Yes, Mr. President, Our Infrastructure Is In Disrepair. Why Punish America's Businesses?

On February 27th, Obama unveiled a $308 billion dollar program designed to fix and repair our aging road and rail systems.   Last week, he treated some construction workers to a burger lunch in order to, once again, hype his infrastructure bill.

To pay for it, he would stick American corporations for the bill; as if they, alone, are responsible for the problem.   By doing so, he will avoid the bad politics of increasing everyone elses gasoline expenses by increasing the federal gasoline tax; which, by the way, is supposed to cover the cost of these repairs. Instead, he can then blame businesses for the higher prices that they are sure to pass on to us. And, the biggest benefactor?  The labor unions.  A fact that he insured when, by executive order, he mandated Project Labor Agreements for all federally funded projects.

OK, maybe we need $300 billion to fix our roads and rails. But, keep in mind that this nation built its entire interstate highway system for only $425 billion (that cost being adjusted to 2006 dollars).  Before we spend billions of dollars on selectively chosen projects that might be politically expedient (and that's all Obama ever cares about), lets fix the broken funding system that is supposed to maintain this country's infrastructure.

For 20 years, the federal gasoline tax -- the one that's supposed to fund transportation (infrastructure) spending -- has stood at 18.4 cents per gallon.  Never once was it adjusted for inflation.  Right now, it should be about 30 cents a gallon, but no politician is willing to hike it to that rate with gasoline prices already so high.  At the same time, fuel efficiency has increase by nearly 12-1/2%, with the current average being 23.6 mpg. So, by adjusting the fuel tax to reflect that change, it should be at least 36 cents; or, double what it is today.

But, funding is only one of the problems.  "Going green" is another.  Instead of using the federal gasoline tax for fixing or building new infrastructure, much of it was diverted to build seldom used bike paths and to purchase too many single deck, double-deck, and flex buses that run on lightly-used, unprofitable routes.  Then, too, a lot of money has gone to replace conventional diesel buses with those that run on a much greener fuel: compressed natural gas.

So, in order to fix our infrastructure, we are faced with two simple tasks.  First, raise the gasoline tax.  It doesn't have to be done all at once.  It could be raised gradually; say by three cents a year until parity with inflation and fuel efficiency is achieved.  Then, permanently index it to inflation. Second, let's put a moratorium on "going green" and focus on fixing what is currently broken.  After all, a double-decker bus with only a handful of riders isn't very "green" now is it?

References:

Obama hopes Congress will fund $300b for roads, rails: http://www.bostonglobe.com/news/nation/2014/02/27/seeking-money-for-aging-infrastructure-obama-looks-tax-changes/dFwOuSren5NNvUrkTZEzxM/story.html

The Gas Tax Doesn't Work Because Politicians Broke It: http://www.forbes.com/sites/taxanalysts/2013/10/24/the-gas-tax-doesnt-work-because-politicians-broke-it/

Executive Order 13502: Project Labor Agreements For Federal Construction Projects: http://www.whitehouse.gov/the_press_office/ExecutiveOrderUseofProjectLaborAgreementsforFederalConstructionProjects

Wikipedia: Interstate Highway System: http://en.wikipedia.org/wiki/Interstate_Highway_System

Cars in the U.S. are more fuel-efficient than ever: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/13/cars-in-the-u-s-are-more-fuel-efficient-than-ever-heres-how-it-happened/

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The Democrats, Citizen's United, and the "Evil" Koch Brothers

Last October, Senator Bernie Sanders stood on the steps of the Supreme Court building and railed against the high court's Citizen's United decision that allowed corporations to spend and attempt to buy votes with huge campaign donations.  In his ire he singled out the Koch brothers (Koch Industries) as examples of billionaires and corporations buying votes:



What's interesting about this video is that there are two placard holding individuals from the CWA (Communication Workers of America), a labor union, standing in solidarity with old Bernie.

