From Bad To Worse: Japan Was On Path To Debt Default BEFORE Earthquake, Tsunami And Meltdown. America Next.

Meltdown.  That’s a good word for Japan these days.

And I’m not talking about the nuclear reactors, either.  I’m talking about what had been one of the most powerful economic engines on the planet.

Look at the facts in late 2010 BEFORE the earthquake, tsunami and nuclear reactor.  They didn’t look pretty then; they’ve become nightmarish since:

Japan Will Default as Economy Unravels, Bass Says
October 13, 2010, 4:19 PM EDT
By Nikolaj Gammeltoft and Susanne Walker
 
Oct. 13 (Bloomberg) — Japan will be forced to default on its debt, Greece’s economy is “done” and Iceland is worse off than Greece, said J. Kyle Bass, the head of Dallas-based Hayman Advisors LP who made $500 million in 2007 on the U.S. subprime collapse.

Nations around the world will be unable to repay their debt and financial austerity in a country such as Ireland is “too late,” Bass said today at the Value Investing Congress in New York.

Japan’s economy may unravel in the next two to three years, and its interest payments will exceed revenue, he said. “Japan can’t fund itself internally,” Bass said.

The country’s year-over-year gross domestic product was 2.4 percent as of June 30. It has the world’s largest public debt, approaching 200 percent of its GDP amid a 5.1 percent jobless rate. Consumer price fell by one percent in September and has been negative each month since May 2009, as deflation has taken hold.

Pricing on Japanese interest-rate swaps is the best he’s ever seen, Bass said. Investors could make 50 to 100 times their capital betting on them, he said, calling them a lottery ticket on Japan’s economy.

Japanese bonds have returned 3.3 percent this year, according to Merrill Lynch Indexes, compared with a return of 0.872 percent in 2009.

Crisis

Bank Of Japan’s Governor Masaaki Shirakawa refused to expand monthly purchases of government bonds this year even as deflation persisted. The bank on Oct. 5 instead created a 5 trillion yen ($60 billion) fund to buy bonds and other assets, and pledged to keep its benchmark interest rate at “virtually zero” until the end of deflation is in sight. Deflation has been entrenched in the economy since 1998. The GDP deflator, a gauge of prices across the economy, has fallen 14 percent since 1997, according to data compiled by Bloomberg.

A financial crisis in 1997-98 precipitated by bad loans on Japanese lenders’ balance sheets stemming from burst land and stock-price bubbles of the early 1990s set off Japan’s deflation. Property prices have slumped for 17 of the past 19 years, and stocks remain 76 percent off of their 1989 peak, according to the Nikkei 225 Stock Average.

Japan’s currency traded at 81.79 per dollar, compared with 81.72. It touched 81.39 on Oct. 11, the strongest level since April 1995.

Bass began buying securities with shorter durations last year as he predicted central bank and government actions globally to rescue the financial system will result in “outright currency debasement.”

He began buying shorter-term debt and precious metals then, anticipating hyperinflation will lead to higher interest rates. Bass also said in May that Europe’s debt crisis will not be solved by the $1 trillion loan package the International Monetary Fund and the European Union agreed on earlier that month.

–Editors: Nick Baker, Dave Liedtka

And that was all BEFORE Japan went from the frying pan into the nuclear fire.

What’s being said now?

Quake shattered Japan poses global debt worry
GARETH COSTA, The West Australian
March 15, 2011, 6:11 am

Concerns have emerged in global credit markets over how heavily-indebted Japan will be able to pay for its biggest economic reconstruction effort since World War II.

The Bank of Japan’s promise yesterday of a ¥15 trillion ($182 billion) cash injection into its banking system managed to soothe global equities, but not debt markets as Japanese government credit default swap rates used to insure against debt default soared 13 points to 92.

Although not yet at critical levels, analysts said yesterday’s sharp spike in the CDS rates highlighted debt market concerns about Japan’s funding pressures within a cash-strapped global economy.

“When you have a market the size of Japan down this much, it’s going to affect everybody,” Stephen Halmarick, head of investment markets research at Colonial First State Global Asset Management, said.

“A tragedy of this proportion is going to take up a lot of economic resources.

“It’s going to have quite a negative impact on growth.”

Credit markets were already concerned that Japanese government debt had ballooned to $US12.2 trillion, or 200 per cent of GDP.

Insurance experts estimate the repair bill carried by foreign reinsurers will be capped at $US34 billion, with the rest borne by Japanese insurers, the Government and uninsured homeowners.

Japan has so far managed to function under its debt because it has predominantly been funded by domestic investors and because it runs a steady trade surplus.

However, analysts caution that short-term liquidity constraints could prompt strong yen repatriation flows out of foreign markets as occurred after the Kobe earthquake.

Early estimates suggest the cost of the Sendai earthquake will easily exceed the $US100 billion Kobe earthquake in 1995.

