Forty Eight: GM's Cash Burn

Economists typically refer to the rate at which a company goes through cash as a "cash burn" rate. How very appropirate for GM. Actually, it would be better to take GM's remaining cash, and any cash gift currently contemplated by those idiots in Congress, and setting it all on fire. At least some heat would be generated, as opposed to simply flushing the money down the giant GM toilet.

GM has now taken to sending junk emails to dealers and employees, begging those people to in turn send out junk mail to their friends and family, trying to perpetuate the fiction that if GM goes into bankruptcy, the U.S. economy will lose hundreds of thousands of jobs. This is no more believable than assertions a few months ago (by GM) that GM had more than enough cash to carry it through it's current slump.

Two years ago GM posted an annual loss of $12 billion, and at that time had no realistic plan of turning the business around. They still have no plan. The "future" of GM is supposedly the Volt, which requires a $7,500 tax credit to get people to buy. This is the best that GM can come up with after spending $100 billion in capital.

If ever there was a company which deserved to be shot in head, it is GM.

Forty Seven: Education Is To Blame

In the midst of today's economic carnage, whether in banking, the auto industry, real estate, or the perennial state of gross inefficiency in government, one culprit in the finger pointing blame game has been missing, and that missing party is the one principally and often times exclusively, responsible for all of our current woes. I refer to higher education in general, and specifically, MBAs.

It is probably safe to assert that the vast majority of individuals in positions of authority and control in this country, whether in business or government (and many of these individuals move effortlessly between the two sectors) are products of the best academic institutions our educational system has to offer. These are the people who gave us credit default swaps, collateralized debt obligations, and other exotic forms of financial structuring which has led to today's mess. It is also a fact that the cost of a four college degree today is over 1000% more than it was 30 years ago.

I don't see any of my friends without MBAs who would have dreamed up economic calculations and scenarios in which borrowers with no provable income are enticed to get loans to buy real estate for 100% of the "appraised value" of the real estate, with the loan being guaranteed by a "government sponsored entity" (FNM FRE), and authorizing the GSE to borrow ten times the amount of these dubious loans to finance its own existence.

Higher education has been the death knell of common sense and fundamental understanding of physical and natural laws of resources and economics.

Forty Six: Will The Chief Justive Step Up?

Conventional civics curriculum teaches that the U.S. has three branches of government - the executive, legislative, and judicial. But practical experience actually shows us there is a fourth - the vast and sprawling and ever-increasing federal bureaucracy. The executive and legislative are now firmly in Democratic control, and the bureaucracy has always been, and will always be, a Democratic bastion. This leaves the judicial branch, which while leaning heavily Democratic in most lower courts, has a slight Republican edge with the Supremes. The question before the country now is, will Chief Justice Roberts accept the mantle and step up to assert his constitutional responsibility to be a moderating influence on the almost unfettered power of liberal Democrats?

The Barney Franks, and Christopher Dodds, and Harry Reids, and Charlie Rangels will work Barack Obama like a hand puppet. Government expansion in the next four or eight years will make the housing bubble look like minor pimple. Private capital will be sucked out of the economy and into government, and then distributed in the most inefficient ways possible to the individuals least likely to reinvest that capital in productive activities.

Mr. Chief Justice, will you do your duty?

Forty Five: Rewarding Incompetence & Irresponsibility

"It's not my fault," said the borrower who lied on his loan application, "the mortgage broker told me this was the best loan for me; besides, he knew I couldn't pay the loan, but said I could always refinance as the house price increased."

"It's not my fault," said the mortgage broker, "all I do is take the app; the underwriters decide who gets a loan."

"It's not my fault," said the underwrister, "Fannie and Freddie and FHA and Angelo Mozillo told us to make these loans."

"Its' not my fault," say the Fannie and Freddie executives, "Barney Frank and Chrisopher Dodd, and yes, even Barack told us to shovel this money out to people who really have no business owning a house, much less being on the hook for for a long term loan."

"I've got a great tan, don't I?" said Angelo, "and Chris Dodd is one of my very best friends!"

"It's not our fault," say Christopher and Barney, "or maybe it really is, but we don't give two shits, because at the end of the day, government is going to regulate, take over, and in general swallow this whole mess, which means an exponential spurt of government growth, which in turn means more Deomctratic voters, which further cements our positions as parasites for life, living off the ever-dwindling numbers of chumps who pay their taxes and bills and try to create something of value with their efforts."

The End.

Forty Four: The "Change" Prez?

For the past eight years we have had a President who, by all accounts, is not the brightest knife in the drawer, at least by traditional academic standards, which to my way of thinking are not all that important. However, for the sake of argument, I'll admit that BO is the anti-Bush when using those same standards. So where does that get us as a country? What will be the differences in how we are governed?

BO is going back to the traditional/Democratic well for his political appointments (Emanuel, Podesta, etc.). What kind of change will result from this? When we look back after four years, I suspect that government will have expanded in our lives at a significantly greater pace at the expense of our ever shrinking personal freedom and personal responsibility. Democrats do not really care about the private economy, because liberals live off the public sector. They take our resources in the form of greater taxes, fees, and regulations under the auspices of providing "services" which otherwise would have been provided by the private sector more efficiently. Those same services will now be administered with an onerous and generally incompetent layer of government bureaucracy.

Real wealth creation (and hence tax revenue) will diminish, so government will have to fund itself with artificial wealth, better known as inflation (higher wages and prices for the same or lesser amounts of goods and services). This has always been the model embraced by government types who have never had jobs where your value is measured by the value you produce.