Now, while it is true that the Koch Bros. and their corporation contributed $18 million in campaign donations in the recent years with 90% going to Republicans and only 8% going to Democrats, that was peanuts in comparison to the donations made by the CWA.  That union spent more than $36 million -- double that of the Koch's -- with 86% going to elect Democrats and the balance spent on Democrat initiatives and pro-labor Independents.  Not one dime was spent on Republicans. At least the Koch brothers spent some of their money on Democrats. Of the top 156 campaign donors who spent $5 million or more, 31 were labor unions.  In total, those unions spent $808.5 million dollars of which 81% went to Democrats and only 11% went to Republicans.

For years, liberal politicians have demonized the Koch brothers and Citizen's United case.  At the same time, those very same liberals were unabashedly taking nearly a billion dollars from unions.  They also don't mind it when other left-leaning billionaires, like Warren Buffet, contributed to their campaigns or when multimillionaire Hollywood types would fund raise for them.  In fact, when California billionaire Tom Steyer pledged $100 million in campaign funds in support of Democrats and environmental issues, none of those who would normally castigate big-time Republican donors uttered a single word.

The simple fact is that Democrats don't want any opposition.  They don't want Fox News.  They used the IRS in keeping many Tea Party activists from gaining tax free status, and they certainly don't want any villains like the Koch's contributing money to Republicans.  They also want the average American to believe that those evil brothers are destroying Democracy by buying votes with their massive wealth. On the other hand, they gleefully accept millions from labor unions and other rich campaign donors. It is impossible to wade through hypocrisy so deep!

References:

Center for Responsive Politics: Top Campaign Donors: https://www.opensecrets.org/orgs/list.php

Tom Steyer planning $100 million campaign push: http://www.politico.com/story/2014/02/tom-steyer-campaign-donor-103617.html

The False Story Told By Exit Polls In Wisconsin

Last night, Fox News admitted that they were unable to declare an "early" win for Scott Walker because the exit polling had told them that the race was going to be extremely close.  This was despite the fact that, at the time, Walker had a 20+ point lead against Barrett with more than 20% of vote counts in.  Finally, with 25% of the vote in, they declared a win for Walker.

The fact is that the exit polls were flawed.  People lied to the pollsters and the data was inaccurate.   They probably lied because other pro-union family members and friends were with them when the pollster was surveying the rationale behind their vote.  Yet, all night long, Democrat pundits (not just on Fox) cherry-picked various pro-Democrat parts of the polls to soft-pedal their loss for the night as if the exit polling was completely in line with the night's results.   In essence, they saw what they wanted to see; and the Democrats, my friends, are in complete denial.  Further, they concluded (probably quite falsely) that Obama still had a significant lead in Wisconsin by stating that exit polling indicated that many of those who voted for Walker would still vote for Obama.
 
This morning, with proper reflection, the level-headed opinion writers of the nation's media are painting a bleak picture for the future of public sector unions, the Democrats, and President Obama.  They understand the consequences of last night's loss.  They understand that a loss has "psychological" impact on voters going forward.  By that I mean that it is only human nature for people to not to want to align themselves with losers.  And, it wasn't the Republicans who were losers last night!

California's Taking A Bullet Train To Its Head

On a near daily basis, people and businesses are leaving California to find new homes and new places  without high taxes and government spending, environmental nonsense, and absolutely out-of-control regulations. It's as if the ghost of Horace Greeley has come back to say: "Go East young man. Go East!"  And when they do leave, they take their tax base with them; leaving California with a declining source of revenue.  So, in response to the exodus, Governor Jerry Brown wants to raise taxes even higher in an attempt to close the gap on an already estimated $10 billion budget deficit for this year.  With the 3rd highest state income tax rates in the nation, Brown seems to be hell bent on being numero uno; guaranteeing that California has the worst business climate of all the states.

