The blog Green Corruption’s “Obama green-energy failure” list contains 23 bankrupt and 27 troubled green energy companies which were backed by the federal government. This list uses data compiled by the Heritage Foundation, but also includes some things the conservative think tank doesn’t.

According to the Heritage Foundation, $80 billion was set aside in the 2009 stimulus package for clean energy loans, grants, and tax credits, and 10 percent of these funds have gone to companies that have filed for bankruptcy or are in dire straits.

As I have said before, I believe there will come a day when green energy makes sense. I also believe that day will come after the free market has culled out the technologies that do not work and the technologies that do work have naturally risen to the top of the pile. Government subsidies interfere with that process and actually slow down the successful development of green energy–not to mention the amount of money the government has lost in picking winners and losers (mostly losers).

As taxpayers, we have the right to invest our money where we chose to invest it. There is nothing in the Constitution that gives the government the right to make investments in green energy for us.

 

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Your Taxpayer Dollars At Work

Bloomberg.com is reporting today that A123 Systems Inc. (AONE), the electric car battery maker that received a $249 million federal grant, has filed for bankruptcy protection. The company says that it will sell its assets to Johnson Controls Inc. (JCI).

The article reports:

The company listed assets of $459.8 million and debt of $376 million as of Aug. 31 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware.

The Waltham, Massachusetts-based company said yesterday it expected to fail to make an interest payment due yesterday on $143.8 million of notes expiring in 2016.

The article further reports:

Electric-vehicle sales since 2011 totaled fewer than 50,000 through September, just 5 percent of Obama’s target to have 1 million such vehicles on U.S. roads by 2015.

The debtors’ two largest customers are Fisker and AES Energy Storage LLC and its affiliates, which accounted for about 26 percent and 24 percent of their total revenue during the year ended December 31, 2011, respectively, court papers show.

Republican presidential candidate Mitt Romney said last month that Obama has picked “losers” for alternative-energy loans and grants. His running mate, Paul Ryan, has called for all green-energy subsidies to be eliminated.

A123 has posted at least 14 straight quarterly losses. Its shares have fallen 85 percent this year to 24 cents at yesterday’s close in New York and traded at 16 cents at 8:29 a.m. before the start of regular trading.

I am really glad these people are not managing my stock portfolio; unfortunately, they are managing my country.

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We’re Still Not Done With Solyndra

On Wednesday, the Washington Times posted an article about the bankruptcy of Solyndra.

The article states:

The Internal Revenue Service urged a bankruptcy judge to reject solar panel maker Solyndra LLC’s bankruptcy plan Wednesday, saying it amounts to little more than an avenue for owners of an empty corporate shell to avoid paying taxes.

“The undeniable conclusion is that tax benefits drive this plan,” attorneys for the IRS wrote in a bankruptcy pleading.

The attorneys for the IRS stated that that the tax breaks would be worth more money than funds set aside for creditors.

The article explained the bankruptcy plan:

Under Solyndra’s reorganization plan, two big investors in the company, Madrone Partners LP and Argonaut Ventures, together would own nearly all of a shell company formed in the wake of Solyndra’s bankruptcy reorganization.

But the IRS said in court papers that there was little reason for the shell company to exist other than to help the owners avoid taxes. Argonaut is the investment arm of a family foundation headed by Oklahoma businessman George Kaiser, a fundraiser for Barack Obama’s 2008 presidential campaign. Madrone has ties to the family that owns Wal-Mart Stores Inc.

The article concludes:

The government attorneys said that while the reorganization plan had “some marginal benefits,” there was no doubt that the most important priority was to “preserve a shell corporation to be able to reduce future tax liabilities by hundreds of millions of dollars.”

This is what crony capitalism looks like.

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Another One Bites The Dust

A website called GlobalWarming.org reported on Friday that the Las Vegas Sun reports that Amonix, Inc., a manufacturer of solar panels that received $5.9 million from the Porkulus, will cut two-thirds of its workforce, about 200 employees, only seven months after opening a factory in Nevada. Earlier last week, Ener1, a manufacturer of batteries for electric vehicles and recipient of Stimulus largesse, filed for bankruptcy.  Evergreen Energy , also a recipient of stimulus money, has also declared bankruptcy. These companies are not even viable when the government is writing them enormous checks! When you consider the amount of stimulus money spent on pet projects of President Obama, it is scary. He could have simply given each taxpayer $100,000. I suspect that would have truly stimulated the economy!

The interesting part of the article linked above is the comments. There are definitely some people out there who are paying attention and who are angry that taxpayer money is being spent in this way.

 

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Who Is Paying For This ?

A photovoltaic (PV) module that is composed of...

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The Contra Costa Times reported on Friday that Solyndra has asked its bankruptcy judge to pay remaining employees up to $500,000 in bonuses.

The article points out:

Senior executives at Solyndra collected hefty quarterly bonuses — ranging from $37,000 to $60,000 apiece, with some executives receiving both rounds of bonuses — within six months of the company’s closure last August, when about 1,100 workers were laid off without severance.

According to the article, the bonuses requested would “go to workers lower on the food chain than the sizable bonuses handed out to key executives in the months before the company’s bankruptcy — 13 of the 21 possible recipients the Associated Press listed were equipment engineers and facilities workers.”

There are a few things at work here. What kind of responsible executive takes a huge bonus as the company is going under? What about taking the bonus and then laying off workers without severance? I am all in favor of people making money–I just think we need to bring the concept of ethics back into our business model.

The kind of abuses we have seen in the financial sector of our economy will not be fixed by increased regulation–they are indications of a lack of morality and accountability that is currently running rampant in our society. Until we get back to our national roots as a Judeo-Christian country, we are not going to solve our problems–financial or otherwise. The reason the Ten Commandments were posted in our schools was to let students know that at some point in their lives they would have to answer to a higher authority. When we removed the concept of a higher authority, we opened the door for the financial collapse that we have seen. When our financial moguls do not realize that they are accountable for their behavior, they don’t bother to play by the rules.

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