Bailouts

Fox News's Stuart Varney had a heated debate Wednesday with Air America's Mike Papantonio about the state of the economy and the effectiveness of the $787 billion stimulus package.

Subbing for Neil Cavuto on Wednesday's "Your World," Varney tried repeatedly to get his liberal guest to admit that porkulus hasn't worked and that the economy is getting worse.

Papantonio wasn't having any of that hypocritically and amnesiacly claiming, "We have to get behind this President and be more positive" adding "You cannot be ankle-biting every day this man says something, you can't be attacking"  (video embedded below the fold, h/t NBer Dan Scott):

New York Times reporter Edmund Andrews is again writing about housing -- and about a proposed government agency that could have helped him during his own housing crisis -- on the front page of Wednesday's Business section, "Banks Balk At Agency Meant to Aid Consumers."

Andrews courted controversy in May upon the release of his book "Busted: Life Inside the Great Mortgage Meltdown," about his own personal mortgage crisis. But his denunciations of greedy banks left out vital information -- his wife's previous two bankruptcies.

From Andrews's story on Wednesday:

Banks and mortgage lenders are placing top priority on killing President Obama's proposal to create a new consumer protection agency that would regulate home loans, credit card fees, payday loans and other forms of consumer finance.

The Obama administration fired an opening shot on Tuesday, sending Congress a detailed, 150-page proposal for an agency that would set new standards for ordinary mortgages, restrict or prohibit risky loans, investigate financial institutions and enforce new laws aimed at protecting credit card customers.

"This agency will have only one mission -- to protect consumers," said Timothy F. Geithner, the Treasury secretary, in a written statement on Tuesday.

As we near the end of June, which is supposed to be one of the four biggest months for federal tax collections (January, April, and September are the others), it is clear that the serious receipts shortfalls are not only continuing, but have caused the March 20 projections of the administration and the Congressional Budget Office (CBO) to be outdated.

Media coverage of the ongoing receipts dive has been minimal at best. A Google News search on "federal receipts" (typed in quotes) returns on seven items, two of them originating from yours truly.

Here is where things stand as of the last Friday of June in both 2009 and 2008, per Uncle Sam's related Daily Treasury Statements:

Just last year the government claimed bailouts of major banks like CitiGroup were necessary to prevent economic collapse. But now that banks are turning a profit NBC is returning to attacks on pay.

A June 24 segment of “Today” attacked CitiGroup’s “internal discussions” to raise salaries (by 50 percent in some cases) and other major banks with footage from the 1987 movie “Wall Street,” AIG protest footage and an unemployed Michigan woman.

Meredith Vieira began by stoking class envy saying the story “might make some people hot under the collar.” Citigroup “wants to move away from paying big bonuses by instead giving nearly 300,000 workers large pay increases and it is not alone,” Vieira said.

Maybe reporters Brian Faler or Nicholas Johnston at Bloomberg asked Barack Obama some really challenging questions when they had a chance to interview the President at the White House. Maybe they even did some basic fact-checking. If so, there's precious little evidence of either in their June 16 report.

They allowed the president to blame most of the current year's deficit on George W. Bush. They let him speak of "robust" growth when the best guesstimates they quoted for the second half of this calendar year and all of next year are anemic -- at least as the press benchmarked growth during the Bush 43 years.

The Bloomberg pair also ignored the alarming deterioration in federal receipts from economic activity that has continued into June, one of the four biggest collections months of the year.

Here are key paragraphs from Faler and Johnston's failed filing (bolds are mine):

The Associated Press posted an "analysis" piece by writer Tom Raum on June 15 to address the GOP strategy against Obamacare and other administration policies but the APs characterization of the GOPs efforts almost seem meant to belittle and de-legitimize that opposition as opposed to describing it. The entire GOP argument against Obama is boiled down to a use of "buzz words" as far as AP's Raum is concerned. Apparently, no political truth or ideological disagreement really enters into it. Only "tactic," and "strategy" built on "buzz words" and "fear" is offered by the GOP instead of real issues according to the AP.

In "GOP using buzz words to taunt Democrats," with a subhead of "Republicans claim Obama embraces 'socialism,'" Raum never once admits that Republicans just might have a principled ideological opposition to Obama's policies leaving readers to get the vague feeling that the GOP is trying just anything to find a winning issue. Further, the entire article is premised as if the Democrats are correct and the GOP is just trying to chip away at their essentially correct stand on the issues. AP even presents a lefty professor to shore up the AP point of view -- naturally the professor's propensities are not divulged.