Japan’s increased funding pressures are also occurring in a global economy far more cash-constrained than in 1995, and unless export earnings begin flowing soon, escalating funding costs could push the country’s financing costs over the tipping point.

Japan has been one of the biggest buyers of US Treasury debt and in January pledged to also buy up to one-fifth of bonds from the European Financial Stability Fund that was created to bail out Greece and Ireland, all of which will become secondary to Japanese funding needs for the next few months.

The country is also one of the world’s biggest holders of gold bullion.

Any decision to cash in on bullion’s record price and offload much of its sovereign holding would likely depress the gold price.

Japan’s Nikkei equities index slumped 6.2 per cent, its worse daily performance in two years.

[…]

What impact will it have on the global markets if the 3rd largest economy in the world defaults?  What effect will it have on the ability of the world’s largest debtor – that’s YOU, America – to continue to get credit as WE begin to look more and more like a default-likely credit risk???

Japan was the second largest purchaser of American debt, and was so far ahead of #3 (Japan buys 3 1/4 times more of our debt than Britain), that it’s not even funny.  The U.S. needs a sucker, I mean an investor, to continue to artificially prop-up our insane lifestyle.  Who’s going to do that now?

What you’re going to see is either the Fed dramatically hasten the rate at which it devalues the dollar, which in turn will hasten the inevitable result of America becoming a banana republic, or a giant spike in interest rates as other U.S. debt buyers demand more reward for their risks.

A third alternative is that Japan could begin to sell off its US debt to raise money to rebuild.  While that seems like the obvious course, it turns out in this crazy world it isn’t; were Japan to sell it’s U.S. debt, the result would surely kill the U.S. dollar, but it would also dramatically strengthen the yen and hurt Japan’s export market just when they need it most.

My point is it’s a lose-lose.  And the U.S. loses right along with Japan.

Yet “no drama” Obama didn’t care.  He didn’t even bother to mention Japan or it’s earthquake or its tsunami or its nuclear meltdown in his address the day after the disaster.  And just to demonstrate that he truly truly, truly didn’t give a damn, he played 18 holes of golf.

See the photos of Obama’s golf outing from Sadhill.

Then there’s the unfortunate fact that this disaster has coincided with the far more important NCAA basketball tournament.  A president has to choose his priorities, and clearly the basketball won out.

Note #1: this is hardly new behavior from the man who promised “hope and change.”

Note #2: the mainstream media excoriated Bush for golfing a tiny fraction as often as Obama.  One example is the liberal Washington Post headline from August 5, 2002, “Before Golf, Bush Decries Latest Deaths in Mideast.”  I wonder what the Post’s headline would be about Obama if they had even a shred of fairness in their coverage?

We’re in trouble.  And our leader is a fool.  And we have a media that is hell-bent (literally) on ignoring or explaining away this fool’s actions and responses.

One of the things I came to believe as I realized that Obama would actually quite possibly get elected president was that our economy was dead meat.  I entirely got out of the U.S. stock market entirely and won’t return until Obama and the Democrats are out of power.  The reason is that I believed – and STILL believe – that when our economy collapses, it will happen very suddenly, like a house of cards falling down.  And it might not start in America; rather, an event in another country will set off a spiral that will envelope us and expose us for what we truly are.

And just where truly are we?

News from globeandmail.com
The scary real U.S. government debt
Wednesday, October 27, 2010

NEIL REYNOLDS

Ottawa — reynolds.globe@gmail.com

Boston University economist Laurence Kotlikoff says U.S. government debt is not $13.5-trillion (U.S.), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The U.S. is bankrupt.”

Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the U.S. is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The U.S. fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of U.S. GDP.”

This sum is equal to all current U.S. federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.

Our actual debt is not the fourteen trillion dollars that would be scary enough; it is $200 TRILLION.

That isn’t some rightwing thinktank saying that; it’s the IMF.

Japan had a literal meltdown.  It is about to have a financial meltdown.

And America will not be far behind.

As you look at the current fiscal situation, with Democrats not just fighting to keep the status quo of reckless and morally and mentally insane spending that will necessarily bankrupt America – and with Democrats literally sitting back waiting to demonize Republicans as “mean-spirited” the moment they try to do what is absolutely necessary to get our skyrocketing spending under control – realize that the United States is necessarily going to explode and collapse just like those reactors in Japan.

Democrats murdered America.  It was Democrats who were responsible for nearly ALL of those $200 trillion in debt that will destroy us (it is a simple fact that the Social Security, Medicare and Medicaid that constitute virtually all of our actual debt were all Democrat programs).  And it is Democrats who will literally fight to America’s death to prevent the nation from doing what is necessary to fix our situation before it is too late.

