When the recent crisis in the financial sector began, the press and others immediately began to shout that the free market system had failed. John McCain suspended (and lost) his campaign to try to save the world by leading the effort for a $700 BILLION bailout that had to be passed immediately lest the entire economy come to a screeching halt. Here we are, weeks later, less than half of the original amount handed out and yet we are still here. Now the “Big Three” automakers send their corporate bigwigs in their corporate jets to Washington with their hands out saying they just can’t make it without a taxpayer bailout.

Some Republicans have joined the cry and have said that the only answer for the party’s future is to move “to the middle” (read move left) in order to regain strength. They say that we need more government regulation to control the greed on Wall Street and in corporate board rooms. They ignore the fact that these “crises” are directly attributable to government interference in the marketplace.

If the Republicans want to get back in office the formula is simple. Follow the path laid out by Ronald Reagan in 1980 and followed by Newt Gingrich in 1996. John McCain didn’t follow that path and Republicans stayed home in droves. Look at Ohio where Obama got fewer votes than John Kerry did in 2004 but John McCain got over 130,000 fewer votes than George Bush did in ’04. Republicans sat on their hands and we got President-elect Obama.

Americans have shown over and over again that they want candidates who stand for and deliver smaller government. They want candidates who stand for lower taxes (Obama stole that message this year). The Republicans betrayed them by proving that “compassionate conservatism” meant bigger government, more pork, and higher deficits. John McCain was the wrong candidate because he was the ultimate champion of the RINOs (Republicans in Name Only). Although he is right on so-called “earmarks”, he is wrong on campaign finance, he was wrong on tax cuts, and he was wrong on the courts.

The press and the Democrats tell us that Americans want “bi-partisanship” what they mean of course is that they want Republicans to agree to what the Democrats want. When Republicans start standing up for the free market, when they again start demanding more freedom rather than less, and less government rather than more; then and only then will they start winning elections again.

The free market works, socialism and centrally controlled markets do not. This has been proven over and over again. It is time to stand up for what is right, it should be easy, because it works.

God Bless America

I think it is now safe to say that the country is in a recession and it threatens to be a bad one. Certainly the economy is in the worst shape since the Carter presidency although we are still MUCH better off than we were in 1979. (Remember 13% inflation, 21% mortgages, and 11% unemployment?) All the talk in Washington these days is about bailouts; $700 Billion already for the finance industry, and now the debate is over $25 Billion more for the auto industry.

The finance bailout is already done, so I won’t go into that one now, but why are we looking to bailout the “Big Three” automakers? I can see an argument for assisting GM and Ford since to some considerable extent the government caused their problem (more in a moment) and there are millions of US stockholders who stand to lose if they file bankruptcy. But Chrysler is privately held and recently purchased by investors who theoretically knew what they were buying; I don’t see any legitimate reason to assist them.

Why are GM, Ford and Chrysler in so much trouble today while Honda, BMW, Mercedes, Toyota, Mazda and others seem to be able build cars in the US profitably? I see two reasons: 1) the government has forced GM, Ford and Chrysler to build cars that are not in their “sweet” spot and target markets. They have done this through CAFE (Corporate Average Fuel Economy) regulations that led to the creation of such exciting vehicles as the Ford Aspire and the Chevy Metro. The American consumer looks to the big three for large, safe, comfortable, reliable cars and trucks. When they want high economy, they look to the Japanese manufacturers, when we want high performance, great handling cars we look to the European manufacturers. Cadillac is still the luxury leader, Ford is still the family car and the work truck, Jeep is still the offroad adventure. That is what the market wants. Who wants to be caught dead in a Ford Aspire (the odds being pretty good if you actually drive one)?

The 2^nd reason is self-inflicted. The management of these companies did not have the courage to stand up and tell the UAW where to get off during contract negotiations and they have been pushed into unsustainable and ridiculous union contracts to the point where the highest single cost of any vehicle is not the engine or computers or any physical part but is the cost of union benefits (the second largest cost is taxes, more on that in a minute).

Bankruptcy would allow the companies to renegotiate these absurd contracts, end the “job banks” where employees sit around and get paid while waiting for something to do, and would allow the kind of restructuring that is necessary. GM would be better off without Pontiac, Ford could lose the Mercury brand. Would anyone but my Dad miss Buick?