Oil Is Trending Upward Again

Oil prices are trending higher. Right now, the price per barrel is around $67/barrel. Last year, as you recall, the price per barrel was around $130+. This caused the price of gasoline to go to over $4.00 per gallon. Right now, the average price for a gallon of gasoline is $2.65/gallon.

This was one big ingredient that caused this current recession. People seem to forget that. This was also a primary cause for the downturn in the automotive industry.

Of course, the liberals in congress and President Obama won't allow us to drill offshore, allow any new drilling in Alaska, build new refineries or build nuclear power plants. This will continue to put us at the mercy of OPEC.

Don't be surprised if gasoline skyrockets to over $3.00/gallon by the end of summer.

Hold on to your wallets!

GM: Now Government Motors

General Motors, once the dominant automobile manufacturing company, filed for Chapter 11 bankruptcy early this morning. This was a move that they should have done a year or two ago, and it wouldn't have required a bailout of over $26 billion of taxpayer money. They stand to receive another $30 billion of taxpayer money on top of that. Welcome to Government Motors!

According to the Wall Street Journal.com:

In bankruptcy, the auto maker will split apart into two companies: a leaner new GM and a so-called old GM, which will include the pieces that will be wound down. GM intends to accomplish the split through a Section 363 sale, which would transfer the new GM assets to an entity owned by the U.S. and Canadian governments, the United Auto Workers union and the company's unsecured creditors.

14 GM assembly plants will close by 2011. Those are jobs lost, not jobs saved!

Basically, the government now owns over 60% of GM. Welcome to Government Motors.

Chrysler and The Rule of Law

The Wall Street Journal has an excellent piece on Chrysler and The Rule of Law. In it, they wrote:

Fleecing lenders to pay off politically powerful interests, or governmental threats to reputation and business from a failure to toe a political line? We might expect this behavior from a Hugo Chávez. But it would never happen here, right?

Until Chrysler.

The close relationship between the rule of law and the enforceability of contracts, especially credit contracts, was well understood by the Framers of the U.S. Constitution. A primary reason they wanted it was the desire to escape the economic chaos spawned by debtor-friendly state laws during the period of the Articles of Confederation. Hence the Contracts Clause of Article V of the Constitution, which prohibited states from interfering with the obligation to pay debts. Hence also the Bankruptcy Clause of Article I, Section 8, which delegated to the federal government the sole authority to enact "uniform laws on the subject of bankruptcies."

The Obama administration's behavior in the Chrysler bankruptcy is a profound challenge to the rule of law. Secured creditors -- entitled to first priority payment under the "absolute priority rule" -- have been browbeaten by an American president into accepting only 30 cents on the dollar of their claims. Meanwhile, the United Auto Workers union, holding junior creditor claims, will get about 50 cents on the dollar.

To read the full article, go here.

Bailout Car Ad

I saw this car ad parody at a forum I belong to. It hits the nail right on the head!



This is what I call "truth in advertising!"

GOP Wrecks UAW Bailout

The U.S. Senate shot down the United Autoworkers bailout that is disguised as a bailout of the big three U.S. automakers, GM, Ford and Chrysler.

According to FoxNews.com:

GOP objections stalled the measure in the Senate Thursday night. Republicans put pressure on the powerful autoworkers union as they tried to squeeze out concessions in exchange for their support.

"This was just simply subterfuge on the part of the minority in the Republican Party who wanted to tear down any agreement that we came up with," UAW President Ron Gettelfinger said at a press conference, declaring "the auto industry around the world is in peril."

Intense negotiations broke down over the union's refusal to meet GOP demands for wage cuts. Corker, the architect of the Republican counterproposal to the House-approved bill, told FOX News that negotiators were "just three words away from a deal."

Corker rejected the accusations, telling FOX News the union simply refused to offer a date by which they could be competitive with foreign automakers who have plants in the United States.

"I was stunned that they would walk away from a deal to put these companies on an incredible footing, a healthy footing for their employees for years to come," Corker said.

The senator complained that the UAW pay scale is "far higher" than at other plants in the United States, particularly those of foreign automakers.

In terms of hourly wages, the pay scales are similar. For instance, General Motors says the average UAW laborer makes $29.78, while Toyota says it pays about $30 per hour.

The difference is in the benefits, however. GM's hourly labor costs (including pensions and health care) total $69 for active workers. Toyota's total about $48 per hour at older U.S. plants.

This does not even mention the benefits that thousands of retired autoworkers are receiving. The UAW is unwilling to make any cuts until 2011. Sorry, but if this really were a crisis, then they should be willing to make cuts now.

Hugh Hewitt wrote in today's Townhall.com blog:

Now Senator Reid has announced he's giving up and going home --one of those moves that makes me wonder about the whole premise of the exercise. If a real crisis is at hand, does the Congress go home for a month?

Since no input by the GOP was allowed by the Democrat majority, so small wonder the Republicans in the Senate voted against this bailout of the UAW.

It is about time the GOP showed some backbone. If the Democrats continue to refuse to negotiate for terms favored by the Republicans, then this bailout is good as dead.