Global Warming
Cap and Trade...Round #1

I saw Carol Browner defending the narrow Cap & Trade victory of the Administration. She deftly avoided all issues concerning policy decisions based on the science of global warning. About all she would say is that the science is clear. However, in the interest of “fair and balanced”, take a gander at the following.

Washington, D.C., June 26, 2009—The Competitive Enterprise Institute is today making public an internal study on climate science which was suppressed by the Environmental Protection Agency. Internal EPA email messages, released by CEI earlier in the week, indicate that the report was kept under wraps and its author silenced because of pressure to support the Administration’s agenda of regulating carbon dioxide.
The report finds that EPA, by adopting the United Nations’ 2007 “Fourth Assessment” report, is relying on outdated research and is ignoring major new developments. Those developments include a continued decline in global temperatures, a new consensus that future hurricanes will not be more frequent or intense, and new findings that water vapor will moderate, rather than exacerbate, temperature.
New data also indicate that ocean cycles are probably the most important single factor in explaining temperature fluctuations, though solar cycles may play a role as well, and that reliable satellite data undercut the likelihood of endangerment from greenhouse gases. All of this demonstrates EPA should independently analyze the science, rather than just adopt the conclusions of outside organizations.
The released report is a draft version, prepared under EPA’s unusually short internal review schedule, and thus may contain inaccuracies which were corrected in the final report.
“While we hoped that EPA would release the final report, we’re tired of waiting for this agency to become transparent, even though its Administrator has been talking transparency since she took office. So we are releasing a draft version of the report ourselves, today,” said CEI General Counsel Sam Kazman.

Soooooooooo…maybe the science is not as compelling as Czar Browner asserts. Or, maybe the EPA data is faulty which would be an “inconvenient truth”. Have I heard that phrase elsewhere? Certainly, there is still much to be hashed out before a massive legislative remaking of our entire society and its energy use and production.

Obamanomics
The Devil is in the Details

So, now we have the “new GM”: Government Motors. The largest industrial manufacturer in the history of the US is in bankruptcy. And, when it emerges from Chp 11 reorganization, you and me, the American taxpayers will be the largest shareholders. Next will be the UAW. To get the “new GM” out of bankruptcy will cost another [conservatively] $50B and if one adds up all the cash poured into GM by all parties there will be a $100B price tag!

In its heyday, the “old GM” had a max capitalization of around $60 B. So, it appears that it will have to be fantastically successful for you and me to get our investment back. The POTUS says he wants to begin having the “government” [you and me] get out of its investment in 18 months. Good luck! The government has never run any venture successfully [Say: USPS]. And, the union has never been interested in business ownership because that is at cross purpose with their vision: labor, not ownership, should benefit from the business. As I have written before in this space…it will be interesting to see how this unfolds.

While there have been some hard decisions made that management and labor failed to do over the past twenty years, as my mother used to say “the devil is in the details.” First detail, the UAW has no change to current wages, benefits or pension plans. The “new contract” they negotiated with the US Treasury is re-negotiated in two years just in time for the re-election bid of the POTUS. Do you think that renegotiation will benefit the government owners [you and me] or the union owners and workers?

Second detail, part of the reorg plan is to sell Opel. But, it is a sale with a condition that the buyer cannot compete with the small Opel cars in the US or China. It is sort of the opposite of Chrysler/Fiat where Fiat was needed to provide Chrysler with needed small car technology. Detail three, closely connected with detail one and two, the cars now manufactured by GM overseas, the little green ones, cannot be imported to the US. The upshot of the whole matter is that the “new GM” will have to retool what factories are left to build new little green cars in the US without benefiting from already available little green overseas produced cars and without competition from Opel. How convenient for the workers…they will be guaranteed jobs to build the “new GM’s” new fleet! [Repeat Q. at the end of the forgoing paragraph.]

While the administration says it is not interested in managing the “new GM”, it has already fired the previous CEO and has guaranteed the head quarters will remain in Detroit. Not exactly passive ownership positions. This whole matter of “to big to fail” has lead us to a debacle of enormous scale. Debt owners all over the world have had their “priority claims” crammed down their throats. This includes small potato investors worth less than a million dollars who had $ in GM debt as a “safe, non risk investment”. Thousands of dealers have been shut down affecting thousands of jobs in towns and cities, small and large, throughout the land. There is a push to reformulate the auto business in the US moving the country to manufacturing of little green cars that we are not sure the consumer even wants.

