Government Sanctioned Recession in America
By Doc Vega
From the very beginning of 2009 when President Obama took office and signed the infamous 787 billion dollar bail out, America began the perilous journey down the path of economic decline. Unprecedented moves by the oval office chief executive caused a series of ripple effect policies that changed American government’s role in its stewardship over the nation’s commerce and law making.
Nationalizing 2/3 of US auto industry
Bailing out 2 major car manufacturers, literally making the US government a partner in the private enterprise of General Motors and Chrysler effectively removed the incentive and direction of these 2 corporate giants to make a profit based on sound business practices when President Obama was actually bailing out the UAW in order to buy those votes. Taxpayer’s money literally was held hostage in nationalizing 2 out of 3 major US car building giants. Ford remained independent and strong. President Obama nullified all claims of stockholders and voided their legal ownership in GM, fired a head executive, and even earmarked another $
7500.00 in taxpayer dollars to each Chevy Volt built.
The Chevy Volt, an overpriced, under performing, small hybrid stickered with an outrageous $40,000.00 price tag that includes a $7500.00 incentive for consumers to buy based on a taxpayer-funded rebate. A car that does not sell. Why? The Chevy Volt represents an intrusive government solution destined to fail in a market place that will not support a product that does not meet consumer demands. This is the epitome of government intervention where it does not belong.
GM and Chrysler would have been better off being allowed to bankrupt and restructure according to private sector standards of reorganization and debt management. Obama’s academic vacuum, bureaucratic directives only burned investors and created more federal debt adding to an already outrageous deficit. A bail out for political agenda instead of sound ethical and business practices will lose every time.
In an effort to avert layoffs that would have occurred in the auto industry, the government reasoned that the bailout would stave off more unemployment which would fuel a deepening recession. While Ford did not take a bailout its competition was given an unfair advantage by the government handouts that positioned Ford competitors where they normally would not have been.
The Obama administration also needlessly created a furor over demanding which dealerships needed to shut down in order to cut costs of new model distribution in the market. Families that had operated dealerships for generations were forced by the government to leave the only business they’d known for political reasons. If they had voted Republican, they were out! President Obama’s planners also discriminated against rural dealerships, thinking that they were unnecessarily creating higher costs of travel and multiplicity of retailers. By doing this, Obama’s policies limited choice to the consumer and convenience and only handed the cost of inefficiency over to the buyer who was forced to travel further with less service within reach of his own locality. It was the dictatorial planning of the Democratic regime that alienated the consumer, needlessly destroyed jobs, franchises, and independent dealers over political agendas, and saddled the American people with the debt of bailing out 2 major US car manufacturers who today remain firmly in debt to the government and the people as the economy grows at 1.5 to 2% and unemployment remains devastatingly high.
First act of racial inequity committed by the adminsitration
When first taking office the Obama White House immediately fired 200 white staffers for no other reason than replacing them with Black Americans for the sake of racial equality. This was not a very fair or transparent way to begin his presidency, but no one can ever say that the President ever regretted contradicting his promises where hope and change were concerned. This illustrates for us the bold and unapologetic approach to the way the Obama White House made its political decisions at the expense of others.
Discouraging US business with high taxes
Refusing to lower the Corporate tax, which at the time was the highest in the world at 39% helped drive American employers offshore to more tax friendly jurisdictions. Why would American corporations have any incentive to remain on US soil when it was costing them significantly to stay? Answer. It simply did not make good economic sense. The CEO of Intel Corporation admitted that to build a new factory in California would cost another billion dollars as opposed to building anywhere else in the world according to CEO Paul Otellini. Not to mention the fact that Intel employees could not even afford the housing in California if the company had constructed a new plant.
Government created recession
If the state and federal government creates a hostile environment to American companies, how do they create jobs. Once again a government sanctioned recession remains in effect thanks to a rigid ideological indifference that sanctions the conditions that make recovery impossible. Although GOP Presidential hopeful, Mitt Romney will significantly lower corporate taxes to re-attract US employers back home on our soil again it will take more than that. Obsessive and politically motivated EPA restrictions have also made doing business in the US prohibitive. President Obama has used the EPA to attain through unrestrained regulations what he could not achieve through votes from Congress.
Leadership out of touch
The failure of the Obama administration has can be measured through the hardship in our commerce and society caused by failed government policy. These policies are a reflection of a leadership that has taken the isolation and inexperience of academic approach over the time-tested success formulas of a free enterprise economy that gauges supply and demand as the correct barometer of operation. The private sector can always competitively and cost effectively deliver products to the market place.
Fiscal mismanagement of government
The long history of government failure to cut costs and run an enterprise with sound principles business is clearly evident in the multibillion dollar failures of AMTRAK, Medicare, Medicaid, Social Security, and a host of other government managed public agencies. Where as the bureaucrats that run these bloated tax sucking monsters argue that these organizations were not intended to run like businesses, in the end they will run like any other business when the funds run out as closures, rationing, and greater calls for revenues dictate sunset the mentality of an uncertain future. Yes, policy does create an inevitable environment of failure by imposing unwise economics upon the population of Americans who must wade through the rhetoric and misrepresentations of the Democrats who would rather remain in power than do the right thing and adopt Plan B.
The wrong economic model
Keynesian economics are a proven liability to the American model of government and business. Europe is in a catastrophic decline thanks to this flawed economic paradigm, yet President Obama has only denied the late Ronald Reagan’s accomplishments and even tried to attribute Reagan’s brilliance to himself, which was nothing more than another false narrative. President Reagan embraced “Supply Side” economics not the Keynesian myth that has plagued America with a micro managing federal government that has grown larger than the GDP of the US economy.
When a government has grown to that size, there are only two options.
1) It must become a dictator ruled socialist regime.
2) It must radically change it’s misguided direction before the situation becomes irreversible.
I’ll choose option 2. There is still time.