Now, you would think that, with all the debt and deficit problems and with people exiting due to over-regulation and taxing, the California legislature and Governor Brown would be working overtime to reduce spending.  But, no.  California continues to do what it's always done: spend and regulate.  In fact, Jerry Brown's latest foray into extravagance is a proposed, taxpayer-funded $100 billion bullet train from L.A. to San Francisco.

Big labor is all for California taking the "bullet" because this 10-year project means a lot of union jobs.   The environmentalists see it as a way of keeping cars off the roads and airplanes out of the air. However, the fact that this project will cost Californians $10 billion a year in money they don't have seems to go right over the politician's heads.  California is already running a $10 billion budget deficit and this project will double that. The fact that bullet trains have only proven themselves cost effective against other modes of transport over short distances -- 40 miles or less -- without serious government subsidies, also doesn't seem to have Jerry Brown and other Democrats losing any sleep. Nor does it seem to matter that a tax-payer subsidized bullet train will actually reduce state income tax and, in addition, cause airlines to cut back on flights causing a further loss of revenue.

California is already near bankruptcy and, if the bullet train project is actually approved, it could very well push the state over the edge into financial default.  What concerns me is that, when California does default, the state will likely seek a bailout from Washington, and, you can bet that big spending Obama and other Democrats will be glad to oblige; and, my guess is, without any real austerity mandates.  So, ultimately, California will be rewarded for its irresponsible handling of its state government, with the rest of the country having to pony-up the cash to bail them out.

Obama's Tactical Indecision On the Keystone XL Pipeline

We've now learned that the President will put off his decision on whether or not to proceed with the Keystone XL, Canada-to-the-Gulf Coast, pipeline until after the 2012 elections. Many see this as another one of Obama's "present" votes which he had made so famous in his days with the Illinois Legislature. In reality, his indecision is the same as voting "no" without really saying it, because a year's delay will probably sink the project completely. The builder of the pipeline, TransCanada Corp., and the Canadian government aren't going to just sit around and wait for U.S. approval. Instead, they will redirect their efforts by building a truly trans-Canada pipeline that will carry oil to critical parts of Canada and to the Canadian coasts to supply tankers that are probably bound for places like China.

You see, the problem with the Keystone XL pipeline decision is the fact that no matter how Obama votes he's bound to fracture his own political base. If he votes "yes" to the project, the environmentalists will be angered. A "no" vote will be a slap against the unions who have been counting on the Keystone project as a source of thousands of high paying union jobs. By not making a decision, Obama feels like he has threaded the needle; keeping his base in tact.

But, to me, Obama has made a serious tactical error.

First, he's handed the Republicans three big "sticks" with which they can beat him over the head from now to the election. The first is all about jobs and the fact that thousands of jobs will be not be created at a time of such high unemployment. The second stick is the fact that we will become more dependent on imported oil from countries who are not our friends when, in fact, it would have been better off importing that same amount of oil from our friendly neighbor, Canada. Lastly, the pipeline would have had the added benefit of lowering the delivery cost of imported oil from Canada. A cost that would have eventually been reflected at the pumps with lower gasoline prices.

Then, too, the labor unions have to be angry about the delay. If the XL project is finally scrapped, that will only accentuate their anger.

This is another example of Obama putting his reelection bid ahead of the needs of the country. His own EPA issued a report stating that the environmental risk of that pipeline was miniscule. Yet, this President's anti-oil ideology and his concern over losing his environmental voting block has put the environment ahead of all other factors in delaying his decision. This is simply irresponsible and another reason why this man should be voted out of office next year.

Obama Signals Trouble With His Base

Over the past two weeks, Obama has made it publicly clear that he knows he's in trouble with his political base of once-fellow Democrats.