First the federal government's auto bailout bullies came for Chrysler's secured, first-lien creditors, and defeated them.

Then they came for General Motors' unsecured bondholders. The feds appear to be in the drivers' seat in shafting them disproportionately to force a better deal for the United Auto Workers' healthcare trust.

Now, in a matter that at first only seemed to interest the Wall Street Journal, they've also come after Delphi's debtor-in-possession (DIP) financing providers as GM attempts to scoop up what it wants from the bankrupt auto-parts supplier. But this time, at least for now, a bankruptcy judge with a richly appropriate name has stopped them:

Here we go again. Controversial filmmaker Michael Moore is going offer his solution to societal ills through one of his documentaries.

If Moore's past movies are any indication of the coverage he will get, it is sure to be a media hit. Already, Huffington Post blogger and MSNBC daytime anchor Carlos Watson is praising praised Moore's early promotion of the flick.

"Michael Moore, the filmmaker, is back and this time he was taking aim at Wall Street," Watson said on June 15. "[H]e did a very funny thing, Sarah, this weekend when you showed his documentary in some of the movie theatres. It was very interesting. He had ushers walk along, trying to take up money for CEOs and Wall Street banks."

A fabulous 1934 Chicago Tribune cartoon that has recently been making the rounds in the blogosphere as an example of history sadly repeating itself was marvelously rerun at the paper's website on June 10.

In it, members of Franklin Delano Roosevelt's administration are seen shoveling money out of a wagon with a billboard on the side declaring, "Depleting the resources of the soundest government in the world."

On Wednesday, the Trib reprinted the cartoon with the caption "This is a 1934 Chicago Tribune political cartoon that many say rings true in today's political and economic climate. What do you think?" (full, largely legible print below the fold along with an explanation of the characters uncovered by The Federal Observer, h/t NBer Gary Hall):

You can't make this stuff up. The titled quote comes from a Bloomberg story today about new GM Chairman Ed Whitacre. You also can't make up most of the media's calm acceptance of yet another person heavily involved with running General Motors, aka Government Motors, who knows next to nothing about cars except as a consumer who drives them.

At least it's refreshing that this guy has experience running a business, which is more than you can say about the other two architects of the company as it currently subsists.

On May 31, the New York Times put out a fawning portrayal of the a Mr. Brian Deese, the guy who was the only full-timer on President-elect and then President Obama's car team from Election Night until mid-February.

Fasten your seat belts, this guy's lack of any kind of pedigree will have you death-gripping the steering wheel, as will the smug dismissiveness of a business system that has been the most successful in human history:

If you stand in the way of President Barack Obama's agenda, beware because there may be a litany of consequences that could result from your act - regardless if the obstacle is legitimate or not.

On June 8, Supreme Court Justice Ruth Bader Ginsburg issued a stay to review an appeal by a trio of Indiana pension and construction funds that own a part of Chrysler's secured debt. They claimed the administration's handling of the deal that would have sold Chrysler's assets to Italian automaker Fiat (BIT:F) arbitrarily threw 150 years of bankruptcy law out without process of law.

The Supreme Court later vacated her order, which cleared the way for the deal. But during the 24 hours in between, there was a sense of panic coming from the broadcast networks, fearing the worst.

Actor Jon Voight, who recently spoke critically of President Obama at a Republican fundraiser, appeared on Tuesday's The O'Reilly Factor to reiterate his problems with Obama. After recounting that America was "warned" by Hillary Clinton and Joe Biden during the Democratic primary season that Obama "had no experience" and was a "novice," the conservative actor reminded FNC viewers of the unheeded warnings about Obama's connections to questionable figures like Bill Ayers and the Reverend Jeremiah Wright:

Look, he was a fellow who was associated with all the wrong people. The signs were up. His associations with Bill Ayers, Alinsky, with ACORN, with Pfleger, with Wright. But no one seemed to take the warnings. And his inexperience was quite evident.

Many have claimed the federal government was playing fast and loose with the rules surrounding its takeover of General Motors and the circumstances surrounding the selection of which dealerships would remain open and those that wouldn't. Fox News' Gretchen Carlson came forward with evidence of this through a personal account of dealership closings.

Carlson, a co-host on the Fox News Channel's morning show "Fox & Friends," appeared on Glenn Beck's June 9 program and questioned the logic behind the decision reached by the government and General Motors (GM) to close down a dealership that has been in her family for 90 years.

