Gangster gov targets Toyota; Obama trashes Las Vegas, AGAIN; Debt crisis in Europe

"[A] wise and frugal government ... shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government." --Thomas Jefferson 1) Gangster government targets Toyota What is it about the automotive industry that inspires such thuggish attitudes in the Obama administration? The Examiner's Michael Barone coined the term "gangster government" to describe threats by the White House last spring against Chrysler creditors who had the temerity to insist that bankruptcy laws be followed in the bailout of the perennially ailing third member of the once-fabled Detroit Big Three. Now along comes Transportation Secretary Ray LaHood muttering darkly that "we're not finished with Toyota (emphasis mine)" in the controversy over sticking gas pedals in vehicles made and sold in America by the Japanese automaker. The basis for these threats is little more than anecdote-based suspicions that an electronic malady related to electro-magnetic interference from power lines might be the problem instead of the mechanical wear identified by Toyota engineers. Regardless, LaHood, headline-chasing congressmen like Rep. Henry Waxman, D-Calif., and a chorus of Naderite auto safety nannies led by former National Highway and Traffic Safety Administration Administrator Joan Claybrook are demanding that Toyota submit to a punishing new round of subpoenas, hearings, and media inquisition. It's not enough that Toyota -- the auto industry's perennial leader on respected measures of initial and long-term quality -- has already taken the unprecedented step of suspending production and sales of eight of its most popular models, undertaken a crash course to identify the cause of the problem, and guaranteed a fix for every one of the 2.3 million affected owners. Given the Obama administration's catering to one of its favorite special interest groups, the United Auto Workers union, during the government's bailouts of General Motors and Chrysler last year, it is difficult to avoid wondering whether Toyota has become a victim of the Chicago Way of dealing with competitors. … Keep the controversy going and odds are good that Toyota sales will continue to drop. The biggest losers besides American consumers will be the men and women who own and work at Toyota's 1,200 U.S. dealerships and the 30,000 Americans who build Toyotas in its five factories here. LaHood might as well have said "Nice car company ya got there, be a shame if anything happened to it (emphasis mine)." See: http://www.washingtonexaminer.com/opinion/Gangster-government-targets-Toyota-83460857.html 1a) Does the Government Pose a Bigger Threat to Toyota Than its Sticky Pedals? Toyota’s bad press has been for its sticky pedal incident certainly isn’t surprising, but is all the negative attention warranted? When asked about the Toyota recalls, Transportation Secretary Ray LaHood responded by saying, “My advice to anyone who owns one of these vehicles is stop driving it, and take it to the Toyota dealership because they believe they have the fix for it” and that “we’re not finished with Toyota.” Hood later toned down his remarks but immediately after his “stop driving” comment, Toyota’s stocks plummeted. Even after recovering some, the stock closed down 6% that day. Much like Vice President Biden’s comments not to use public transportation or ride an airplane because of swine flu, LaHood’s comments were a bit over the top and have caused some to question the government’s motive. We don’t speculate motives at The Heritage Foundation, but it’s easy to understand why a government that now owns a major stake in General Motors would want to put continuous bad press on a rival automaker. In fact, GM’s sales were up 14 percent in January while Toyota’s fell 16 percent. Ford, which refused government bailout cash, had sales figures increase 25 percent. This could simply be a market response to a bad product; profits and losses are a telling sign in the economy, but the government shouldn’t be holding Toyota’s head under the water. Toyota handled the problem quickly by recognizing the problem as well as recalling and guaranteeing a fix for all 2.3 million potentially affected owners. See: http://blog.heritage.org/2010/02/05/does-the-government-pose-a-bigger-threat-to-toyota-than-its-sticky-pedals/ 2) Morning Bell: The President’s Permanent Political Slush Fund After suffering major electoral and legislative defeats last month, President Barack Obama took to the campaign trail in Nashua, New Hampshire, pitching his administration’s latest new plan to lower our nation’s double digit unemployment rate. This time, the President hopes to do for small businesses what Fannie Mae and Freddie Mac did for home mortgages. Specifically, he wants to create a new $30 billion “Small Business Lending Fund” which will loan money to banks with assets under $10 billion at favorable new rates, as long as they comply