Auto Bailout?

Check out this Washington Post Story.

To briefly highlight its’ content…

The U.S. automakers are seeking to get their hands on some of the $700 billion bailout money that the legislative and executive branches of government shoved down our throats.

To quote the article, “In recent weeks, top auto industry executives have been making the rounds in Washington, trying to shake loose federal cash all over town. Both GM and Ford posted big losses yesterday as the car companies continued to pay out in salaries and other expenses more than they are taking in from sales.”

Growing up in a state dominated by the auto industry, this has been coming for the past 35 years.

Lets look at the average auto worker.

Wages: From U.A.W:  Average auto worker $28.71/hr ($60K/yr).   According to Workers Comp Insider, the typical auto worker gets five weeks vacation and 17 holidays a year…but no sick time…it has to be used as vacation time.

From Bloomberg ” Under a four-year accord reached Sept. 26 (2007), all new employees would start in so-called non-core jobs such as janitorial and maintenance work and make about $28 an hour in pay and benefits, compared with $51 for present employees, the people said. They asked not to be identified because contract details haven’t been released.

For you business savvy people, this is labor and labor burden (The costs, above and beyond gross compensation, that an employer incurs in order for an employee to perform the work he was hired to do).

This cost per vehicle for wages per vehicle according to the U.A.W. itself:  $2400

Health Care : $0 + co-pays. (USA Today) The cost of this benefit adds $1,100 to $1,500 to every vehicle made by U.S. Auto workers.  They pay nothing out of their paychecks for health care.

This whole industry has been failing for decades and they have failed to adequately modernize their plants, keep wages even close to controllable levels and keep with the the full efficiency needs of this nation.

Now they want money to bail them out of their trouble because the companies are failing to bring in more than they are spending.

I would love to know what they intend on doing with this money they want to get from the tax payers…and how are they planning to pay it back.

They aren’t really working from the best business model.   Sell sub-standard vehicles at over inflated prices while paying workers and executives outrageous salaries and benefit packages.

A Crook is a Crook!

These words come from a dear friend of mine.

This country is in the midst of a financial fiasco at this time and I have been doing a little digging.

The Government is currently scrambling to come up with solutions to this problem, but do not be naive enough to think that they haven’t had a hand in this process from the start. State and local governments are equally at fault.

In this area, the local governments were increasing property assessments (tied to property taxes) on the basis that these homes were selling at such high rates and big $$$. The lending institutions were issuing “interest only loans”, “paper free loans” and “sub-prime” loans” because “EVERYBODY DESERVES A HOUSE”…even if they couldn’t pay.

The State and local governments became “fat” because of the increased property tax revenue and the lending institutions were just passing this loans around as commodities like they weren’t real. Everyone was “fat and happy because they were just “kicking the can down the road”, but this money wasn’t real.

The Government LOVED the tax revenue, the banks loved the “assets” they could show on their books (and the bonuses that came along with them) and the people who could actually afford to own a home, now had a mortgage. Don’t be fooled…these programs aren’t just for the poor. Depending on the area, these loans could be purchased up to $417,000.

Most of this happened under the guise of these two quasi-government agencies Fannie Mae and Freddie Mac. They were government sponsored enterprises, but publicly traded companies, and as of today the U.S Government is under control of a $6,000,000,000,000 piece (50%) of the U.S. Housing market. Fannie Mae was stated in the 1930’s under FDR “New Deal” that has handcuffed us with the antiquated Social Security System (which should be ready to fail soon) and the Securities and Exchange Commission, which helped WATCH this whole financial crisis happen.

On September 17, 2004, The government reports of gross accounting abuses in 2004 at Fannie Mae.

The referenced 121 page report outlined the culture of behavior that was an issue over four years ago at Fannie Mae.

• Management’s desire to portray Fannie Mae as a consistent generator of stable and growing earnings;
• A dysfunctional and ineffective process for developing accounting policies;
• An operating environment that tolerated weak or non-existent controls;
• Key person dependencies and poor segregation of duties;
• Incomplete and ineffective reviews by the Office of Auditing;
• An inordinate concentration of responsibility vested in the Chief Financial Officer; and
• AN EXECUTIVE COMPENSATION STRUCTURE THAT REWARDED MANAGEMENT FOR MEETING GOALS TIED TO EARNINGS PER SHARE, A METRIC SUBJECT TO MANIPULATION BY MANAGEMENT.

Read that last one again. The company lied about profits to increase the management bonuses in the government sponsored enterprise.

Fannie Mae is was the largest purchaser of Countrywide Financial Corporation loans.