All that is left of the old GM is…well…the UMW. The workforce, albeit smaller, soldiers on knowing it will have jobs at least for a while longer. As long as the taxpayers do not revolt and the administration needs to be re-elected, the “new GM” will be the poster child of a planned economy. Keep your eyes and ears open about the next big program to keep the “new GM” operating even if it cannot compete in the market place. The devil will be in the details.

Dare to be Daniel
Babylonian Dreaming

Nebuchadnezzar was a world leader. A man who had power and authority over an entire nation. But, like all of us, when he closed his eyes at night, he had no control over his sub-conscious hours. We are told in Daniel chapter 2 that he had a dream that left him troubled and anxious. He asked his advisors what the dream meant. Now, I do not know if the advisors in the White House, Kremlin or 10 Downing Street are presented with such tasks, but for Double Z, this was a big deal. Now, if these boys knew the dream and its interpretation, they could tell him what they thought he wanted to hear or what would put them in the best light. But, they were incapable, and admitted so, which is a virtue in itself. Their response was probably the wisest statement these wise men ever made: No man can do what you want; only the gods whose dwelling is not with flesh.

Double Z was not used to this type of response. These were his handpicked advisors. They should know these things…after all they are the best and brightest in Babylon. We receive two insights into Double Z. One, for all his power, wealth and authority he was terribly insecure. He was frightened by a dream for crying out loud. Secondly, when he could not get an explanation from his trusted cabinet, he fell into a rage. He ordered his cabinet dissolved in the most literal of fashions. He ordered them all destroyed! Just the kind of cool and calm leadership the country needed an egomaniacal despot who issues death penalties to those who cannot interpret his dream. Nice!

Daniel and his friends are sought out to do the dirty deed. What a turn of events. Now Daniel can do away with the most powerful of the king’s advisors and he and his friends can move into their positions. Now they will be in charge of the nation that overthrew Judah and make things right again. Well, remember, Daniel did not see himself as a rebel within the enemy capital waiting for the right time to topple the evil Chaldean government. He was serving his God in a foreign land. This is not exactly an argument for the theonomists or even the neo-Calvinists. Daniel was not interested in claiming Babylon for Christ.

He asked the captain of the king’s guard what was going on that these men had to be killed. Upon hearing about the dream, Scripture says Daniel went in and requested the king to appoint a time that he might show the interpretation to the king. What was he thinking? If the wise and powerful advisors could not tell Double Z about the dream where does Daniel get off making such a request? Was this an act of hubris on his part? No. When he was granted the opportunity, he called a prayer meeting. You see, Daniel and the advisors were kind of on the same page. The condemned cabinet said only the gods could know the dream. Daniel understood that the sovereign God of the universe, the Creator and Sustainer of all things, did know.

So, Daniel called a prayer meeting. The hit squad of the king became the prayer warriors of God. And, the prayers of the saints yielded the interpretation of the dream. Daniel knew that all actions of a believer should be bathed in prayer. Notice again what Daniel did not do. He did not rush out to Double Z and proclaim “I figured it out”. No, his immediate response was to render honor, glory and praise to God for his mercy and grace in revealing the dream. He praised God for His eternal wisdom and power, His governing of history and for making His will and way known to His people. Only after prayer and praise did Daniel make way to the king for interpretation of the dream.

Daniel's actions spared the lives of the king’s wise men. But, what the king and the court saw was only the end result of more obedience by Daniel, this time in prayer and worship. So now he could go to Double Z equipped by God Himself to speak the Truth in boldness. He assisted the oppressor king and saved the lives of those who lorded over him. What a corrective to us. We seem to think if we can get control of the government, all things will be better. Daniel sought to serve the king and save the lives of his enemies. He did not see himself as the agent of change for Babylon. He was an obedient man of prayer and worship used by His God.

We can discern many lessons from this incident:
1] Always be a life saver, not a life taker, even when it is your enemies.
2] Obey God but serve the king. Is this not what our Lord was saying in his render to Caesar talk?
3] Always bath your prospective efforts in prayer.
4] Seek the mercy and grace of God for you can…pagans cannot…that is why Daniel could obtain the answer and the advisors could not.
5] Always be thankful to the God Who provides. How often do we seek His wisdom and when He delivers we forget to be thankful?
6] God alone is to receive glory through our praise to Him for His eternal wisdom, governing of history and His fellowship with His people.