"I'd like to get a hold of the car czar too," Carlson said. "Never did I think personally that I would need to get a hold of him, but now I do because my parents have owned a General Motors dealership in Anoka, Minn., for 90 years and they were terminated last week and they would like to know why. They would like to know why from the car czar."

The Obama administration’s arguably unconstitutional and potentially illegal makeover/takeover of General Motors and Chrysler hit a legal road block on June 8, when Supreme Court justice Ruth Bader Ginsburg issued a stay preventing Team Obama’s plan to sell Chrysler to the Italian automaker Fiat. This speed bump was a great opportunity for the media to pay attention to objections to the White House’s reckless executive-branch manipulation of the auto business.

Or not.

President Bush and his team were regularly savaged by the media elite if they so much as sniffed a hint of evasion over the rule of law and the bounds of constitutional authority in fighting terrorism. So why is President Obama’s unprecedented intervention in the auto industry, including a TARP-fund bailout expressly ruled out by Congress, all but ignored?

Even with the Supreme Court order, the nightly news shows of CBS and NBC gave the decision just a few seconds of air time, the equivalent of a stifled yawn, and never went anywhere near describing the strange bankruptcy proceedings the Obama administration has cooked up to manipulate the industry to its liking.

**UPDATED WITH VIDEO**

In the ever-expanding aura of liberal hysteria surrounding MSNBC, Chris Matthews is regularly outpaced by the formerly coherent sportscaster, Keith Olbermann.  But Matthews may have won the nightly laurel wreath last night, with his insight on Sarah Palin’s warning against federal bailouts.

The offending quote from Palin is not unlike many other things heard from other current leading Republicans:

GOVERNOR SARAH PALIN: We need to be aware of the creation of a fearful population and a fearful lawmakers being lead that believe that big government is the answer. To bail out the private sector because then government gets to get in there and control it and, mark my words, this is going to happen next I fear, bail out next debt-ridden states, then government gets to get in there and control the people.

Palin is referring to the possible federal use of forced funded mandates.  It is conceivable that, if a Mark Sanford is legally required to use federal money, with all of its attached mandates, state governments could be forced to use more money to provide more services – possibly services that the voters in the states do not need or desire.  That is conservatism du jour these days – and not rhetoric outside the norm, for the GOP.

So what was Matthews’ reaction?

Ed Frank created an interesting little video that serves as a stark reminder of how harsh the Old Media was on Bush's "faltering" economy in comparison to today's hearts and flowers style of reporting during the age of Obama, even though the stats are far, far worse under Obama than they ever were under Bush.

Frank's video is shocking for its revelation of how Bush was slapped around and how every economic indicator during his tenure in the White House was deemed as obvious proof of the supposed though times we then faced. Yet now, every dismal indicator is celebrated as if recovery just around the corner. Under Bush the Old Media was sure the economy was a wreck, now the wreck proves we will surely be saved by Summer!

There is happy-talk and then there is delusion. The Associated Press has just approached the delusional stage with its recent assessment of what the unemployment numbers mean. Absurdly, the AP seems to imagine that the continued job losses under Obama means that job hunters are experiencing "raising hopes"! It's like sitting on the Titanic pleased that taking on water raises hopes that a nice, relaxing bath is will soon be at hand.

The first paragraph of the story claims that since last month saw a few less layoffs, why, that is saying that what we have here is "the brightest hope yet that an economic recovery" will take hold later this year. What does the AP offer as proof? Not a whole lot, sadly. In fact, the very next paragraph sort of torpedoes the first. After this "brightest hope" business, the AP gives us this:

Even if they ultimately lose their last-minute court battle, the Indiana pension funds defending their rights as secured first-lien creditors of Chrysler have done a valuable deed.

We have learned, among many other things, how at least one government lawyer characterized the funds' lawyer, Thomas Lauria.

A $10,000 Democratic Party donor, Lauria, despite clear evidence of intimidation of his originally larger pool of clients by Barack Obama himself (in his April 30 speech announcing the company's bankruptcy filing) and his car guys, has nonetheless bravely pursued the important contract law and fiduciary duty issues involved in the shortchanging of his clients for several weeks.

Wait until you see the word the government lawyer used to describe Lauria.

On CNBC, Tony Fratto, former White House Spokesman for President Bush, has used the nice word -- that would be "deception" -- to say that Barack Obama is lying about his claims that his "stimulus" efforts saved any American jobs. Not only does Fratto devastate the administration's claims to have saved jobs, but he rightfully points out that the lapdog media is letting Obama get away with the deceit.

