From the The Washington Times

By, William Ehart

“Cash for clunkers” was a party for U.S. auto sales in August, but the hangover began before the month had ended, analysts said.

The federal program offering rebates of up to $4,500 for those trading in older cars for more fuel-efficient models made August the best month of the year so far for auto sales.

The combination economic stimulus and environmental initiative boosted sales particularly for Ford, Toyota, Honda, Hyundai and Subaru, but sales tailed off in the final week of the month after the program ended Aug. 24.

“I’m disappointed,” said analyst George Magliano of IHS Global Insight. “We thought there would be a little more of a push at the end of the month, but it started to run out of steam.”

Some were encouraged, however, by a 13 percent increase in sales of Ford’s F-series pickup trucks, often used by contractors.

“It may be a glimmer of hope” for the economy, Ford Vice President Ken Czubay said.

Mr. Magliano increased his forecast for this year’s sales by about 500,000 vehicles to 10.3 million as a result of better-than-expected “cash-for-clunkers” sales.

But he lowered his prediction for next year’s sales by about 250,000 to 11.1 million vehicles.

About 700,000 cars were purchased through the clunkers program, at a cost to taxpayers of $2.88 billion.

“Anecdotal reports detailed a significant decrease in the selling pace during the last week of August,” Robert W. Baird analysts David Leiker and Keith Schicker wrote Tuesday in a research note. “This does not bode well for September.”

While sales at most automakers rose in August, particularly among Asian manufacturers, Chrysler sales fell 15 percent and General Motors sales fell 20 percent, suffering from a comparison to strong sales in August 2008.

“Chrysler along with GM is another one of those manufacturers where you don’t think of them when you think of fuel-efficient vehicles,” said Jessica Caldwell, an analyst with auto information site Edmunds.com.

“From an inventory standpoint, they definitely suffered as they shut production pretty much for a long time,” she said.

GM, hurt by its own bankruptcy-related shutdown, said inventory levels sank to 379,000 in August — the lowest since GM began keeping track.

Toyota’s August sales rose 6.4 percent as it dominated the clunkers program. Honda’s sales rose 10 percent, its biggest increase since May 2008. Sales at Subaru, the only automaker with a year-to-date sales increase, jumped 52 percent. Hyundai sales surged 47 percent to a record.

Foreign automakers fared best in the clunkers program. Detroit automakers, which have captured 45 percent of U.S. sales year to date, got 39 percent of cash for clunkers sales.

Ford sales rose 17 percent on the popularity of fuel-efficient vehicles such as the Focus and the Escape, among the top sellers in the clunkers program.

By Howard Rich

The tombstone for General Motors really should have read 1908-2008.

hat’s because December 2008 is when the bell finally tolled for GM – when the marketplace determined that a combination of poor management decisions, union pressures and a slumping economy had made the automotive giant’s continued existence mathematically impossible.

Of course, that was also precisely when the administration of former President George W. Bush stepped in with a $17.4 billion bailout for GM and Chrysler, with further funds contingent on the two companies creating a “path to profitability.”

At the time, a skeptical American public heard talk of all the concessions that were being made by company executives, car dealers and the notoriously inflexible union bosses.

But it was former Treasury Secretary Henry Paulson who hinted that this massive infusion of taxpayer cash might be nothing more than the world’s most expensive delaying tactic.

“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 said at the time, comments which were echoed by the Bush White House.

Fast-forward to February 2009, when the “reorganization plans” of Chrysler and GM were unveiled – and shown to be nothing more than requests for even larger taxpayer funded bailouts.

Still, the “tombstone moment” was delayed another month until this week, which has brought us perhaps the most bizarre – and disturbing – chapter in the evolution of the bailout culture that has infected our nation’s capital.

This week, the President of the United States insisted on the removal of a private sector CEO. And once he had been removed, that CEO’s severance package was governed by Treasury Department regulations.

No longer just bailing out companies, the White House is now determining who should run them and what their retirement packages should be.

Not only that, Obama has taken the unprecedented – and unnerving – step of guaranteeing all GM and Chrysler warranties.

Thank about that for a moment, in its ongoing attempts to revive a dying patient, the Obama administration has just put every American taxpayer on the hook for potentially billions in auto repairs!

Obama’s auto task force is also calling the shots on which models GM should produce and sell, and telling Chrysler who to merge with and for how much – all the while holding additional bailout billions over the heads of the two “private” corporations in case they refuse to abide by the government’s wishes.

One pro-free market commentator told me that “Obama might as well have reached into the corporate boardroom and started running that company.”

“That’s exactly what he did,” I said.

Obama’s actions “should send a chill through those who believe in free enterprise,” said Tennessee Senator Bob Corker.

How true.

