Obama’s Chamber Speech a Tangle of Contradictions

In a speech today to the Chamber of Commerce, Barack Obama called for a reduction in corporate tax rates and simplification of the tax code, but he then pitched alternative energy, which is based wholly on tax breaks and subsidies. He said spending must be reduced and then again plugged the boondoggle of high-speed rail, which only benefits politically-connected contractors and unions, and bond traders. He said he favored free trade and then claimed that inventing something here and manufacturing it abroad “breaks the social compact.”

Obama started by saying that Americans have had their faith shakened in the institution of business. This is not true. Americans are hard-working and entrepreneurial. People are upset with the excesses of Wall Street that have been rewarded with bailouts that Obama has now institutionalized. Executives of big banks and car companies know that they will never be allowed to fail. They are running …

Is Dan Akerson Driving GM Off a Cliff?

Akerson photoAs Karl Marx once said, history repeats itself, first as tragedy, second as farce. In last year’s epic auto chronicle, Crash Course: The American Automobile Industry’s Road from Glory to Disaster, author Paul Ingrassia wrote about the catastrophic decline of the American automobile industry in the seventies:

Just as General Motors was led by financial people, Honda would always be led by engineers… Put another way, the bean counters ran GM, while the car guys ran Honda. It would make a crucial difference between Honda’s success and GM’s failure.

While Ingrassia has recently written that he sees a glimmer of hope in what he terms GM’s great “restructuring,” the fact remains it wasn’t a “restructuring” at all, but the largest government seizure of privately-owned assets in history.

The reality is that GM seems to be making the same mistakes all over again. Less than two years after the government’s …

Modica: Will State & Muni Bondholders Get Crushed to Benefit Unions?

During an appearance on Fox Business Network on Tuesday, NLPC Associate Fellow (and GM bondholder) Mark Modica warned that the GM bankruptcy may provide a model for insolvent states and localities to crush bondholders and taxpayers to protect politically-connected unions. “Follow the Money” host is Eric Bolling. Here’s a transcript:

Eric Bolling: GM’s creative approach to bankruptcy involved a lot of politics and back scratching and it might be just the playbook the states need, who are in financial trouble. Mark Modica, former GM bondholder himself who got hammered by the GM bailout has been all over this. Ok, sir, go ahead, we talked a lot about the GM bankruptcy and what happened. Tell us what happened to the bond holders.

Mark Modica: Hi Eric. Yeah. There was obviously favoritism as politically favored groups like the UAW did very well. I like to call it a wealth redistribution scheme. …

Paranoid Rangel Claims We Broke Into His Office

One of the more bizarre elements of today’s Washington Post profile of Rep. Charles Rangel (D-NY), by Wil Haygood, is this:

Rangel has genuine vitriol for the National Legal and Policy Center, which filed complaints against him with the Federal Election Commission, the IRS and the House Ethics Committee. He claims that investigators for the group followed him to the Dominican Republic and broke into his office.

Rangel has made no secret of his contempt for the National Legal and Policy Center (NLPC), but this is the first time he has libeled us or accused us of committing a crime.

Rangel previously lashed out at us on the House floor on August 10 of last year when he expressed a similar paranoia:

And they followed me on vacation. They followed me when I was doing business. They’re at the airport. They’re outside where I live. It’s kind of rough.

Rangel ‘Lays Blame’ on NLPC for His Ethics Problems

Rangel photoWashington Post reporter Wil Haygood today examines the plight of Rep. Charles Rangel (D-NY) since his Censure in early December. Haygood sat down with Rangel for two recent interviews, and reports Rangel’s “answers were full of contradictions that seem to defy easy explanation.” Also:

Rangel has genuine vitriol for the National Legal and Policy Center, which filed complaints against him with the Federal Elections Commission, the IRS and the House Ethics Committee.

Haygood paints a picture of a bitter and confused politician who seems unable to accept the fact that his time has long passed:

While taking blame for what he termed “overzealousness” in fundraising, Rangel chided members of Congress who voted for censure instead of a less serious reprimand, howled about a double standard, vowed that this episode “is not over yet” and complained bitterly about the National Legal and Policy Center, a Falls Church-based organization that chases

Will SEC’s ‘Say on Pay’ Rule Do Any Good?

golden parachuteAs someone who has sponsored “Say on Pay” shareholder proposals with companies like Boeing and Procter & Gamble, I wonder whether SEC-mandated votes on executive compensation will do any good. In fact, I worry that it may lead to a false sense of shareholder empowerment.