Fratto calls the jobs-saved rhetoric a "breathtaking deception" and is aghast at the "gullibility of the Washington press corps" for reporting Obama's claims with a straight face and an un-skeptical eye.

Oh, it isn't that the numbers that Obama uses to make his claims are somewhat jiggured, but that the whole claim is impossible to figure all the way around and Obama's economic team knows it, according to Fratto. The claim is simply a fiction, a fantasy, a claim made based on no numbers and no ability to find them.

In a time when fiscal responsibility from politicians seems to be a thing of the past, NBC’s “Today Show”  and ABC’s “World News with Charles Gibson” criticized California Governor Arnold Schwarzenegger for his proposed budget cuts in his effort to save California from reaching total financial ruin.

The June 3rd “Today Show” featured numerous opponents of Schwarzenegger’s budget cuts, but nobody supporting or defending them.

The segment began with a clip of the governor stating: “Our wallet is empty. Our bank is closed, and our credit is dried up,” a fact that does not seem to bother NBC, as they mourn the proposed solution to this problem: the cutting of what they deemed “essential services.”

In what could be a new record for the Morning Joe crew, Joe Scarborough exploded into an anti-media rant today – a mere six minutes and forty-one seconds into the show.  From review of the tape, it is clear that Scarborough had not missed his morning coffee – so that was apparently not the reason for his detonation.  What, then, set Scarborough off?

This Scarborough eruption was brought to you by the past (and continuing) failure of the main-stream media to cover President Obama fairly.  In Mika Brzezinski’s morning news rundown, there was (what was supposed to be) a short segment on President Obama’s comments yesterday; regarding the latest in a series of auto-maker bailouts:

JOE SCARBOROUGH: How can he say that with a straight face? Seriously. This is one of the things that's troubling about this President is he can say things with a straight face that the media does not call him on.

After arguing the details of the President’s proposal at length (length for a TV show...), Brzezinski provided this gem:

Roll Call is reporting that during the typical Friday afternoon document dump -- a practice used to hide actions that might prove somewhat embarrassing to the White House -- the administration quietly announced that some of the former restrictions on lobbying ballyhooed about during the late campaign have been lifted. And now, we have to wonder: will the media notice this sudden change? I mean, a whole day has gone by and so far only Roll Call has mentioned it.

In any case, let special interests ring, baby!

"Dealergate" is a term referring to a collection of evidence indicating that dealership termination decisions at bankrupt Chrysler may have been based on factors other than maximizing the chances that the company, post-bankruptcy, will be viable and profitable.

Josh Painter at RedState has a roundup focusing on what have been the primary concerns, which continue to be vetted by Doug Ross (here, here, here, and here), Joey Smith, and several others. Those concerns are that dealers with records of supporting Republican candidates and organizations were disproportionately terminated in comparison to those with records of supporting Democratic candidates and causes, and that certain terminated right-leaning dealers have seen their territories gobbled up by Democratic Party-connected business cronies.

A separate but very relevant Dealergate issue should be whether minority-owned dealerships were unfairly spared at the expense of non-minority dealers.

Earlier today at my blog, I noted in a post updating the sad situations at bankrupt Chrysler and headling-for-bankruptcy General Motors, that GM is, according to a Wednesday Reuters report, offering secured bondholders a much better deal than the 29 cents on the dollar Chrysler's secured creditors have been offered. Chrysler's "non-TARP secured lenders," after what they allege with much evidential support was a campaign of threats and intimidation by President Obama and the White House, abandoned their efforts to have their first-lien rights recognized in bankruptcy court.

But Indiana pension funds holding some of that secured debt representing teachers, police, and other workers have taken legal action objecting to the terms of the Chrysler bankruptcy that don’t give first-lien lenders their proper and legal due.

It thus appears, despite a chest-thumping May 2 assertion in the New York Times that the White House's Chrysler hardball might have taught GM lenders a "lesson," that Obama and his car guys don't have the stomach for riding roughshod over the rights of GM's secured bondholders and ending up with the possibility of another bankruptcy moving into a regular federal district court (the Indiana situation could be the first).

Now what? Well, if you're Team Obama, you instead try to put the screws to GM's unsecured bondholders -- to the benefit of the United Auto Workers' Voluntary Employee Benefits Association (VEBA) trust.

