Of Bailouts and Boondoggles
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Posted by Howard Rich | Columns
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| Tuesday 30 December 2008 4:20 AM

On this week in 1936, United Auto Workers’ members occupied a General Motors plant in Flint, Michigan, staging a “sit-down strike” that resulted in the beginning of a thoroughly destructive exclusive labor agreement between the company and the union.

With the eager acquiescence of corporate management, the UAW union bosses quickly set out upon a decades-long policy of bleeding the competitive life out of General Motors (and Chrysler and Ford). That policy helped the union emerge as an unrivaled political force and eminently wealthy special interest. But, the relationship was, if anything, parasitic.

Like a parasite devouring its host organism, the union thugs have finally ended up slaying the goose that laid their golden eggs. In this case, however, it must be noted that the goose willingly laid its head upon the chopping block.

Bowing to each and every union demand with slavish obsequity, the Big Three management all but abandoned even the appearance of focusing on long-term viability rather than the next quarter’s profits. As, Noel Tichy, a University of Michigan business professor and author who ran General Electric Co.’s leadership program 1985-87 and once worked as a consultant for Ford, recently wrote, “There has been 30 years of denial. They did not make themselves competitive. They didn’t deal with the union issues, the cost structures long ago, everything that makes a successful company…”

And as was all but inevitable, soon, both the union and the host will begin to disappear beneath the waves of a free market reality that American politicians can’t bail them out of – no matter how much taxpayer money they throw at the problem.

It turns out that Reagan was right – you can’t consistently turn a profit with a Marxist albatross hanging around your neck. And of course the thick-necked union enforcers don’t get it – steadfastly refusing to acknowledge that fattening their pension funds has crippled the sustained employability of the millions of American workers they were created to “protect.”

Even as American taxpayers are pumping billions of dollars into a dying industry, there is near universal agreement that this latest round of excess government interventionism is destined to fail.

“This is like taking a little Flintstones Band-Aid and using it on a leg that has been amputated,” Ft. Worth Business Press/ writer Tony Auer wrote earlier this week. And amazingly, no one in the Bush administration that foisted this mess upon us is seriously challenging the analogy’s accuracy.

In fact, even before the president approved the initial outlay of $17.4 billion (previously rejected by Congress), his own Treasury Secretary, Henry Paulson, admitted the long-term futility of the investment.

“If the right outcome is reorganization or bankruptcy, then isn’t it better to get there through an orderly process where every effort is made to avoid it, and if it can’t be avoided, everyone’s prepared for it?” Paulson told a group of New York industrialists shortly before Bush approved the bailout.Bush’s spokeswoman similarly referred to the bailout as giving Detroit a “soft landing.”

Of course, some analysts anticipate another $50 to $75 billion worth of “soft landing” being poured into the “Big Three” over the coming fiscal year as a more “labor-friendly” administration comes into power in January.

Not surprisingly, the union bosses remain just as arrogant and the corporate chiefs just as tone-deaf as they’ve always been; the former adopting a harsh line in negotiations and the latter supinely accepting it as they both race to the brink of extinction. Having chauffeured the compliant carmakers off a cliff by refusing to make concessions to keep them competitive, they are now making certain that the ruinous cycle repeats itself on an even higher-stakes stage.

Specifically, labor bosses are refusing to agree to the wage concessions of the initial bailout, terms which one of their bought-and-paid-for, Democratic Congressman Rep. Barney Frank, recently decried as an “unfair assault on working men and women.” Of course, while Frank and labor’s other leftist allies invoke the tired old class warfare liturgy, just last week it was revealed that the UAW was continuing to operate a money-losing $33 million lakeside retreat with its own $6.4 million designer golf course.

And in a particularly juicy bit of irony, the union pays for the facility with interest from its “strike fund.”

This is precisely the sort of self-serving hypocrisy that has caused the UAW to lose nearly two-thirds of its membership over the past three decades.

Yet while the costly (and unnecessary) demise of the American automotive manufacturer will no doubt continue this coming year, Washington politicians haven’t learned the painful lesson of the “Big Three.”

In fact, they’re trying to add millions of new workers to organized labor’s dwindling rolls by passing the oxymoronically-entitled “Employee Free Choice Act,” which actually strips away a workers’ right to a secret ballot.

America simply cannot afford to conjure up new ways to bring organized labor back from the dead. As the sad saga of Detroit makes clear, doing so is only to invite further disaster.

Common Sense, Not Cult Worship Needed To Fix Our Economy
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Posted by Howard Rich | Columns
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| Wednesday 10 December 2008 5:05 PM

By, Howard Rich

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I’m all for optimism.

Inspiring hope and exceeding expectations is what America is all about, which is why it’s sad that we find ourselves at a point in our nation’s history when both of these things are in such short supply.

Lamentably, such is the debris of our new American order.

We live in a pseudo-socialist state, one in which multi-billion dollar government bailouts out-of-control debt, secret backdoor earmarks and rampant corruption and influence-peddling continue to trump the needs of families and small businesses who want only to share in the prosperity enjoyed by their elected officials up in Washington.

Our political system desperately needs “change,” which is why for millions of Americans President-elect Barack Obama has become something of a panacea in these turbulent times, positioning himself as an iconic source of hope and confidence amidst the drab backgrounds of increasingly dour economic news

There’s no denying the historical significance of Obama’s victory last month, nor is there any doubt that thanks to the media’s acclamation he has become nothing short of a ldquo;transformative” figure, producing the same “Morning in America” feeling that guided President Ronald Reagan to successive landslides and brought America back from the brink of an economic disaster.