Many get hung up on the interpretation of the dream and are enthralled with the images in the dream. The message of the rise and fall of kingdoms of this earth not being an accident but an outworking of God’s judgment on the nations of the world for not following His word and law gets our end times motor running. This is important, because it applies to Judah, Babylon and the USA. But, those are matters in the eternal hands of God and His divine historical timetable. The message of Babylonian Dreaming for the individual Christian is to be obedient, faithful people of prayer and worship to the sovereign God of the universe. Dare to be Daniel as you live out your daily life in the company of all, even oppressors and enemies!

Living in the World
Remembering

Decoration Day was started in Boalsburg, PA, by 3 women who wanted to honor the Civil War dead. A point of order: Decoration Day is May 30th not the manufactured or fake holiday the enables federal workers to have a three day weekend at the end of May. Now it is called Memorial Day and we celebrate the warrior dead of all wars, those who have served in the military, KIA or not, and all of our ancestors who have gone before us and through their sacrifices enabled us to have a better life. It is a time of remembering.

Each year I prepare for May 30th by attending those places where my relatives are buried and planting their graves with annuals. In St. Luke’s cemetery in Luthersburg, PA, my paternal grand parents and great grandparents are buried. It is the former German Reformed Church where they were married and my father baptized. Also, in Luthersburg, is the Union cemetery, one of thousands of Union cemeteries in the county first established for Union Civil War dead. It is there my parents are buried. Finally, on to Sykesville, PA, the place of my birth, where my maternal grandparents, my Uncle Milton and infant aunt are interred.

This year I added to my itinerary, a trip to Paradise, PA. Like Sykesville, it is in Jefferson County, between Sykesville and Big Run, PA. The reason was to find the graves of my mother’s grand and great grand parents have their graves. I needed assistance in finding the graves, so I journeyed to Punxsutawney, PA, to pick up my mother’s sole surviving cousin, Daryl Kicher. Daryl is 82, failing fast, and living in what he calls a “rest home” in Punxsutawney. After lunch we began our journey to Paradise; what a journey it was!

As I said, Daryl is failing, and he had difficulty in remembering exactly where the cemeteries were. So, we spent a pleasant May afternoon covering most of the eastern Jefferson County winding, macadam roads. It included a run through Wishaw, a town named after W. I. Shaw, the mine superintendent of what was the second largest bituminous deep mine in Pennsylvania at the beginning of the 20th century. Like all the old Pennsylvania bituminous deep mine towns such as Kramer, Snowshoe, Grassflat, and Helvetia, there is not much of the community and no prosperity left in these places. Eventually, we found the former churches of Paradise and their church burial yards holding ancestral Kichers.

Remembering. We do not do enough of that. We are busy folks, living life to its fullest [usually understood in a selfish manner] at breakneck pace. We have little time for remembering. But, the problem with that is not the remembering, it is the opposite side of the coin. Forgetting. We forget where we come from and who sacrificed and worked so that we could be better off than they were. We forget how we were blessed with caring and loving forbears. We forget who we are. Remembering is an antidote to self-centeredness and self-focus. So, on this coming Decoration Day take time to remember so you do not forget the people who make it possible for you to be who you are.

Obamanomics
Credit Cards and Automobiles

Two revealing circumstances occurred this week before Memorial Day, which is celebrated early this year. One was the credit card legislation that the President wanted on his desk before the holiday. Amazingly, although some adjustments between the Senate and House bills is required, the deadline of Obama looks doable. This legislation is hailed as relief for the debtor who has had high balances and has had his rate or payment requirements changed in mid-stream. You know, the kind of folks who should not have credit in the first place. The government has now fixed that problem. Right?

Sure. But, what of the unintended consequences? Credit card companies have made big money from those who could not pay balances when due. The interest rates have always been high and a great profit source for the companies. That has made them greedy for more card holders. So, college kids out of college yet without work received credit card offers. Maybe their limits were only $500 but they charged to the limit and could not pay balances. Millions of interest payments on $500 balances equals real money. First unintended consequence: Those offers will now be non-existent, which is a good thing but there will also be many lower income folks, who could pay modest balances, who will also not be able to have cards. When their time is up…no new card. Some credit card companies seeing this coming are already offering to buy back credit cards from customers!

Second unintended consequence: Those who paid balances will become the new source of income for credit card companies. They are, after all, in business to make money. Someone has to pay. It had been a great ride for payers. They change a purchase with interest free money and if they pay their balance in dull when due they have used the bank’s money without an interest payment of any kind. When credit is restricted and high interest is not recovered from non-balance payer, how will money be made? Two ways seem to be the only option. One, charge interest from the date of purchase so that no one uses bank money for free. Two, charge fees again for all cards. Anyone over the age of 40 can remember the days of two.

