It has now been over six months since General Motors finally recalled vehicles with a known deadly ignition switch defect. The defect was attributed with being the cause of accidents that resulted in at least 13 deaths. The Wall Street Journal now reports that only 34% of the recalled vehicles have been fixed.
GM has taken $3.4 billion in charges and losses on the past two earnings' reports for all of their recalls, despite the fact that most of the recalled vehicles have yet to be repaired. The most questionable part of GM's charges come from the first quarter's earnings' report.
General Motors continues to deny that it has a safety problem with brake lines that are prone to corrosion in as few as five or six years. Thousands of owners of GM trucks and SUVs have complained of failing brakes due to brake lines bursting from the rust problem. One of these owners, Joe Palumbo from Pennsylvania, has made it a quest (see his website here) to expose the safety defect, thus far to little avail. GM's latest response to Mr. Palumbo includes an implied admission that the company has been using inferior quality brake lines in its vehicles.
Two years ago, in August 2012, the U.S. Treasury Department issued its so-called "sweep" rule forcing mortgage giants Fannie Mae and Freddie Mac to surrender all future profits. Shareholders were angered. Some sued the government. Their displeasure now has a measure of vindication. Near the end of July, an unnamed source leaked a confidential Treasury document (see pdf) to the public, dated June 13, 2011, showing that the department was willing to go to bat on behalf of outside investors, particularly The Blackstone Group, to facilitate purchases of equity stakes in the companies. At the time, Fannie and Freddie were rebounding from a deep slump, yet their management, under tight federal conservatorship since September 2008, had their hands tied. The latest revelations may strengthen the claims of existing shareholders, and more broadly, the cause of property rights.
New York City Democratic leader Albert Baldeo was convicted last week of seven counts of obstruction of justice. He was acquitted on three counts of fraud related to the use of straw donors to qualify for taxpayer matching funds for 2010 for his unsuccessful City Council campaign. The scheme was exposed by NLPC and was the subject of a New York Post story on October 11, 2011.
Baldeo is a close associate of Rep. Gregory Meeks (D-NY). The two shared an office from 2006 to 2009. The two have jointly sponsored workshops and programs on immigration and mortgage foreclosure. Meeks even arranged for a Congressional Proclamation in 2009 that called Baldeo a "visionary leader" and thanked him for his community service. See photo.
The arrival of Al Sharpton in St. Louis could have been predicted. And his departure can't come soon enough. On Tuesday morning, Sharpton, the New York City-based minister, civil rights leader and media personality, was in town supposedly to defuse the ongoing street violence following the fatal shooting last Saturday by a white police officer in nearby Ferguson, Missouri of a local black youth, Michael Brown. As revealed days later by hidden video footage, Brown very likely had robbed a convenience store. Moreover, Brown minutes later assaulted the officer and tried to grab his gun. Sharpton has demanded that police release the name of the officer and arrest him. Early today, he got his first wish. Hopefully, the cop, Darren Wilson, won't have to hide for the rest of his life.
General Motors has yet another unresolved safety concern with its vehicles. This one involves trucks with anti-lock braking system (ABS) problems. The ABS in some GM trucks engages at slow speeds in dry conditions, leading to a loss of braking and increased stopping distances. Once again, this is a known problem at GM, as they have recalled vehicles previously from earlier model years with the same problem.
It has been two years since General Motors admitted that there was little demand for the Chevy Volt (as reported here) due to there being "no plug-in market." Their answer was to "create market" to drive sales for the politically popular but economically-nonviable Volt. GM manipulated sales for the Volt through the use of subsidized leases at a time when President Obama's favorite, green wonder-car was being criticized for low sales as it failed to live up to the early hype.
If sunshine is the best antidote to corruption, then Senator John Thune, R-S.D. (in photo), must be opening a lot of windows. Last Wednesday, July 30, Sen. Thune unveiled the Union Transparency and Accountability Act (S. 2688), a measure that would require greater transparency in the information labor organizations report to the Department of Labor. The bill would improve detection of misuse of funds, especially by union officials and benefit fund trustees. Thune explained his discontent over President Obama's approach: "I hope my colleagues join me in supporting my bill to put an end to the administration's political favoritism and restore transparency to union finances. Union members deserve to know how their dues are being spent." The legislation effectively would restore three finalized rules shelved by the DOL in 2009.
For three and a half years, public-sector unions in Wisconsin, to little or no avail, have sought to topple a state law to restrict their collective bargaining abilities. Their options now are nearly exhausted. Last Thursday, July 31, the Wisconsin Supreme Court upheld the constitutionality of a 2011 law passed by the Republican-majority legislature at the urging of GOP Governor Scott Walker. By a 5-2 margin, the court concluded that while public employees may organize unions, their employers are not obligated to negotiate with them. The ruling is a clear victory for Gov. Walker, who survived a voter recall in June 2012 over this issue. It's also a blow for fiscal responsibility at a time when many state and local governments are facing large deficits in employee benefit programs.