Of course, that’s where such comparisons come to a screeching halt. Reagan confronted our nation’s fiscal woes by slashing a bloated federal budget and cutting taxes on a level never seen before (or since) in this nation.

Obama, on the other hand, is seeking to duplicate the failures of the President he is replacing, only on a far greater scale. Rather than investing directly in families and businesses, Obama has chosen instead to support the same flawed government interventionism that capped George W. Bush’s eight-year decent into deeper deficit spending and greater fiscal recklessness.

Amazingly, the fawning press corps that “covered” Obama’s campaign never bothered to point out the remarkable similarities between these two politicians.

Nor did they ever substantively engage Obama on the fact that he took more money from Fannie Mae and Freddie Mac (the government-sponsored mortgage giants who started this downward spiral) than any other politician in Washington. Apparently, turning Obama into “just another politician” wouldn’t have sold newspapers, or network TV advertising.

Plus, the media narrative was established early on that Obama was running against Bush (i.e. against Washington), which meant that an honestly assessment of their commonalities became even less likely as the campaign wore on.

So ingrained in our heads was the dichotomy between Bush and Obama that by the time both signed on to support a failed $700 billion federal bailout, nobody even noticed that they were standing on the same sideline. Bush believed incorrectly that if government would just “do something,” the crisis would solve itself. Similarly, Obama’s approach is to elevate that interventionism by “doing something big.”

Today, people across the nation are so enraptured with Obama that schools have already been named for him and paid government holidays enacted in his name – despite the fact that he has yet to even take the oath of office yet.

Such is our need for instant gratification, apparently, and questions about Obama’s past associations and present lack of experience are simply put out of mind.

Of course, great speeches and a religiously-maintained cult of personality won’t fix our economy. Nor will they secure our freedoms in a destabilized world. Nor will they address the next fiscal cliffs our nation is about to fall off of, Medicare/Medicaid and Social Security.

Only a return to Reagan’s common sense, right-thinking wisdom can fix those things and truly make it “Morning in America” again

America Needs Change Parents can Believe in
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Posted by Howard Rich | Columns
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| Thursday 4 December 2008 5:15 PM

By, Howard Rich

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Let’s not kid ourselves.

Barack Obama isn’t the first (and he certainly won’t be the last) Washington politician to send his children to exclusive private schools.

In fact, Sidwell Friends – the elite private academy chosen by the Obamas for their two young daughters – was also selected by Bill and Hillary Clinton for their daughter, Chelsea, while they lived in the White House.

But you won’t hear me – or any other true educational choice advocate – condemning either family for selecting the educational environment that best fits the needs of their children.

That’s their right as parents.

In fact, in selecting this $29,000-a-year school, Michelle Obama specifically described it as “the best fit for what (our) daughters need now.”

Meanwhile in South Carolina (which includes eight counties with a median household income below what the Obamas will pay per child in tuition costs this coming year) one of the state’s top gubernatorial prospects, James E. Smith, also chooses to send his children to a prestigious private academy.

Again, that’s his choice – and based on South Carolina’s worst-in-the-nation graduation rate, it’s hard to fault him for it.

In Oregon, where the graduation rate is much higher, House Speaker Jeff Merkley and his wife recently attempted to enroll two of their children in a newly-formed charter school. In this case, it wasn’t that their public schools were all that bad, they simply wanted something better.

Yet when reporters first asked Speaker Merkley about his children’s applications, he denied having ever submitted them.

How come?

Well, as it turned out, Merkley had voted against Oregon’s charter school legislation just a few years earlier.

Likewise, South Carolina’s Rep. Smith has been one of the most vocal opponents of parental choice in South Carolina – including choice for those eight counties with household incomes below what the Obamas will pay to send just one of their children to private school this coming year.

And then there’s Obama himself, who is following in the footsteps of Bill and Hillary Clinton, Ted Kennedy and his Illinois colleague Jesse Jackson, Jr., in ardently opposing academic scholarships and tuition tax credits which in most cases add up to less than half what public schools are spending.

“We need to focus on fixing and improving our public schools; not throwing our hands up and walking away from them,” Obama says, a clever sound bite that ignores the billions in new taxpayer dollars we pour into public education year after year in an unsuccessful effort to do just that.

Sadly, politicians like Obama, the Clintons, Kennedy, Jackson, Smith and Merkley are hardly unique in availing themselves of the very choices they refuse to make more accessible to the vast majority of American parents.

According to a 2007 report by the Heritage Foundation, 37 percent of U.S. Representatives and 45 percent of U.S. Senators enroll their children in private schools – a rate four times higher than that of the general population.

Simply put, choice is a good thing – but only for those rich or powerful enough to enjoy it.
So what is Obama’s solution for the rest of America’s parents?

For all his talk of “change we need,” and “change we can believe in,” Obama’s plan is all too familiar – keep throwing more money into the same old failed bureaucracies while branding anyone who wants to empower parents as being “anti-public education.”

Yet as our nation falls further behind its industrialized peers in standardized test scores, we desperately need an education system focused on achieving results, not accommodating a status quo that has proven utterly incapable at adapting to a changing world.

More money and expensive new “accountability” measures have clearly failed to move us forward.

We must now provide change that parents can believe in, a process which begins, ironically, with providing them the same choices currently enjoyed by their leaders.

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