with a slew of new regulations designed to incentivize them to loan that money to small businesses. Never mind that a recent poll of small business owners by the National Federation of Independent Businesses ranked “Finance and Interest Rates” as the second to last most important problem facing their business. And just where does the President plan to get this new $30 billion? The President explained yesterday: “This proposal takes the money that was repaid by Wall Street banks to provide capital for community banks on Main Street.” In other words, TARP – the $700 billion Troubled Asset Relief Program first signed into law by President George Bush, and then used by Treasury Secretary Hank Paulson to force many financial firms into taking taxpayer money they never wanted in the first place. But if Wall Street banks are paying-back their TARP funds, then how can President Obama say the following when justifying his Financial Crisis Responsibility Fee: We want our money back, and we’re going to get it. And that’s why I’m proposing a Financial Crisis Responsibility Fee to be imposed on major financial firms until the American people are fully compensated for the extraordinary assistance they provided to Wall Street. If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers. Now, our estimate is that the TARP program will end up costing taxpayers around $117 billion — obviously a lot less than the $700 billion that people had feared, but still a lot of money. So which is it? Are Wall Street banks repaying their TARP obligations in full so that the President can afford to spend $30 billion on his new Small Business Lending Fund? Or is TARP going to lose $117 billion? The answer is both. In reality, the major financial firms that took TARP money – many against their will – are paying-back those funds, and American taxpayers will get every single dime they are owed. But TARP has long since devolved from a one-time emergency action into a crony-capitalist political slush fund. TARP will lose money. But those losses will come almost entirely from the bailouts of union-backed firms General Motors and Chrysler, as well as AIG. Of course, GM and Chrysler are exempted from President Obama’s Crisis Tax, as are the government firms at the core of the housing bubble – Fannie Mae and Freddie Mac. The President’s Crisis Tax has nothing to do with recovering unpaid taxpayer TARP money and everything to do with finding a new source of revenue to help cover up the Obama administration’s massive new spending increases. See: http://blog.heritage.org/2010/02/03/morning-bell-the-presidents-permanent-political-slush-fund/ 3) The States Fight Back: Virginia Rejects Obamacare’s Individual Mandates Yesterday the U.S. Constitution and federalism won a key battle. The Virginia Senate, which has a Democrat Majority, passed a bill prohibiting a requirement for Virginians to purchase health-care insurance. Five Democrats from swing districts joined all of the Senate Republicans in voting in favor of the measure. And with a Republican State House and Governor, this bill is expected to make it into law. …With the health care debate in limbo, news outlets are highlighting state efforts to protect their residents from federal Government intrusion. In addition to Virginia, over 2/3rd’s of the States have introduced measures to stop individual mandates on health care. Many State Attorney Generals have threatened to sue if current federal reform proposals are passed into law. State legislators across the country are considering various bills that would allow their state to opt out of key provisions of Obamacare or provide state voters a chance at the ballot box to reject nationalized health care in their state. See: http://blog.heritage.org/2010/02/02/the-states-fight-back-virginia-reject-obamacares-individual-mandates/ 4) House Allows Debt to Rise $1.9 Trillion WASHINGTON (AP) — The House voted Thursday to allow the government to go $1.9 trillion deeper in debt, an increase of about $6,000 for every United States resident. The accumulated debt already amounts to roughly $40,000 per person. The debt increase, approved 217 to 212, is only enough to keep the government afloat for about another year as it borrows more than 40 cents of every dollar it spends. The budget is more than $3.7 trillion this year, and the deficit is approaching $1.6 trillion under the budget submitted by President Obama this week. Democratic leaders devised the increase, to $14.3 trillion in the cap on federal borrowing, to ensure that the rank and file will not have to vote on another increase before the November midterm elections, when they will face voters who are angry over government spending and debt. Passage of the bill sends it to Mr. Obama, who will sign it to avoid a first-ever default on United States obligations. See: http://www.nytimes.com/2010/02/05/us/politics/05debt.html 5) Morning Bell: Second Stimulus, Same as the First When President