Social Security is now paying out more than it takes in.  Workers under forty are rightly quite confident that the system will collapse before they get a chance to collect.  Republicans want to fix the system before it collapses in order to save it.  But Democrats lie about the Republicans efforts (which would kick in slowly and not affect current retirees at all).  And Democrats race us faster, ever faster toward the collapse and nightmare that surely awaits America.

We’re a dead nation walking.  We just don’t realize it yet.

That’s the hope and change you voted for, America.  I hope you enjoy your starving in the soon-coming banana republic your false-messiah president created for you.

Bizarro Obama’s Credit Bill Subsidizes Stupidity By Penalizing Prudence

Elaine and Jerry have the following dialogue in a famous Seinfeld episode titled, “Bizarro Jerry”:

“He’s reliable. He’s considerate. He’s like your exact opposite.”

“So he’s Bizarro Jerry.”

“Bizarro Jerry?”

“Yeah, like Bizarro Superman, Superman’s exact opposite, who lives in the backwards Bizarro world. Up is down, down is up, he says hello when he leaves, goodbye when he arrives.”

“Shouldn’t he say badbye? Isn’t that the opposite of goodbye?”

“No, it’s still goodbye.”

“Does he live underwater?”

“No.”

“Is he black?”

“Look, just forget the whole thing.”

– Elaine and Jerry, in “The Bizarro Jerry”

Well, let’s not forget the whole thing, Jerry.  Because Bizarro Superman is now among us.  Art, imitation, and boob-tube television have come to life: Barack Obama is our Bizarro Superman.

Bizarro Superman is the sort of Superman who saves the guilty by beating the snot out of the innocent.

Did you buy a house you could afford?  Bizzaro Superman flew in and established a system whereby you subsidized those who foolishly overextended themselves.  After bailing out these fools who received assistance primarily by belonging to traditional liberal voting blocs, three out of five of them are already defaulting again (necessitating yet another bailout from you).

Do you have an account with a bank that took (in many cases was forced to take) TARP money?  Bizarro Superman wants to impose his political agenda on banks, so he won’t allow them to repay their loans.

Did you hope to be able to improve your lot in life with the gigantic stimulus package?  Sorry, Bizarro Superman’s stimulus turned out to be the porkulus that conservatives said it would be, with far more money going to 40 years’ worth of liberal pet projects than to job creation.  We’ve also recently learned that due to massive structural flaws the stimulus is bypassing all of the counties that most desperately needed help.  It might have helped if someone had actually been allowed to read the bill first, but Bizarro Superman didn’t want to take any chances that someone would see what a socialist power grab it truly was.

Did you invest in secured debt from Chrysler and GM?  Sorry, buddy: Superman has flown in and given your safe and secured investment dollars to his UAW cronies.  When the secured investors – who by law were entitled to be at the head of the line in any bankruptcy – balked at being paid pennies on the dollar while the UAW was given the farm – Bizarro Superman demonized them as “greedy hedge funds” and threatened them with public propaganda attacks.

Bizarro Superman has flown in and promised that 95% of Americans will get a tax cut under his plan (which actually just means more welfare for the 43.4 percent who already don’t pay any federal income tax at all even as our small business owners who employ most American workers are increasingly taxed into oblivion).  Will people pay less in taxes under Bizarro Superman?  Just for your information, the average 30 year old will pay $136,932.75 just for the interest of just Obama’s 2010 budget over the course of his or her working lifetime. Americans will be paying FAR more of their money to the government – and they will have Bizarro Superman to thank for it.

Only in Bizarro world does an administration say it’s “the patriotic duty” for some to pay a an even more massive tax burden imposed on them even as it promises that the other 95% should be LESS patriotic by paying less in taxes.

Are you one of the 100% of Americans who use energy?  Get ready for the price of it to skyrocket (“necessarily skyrocket,” to quote Bizarro Superman).  Even the Obama administration admits that Bizarro Superman’s energy plan will increase the average American’s electric bill by $1,800 a year.  Which means it will very likely be a hell of a lot worse than that.

Only in Bizarro world does Congress actually hire a speed reader to read really fast a terrible energy bill that Representatives and Senators won’t bother to read at normal speed.

Now Bizarro Superman has flown in and saved risky credit-card borrowers by establishing a system that will penalize those who have always paid their bills on time and in full.  From the New York Times:

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

Again and again, on issue after issue, our Bizarro Superman, Barack Hussein Obama, has come to the rescue of the irresponsible by punishing the responsible.

Our economy became the greatest in the history of the world by policies that rewarded sound and prudent investment while punishing foolish behaviors.  Those days are long gone.  We’re in Bizarro world now.

I pulled out of the stock market following the Democratic National Convention when I had that first moment of genuine fear that Obama would probably win, and put my nest egg into gold and silver.  Betting that Obama would be a disaster for the economy has been the best financial move I’ve ever made: I’ve made a 15% return on precious metals even as investors in the stock market lost about 30%.