Now this seems eminently reasonable. Credit card companies need to make money. But, what will card holder who have the wherewithal to pay balances do? Do you think they want to pay interest on purchases? I think not. There will be a flight to cash and those that have will spend and those on the margins will not. Unintended consequence three: Making the consumer economy weaker, which we are told is 2/3rds of our overall economy. Charging a fee for maintaining a card may not have the same disincentive, but we have an entire generation who never paid to have a card. So…who knows how the new way will be received.

Unintended consequence four: Many of the big banks make big money from credit card operations. At a time when we are worried about future “stress” on them we make “stress” for them by impacting a stream of revenue. So, Congress and the Administration have saved the “deadbeats” from the greedy credit card folks. There is blame to pass around on the credit card mess. But, the remedy may in fact be deleterious to those who used their cards correctly and the entire economy. But, that is not all….

The second big item of the week was the Obama Administration’s announcement of 39 mile per gallon fleet standards by the year 2016! This was done with apparent agreement by the Big 3 [or is it Little 3], major foreign makers, UAW and environmentalists. It was a Kodak moment with all the players smiling behind the President. The WSJ had an editorial with the sub-title “Are we nuts?” Automakers in this country have lost money to date trying to meet 20 something standards. Why? Because consumers want bigger cars that do not meet the standards but they have to build unwanted, what we used to call, “compact cars” folks do not want.

Living where I do where winters are tough and much travel is on I-80 with 60% of the traffic is 18 wheelers, I for one do not want a “compact car”. But, this is an example of why elections have consequences. BO has the banks in tow, is about to own Chrysler and GM with the UAW, and wants to forward his “green” agenda by building hybred “compact cars”. Notice how this lines up: Two of Bo’s constituent supporter groups are happy [unions and environmentalists]; he will have ownership of two of the three US auto makers; and Ford and the foreign makers have to play ball since they are still private enterprise [for now!] and will have to deal with credit markets and banks now controlled by the Treasury. It’s a perfect Strorm!

The feds justify this by saying this eliminates individual state CAFE standards the create inconsistency for the auto makers. But, the target is more ambitious than the 32 per gallon by 2015 standard heretofore established by those trying to balance mileage against profitability. The latter is obviously not a concern of the Obama Administration. These “green compacts” will be build, and we will all go along. So, how does this happen if the consumer doesn’t want the cars? Grab you wallet! Subsidized loans or tax credits for buyers will be the only way. Again, we all are in this together and short of outlawing any car over 4 cylinders or without a battery, subsidies from the government [the taxpayer] seems to be the only way.

We cannot stand many more weeks like this one. The Obamanomics policies are coming fast and furious. We have yet to get into cap & trade tax or health care reform. I guess I should look on the bright side. With the new “green compacts” I will travel less, walk more, create less green house gases and be healthier and we won’t need a carbon tax and government health care. Some how, I don’t think it will work out that way. The worse it yet to come from Obamanomics.

Living in the World
Cheer, cheer for Old Notre Dame

We in the Protestant world have experienced this for a long time. Our institutions of higher learning going the way of the secular world…think Harvard, Yale and Princeton. So, it is not a surprise to see a flagship university of the Roman Catholic world slipping away from its heretofore sacred principles. The fuming and agitating about an avowed baby killer speaking and being awarded an honorary degree by Notre Dame University recognizes the new world. It is more of an honor to have the POTUS speak at your institution than have your institution stand by virtues and principles of the church that sponsors the institution. If shows the enlightened stance of NEW Notre Dame.

At Lucas’ wedding I had an interesting discussion with one of his classmates at Catholic University of America, a Papal school, and another premier Roman Catholic university. Danny and his wife were quite perturbed at the invitation extended to President Obama by ND as well as the covering of the symbols of Catholic Christianity when BO spoke at Georgetown. Yet, they also recognized that BO was also helping to delineate true religion from the cultural Catholicity that is becoming prevalent in the United States.

Again, I believe the Protestants are ahead of the game here. For a long, long time, folks have realized there is a bright line of difference separating orthodox Reformed belief and practice and what much of the contemporary evangelical church believes and practices. Man driven worship because there is no God centered doctrine; discipleship in the Word missing because the Word is no longer central to life; discipline of the saints non-existent because there are no Biblical standards accepted as normative; a desire to be accepted by the world because we have no concept of what is pleasing and acceptable to a holy God. It is easy to see the difference between content less Christianity and true Biblical faith; the former adapted to the culture, the latter not so.