Barack Obama was sworn into office, the U.S. economy employed 134.6 million people and the unemployment rate stood at 7.6%. In response to growing job losses, President Obama passed an $862 billion stimulus plan that his economic experts promised would help the United States employ at least 138.6 million people by 2010. Reality has not been kind to President Obama’s hope. Today, the Bureau of Labor and Statistics released its monthly jobs report showing the U.S. economy shed another net 20,000 jobs, leaving only 129.5 million jobs, almost 10 million short of the President’s promises. Anticipating this bleak job news, the President announced in his State of the Union address last week: “That is why jobs must be our number one focus in 2010, and that is why I am calling for a new jobs bill tonight.” It is understandable why the President wants to call this new legislation a “jobs bill” instead of what it really is: his second stimulus. But that would mean admitting that his first stimulus completely failed, which both the objective evidence and the opinion of the American people show it has. And why did the President’s first stimulus fail? For the same reason his second stimulus is destined to fail: Only the private sector in pursuit of opportunity can create jobs on net. The best we can hope from government is that it keeps to a minimum the jobs it prevents and the income and wealth it destroys. See: http://blog.heritage.org/2010/02/05/morning-bell-second-stimulus-same-as-the-first/ 6) Obama responds to ire over 2nd anti-Vegas remark …It was the second time since taking office that Obama singled out Las Vegas as a potential example of spending excessively. …"When times are tough, you tighten your belts," Obama said, according to a White House transcript of his appearance Tuesday at a high school in North Nashua, N.H. "You don't go buying a boat when you can barely pay your mortgage," Obama said. "You don't blow a bunch of cash on Vegas when you're trying to save for college. You prioritize. You make tough choices." The comments quickly sparked a flurry of reaction in the Silver State, which supported Obama in the 2008 election. Nevada had an unemployment rate of 13 percent in December. Las Vegas Mayor Oscar Goodman said during a hastily called news conference that Obama is no friend to Las Vegas and would not be welcomed here if he visits. "I'll do everything I can to give him the boot," Goodman said. "This president is a real slow learner (emphasis mine)." …"Enough is enough!" Democratic Congresswoman Shelley Berkley said in a statement. "President Obama needs to stop picking on Las Vegas and he needs to let Americans decide for themselves how and where to spend their hard-earned vacation dollars." …Reid, one of Obama's closest allies, issued a statement headlined "Reid to Obama: 'Lay off Las Vegas'" and was unusually blunt in his reaction. "The President needs to lay off Las Vegas and stop making it the poster child for where people shouldn't be spending their money," Reid said. "I would much rather tourists and business travelers spend their money in Las Vegas than spend it overseas." …One year ago, Obama commented during a town hall meeting in Elkhart, Ind., that corporations shouldn't use federal bailout money for trips to Las Vegas, the Super Bowl or corporate jets. Tourism and casino officials said the comment hurt the city as companies canceled meetings in Las Vegas and rescheduled them elsewhere (emphasis mine). See: http://news.yahoo.com/s/ap/20100203/ap_on_go_pr_wh/us_obama_las_vegas 7) Stop the Erosion of National Sovereignty Many Obama administration officials — and most likely the president himself — are enamored with international law and institutions. Thus, when it was reported last year that the administration was seeking to change U.S. policy toward the International Criminal Court (ICC) to facilitate increased U.S. cooperation with the court, there was barely a ripple of surprise. But the story did raise justifiable concerns over what such a policy shift might mean for U.S. military servicemen and civilian officials, and what impact it might have on America’s ability to defend its interests. Last summer, we wrote a rather lengthy piece discussing the reasons that policymakers should be concerned about changing U.S. policy toward the ICC. Our concerns were underscored by the ICC prosecutor’s subsequent announcement that he was looking into alleged war crimes in Afghanistan that could involve actions by U.S. servicemen and officials. …The ICC and the use of universal jurisdiction are two facets of an increasingly prevalent and alarming trend of eroding national sovereignty by divorcing the vital link between the law and the people subject to it. As Hannan concludes, we need to arrest this trend and “return to the well-tried and understood concept of state sovereignty, which operated effectively enough between 1648 and the 1990s. When was the internationalization