On September 12, in an obvious attempt to win back lost Hispanic votes, he announced that his Administration will no longer deport any illegal aliens unless they have committed a felony; probably saving 300,000 from deportation. Then, there was the jobs bill to provide funding to keep unionized state government workers on the job and to provide "union" infrastructure jobs with billions in project spending. On Monday, there was his rose garden speech. In that "punish the rich" diatribe, he served up as much red meat to the left as he possibly could by playing the typical Democrat's class warfare card. Following that, his Attorney General, Eric Holder, announced in a press interview in Brussels, that Obama will seek to close Guantanamo Bay by the November elections of next year. Then, too, his U.N. speech of today was truly aimed at closing the wounds that he had opened with the Jewish community over Israeli-Palestinian peace negotiations. Lastly, within his U.N. Arab/Israeli speech, he oddly brought up the topic of Gay/Lesbian rights.

From all of the above, it is obvious that Obama is all out for Obama in 2012 and, could care less if his policies are good or bad for the country as a whole. With so much "base building" politics in just two short weeks, it appears the President is in panic mode and that he will do whatever it takes to "buy" his way back into winning next year's election. Now, who's putting politics before country?

Obama Ignoring Hoffa's Remarks Reflects His Lack of Leadership

Sure, it wasn't President Obama that said "we're going to take these son-of-a-bitches out" when talking about the TEA Party and the GOP at the labor union rally yesterday. They were the words of Jimmy Hoffa Jr., the leader of the Teamsters Union. (Click to See the Hoffa Video)

However, in not condemning those words in his appearance on the same stage, just after Hoffa said them, Obama certified them as if they were his own. If Obama didn't agree with what was said and still remained silent in its condemnation, it reflects a cowardliness and a lack of leadership in taking a stand against one of the most uncivil remarks we've heard this year. In the wake of the "Gabby" Giffords' shooting, it's hard to see how he could condone what was said; especially after lecturing the country on "civility" in the speech that he gave just following that horrendous shooting. Once again, the President leaves the country wondering what kind of person and what kind of leader he really is.

Obama's Emergency Budget Request

Late last Saturday evening, a day and time that's truly odd for an American President to introduce any new plan or program, Obama sent a request to Congress to immediately act to appropriate an unspecified amount of emergency funding. This was to be used to keep the jobs of teachers, police, and fireman from being effected by the ongoing budget cuts in state and local governments. This President, who has done nothing to create any real private sector positions, finds himself compelled to fight for the jobs of the union personnel who got him into office.

Of course, the readers of this blog know that I object to any such actions because it only sustains the out-of-control spending by too many Democratically controlled states; many of whom find themselves nearing financial bankruptcy.

Interestingly, many Democrats also seem to be balking at this request for more spending because they know that the voters may be reaching their breaking point. At the same time, I find it interesting that the mainstream media might be tiring, too, of the outrageous and extravagant spending of this President. This is clearly evidenced by an opinion piece in yesterday's normally left-wing Washington post titled: Myths about the teacher layoff crisis. I think it is a very interesting and truthful article that exposes the lies that Obama and the Democrats are willing to put forth to support their personal political agenda. Please take the time to read it.

Is There A Greek Tragedy In Our Future?

Greece is a highly socialist and quasi-capitalist country that is trying to operate within a capitalist environment. One-third of their workforce works for the government. The balance works to literally support all those government workers. That's because government workers are non-contributors to the economics of the country. In reality, they are leeches. And, like too many leeches attached to any body, the body will finally die for the lack of blood.

The blood letting really stems from the fact the unions are so strong in Greece. A union worker, working for the government, can retire at age 53 with full benefits and at their highest pay for life. This is unsustainable. Because of this and other factors, the Greek debt is now more than 90% of their total Gross Domestic Product (GDP). Please understand that this is not a percentage of "gross domestic profit" that would be capable of generating tax revenues for the country. Instead it is total value of the products that Greece produces and, from which, the actual taxable income is less than 10%. This, then, makes it almost impossible to pay back any debt without years and years of reduced spending and increased taxes. Making things worse, the Greek debt is so high, that the rating agency, Standard and Poors, has had to downgrade Greece to junk status for their bonds. This in effect has caused the amount of interest that Greeks pay on their debt to skyrocket; making it even harder for them to avoid defaulting on all their loans.

The European Central Bank (ECB) and the International Monetary Fund (IMF) have come up with the equivalent of $146 billion to bailout Greece. But, the money has strings attached. Those strings are primarily aimed at labor with mandated reductions in government worker pay and benefits; including retirement pay. Thus, the riots in the streets.

The ultimate survival of Greece lies in the hands all the unions. But, as you can see, the riots tell a story of a labor element within Greece that is not willing to budge on pay and benefits. So, it is my opinion, as well as others, that Greece will fail to recover. Ultimately, the European Union will have to shed Greece out of its need for self-preservation. Greece is a gangrenous appendage that could take down the rest of the European economic union, and as such, it must be amputated.

As a result of this excision, Greece will default on all of its debt obligations. No one will want to trade with that country without extreme guarantees or by forced higher prices for everything that the Greeks need to survive. That means that Greece will plunge itself into a deep economic (and, probably mental) depression with double-digit inflation. In effect, it will become a mini version of what this country looked like in the 1930's.

Is this outcome in our future? It might just be. In states like California, New Jersey, and Michigan and in so many others, the amount of unionized government workers with similar pay and benefits guarantees is very high. And, as we have already seen in California and New Jersey, the unions refuse to budge on any more cuts in jobs, pay, or benefits; while, in the non-government sector, people are sustaining heavy unemployment levels. To make things worse, this President and this Democratic Congress have poured billions into state governments vis a vis the Stimulus Package to keep them from making the needed, hard decision to cut back on any unionized government workers; including teachers, police, and firemen. But, the spending continues and their deficits keep increasing and a Greece-like situation is already sitting at their doorsteps; with our Federal government being the only recourse to keep these states alive. But, that too, could accelerate the country's path to higher and higher debt in less time than was previously thought.

I am concerned that we have the same problem ahead of us that the European Union is having with Greece and other countries like Portugal, Spain, and Ireland. Except, in our case, it is the very socialist nanny-states like California who will become our equivalent of the current Greek Tragedy. And, let's not forget, our national debt is expected to exceed Greece's 90+ percent of GDP by the year 2020 and become as high as 125% of GDP by 2030. So, if we don't heed Greece as the Skull & Crossbones warning in our path to increasing social programs, it won't just be California but this whole country that collapses.

Is Obama A Socialist?

There seems to be a raging conflict in this country among the political partisans of our media as to whether or not Barack Obama is a socialist. In fact, just last Monday, that was the debate on the O'Reilly Factor with Juan Williams (on the political left) and Mary Katharine Ham (on the right). The people on the left, like Juan Williams, are adamant in defending Obama as "not" being a socialist.

But, what they are all missing is what a socialist -- one who believes in socialism -- isn't. By definition, socialism is the complete opposite of selfism, individualism, and capitalism. Therefore, if Obama is not a socialist, please explain to me what policies he has initiated in opposition of socialism.

Just think about what he has done or promoted since he came to office.

Ask yourself the following questions:

Is the government takeover and the ultimate handing over of the control of General Motors to the labor unions (instead of the creditors -- as would be the case in a normal capitalist society) a non-socialist act? Is the nationalization of health care in America a non-socialist act? Is forcing individual citizens to buy health insurance or face fines and imprisonment a non-socialist act and one that promotes individualism and/or selfism? Is telling banks and lending institutions how much they can pay the executives an act of capitalism and one that promotes the principals of capitalism: individualism and selfism? Is price fixing the rate that college students pay for student loans and forgiving those loans if they work for the "state" a non-socialist act? Is the potential of passing a law that takes away the Secret Ballot for unionization of companies a non-socialist, capitalistic act? Is that even American? Is spending Federal tax money to force the installation of "green technologies" rather than letting the free market system decide if those technologies are appropriate and cost effective a non-socialist act? Is constantly meeting with the leader of the SEIU and taking this country in the direction that would primarily support labor unions non-socialist or capitalist behavior?

Obama has no love for business -- the very engine that has done more to make this country what it is. The bottom line is that Obama is anti-business and a big government "socialist". That's what he is and to defend him as being something other than that is just blind stupidity.

Making Payroll

One of the key objectives of any business, large or small, is "making payroll". In concept, it is extremely simple. Making payroll simply means having enough funds available to pay all your employees after having paid all other expenses and taxes. If there aren't enough funds to pay everybody, some worker or workers will have to go. Whenever making payroll is already tight, the business can't afford to hire any new employees.

Right now, it is "making payroll" that is behind the loss of jobs and the high rate of unemployment. It is also why business aren't hiring. All that business owners can see ahead of them is higher expenses and higher taxes that might make them less capable of "making payroll" in the future.

Business owners see is that their own state legislatures are raising taxes in order to fight rising state deficits. They see the advantage of the Bush Tax Cuts being ripped away from them next year. These see themselves being forced to provide health care benefits to all their employees or pay an 8% payroll tax penalty under the current health care reforms that are in Congress. They see high energy related expenses and also see themselves being forced to buy carbon credits if Cap and Trade is passed or if the EPA imposes carbon-controlling fines. They could also see unionization of their workforce if Card Check passes and they wind up having to pay their employees higher union wages and benefits.

All these factors weigh on their ability to make payroll.

What Obama and his naive academic economic advisers don't seem to understand is that business won't hire unless they can be assured that they can continue to make payroll. Giving a business a silly $5,000 tax credit to entice them to hire new employees is just political B.S. and stupidity when, in fact, those same businesses could be looking at many more times that number in increased taxes and expenses due to Obama's planned legislation.

If Obama really wants to create jobs, he should scrap health care reform and Cap and Trade. He should guarantee that the Bush Tax Cuts stay in place for at least another 5 years. Then, and only then, will business start hiring again.

Workers Puttering Around....AGAIN!

It seems as if we never learn from the past. During the Great Depression, FDR, his economic team, and the then-Congress thought that "road building" and "public works projects" would get the economy back on its feet. So, they implemented the WPA (Work Progress Administration) to employ the unemployed in things like building roads and bridges and other public works activities. But, after years of failing to provide tangible economic recovery, the term WPA, instead, became jokingly known as Workers (just) Puttering Around.

When Obama and his Democratic majority pushed through the Stimulus Package, they, too, advertised that "shovel-ready" road-building and other public works activities would bring America back to it's feet with jobs-a-plenty. Now, a year later, we have an unemployment rate in double digits at 25 percent higher than what Obama had promised; and, that rate could possibly increase further. Also, there is no significant indication that any"shovel-ready" public works activities have made a single dent in the continued loss of jobs (Click to See the Full AP/CNBC Story: "What Stimulus? Road Projects Aren't Boosting Jobs Much").

The stupidity of the so called "shovel-ready" stimulus plan was that it ignored all that had been written about how ineffective the WPA was during the Great Depression. Almost every job created by the WPA turned out to be short-lived, temporary employment. As a result, there was no ripple effect throughout the rest of the economy.

To revisit the WPA again, during this recession, shows how absolutely ignorant Obama and his economic team are of history. Even this lone blogger predicted failure when I wrote the entry "The Lessons of the WPA and the Great Depression" in October of 2008 -- three months before Obama got into office and four months before the Stimulus Plan was enacted. I will say it once again: The only purpose of the Stimulus Package was to pay back the labor unions (teachers, police, fire fighters, SEIU, AFL-CIO, etc) for supporting an Obama run for the White House and to gain a Democratic control of Congress in the last election. Getting the economy back to work was the last thing on Obama's mind when he signed the Stimulus Plan into law. And, every day that goes by just proves me right!

Ron Bloom, The Manufacturing Czar: A Blooming Mistake!

I guess if you absurdly think that it is labor -- specifically union labor -- and not management that creates jobs, then, it makes sense that you appoint a man like Ron Bloom as Obama's new manufacturing czar (Click to See Full Story: "President Obama to Appoint Ron Bloom Manufacturing Czar").

But, having spent years working on the opposite side of the labor unions, I know that the only way that hiring increases, at least when unions are involved, is by the time-tested union technique of worker slow downs. As a manager, I was able to create hundreds of in-house jobs because outside, contracted unionized labor for various services was just too expensive. Because of the cost efficiencies in hiring my own staff, our company had more working cash to expand or create manufacturing jobs or to spend more on Research and Development into new products that would ultimately create new jobs.

I find it very interesting that an ex-union executive would be nominated as the person -- another czar -- whose job it is to increase manufacturing activity in America. Ask yourself this simple set of questions: "Which came first? The Unions or the business they work for? " I am personally unaware of any company who started up with its workers already unionized.

One of the primary reasons that manufacturing has left this country -- in addition to high tax rates and strict government regulation -- is the high cost of labor and the inability of unionized companies to increase productivity because the unions will almost always resist any attempts to automate manufacturing. That's because any automation would eliminate union jobs. Like it or not, labor unions are just another form of a cartel; like OPEC for oil prices or De beers for diamonds. They force higher wages through non-competitive tactics. As a result, the lack of competitiveness forces companies to ship more and more manufacturing to overseas locations. For years, they've refused to concede any small losses of jobs; only to have much of their jobs completely lost to other countries like Ireland, China, Japan, and Mexico. Union membership has consistently declined in the last 25 year from a high of 21 percent of the workforce, 25 years ago, to today's 12.4%.

This year's best examples of labor union's having an opposite and negative impact on the manufacturing sector is the bankruptcies of both General Motors and Chrysler. And, if anyone thinks those two companies have any real future with Obama and his people running the show, one only has to look at the Cash For Clunkers program, where both Chrysler and GM failed to match their current market share by selling cars under that program. GM, for example, has an overall 19% market share in auto sales in this country. Yet, in Cash For Clunkers, GM only sold 17 percent of all the cars sold under that program. Chrysler was even worse. The big winners were Toyota, Honda, and Nissan; all of which have non-union production facilities in the United States and who beat American manufacturers in the depth of quality, craftsmanship, and fuel efficiency. One of the reason that Toyota has such high sales against American autos is because of its resale value. In 2 to 3 years of being in service, American cars have higher repair rates and, subsequently, lower resale values. That all has to do with the fact that, in order to be cost competitive, more of the expense of building a vehicle goes into salaries and not into the quality of the parts that make up the car.

I would think that you would want a manufacturing czar who had a proven track record of creating manufacturing jobs in this country. There are hundreds of them; but, they are almost all CEO's and that's when reality and Obama's labor-leaning ideology and anti-bourgeoisie philosophies are at complete odds with each other. For that reason, don't expect American manufacturing to bloom under Ron Bloom.

The Labor Unions: A Very Special Interest!

Contrary to the precepts of all previous bankruptcy proceedings in the history of the United States, the United Auto Workers were given preference over both creditors and stockholders and wound up with an ownership interest in the New General Motors Corporation and a controlling interest in the new Chrysler (Click to See Full Story:" How the UAW's new ownership stake in GM and Chrysler will defang the union").

When California was trying to come to terms with it's budget problems, the option of cutting worker hours and pay may have been stifled by the influence that the SEIU (Service Employees International Union) had with this White House (Click to See Full Story: "SEIU May Have Pressured White House into Withholding Stimulus Funds for California")

When, hammering out ways to pay for the impending health care reform bill, union health care benefits would not be taxed while everybody else's would be (Click to See Full Story: "Union workers would be exempt from Dem health care tax").

Now, it appears that the AFL-CIO is pushing tax legislation through this all-too-friendly Congress (Click to See Full Story: "AFL-CIO, Dems push new Wall Street tax").

Lastly....Obama's words:

And So, The Trade Wars Begin!

We already know that the Democrats and the Obama Administration have refused to sign free trade agreements with both Columbia and South Korea (See Full Story). As a result, we, as a minority manufacturer in the world, are limited in the amount of products that we can sell to those specific countries. It puts us at a cost disadvantage in trying to compete with other countries that already have free trade agreements in place with South Korea and with Columbia.

During last year's campaigning, Obama had mentioned that he might renege on and renegotiate the NAFTA trade agreement between us and Canada and Mexico. That resulted in both Canada and Mexico getting into a tizzy. Obama had to soften that stance by sending out a representative to say, in effect: "Not to worry...it's just politicking!" (See Full Story) Then, when the Stimulus Package was being rammed through Congress, it included a "buy American provision" that got the European Union in a lather. In both situations, the intent was to appease the labor unions. However, in both cases and only after seeing the backlash, Obama appeared to reluctantly back off.

I hardly think that all these stuttered attempts to block free trade are just "politicking". The Obama Administration is aiming to stifle free trade and create the kind of protectionist atmosphere that would provide a short-sighted and short-termed benefit to our labor unions. But, many economist think this would ultimately result in the same kind of trade wars that caused and sustained the Great Depression (See Full Story).

Since Obama has been in office, he and his gang of Democrats have consistently made every attempt to satisfy the wishes of the labor unions when it comes to international trade. One such attempt that has already seen blowback was done to satisfy the Teamsters Union by blocking Mexican trucks from entering our borders to bring products in from Mexico. Under the Bush Administration, this had been allowed on a limited basis. But, as a result of Obama's short-sightedness in rescinding that practice, we have now been slapped with trade-limiting and trade-preventing tariffs on 90 products that are being shipped into Mexico (See Full Story). At a time when this country is already in deep recession and when many of our companies have seen their international sales plummet, we are now unable to competitively sell many of our products to Mexico and we could easily see a loss of $2.4 billion in export sales.

Mark my words, this kind of thing is only going to set up a lot of distrust between ourselves and all of our other worldwide trading partners. Those countries that we trade with can't help but ask themselves: "Are we next?"

We are not in a position to start dictating trade. Americans buy more imported products than we sell overseas. That's why, for years, we have had billions of dollars a month in trade deficits. If protectionist trade barriers go up, the American consumer will be the only loser because we will have to pay more for all those imported things that we love to buy. That's inflationary and it will hurt the poor the hardest. On top of that, our products will be less attractive to foreign customers because they will be more expensive than products from other countries. That could result in lost American jobs.

Maybe that's the plan. Maybe Obama wants to force Americans to buy only American by causing the prices of imported goods to rise. But, if that is the plan it is definitely a dumb one and, believe me, one that will hurt us more than help us.

In my opinion, we have lost manufacturing jobs in this country because of a variety of reasons; and, high labor rates is just one of those reasons. But, more than anything, it is our system of taxation that is the most crippling. I still believe that, if we went to some form of consumption tax and not an income tax structure, we could be more competitive in the world because our American products wouldn't carry all the burden of employee and company income taxes that are being applied throughout the manufacturing, distribution, and sales processes. Additionally, a consumption tax would have a fairer and more equal effect because taxes will be applied to both domestic and imported goods, equally. Today, imported goods go untaxed by this country until they actually reach our shores and are finally sold.

Protectionism isn't the way to increase domestic manufacturing and regain manufacturing jobs that have been lost to other counties. But, a new tax structure might. I only wish that our politicians would come to that conclusion before all of our manufacturing jobs go overseas.