Yesterday, the Securities and Exchange Commission voted 3-2 to adopt a rule requiring public companies to hold an advisory vote on executive pay at least once every three years.

At Boeing in 2008, our “Say on Pay” proposal got 38% of the vote, an extremely strong vote for a proposal opposed by the company’s management.  It had little impact. Management paid no attention to us and Boeing CEO James McNerney continues to be overpaid, even as the company experiences setback after setback.

Public companies should be controlled by shareholders, and their representatives, the board of directors. Unfortunately, corporate boards today are characterized by cronyism and …

GM’s ‘Looming Train Wreck’

GM logoUpbeat reports of GM’s “progress” have prompted politicians to pronounce the auto bailout a “success” and rocket the share price to 37. But do these reports reflect reality? The unrelated declines of both the American automotive and daily newspaper businesses have resulted in even less reporting on a beat that was thinly covered to begin with.

Right now, news about GM is what GM says it is. Business editors have little choice but to recycle GM press releases. They do not have the troops to do actual reporting. Even in the heat of the IPO coverage, GM’s financial data was uncritically repeated, never mind that the company could not even attest to its own financials.

Now comes Peter De Lorenzo, an automotive journalist who actually knows what he is talking about. These days he practices his craft on the Autoextremist.com website. De Lorenzo is not buying the GM hype. In …

Schwarzman Gets Billions; Taxpayers Get Bankruptcy

Schwarzman photoStephen Schwarzman is Chairman, CEO and Co-Founder of the Blackstone Group private equity firm. He is reportedly worth $8 billion. According to the Blackstone website, 36% of the money it manages is in public pensions, the largest single source.

On Wednesday, the Blackstone Group put out this statement:

Blackstone’s view on public employee pensions is clear and unambiguous: We believe a pension is a promise. Working men and women should not have to worry about their retirement security after years of service to their communities. We oppose scapegoating public employees by blaming them for the structural budget deficits that cities and states face. We at Blackstone are committed to helping public employees retire with confidence in the strength and reliability of their pensions.

What about people who pay taxes but who don’t work for the government? Aren’t they “working men and women,” too? And speaking of working people, …

Is Obama Responsible for McCrudden’s Threats?

McCrudden photoThe FBI’s reported arrest of money manager Vincent McCrudden for allegedly making threats to kill members of the Securities and Exchange Commission (SEC) and other government officials prompts the question of what role, if any, anti-capitalist and anti-Wall Street rhetoric played in his actions. If the logic of the Left that was applied to the Tucson shootings – that Tea Partiers and Sarah Palin somehow had something to do with Jared Loughner’s rampage –  should not President Obama and other politicians be held responsible for McCrudden’s threats?

According to CampaignMoney.com, a Vincent McCrudden made a $2,300 donation to Obama for America on April 19, 2007.

Of course, Obama’s anti-banker and anti-Wall Street rhetoric was just that. In the wake of all the bailouts, Obama is actually the best friend the big banks and Wall Street have ever had. But does that mitigate the potential impact of his words on …

CNBC: Flaherty Says Reduce Corporate Income Tax

Would a cut in the corporate tax rates really help create jobs? I debate this question today with David Callahan of Demos. CNBC hosts are Tyler Mathison, Sue Herera and Michelle Caruso-Cabrera. Here’s a transcript:

Michelle Caruso-Cabrera: Two Congressional committees will tax up tax reform this term. President Obama is trying to mend fences with Wall Street and the business community including the Chamber of Commerce’s Chairman, Tom Donohue – today clamoring for lower tax rates on corporations. Would a cut in the corporate tax rate really help to create jobs? David Callahan is a Senior Fellow at Demos and author of Fortunes of Change, the Rise of the Liberal Rich and the Remaking of America and Peter Flaherty is President of the National Legal and Policy Center. Gentlemen, good to see you. David, let me start with you. Would lowering corporate taxes help to create jobs in America?…

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