And yet even as the government is guaranteeing GM’s warranties and providing an undisclosed amount of interim operating cash during this latest two-month reprieve, Obama and his socialist sycophants are pretending that they have administered some “tough love” to the company.

Nothing could be further from the truth.

America should have never taken those first, fateful steps down the road toward our present socialist experiment. And yet $13 trillion later, with the market still in shambles, jobs still on the decline and income levels flatter than pancakes, we’re stuck with an administration that seems hell bent on pushing the envelope of government control as far as it will go.

How bad has it gotten for what’s left of our free market?

Consider this – three months ago language like “socialist sycophants” would have been considered over the top.

Not anymore, though. What used to pass for rhetorical “red meat” among true free market supporters is now putting things mildly.

With each fresh interventionist encroachment, Obama is twisting the knife deeper into the belly of an economic system that founded, built and sustained these United States through generations.

Certainly, based on tens of billions of dollars lost and tens of thousands of jobs lost, Rick Wagoner deserved to be shown the door at GM.

But that should be a decision reserved for GM shareholders.

The fact that such a decision was made unilaterally by the President of the United States – holding the taxpayers’ checkbook in his hand as he made it – runs completely counter to everything this country stands for.

Yesterday’s invisible hand has become today’s iron fist.

We must unclench it, or risk joining our former Cold War adversaries on the ash-heap of history.

By, Howard Rich

We don’t name calendar years in America like they do in China, but if we did, it wouldn’t be hard to find a moniker for 2008.

It was “The Year of the Bailout.”

A.I.G, Bear Stearns, Chrysler, Citigroup, Fannie Mae, Freddie Mac, Morgan Stanley, Indy Mac and GM are just a few examples of taxpayer-funded benevolence this year, as our government veered wildly (and expensively) toward nationalization and rule-by-decree in attempting to resolve a crisis largely of its own making.

And while there is some confusion as to the current price tag of this growing “Bailout Mania,” we know that over the past sixteen weeks the U.S. government has poured nearly $10 trillion dollars into “correcting” the market.

You heard that right – $10 trillion dollars.

Think about that number for a moment, because it’s a lot larger than the $700 billion financial services bailout George Bush signed on October 3, which effectively marked the end of capitalism as we know it in this country.

That so-called “Emergency Economic Stabilization” is the bailout most Americans are familiar with, including the $17.8 billion chunk of it that was awarded to Detroit automakers.

But what about the rest of the money?

What about the $2 trillion in FDIC assurances, $1.75 trillion in Federal Reserve commercial paper purchases, $900 billion in term auction facility lending, $600 billion to insure money market funds, $600 billion to cover Fannie and Freddie’s worthless mortgage-backed securities, $550 billion for discount Federal Reserve loans, $500 billion to insure FDIC deposits, $300 billion for FHA mortgage relief, $250 billion for Citigroup debt, $225 billion for securities loan facility lending, $200 billion for Fannie and Freddie’s debt, $112 billion for A.I.G., and on down the line.

Add all those numbers up and you’re dealing with more than twice the inflation-adjusted cost of rebuilding post-World War II Germany, the Louisiana Purchase, NASA’s entire budget (since its inception), the S&L bailouts, Roosevelt’s New Deal, the Korean War, the Vietnam War, the Gulf War, and the Iraq War – combined.

Again, that’s inflation adjusted – and all of it spent or pledged by our government within the last sixteen weeks.

2009 could bring additional bailouts, as well, with President-elect Barack Obama proposing another $800 billion plan this week and a number of states announcing that they will seek $1 trillion from the federal government to bail them out of bad spending decisions.

The dimensions of this bailout culture are truly staggering, but other than trillions in “troubled assets,” what exactly have ‘We the Taxpayers’ purchased?

For starters, a lot of debt. With only a fraction of the total bailout tab on the books, our national debt has already soared to more than $10.7 trillion dollars.

That’s an astounding 72.5% of our gross domestic product (GDP).

Eight years ago, the debt was $5.6 trillion, or 58% of our GDP.

Throughout this crisis, we were told by leaders of both parties that government had to “do something” or else we would face an “economic Pearl Harbor.”

I would argue that with wealth disappearing, unemployment skyrocketing, productivity vanishing and consumers burying their money, the “economic Pearl Harbor” is upon is – and that the trillions in bailout funds did nothing to slow its fury.

In a recent article published in the Wall Street Journal, former American Express CEO Harvey Golub proposes a different solution.

“We must get back to our historic reliance on personal responsibility and market forces, and get government out of economic management,” Golub wrote. “It doesn’t do a good job, as the current economic mess amply proves.”

I couldn’t agree more.

Let’s not continue down the same road this year. Let’s make 2009 the “Year of Fiscal Responsibility.”