The Fed and the FDIC have waived lending and borrowing rules for GMAC in order to ease consumer borrowing for GM and Chrysler cars, and the Washington Post doesn't seem to find anything unusual about this:

The Federal Deposit Insurance Corp. granted a rare approval to a program that will allow GMAC to raise money cheaply and take on lending for Chrysler. The Federal Reserve had to waive a rule separating banking and commerce that would have prevented GMAC, which just became a bank holding company, from lending to GM customers because the auto maker is a major shareholder in GMAC.

According to the Post, "The decision by regulators to grant these waivers demonstrates the lengths the government is going to prop up the nation's auto industry."  Well, Ford Motors is also part of the auto indutry, but it doesn't appear that Ford Credit is going to benefit from this program, so it's not the auto industry that's getting breaks, it's the now-government-un car companies.

For the Fed to make an exception to its rule separating banks and commercial enterprises would not be unprecedented. The Fed took such a step in its original decision to bring GMAC under the agency's umbrella and it made similar moves involving other financial companies.

On May 15, I posted (at NewsBusters; at BizzyBlog) on the Obama administration's and government-run Chrysler's blatant deception concerning whether plants would be closed as a result of the company's bankruptcy filing.

Specifically, on April 29 and 30, Obama, the administration and Chrysler told senators, congressmen, state and local politicians, and local and regional union leaders that the bankruptcy (these are Obama's words) "will not disrupt the lives of the people who work at Chrysler or the communities that depend on it." Those who heard this and other reassurances reasonably concluded that no plants would be permanently closed. But on May 1, government-run Chrysler announced that it would close plants in Michigan, Missouri, Ohio, and Wisconsin. Days later, hundreds of Chrysler dealers were terminated.

The national media establishment has treated all of this as a non-story, so I expect it will do the same with this update from the Cleveland Plain Dealer. It includes news that two Ohio congressmen, one Democrat and one Republican, are demanding documents relating to the who, what, where, when, and why of the plant-closing decisions:

Imagine if in December George W. Bush and his administration had:

• Decided to issue the initial bailout billions to General Motors but not Chrysler, thereby forcing Chrysler into bankruptcy.
• Had his advisers get on the phone with elected officials in towns and states where Chrysler has plants and told them that the bankruptcy was about to happen.
• Said that the Chrysler bankruptcy "will not disrupt the lives of the people who work at Chrysler or the communities that depend" on them.

Now imagine if, 24-36 hours later, Bush's advisers disclosed that many Chrysler plants would close.

Does anyone reading this think that such an obvious betrayal would have gone unreported by the major TV networks or newspapers of record?

What is the idea of the American dream, of working hard and achieving something, and knowing that all, you know, half your wealth is going to someone who didn't do that?

So asked CNBC's Maria Bartiromo Thursday during a stirring discussion with a union advocate who had the nerve to claim the problems in the auto industry were all caused by a lack of a nationalized healthcare system, and that only the top one percent of wage earners in America should pay federal income taxes.

Unlike most media members who would have applauded such sentiments coming from one of their guests, Bartiromo pushed back, with respect and professional courtesy not seen much from journalists these days, and in a fashion that would make many Americans currently concerned about their nation's direction a wee bit nostalgic and tremendously proud.

What follows is a partial transcript of this exchange, as well as an embedded video of the entire segment:

In Part I (at NewsBusters; at BizzyBlog) of my coverage of Martin Crutsinger's Associated Press report about Uncle Sam's Monthly Treasury Statement and the Obama administration's deficit projections, I noted that the government "miraculously" shrunk the deficit through March, the first six months of its fiscal year, by $175 billion, by employing an "accounting change."

Even though this "accounting change," which does not report TARP disbursements as outlays because they are considered "investments," violates fundamental cash-flow reporting principles, Crutsinger gave the change an unskeptical treatment. He also failed to tell readers whether the administration used the old or new method in calculating its latest full-year deficit projection of $1.84 trillion. If Team Obama used the new method to determine it, the deficit under the old and more correct method will more than likely be over $2 trillion.

Crutsinger also failed to report the steep dive in federal receipts that took place in April, which is the government's highest month for collections, compared to last year's all-time record April haul, which I referred to as the "Supply-Side Stunner," and which Crutsinger and others also failed to report when it occurred last year (at NewsBusters; at BizzyBlog).

Here is how April 2009 collections compared to April of 2008:

You have to see this to believe it, and even then you'll have a hard time believing it. It's the Obama administration's deficit reduction program, otherwise known as "change the accounting."

Here is what the Monthly Treasury Statement (MTS) from Uncle Sam looked like in March:

Here is the report for April: