Bailouts

In a news report that sounded like an Obama campaign commercial, CBS Early Show correspondent Kelly Wallace declared: "Facing the most serious economic crisis since the Great Depression, the Obama Administration is asking for the biggest stimulus plan in history. An estimated $775 billion to prop up a very sick economy." In the report, Wallace cited Nariman Behravesh, chief economist for Global Insight, who exclaimed: "We really need something big, bold, and swift to kick start the U.S. economy. And I think the Obama plan looks like it meets almost all those criteria."

Wallace ran through some of the key talking points of the plan: "Roughly $300 billion of that relief money will go directly to tax cuts for 95% of American workers...For businesses, a proposed $100 billion in tax incentives and refunds to jump start job creation...Of the 3.2 million jobs that the Obama Administration says will be saved or created, a million will come from a $25 billion investment in infrastructure...while making a long-term investment in renewable energy and other green initiatives." Wallace concluded her report: "Obama is confident he can get his stimulus plan passed within two weeks of taking office. Some economists believe the sooner, the better."

It took pornography to hear some economic sense from CNN on the issue of bailouts.

"American Morning" reported on Jan. 8 that Larry Flynt, of Hustler magazine, and Joe Francis, of Girls Gone Wild, sent out a press release  Jan. 7 asking for $5 billion of the federal bailout action.

CNN's Kiran Chetry and correspondent Ted Rowlands reacted with skepticism. Rowlands said, "This seems to many like just another Larry Flynt publicity stunt."

Larry Flynt, the publisher of Hustler magazine, and Joe Francis, the CEO of Girls Gone Wild, are asking Congress for a bailout of the adult entertainment industry.

According to them, during bad economic times "Americans turn to entertainment for relief." Since "Congress seems willing to help shore up our nation's most important businesses, we feel we deserve the same consideration."

I kid you not.

The following is their press release posted at PR Newswire:

Here is some much-needed sanity from Business & Media Institute commentator Dan Kennedy: The first sprouts of the new American economy are already breaking through the snow.

Some associates and I have recently invested capital in forming a new bank. I’m not allowed to give out its name or location here, in this column, as commercial promotion is forbidden thanks to the non-profit status of the publisher – an annoying little oddity, given that I’m writing in defense of capitalism.

But, to the point. A Business Week article from Dec. 22 was headlined "This May Be the Ideal Time to Start A Bank." We agree, or they agree with us. Specific to banking, a start-up with no toxic assets and sufficient capital can borrow cheaply, and can be well-positioned to be acquired at a nifty gain when the recession dissipates and recovery takes over. That’s our strategy and we’re stickin’ to it.

But there’s an even bigger point here…

Reuters ran a little flak for Barack Obama trying to help dull the outrageous expectations placed on The One by his irrationally exuberant adherents in theirs headlined "Congress faces historic challenges" -- As if no other Congress has faced "historic challenges" before? Reuters assures us, though, that times are so bad that we should not expect Obama to live up to any of his outlandish promises. This way, of course, if Obama reneges on them, the Old Media can remind everyone that it’s really our fault for expecting too much, not Obama's for reneging.

Naturally, we get the kind of Bush-is-worst rhetoric we expect from Reuters but we also find that Reuters seems to have forgotten that Congress itself has even lower ratings than does Bush. And Reuters starts off the story conveniently forgetting that the Democrats have controlled Congress since 2006.

GMAC may be in financial trouble, but that isn't stopping the auto lender-turned-bank holding company from maintaining its corporate sponsorships. The question is - will anyone notice? 

In October, GMAC (NYSE:GKM) changed its legal status so that it would be eligible for TARP funds passed by Congress. Late last month, GMAC was approved to receive a $5 billion lifeline from the U.S. government. However, the company is still maintaining its sponsorship of a collegiate bowl game set for Jan. 6 in Mobile, Ala.

"There's about 34 bowl games, 30 of which are sponsored in one way or the other," Fox Business Network's Jenna Lee said Jan. 2 on the Fox News Channel's "Happening Now." "The lower-level, the mid-level games pull in about six figures to have your name attached to one of the games - that's the estimate. And the big games, let's say the Rose Bowl for example, or the Sugar Bowl, or the Orange Bowl - those figures go upwards of $5 to $6 million for some sort of sponsorship."

If exaggerated reports of global economic distress act to further dampen consumer confidence and actually worsen the situation, can press outlets be held legally liable?

Such was espoused by a corporate lawyer Thursday in response to a poll that found 77 percent of Americans "think the financial press is making the economic crisis worse by projecting fear into people's minds."

As reported by Breitbart New Years day (h/t Hot Air headlines):

Ever since the financial services industry totally melted down in September, anti-free market media have pointed an accusatory finger at deregulation as the primary cause of bank, brokerage firm, and insurance company failures.

Yet, as press outlets across the fruited plain deal with declining revenues and layoffs, some believe a looser anti-trust environment could be the solution.

Even more delicious, one such advocate, Variety's Brian Lowry, used to be a deregulation opponent as evident in his Wednesday column: 

Ronald Reagan once said:

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. 

Is there no finer example of this concept than our government's hundred year relationship with the American auto industry?

Before you answer, consider the following Wall Street Journal editorial published Wednesday (h/t Tapscott's Behind the Wheel via Instapundit):

Michelle Malkin called it, as did several NewsBusters commenters. Their prediction was that newspapers on the brink would be asking for government bailouts.

It came to pass in late November that seven Connecticut legislators asked the state's Department of Economic and Community Development for help in keeping the New Britain Herald and the Bristol Press afloat. A JPEG of the full letter with three of the seven signatures is here. Alleged GOP Governor Jodi Rell is apparently sympathetic.

A Wednesday "analysis" piece by Robert MacMillan of Reuters reports that the state agency is indeed "offering tax breaks, training funds, financing opportunities and other incentives for publishers, but not cash."

Here are other key paragraphs from MacMillan:

On Sunday’s Face the Nation on CBS, fill-in host Chip Reid discussed the economic crisis with left-wing economist and New York Times columnist Paul Krugman, wondering: "I know you've been arguing for a more progressive government for a long time and obviously at difficult times like this, I don't want to suggest that a recession is a good thing. But if looking back at this five years, or some number of years, from now, can you envision a country that is better off because of how it responded to this recession?"

In response, Krugman explained: "Well, if you believe, as I do, that we need a stronger social safety net, that we need universal healthcare, then the revelation of just how vulnerable we are when things go wrong is going to help." Krugman went on to praise the New Deal: "We came out of the New Deal, we came out of the 1930s, as a better country, a middle class country, where we had been in the Gilded Age. We came out as a country that took better care of its citizens."

Well, it seems that the folks at Vanity Fair realized that they won't have George W. Bush to kick around any more. So they decided to launch the journalistic equivalent of thermonuclear war against him in an attempt to get its shot at a "draft of history."

In a 14 web-page tome (the photo at the top right is at its beginning) that fancies itself an "oral history," the magazine hauls out every criticism, real or imagined, hurled at the president during the past eight years. It reminds everyone that the media's favorite stereotype of conservatives and Republicans is that they're dumb (I guess Ike's orchestration of D-Day was some kind of accident, and George W. Bush's MBA -- he is the first president to hold one -- was some kind of gift from Poppy).

Sadly, the magazine finds a few former administration officials to pile on. One of them likens Bush to Sarah Palin (that's supposed to be an insult). We're left with the long-discredited meme of Dick Cheney as puppet master and Bush as impotent since Katrina (then how did Bush get that Iraq Surge past everyone and make it stick anyway?).

All you really need to know to spare yourself a truly painful read is what is in the tease paragraph after the headline. Brace yourself:

For a left winger who loves the word "nuanced," Rachel Maddow of MSNBC and Air America Radio struggles with simple analogies.

The unacknowledged Democratic agitprop mouthpiece seized on news of Toyota projecting its first operating loss since 1938 as evidence that unsustainable labor and legacy costs are not to blame for Detroit's malaise.

Here's what Maddow said on her radio show Dec. 22 --

Looking for your own financial bailout?

Well, the unprecedented decline in gasoline prices the past five months is actually giving regular Americans a much-needed boost to their balance sheets possibly greater than what the government is doling out to the financial services and automobile industries.

New data just released by the Oil Price Information Service reveals that we're currently spending $1 billion a day less on gasoline than we were back in July.

Don't expect media members to be lining up to thank the oil companies for what was reported by the Associated Press just minutes ago:

This is really delicious, and should cheer up the grinchiest of Grinches and the scroogiest of Scrooges:

Rumors that Santa Claus may be the latest and most high-profile victim of the worldwide credit crisis sent world stock markets roiling and children's hopes plummeting today as Wall Street analysts warned that Santa's entire production and distribution network could collapse by the end of the day without an infusion of several trillion dollars from the federal government.

Marvelously, the good folks at National Lampoon have already created an hysterical video of Santa asking Congress for bailout funds (embedded below the fold).

But before we get there, Kansas City.com's TV Barn published Alex R. Dahl's satirical piece moments ago:

Is it possible the financial media played a role in facilitating the alleged $50 billion Bernard Madoff Ponzi scheme? An interesting theory by Jon Najarian, CNBC analyst and cofounder of optionMONSTER, contends that they very well may have unwittingly done just that. Madoff, he believes, used media publicity to lure investors to his scheme.

As Najarian explained on CNBC's Dec. 22 "Fast Money," Madoff got his reputation on Wall Street in the payment for order flow business. That's when a brokerage firm receives a payment as compensation for directing the order to the different parties that can execute the order at a lower cost.

"First of all you needed something that was very credible, because what he started off with was very credible," Najarian said. "As we both know, Dylan, he was in the payment for order flow business before anybody else. That meant folks that he was buying on the bid and selling on the offer back when the spread on NASDAQ stocks was 50 cents wide."

You would think from reading yesterday afternoon's report by the Associated Press's Tom Murphy that companies like Toyota, Nissan, and Honda are not that far from finding themselves in the situations US taxpayer bailout recipients General Motors and Chrysler are in.

Murphy tries mightily to make the foreign-owned companies' situations look serious, at one point even putting out the howler that they are "not quite" as bad off as Detroit's Big Three.

You've got to be kidding me.

Murphy's "Meltdown 101: Foreign automakers struggle too" apparently just arrived from the School of Hard Laughs. It is mostly written in a Q&A format. Here are some excerpts (bolds are mine):

UPDATE AT END OF POST: White House issues statement concerning "Irresponsible Reporting by New York Times."

It's official: the housing and financial crisis gripping the nation is President George W. Bush's fault.

So said the New York Times Sunday in a 4900-word, front page hit piece entitled "The Reckoning - Bush's Philosophy Stoked Mortgage Bonfire."

And what was this heinous, catastrophic philosophy that caused all our nation's problems? "Americans do best when they own their own home."

Oh the humanity.

Sadly, much as the Times and its liberal colleagues conveniently forgot and/or ignored all American history prior to March 2003 in order to blame the nation's problems on Bush and the invasion of Iraq, the authors of this disgrace omitted and/or skirted over virtually all the relevant pieces of legislation and issues that led to our current financial crisis  -- as well as articles on the subject published by their very paper!!! -- instead focusing readers' attention on the following (emphasis added throughout, photo courtesy NYT):

Though NewsBusters is normally in the business of critiquing the liberal media, not praising the conservative, I want to ensure that as many of our readers as possible have the pleasure and profit of reading Mark Steyn's recent column: We're in the fast lane to Bailoutistan.

With its mordant, don't-know-whether-to-laugh-or-cry take on our current fix, it's my nominee for best column of the year.

I urge you to read it all, and marvel at its insight and wit.  Let me tempt you with a few morsels:

The UAW is AARP in an Edsel: It has three times as many retirees and widows as "workers" (I use the term loosely). GM has 96,000 employees but provides health benefits to a million people.

The Terminator makes Gray Davis look like Calvin Coolidge. Care to terminate a government program, Governor? Hey, great idea! We'll hire 200 people to do an impact study on terminating the Department of Impact Study Regulation and get back to you in a decade.

Feeling a little bailout fatigue? Tired of the assault on the taxpayer from the federal government to pacify those influenced by the United Auto Workers? CNBC's Larry Kudlow feels your pain.

Call this red meat for the troubled anti-bailout soul. Kudlow, now performing a role as a co-host on CNBC's mid-morning program "The Call," blasted the Union Auto Worker, President George W. Bush, Treasury Secretary Henry Paulson and anyone else associated with $17.4 billion in loans for auto companies announced earlier today on Dec. 19.

"This is a full-up pooper scooper for the American taxpayer, which now owns General Motors," Kudlow said. "We're going to have a GM cabinet. Barack Obama is going to be the new car czar because Bush basically pushed this pooper scooper his way."

It's special treatment for automakers, according to a former airline executive.

Gordon Bethune, the former CEO of Continental Airlines (NYSE:CAL), now a CNBC contributor, told CNBC's "Squawk Box" on Dec. 19 the political process is being substituted for what otherwise should be a bankruptcy judge in determining the fate of the big three automakers.

"Wow, what makes them exempt from reality? What are the bankruptcy laws invented for?" Bethune asked. "I mean - if it works in airlines, works in steel - what's the matter with these guys? Why not have a judge decide instead of the political process? And, you know - you get some fairness in the federal court, so there's no excuse for this whole debacle I don't think."

Bethune is famous for saving a beleaguered Continental Airlines from near liquidation after it had filed for bankruptcy several times, giving him a different perspective on how to turnaround a failing corporation.

Democrats in Congress say the darndest things, don't they? 

My favorite recent example -- 10-term Congresswoman Louise Slaughter of New York talking with liberal radio host Ed Schultz on Tuesday about why she voted in favor of bailing out Detroit (click here for audio) --

SCHULTZ: The Big Three, how did you, you voted in favor of that.

SLAUGHTER: I did, because one in 10 jobs in the United States is tied to what happens to them. I've been on their back as long as I can remember. When I was in the state legislature in the '80s, we passed a seat belt law in New York. And they fought us tooth and nail and (said) if they had to put in seat belts in cars they would surely go broke. And I remember that just before I went down to vote an ophthalmologist from my district called and said, please go down and tell them how hard it is to dig glass out of eyes. But they fought every thing in the world that we ever tried to do, always at the same time that the foreign automakers were doing it and cleaning their clock. I've never understood their reluctance really to do things to help themselves. I guess their political situation was just so good in Washington they didn't have to worry about it.

Full disclosure, you can take the day off.

CBS's "The Early Show" included a statement in its Dec. 18 report on the Big 3 bailout from "auto industry analyst," Dan McGinn. Letting the massive car companies fail "would be like 10 Katrinas hitting America at the same time," McGinn asserted. "The American public understands that."

What the report didn't say is that McGinn is also an adviser to General Motors. Furthermore, TMG Strategies the public relations firm McGinn heads, lists GM as a client. McGinn has been making the case for an auto bailout in many news stories and issuing some compelling statements on behalf of his client.

On MSNBC's "Hardball with Chris Matthews," McGinn was labeled as an "auto industry consultant," Dec. 4. There was no mention of his link to GM.

In a softball profile of the liberal Massachusetts Congressman Barney Frank on Sunday’s CBS 60 Minutes, anchor Lesley Stahl led with: "Barney Frank has been called the smartest guy in Congress, which is lucky for us, since he works on some of the thorniest issues around. The 14-term, 68-year-old Harvard-educated Democratic congressman from Massachusetts is chairman of the House Financial Services Committee, which means his portfolio includes banks, housing, and now the auto industry. " Stahl later added: "...even the most hardened Republicans give him good reviews." Stahl never named any of those "hardened Republicans."

Stahl did offer some critical descriptions of Frank: "There are many ways to describe Barney Frank. I wanted to read you a sampling of descriptions of you. They almost -- they kind of come in couplets. We have, ‘impatient and anti-social,’ ‘sharp-tongued and downright mean.’" However, she soon followed up with positive testimonials of Frank’s non-ideological pragmatism:

Listen to what the financial community says. Here's Henry Paulson on Barney Frank: ‘He’s a market savvy pragmatist who looks for areas of agreement because he wants to get things done.’ Here’s a guy from JP Morgan Chase, he said, ‘He hasn't veered off into Crazyland,’ meaning liberalism. I've heard someone describe you this way: ‘You're liberal on social issues; you're a pragmatist on economic issues.’"

Near the end of the story, Stahl observed: "True to form, he's an equal-opportunity curmudgeon, also criticizing Barack Obama for not being assertive enough on the credit crisis." Frank explained: "Senator Obama has said we only have one president at a time. Well, that overstates the number of presidents we have at this time. We don't appear to have any." Apparently, saying that having President Bush is like not having a president is somehow critical of Barack Obama.

As media company after media company fall on hard times, the amount of handwringing within the journalistic community is reaching epic proportions.

One point not often noticed, however is that there are many similarities between the American media business and our auto manufacturing industry as Tony Hopfinger points out in an excellent Alaska Dispatch post:

There are many reasons for the downturn - a weak economy, the Internet, etc. But one explanation that often goes unmentioned is the generally poor management within the newspapers themselves. It's surprising how many editors, publishers and executives have been allowed to keep their jobs as their papers crumble around them. In any other business, these managers would be replaced. Instead, failures are blamed on "markets" and "ad dollars" and "the Internet," instead of lack of vision and poor leadership.

As Americans across the fruited plain worry about their jobs and how they're going to make ends meet during the current recession, Nobel Laureate Paul Krugman showed Sunday morning just how separated from reality and the common man he actually is.

Appearing on ABC's "This Week," the New York Times columnist said that he wasn't worried about how expensive president-elect Barack Obama's economic rescue plan might get, but instead that the problem will be "finding enough stuff to spend on."

How'd you like to have that problem this holiday season?

With total disregard for what Americans are going through, and an almost unthinkable ignorance of the government's current budget, Krugman responded to host George Stephanopoulos's question about whether he's sticking to the $600 billion economic recovery spending projection he offered on the program a month ago:

To the extent the MSM has been willing to report on the disadvantage under which the Big Three automakers operate compared to their non-union competitors, the focus has been on the huge wage differential.

On this evening's Fox News Watch, conservative columnist Jim Pinkerton highlighted another issue which has gone largely unreported in the liberal media: the onerous union work rules that add literally thousands of positions to the job rolls compared to those of the foreign transplants.

View video here.

Though there's not a ruble's worth of difference between their politics, I normally find Rachel Maddow a kinder, gentler, smarter version of Keith Olbermann.  Not tonight.  Granted, the Countdown host was on hiatus.  But even if Olby had been around, he would have been hard-pressed to outdo Maddow for sheer silliness.

The preposterous proposition Rachel propounded?  Republicans just don't want Americans to make good wages. That's how Maddow in part explained the decision of Senate Republicans to oppose the Big Three bailout.

View video here.

Let's hope we haven't seen the last of economist Peter Morici on CBS.  The University of Maryland business professor, appearing on the Early Show this morning, put the blame for the failure of Big Three bailout squarely on the shoulders of the UAW for its refusal to accept pay cuts putting its members on par with non-union workers at US plants owned by foreign car manufacturers.  The Early Show did manage to balance things with some Dem demagoguery from the mayor of a Michigan city.

Morici singled out UAW president Ron Gettelfinger, calling him "unrealistic" and "selfish." Comic relief was later provided by Virg Bernero, mayor of Lansing, Michigan, who seemed to confuse South Carolina with South Korea.

On Friday, Newsweek.com's Conventional Wisdom gave an approving up-arrow to Congress for brow-beating Detroit auto executives. The magazine lauded the Democratic Congress for having "rediscovered what oversight means."

But what a difference four days make. The December 9 Conventional Wisdom lambasts the notion of a federal auto industry "czar":

Car Czar The only thing less comforting than the management of Detroit's Big Three is the thought of having Congress in the driver's seat.