I told Danny it’s a good thing the Roman Church is stating to see their own bright line. BO is doing the church a big favor. He is clearly showing that there is a difference between what James calls “religion that is pure and undefiled before God” and what passes as Christian religion in the modern world. The President in his commencement speech said there are irreconcilable differences between the pro-life and pro-abortion positions. Yet, he called for mutual understanding and dialogue between the positions. Obviously, Jeremiah Wright and his other pastors through the years have not preached much from James. For the Lord’s brother goes on to define pure and undefiled religion as:

…to visit orphans and widows in their affliction and to keep oneself unstained from the world [Ja 1:27].

We live in the world, but we are not to be taken in by the world’s views, even when those views are held by one who professes to be a Christian and is a popular POTUS. Is dialog possible between means of life and death? Can good seek compromise with evil? If differences are irreconcilable, who is going to change their mind? It seems it was old Notre Dame.

As a kid, I remember the chorus from the ND “fight song”. ND has, and probably will continue to have, the largest following of college football fans in the land. We all used to joke that all the priests and nuns were praying for an Irish victory on every football Saturday. Success has been rare for the Fighting Irish in recent years. Maybe we are getting a glimpse of why…it is no longer OLD Notre Dame. The only thunder to be shaken down from the sky in the future may be the thunder of displeasure or wrath for the NEW Notre Dame. The NEW Notre Dame now stained by the world and the blood of millions of innocent children.

Obamanomics
Auto Politics…er…Policies

Yesterday was an insightful day on learning more about Obamanomics. At the deadline for Chrysler reorganization outside bankruptcy, 20 bondholders failed to agree with the government arranged Fiat-UMW-USA new Chrysler. So, Chrysler filed for the protection of the US Bankruptcy Court under Chapter 11 of the Bankruptcy Code.

Here is the in sight. The President demonized the bond holders, claiming a priority position, for not giving it to the government proposal. It was their fault that Chrysler went bankrupt because they were greedy hedge funds. Wow! These lenders gave Chrysler life in 2007. Now, they are the cause of the failure of Chrysler? What about years of mismanagement and a UMW that negotiated pay without work or production?

Now, in bankruptcy, the rule of law should prevail. So, if the 20 lenders really should have a bigger piece of the pie, they will be able to put forward their case. After all, they were only trying to protect their stakeholders. It appears that the UMW would be receiving a big stake in the “new Chrysler”, about 39% and the bondholders only 10%. No wonder they were steamed. Trade in $6.9B in loans for $2.25 B and 10% of the common stock of the company having a lesser stake than Fiat, UMW and the government!

The judge who handled the Enron case will have to sort out the claims. The President talks of a surgical 30-60 day bankruptcy. What? How can such a complex case be dealt with in 30-60 days? If that does happen, we need to be wary for the rule of law would not have been applied with its right to be heard and due process. Heaven help us if the heavy hand of the government can be used to make a federal judge bend to the will of the Obama Administration. Avoidance of such a thing was the reason the Founders separated the judiciary from the executive and legislative branches.

Why such an effort to save Chrysler in the first place? It is a failed business with a failed business model. This is the auto politics. The UMW, as well as all unions, were big supporters of BO in his election campaign. This is the payback. Keep Chrysler, as well as GM, afloat with taxpayer $, get the companies re-organized, and save as many union jobs as possible. By working out a 39% stake for the UMW in the “new” Chrysler, the UMW is now in an interesting position. As owners, they want cost cutting and efficiency; as labor they want high wages and benefits and relaxed work rules. For years it has been the latter that has ruled with a predictable result.

Maybe it will be easier for the OA to get its auto vision of small, high mileage autos running on ethanol, wind and electric as the standard for US vehicles if the government controls the auto manufacturers. And, if not the Administration, its close allies the autoworkers. It should be interesting to see how this plays out in court and for GM with their June 1 deadline looming.

One thing for sure, Obamanomics is not good for the capitalism that has led to prosperity in the country. Control of more and more of the private sector by government sure does not make folks anxious to invest into private capital. It keeps people holding cash. It is mystifying to me that this same Administration that wants private capital to help in a government partnership to buy the asset backed securities ruining the banks lambastes private capital that helped Chrysler float the last two years as the cause of their bankruptcy. What are they thinking? That’s the problem with policies based on politics…they are inconsistent and not based on anything except raw political power. What a way to run a railroad, an auto company or an economy.