of jurisdiction agreed? When was it even discussed? To quote Judge Bork again: ‘What we have wrought is a coup d’état: slow-moving and genteel, but a coup d’état none the less.’” See: http://corner.nationalreview.com/post/?q=MTcxOTA5YTNhNzRkMjdkODc3Y2M3MTgxNzljODI4ZjA= 8) US Recession Job Loss May Have Been Undercounted By 824,000 In a blow that could come down on the Obama administration and U.S. economy like Thor’s Hammer, the US may have lost 824,000 more jobs than the government said it did between April 2008 and March 2009. According to Bloomberg, which provided the numbers for the possible adjustment, the revision would be posted by the Bureau of Labor Statistics tomorrow, February 5th. That would increase the number of jobs lost due to the recession from 7.2 million to 8 million. …The numbers, if correct, would add a nearly unbearable load to the economic recovery which has caused huge deficits due to government programs led by the Obama $787 billion stimulus package. The package was meant to save or create 3.5 million jobs. Unemployment has risen above 10% despite the government spending. The Administration and some members of Congress have proposed that the government spend another $80 billion on jobs programs. These expenditures would be part of a federal budget which would create a $1.6 trillion deficit in the government’s 2010 fiscal year. …It is not difficult to guess the impact that the news will have on the financial markets which have recovered in large part due to the belief that the jobs problem has improved. If the data from April 2008 to March 2009 could be off by such a large margin, how inaccurate are the numbers from April of last year until now? See: http://247wallst.com/2010/02/04/us-recession-job-loss-may-have-been-undercounted-by-824000/ 9) Embattled Dem Ill. candidate won't step down CHICAGO -- A political newcomer who won the Democratic nomination for Illinois lieutenant governor said he has no intention of leaving the race after details emerged about his arrest for allegedly holding a knife to his former girlfriend's throat. Scott Lee Cohen struck a defiant tone even after running mate Gov. Pat Quinn predicted he would have to leave the race. U.S. Senator Dick Durbin also said Friday that Cohen needs to step aside - though Durbin said he didn't expect President Barack Obama's White House would have to intervene. …Cohen was arrested on domestic battery charges in 2005, accused of pushing his then-girlfriend's head against a wall and of the knife incident. The police report noted abrasions on her neck and hand, but charges were dropped after she failed to appear in court. Police records show the woman had been arrested for prostitution, the Chicago Tribune reported. Cohen said he did not know that at the time. He told WTTW-TV that he met her at a "massage therapy place" and believed she was a masseuse. Cohen denied hitting her and said their relationship was "tumultuous." Fantastic! Keep it up, Illinois! See: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/05/AR2010020501515.html 10) Intel chief: Al-Qaida likely to attempt attack WASHINGTON – Al-Qaida can be expected to attempt an attack on the United States in the next three to six months, senior U.S. intelligence officials told Congress Tuesday. See: http://news.yahoo.com/s/ap/20100203/ap_on_go_ca_st_pe/us_intelligence_threat_senate 11) Debt Crisis in Euro Zone Is Severe Political Test for Bloc PARIS — What began with worries about the solvency of Greece in the face of high deficits, fake budget figures and low growth has quickly become the most severe test of the 16-nation euro zone in its 11-year history. Anxiety about the health of the euro, which has spread from Greece to Portugal, Spain and Italy, is not simply a crisis of debts, rating agencies and volatile markets. The issue has at its heart elements of a political crisis, because it goes to the central dilemma of the European Union: the continuing grip of individual states over economic and fiscal policy, which makes it difficult for the union as a whole to exercise the political leadership needed to deal effectively with a crisis. …While no one expects that the European Union will allow Greece or the others to default or the euro zone to collapse, European leaders and the Central Bank will almost surely have to bend the rules to provide guarantees or loans, if necessary. But even tiding over countries in trouble will not solve the main flaw in the euro: the sharp divergence of national economies that share a common currency without significant fiscal coordination, let alone a single treasury. “The challenges facing the euro zone are very serious,” said Simon Tilford, chief economist for the Center for European Reform in London. “For countries that have become pretty uncompetitive in the euro zone and have weak public finances, the current environment is very dangerous.” See: http://www.nytimes.com/2010/02/06/world/europe/06europe.html