Countrywide was by Bank of America almost two weeks ago.

Countrywide was one of the institutions that obtained these sub-prime loans. Since Countrywide didn’t want to have these bad sub-prime loans on their books, they passed them off to Fannie Mac and Freddie Mac.

Countrywide, according to the linked article, gave favorable loans to the Chairman of the Senate Banking Committee Chris Dodd and the Chairman of the Senate Budget Committee Kent Conrad among others.

In a “completely unrelated” turn of events. Senator Dodd was one of the sponsors for a $300 Billion measure that would enable these same loans initiated by Countywide (and other institutions) to be insured from loss and foreclosure. These two Senators are currently under ethics investigation (by other Senators who are a part of the same broken system.)

This June Wall Street Journal article outlines a couple of additional interested parties (James A. Johnson and Franklin Raines) who had received “favorable” loans from Country Wide. These people are current advisers on one of our Presidential candidate’s political staffs.

James A. Johnson was, from 1991 to 1996, the CEO of Fannie Mae after a five year stint at Lehmen Brothers (now bankrupt). He was the head of one candidates VP search committee and is currently a bundler of donations for the same candidate.

Franklin Raines held the same position with Fannie Mae from 1999 to 2004, before “accepting early retirement”. They have been under investigation since that time of overstating Fannie Mac’s earnings by thirty percent… or $3,000,000,000 ($3 billion) in 2004. He has since agreed to pay over $40 million in fines, penalties and stock options according to this April NY Times article. Raines worked for Fannie Mae previously and even served for one Presidential Administration as Director of the U.S Office of Management and Budget (OMB), which is tasked with giving expert advice to senior White House officials on a range of topics relating to federal policy, management, legislative, regulatory, and budgetary issues.

Mr. Raines is also a financial adviser for the same Presidential candidate as Mr. Johnson.

I am not saying the other guy is as clean as a whistle and I have tried to keep partisanship out of this by mentioning political parties. But I know that this post, if you do some research, is going to be bashing one of them and ignoring the other.

The other party is just as guilty for doing nothing all of the years that this has been happening.

This is where our Government has put us. They knew this was coming and no one had the “balls” to say NO!

I encourage you to research this stuff yourself…it is all there. There was even a Senate Bill in 2005 that could have stopped this over three years ago…but it never made it out of committee.

To stop lending money they didn’t have to people who wouldn’t ever be able to pay it back.

They just kicked the can down the road.

Watch how much power and control you give the Government because it doesn’t know what to do with it. The premise that everyone “deserves” a house is much different that having the “opportunity” to earn one.

I want to know who is really going to change the style of business in Washington.

This is bigger than one President can handle. We have to look at our Congressmen and Senators (along with the President and the Cabinet) and get them out of there. Washington D.C. has turned into a place of lobbying and special interest groups when the writers of the Constitution envisioned a government “for the people and by the people.”

These people “representing” us are either a cause or a solution to the issues we have in front of us. Look at each one of them and ask yourself, “Cause…or Solution?”

No partisanship.

A crook is a crook.

Democrat or Republicans.

We are the people to institute change by holding public officials accountable.

Another $770 million down the drain

Bush calls for approval of $770 million in food aid

By JENNIFER LOVEN, Associated Press Writer 34 minutes ago

WASHINGTON – President Bush urged Congress Thursday to approve $770 million to help alleviate dramatically escalating food prices that threaten widespread hunger and increasing social unrest around the world.

In a surprise midafternoon appearance at the White House, Bush announced he is asking lawmakers to approve the additional funds for global food aid and development programs. The money — to be directed primarily at needy African nations — is being included in a broader $70 billion Iraq war funding measure for 2009 that the White House sent to Capitol Hill on Thursday.

“In some of the world’s poorest nations, rising prices can mean the difference between getting a daily meal and going without food,” Bush said. “The American people are generous people and they’re a compassionate people. We believe in the timeless truth `to whom much is given, much is expected.’”

The new money comes on top of $200 million Bush ordered released two weeks ago for emergency food aid. It also is in addition to a pending $350 million request for emergengy food aid funds. Because the new funds are part of a 2009 budget, they wouldn’t be available for distribution until the start of the fiscal year on Oct. 1, even if they are approved sooner.

Even so, Bush called it “just the beginning” of the U.S. effort to help. He said the United States would spend a total of $5 billion this year and next on food aid and related programs.

“America’s in the lead, we’ll stay in the lead and we expect others to participate along with us,” he said.

The new funds are aimed at meeting immediate needs with direct shipments of food aid, and the White House said they would allow for millions more people to get help. Emergency aid accounts for $620 million of the request, said Steve McMillin, deputy director of the president’s Office of Management and Budget.

