The Great Regressives

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Like most other libertarians, I am not a trusting friend of democracy. I think Thoreau was right when he said, “That government is best which governs least.” Democracy is a means of putting limits on government, and providing the legitimacy of consent for the few state functions that remain. One reason I am not a progressive democrat (small or large “d”) is that the progressives’ century-long demand for people to use democracy to “control the conditions of their own lives” would mean, if it meant anything, the power of every momentary majority to control the conditions of life — or death — for everyone else.

It is therefore not surprising to me that leading advocates of progressive democracy have been self-willed, dictatorial personalities who systematically confused their own whims with the will of the people. Consider Rousseau. Consider the early 20th-century progressives with their lethal mixture of socialism, racism, and prohibition. Consider Bernie Sanders.

Progressives had invented the recall, a hundred years before, but as usual the progressive power structure resorted to every possible means to keep a recall from actually reaching the voters.

Further irony is provided by the fact that the progressives’ specific schemes have always taken a socially antidemocratic form. Socialized medicine means a monopoly that can be challenged only at the risk of your life. Laws providing for collective bargaining mean a corrupt and self-perpetuating union leadership. Empowerment through education means the oppression and banality of compulsory schools.

But if you try to use the means of redress that the progressives themselves came up with, they will call you undemocratic.

Such was the case in the late campaign to recall Josh Newman, a Democratic state senator from Orange County, California. I could tell you a lot about Newman, but it’s sufficient to say that he was a party hack who won election by a few votes in a district characterized by moderate politics and then proceeded to vote for every extreme measure of the state’s Democratic leadership. One of the things he voted for was a giant increase in the gas tax, an increase that will cost the average household $800 a year. Further, he provided the two-thirds majority necessary for the extremists to pass any other bill they might wish to pass.

When he voted for the gas tax, a movement arose to recall him. Progressives had invented the recall, a hundred years before, but as usual the progressive power structure resorted to every possible means to keep a recall from actually reaching the voters. They used lawsuits, union goons, and a sudden legislative change in the rules to put off the fatal day when Newman would appear on the ballot. The anti-Newman forces spent about $2 million; the Newman forces spent about $8 million.

These sentiments were shared and preached continually by the state’s political leadership.

Now here’s the joke. Newman’s campaign dwelt on two issues: the appalling cost of a recall election (about $3 million, allegedly, and you can compare that to the billions of dollars that Newman’s votes were pulling out of Californians’ pockets); and the undemocratic nature of the recall. After all, as Newman proclaimed in his terminally self-righteous speeches, he hadn’t done anything immoral; he had voted for the tax “in good faith.” The people therefore had no right to remove him. These sentiments were shared and preached continually by the state’s political leadership and by such supposed purveyors of news as the Los Angeles Times (now virtually bankrupt, but going down with all its false colors flying).

Newman’s last move was a legislative attempt to ban “bounty signature gathering,” his phrase for paying people to solicit signatures for recall petitions and ballot initiatives. Of course, the only way you can collect the multitude of signatures that progressive law demands is by paying people to get them — and why shouldn’t you? You know why. It’s because your use of the progressives’ democratic mechanisms would cost the progressives their power.

Now comes election night, June 5, and Newman is losing by almost 20 points, and here is what happened, in the words of the San Francisco Chronicle.

Newman spokesman Derek Humphrey said in a statement that "the early numbers are not what we were hoping for," but did not concede the loss in what he termed "an undemocratic special interest power grab."

Even a late endorsement by former presidential candidate and independent Vermont Sen. Bernie Sanders wasn't helping Newman. Sanders recorded a 30-second Facebook ad urging voters to back Newman while praising his support for single-payer health care, education, the environment and immigrant rights.

Well, so much for Newman; he was recalled. This episode is just a footnote to the history of “progressives” and “democracy,” a history writ large in the bloated figures of the university presidents, tech CEOs, state-supported activists, and dynastic politicians who occupy the commanding heights of today’s political economy — progressives all, and despots as far as you permit them to be, each one of them exercising the power that can only be obtained by an undemocratic special interest power grab.




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What Did Obama Motors Know?

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GM — known derisively as “Obama Motors” because of the crony deal it got from the Obama administration — is once again in the news . . . for a massive corporate screwup.

GM is about to be investigated by Congress in the matter of the company’s recall of 1.6 million vehicles. These vehicles had faulty ignition switches. Their malfunctions apparently led to 13 deaths. GM has lawyered up, for it will surely face many tort lawsuits, as it surely should.  Recalls are not unknown in the auto industry, but what is causing Congress to investigate is that it took GM about ten years to get around to the recall. So GM has hired the big-name lawyer who headed the investigation into the 2008 Lehman Brothers failure to be the conspicuous head of its own internal investigation.

This is called: damage control.

When GM switches fail, drivers report that their vehicles become very hard to steer, and the air bags become disabled. So not only is the likelihood of accidents increased, but the likelihood of extreme injury and death also increases dramatically.

GM employees knew about this problem as early as 2004, when reports about it were discussed in the company’s engineering division. This is according to the timeline that GM itself has released. The company is not saying whether or not its engineers asked for a recall, or when the idea of a recall was first suggested.

In a risible act of hypocrisy, the National Highway Traffic Safety Administration (NHTSA) has presented the company with a list of over 100 questions it wants answered. It now appears that the NHTSA knew of the problem as early as 2007. Its people raised the issue in a meeting. But the NHTSA is refusing to answer any questions about it.

The affair has obviously brought back to the minds of investors the old GM — the one that had to be rescued at the cost of billions of taxpayer dollars.

In a lawsuit, settled last year, brought by the family of a nurse killed in a crash involving one of these faulty switches, the plaintiff’s attorney discovered that GM had an engineering team investigating the problem (found to be prevalent in small GM cars). But this was never publicized, so owners of those cars were never warned that they were at risk.

When it was announced that the US Attorney for the Southern District of New York had begun an investigation, GM shares dropped 5%, because the facts seemed to indicate not just negligence, but outright criminality.

This is just the most publicized of GM’s recent recalls. Current GM CEO Mary Barra has launched several other recalls, including one of 1.7 million higher-end vehicles (SUVs and Cadillacs) troubled by an airbag deployment wiring defect. The total number of GM vehicles recalled has now hit 4.8 million for the first quarter of 2014 — a sixfold increase from the number for all of last year. The company has issued seven major recalls in just the first three months of this year.

GM has put aside $300 million to cover immediate costs, but this is obviously not going to cover all the eventual costs. One critic has called for a fund of $1 billion. Some dealers are already reporting slower traffic in their showrooms. Meanwhile, some experts, such as corporate crisis consultant Larry Kamer, are suggesting that this crisis is a good opportunity for Ms. Barra and the “new” GM to show how much they care for customers. Kamer was a consultant for Toyota during its 2010 recall. Toyota recently settled with the U.S. Justice Department on that recall.

Barra has stepped forward to admit that the recall took too long, to offer her condolences to the families of those killed, and to announce that she has assembled a team to help the company handle and “learn from” the incident. Given that Barra was executive director of GM’s manufacturing engineering division while the deaths occurred, one is entitled to be a little skeptical of her new-found burning desire to enshrine the company as the Quality Queen of automotive technology.

As one report notes, Barra has reason to worry. The affair has obviously brought back to the minds of investors the old GM — the one that had to be rescued at the cost of billions of taxpayer dollars. The article notes that Toyota took a major hit to its image from its recall two years ago. Toyota had to pay the Justice Department $1.2 billion for misleading customers. Attorney General Holder boldly declared that the Toyota deal will “serve as a model for how we treat cases with similarly situated companies,” though he didn’t address how that relates to GM.

Here is where one gets suspicious. The feds went after Toyota with a furry when it had its recalls, although the main accusation against it — that some models had “sticky accelerators” — was never proven. When it was charged that floor mats improperly installed by one Lexus dealer in San Diego led to the death of a family, Holder turned his department loose on Toyota, and Secretary of Transportation Ray LaHood loudly proclaimed that Toyota owners should be afraid for their lives.

Of course, while the feds were going after Toyota so furiously, they owned GM. This stank to heaven. However, it is now clear that even as Holder and LaHood were conducting their Obama-jihad against Toyota, their own Obama Motors was known by their own NHTSA to be killing people. Cover-ups are common in government, I suppose, but a cover-up of this magnitude, of a company that had been socialized by the self-same government, is something rare.

Given Eric Holder’s record as an ideological hack, we can laugh at the idea that his Justice Department will honesty investigate GM.

Add to this the fact that at the time a little-noticed provision of GM’s bankruptcy deal was that the “new” (i.e., socialized) GM would not be liable for the tort claims of the “old” (i.e., pre-bailout) GM. This doesn’t just hint of corruption — it reeks. It isn’t clear to what degree GM will use that shield. Law professor David Skeel thinks that while GM is legally safe in using the bankruptcy shield, it would look bad to do so — hardball to the max. And lawyers are already sidestepping the issue by filing suits alleging that the value of some GM models have been hurt, rather than going directly for personal injury tort.

So not only did the Obama administration orchestrate a crony bankruptcy that handed over assets primarily to the administration’s own financial backers, but it apparently stood by and let innocent people die without ordering appropriate recalls. This, so it could run on the election mantra, “Bin Laden is dead, and GM is alive!” Yes, GM was alive, but a number of its customers were dead.

Given Eric Holder’s record as an ideological hack, we can laugh at the idea that his Justice Department will honesty investigate GM. Perhaps what we need is a special prosecutor — somebody outside the control of Holder’s Justice — backed with enough assets to cleanse the stables of Obama Motors.




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Government-Grown Lemons

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A flurry of recent reports brings us up to date on GM — now known as Government Motors, after its nationalization by the Regime. The news is less than inspiring.

First is the report that GM is recalling nearly 4,300 Chevrolet Sonics — because they may be missing their brake pads! The incredible news is that workers at the Orion Township, Michigan assembly plant left off inner or outer brake pads on many of the Sonics manufactured there.

The funny thing is that the same Regime Secretary of Transportation Ray LaHood who told Americans to avoid Toyotas in a bogus brake scare is totally silent about this real brake fiasco.

Then there's the news that came out on the “legendary” Chevy Volt — you know, the EV green machine car of our future. For one thing, it appears that the damn things are costing American taxpayers about $250,000 for every vehicle sold. This to subsidize a car purchased by people whose average income is $170,000 a year.

That’s the estimate provided by James Hohman, economist at the Mackinac Center for Public Policy. He analyzed the 18 government deals that were involved in setting up the Volt line — all the loan subsidies, taxpayer-funded rebates, tax credits, and government grants at the federal and state levels that were arranged for this car. The thing is indisputably green in one sense: it takes taxpayer dollars to keep it alive.

Hohman's estimate does not, by the way, include the bailout money that has been shoveled at GM as a company. Nor does it include municipal support.

The deals Hohman reviewed included $690 million of support by the state of Michigan and $2.3 billion in federal support. That’s a total of $3 billion in for the 6,000 Volts actually sold. As Hohman puts it, “This might be the most government-supported car since the Trabant” (the infamous piece of junk manufactured by East Germany).

Worse, it turns out that GM is calling back all Chevy Volts because of a fire hazard. Seeing several Volts catch fire after crash tests showed that electrical shorts in the battery can ignite the coolant, GM is going to try to fix the problem by strengthening the battery compartment. Just in time!

But the Volt isn’t the only EV that is prone to battery-induced fires. Fisker Automotive has announced that it is recalling its entire line of luxury plug-in hybrids (which sell for over $100,000 each!) because of fire hazards.

I mention the Fisker, because even though it builds its cars in Finland, it received $529 million in American taxpayer-backed loan guarantees. The Regime assured us that the American taxpayer would be paying to provide American jobs, but that was just another lie.




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