The funds also have long-term aims, with $150 million aimed at boosting U.S. programs to help farmers in developing countries increase productivity and make cash purchases of local crops, so communities are less in need of emergency help in the first place.

The issue has become more urgent recently because of food shortages and rising prices that, combined with high gas costs and rising home foreclosures, are putting a huge squeeze on families at home and abroad. What has been termed the first global food crisis since World War II has resulted in cries for help from United Nations officials and raised questions about how Bush will respond.

Some have blamed the food crisis in part on Bush-backed policies that push food-based biofuels such as ethanol as alternative energy sources. Bush says diverting corn and soybeans into fuel is still a smart approach, though he favors increasing funding for research into eventually using wood chips or switchgrass rather than food crops.

Bush’s top economic adviser, Edward Lazear, said ethanol made from corn is responsible for just 2-3 percent of the overall increase in global food prices, which are 43 percent up this year over last year.

Bush’s announcement drew praise from several quarters.

“Millions of people around the world may be saved from starvation if we can quickly move forward with the president’s request,” said Sen. Dick Durbin, D-Ill. “Global aid is not only the right thing to do; it’s the smart and safe thing to do. I commend the president for his leadership.”

The United States is the world’s largest provider of food aid, delivering more than $2.1 billion to 78 developing countries last year.

USAid-Fleecing of America

Foreign Aid is Big Business these days.  This year the cost is $36,200,000,000.00, PLUS $10,000,000,000 for overruns from last year.  There are approximately 117 million taxpayers in the United States.   The math totals about $400.00 per taxpayer goes to foreign assistance.

Under the careful watch of the U.S. State Department this government is not only throwing money at our problems at an alarming rate, but we are doing it overseas also.

The United States Agency for International Development (or USAID) is the United States federal government organization responsible for most non-military foreign aid. An independent federal agency, it receives overall foreign policy guidance from the United States Secretary of State and seeks to “extend a helping hand to those people overseas struggling to make a better life, recover from a disaster or striving to live in a free and democratic country…”

USAID advances U.S. foreign policy objectives by supporting economic growth, agriculture and trade; health; democracy, conflict prevention, and humanitarian assistance. It provides assistance in Sub-Saharan Africa; Asia and the Near East, Latin America and the Caribbean, Europe, and Eurasia. USAID is also organized around four main pillars: Global Development Alliance; Economic Growth, Agriculture, and Trade; Global Health; Democracy, Conflict, and Humanitarian Assistance.

The actual USAid 2008 highlighted budget and summary.  There are a couple of PDF links there that give detailed breakdown of where the $$$ is headed.

Highlight of this years USAid budget.

• Africa-with this year’s requested 54% increase, aid to Africa will have nearly quadrupled under this Administration, from $1.1 billion to $4.4 billion, focused on addressing the crippling effects of disease and poverty.
• Near East-a 6% increase for vital investments in winning the Global War on Terror and empowering the people of this key region.
• Western Hemisphere-with this request, aid to the region has doubled under this Administration, from $862 million to $1.6 billion, and is focused on continued economic growth and strengthening democratic institutions.
• Peace and Security-$6.88 billion for counter-terrorism and counter-narcotics activities and programs to secure necessary conditions for further political, economic, and social progress.
• Governing Justly and Democratically-$1.45 billion to promote effective, accountable, democratic governance, a vital foundation for sustainable progress.
• Investing in People-$6.95 billion to support human capacity development and address poverty and disease, including, $4.5 billion to meet the treatment and prevention goals of the President’s Emergency Plan for AIDS Relief, $388 million for the President’s Malaria Initiative, and $535 million to support equitable access and improved quality of basic education around the world-the largest request ever by this Administration.
• Economic Growth-$2.37 billion to support economic progress and poverty reduction as critical underpinnings of sustainable development.
• Humanitarian Assistance-$2.12 billion to maintain the United States’ long-standing commitment to alleviate human suffering and respond to destabilizing humanitarian disasters

The reason I bring this to everyone’s attention is that we have no say on how this $36 Billion is spent, let alone the authority for our government to give our tax dollars away.  There are some very noble health, food and security issues handled under the watch of USAid, but since the government is involved, we also are providing assistance for the INTERNATIONAL UNION FOR THE PROTECTION OF NEW VARIETIES OF PLANTS.

We all know how efficient the Federal Governments is a the use of our tax dollars.  Because of their excellent reputation, I am not even going to entertain the possibility of ANY Fraud, Waste of Abuse.