I still remember the day I came across the following poll results from the September/October issue of CEO Magazine:

According to the poll, which is featured on the cover of Chief Executive’s most recent issue, by a four-to-one margin, CEOs support Senator John McCain over Senator Barack Obama. Moreover, 74 percent of the executives say they fear that an Obama presidency would be disastrous for the country.[…]

In expressing their rejection of Senator Obama, some CEOs who responded to the survey went as far as to say that “some of his programs would bankrupt the country within three years, if implemented.” In fact, the poll highlights that Obama’s tax policies, which scored the lowest grade in the poll, are particularly unpopular among CEOs.

I’ve pulled out of the US economy due to Bizzaro Superman and his Bizarro economic policies.  No investments in stocks, no purchases of US bonds.  Not with Obama’s mind-boggling deficit spending acting like a 10 ton anvil hovering over the economy due to debt as a percentage of GDP rising like a rocket ship.  I’m making as few purchases as possible.  And I’m not coming back to investment in America as long as Bizarro Superman is our president.

And I’m going to pull out of credit cards now, too.  If I see one fee, or if I see my interest rate go up so much as 1 point due to my cards’ charging interest from the moment of purchase, I’m cutting them up and going back to the tried and true checkbook.

The only question I have is this: at some point Obama’s and the Democrat’s policies of subsidizing stupidity by penalizing prudence are going to implode the economy.  In the aftermath of that disaster, will there even BE a U.S. economy worthy of investing in?

I’m not betting on it.

Obama Backlash Beginning: Montana Defies Administration With In-Your-Face Gun Law

The state of Montana has drawn a line in the sand by passing a new gun law that virtually thumbs its nose at the federal government’s encroachment on state and individual rights.  If the tea parties were the first shot across the bow of liberal fascism, this is surely the second – and it’s being done with heavy artillery.

Liberals have been employing “sanctuary cities” across the nation that flouted federal immigration laws.  Now conservatives are taking that same idea to have “sanctuary states” to protect their citizens’ 2nd Amendment rights against liberal tyranny.  And Montana, Utah, and Texas are leading the nation in standing up to the federal government’s unconstitutional laws in direct violation of states’ rights.

Montana Governor Brian D. Schweitzer, for what it’s worth, is a Democrat.

Montana fires a warning shot over states’ rights
State is trying to trigger a battle over gun control — and make a point

updated 4:54 p.m. ET April 29, 2009

HELENA, Mont. – Montana is trying to trigger a battle over gun control — and perhaps make a larger point about what many folks in this ruggedly independent state regard as a meddlesome federal government.

In a bill passed by the Legislature earlier this month, the state is asserting that guns manufactured in Montana and sold in Montana to people who intend to keep their weapons in Montana are exempt from federal gun registration, background check and dealer-licensing rules because no state lines are crossed.

That notion is all but certain to be tested in court.

The immediate effect of the law could be limited, since Montana is home to just a few specialty gun makers, known for high-end hunting rifles and replicas of Old West weapons, and because their out-of-state sales would automatically trigger federal control.

Legal showdown
Still, much bigger prey lies in Montana’s sights: a legal showdown over how far the federal government’s regulatory authority extends.

“It’s a gun bill, but it’s another way of demonstrating the sovereignty of the state of Montana,” said Democratic Gov. Brian Schweitzer, who signed the bill.

Carrie DiPirro, a spokeswoman for the federal Bureau of Alcohol, Tobacco, Firearms and Explosives, had no comment on the legislation. But the federal government has generally argued that it has authority under the interstate commerce clause of the U.S. Constitution to regulate guns because they can so easily be transported across state lines.

Guns and states’ rights both play well in Montana, the birthplace of the right-wing Freemen militia and a participant in the Sagebrush Rebellion of the 1970s and ’80s, during which Western states clashed with Washington over grazing and mineral extraction on federal land.

Montana’s leading gun rights organization, more hardcore than the National Rifle Association, boasts it has moved 50 bills through the Legislature over the past 25 years. And lawmakers in the Big Sky State have rebelled against federal control of everything from wetland protection to the national Real ID system.

‘Made in Montana’
Under the new law, guns intended only for Montana would be stamped “Made in Montana.” The drafters of the law hope to set off a legal battle with a simple Montana-made youth-model single-shot, bolt-action .22 rifle. They plan to find a “squeaky clean” Montanan who wants to send a note to the ATF threatening to build and sell about 20 such rifles without federal dealership licensing.

If the ATF tells them it’s illegal, they will sue and take the case all the way to the U.S. Supreme Court, if they can.

Similar measures have also been introduced in Texas and Alaska.

“I think states have got to stand up or else most of their rights are going to be buffaloed by the administration and by Congress,” said Texas state Rep. Leo Berman.

Critics say exempting guns from federal laws anywhere would undermine efforts to stem gun violence everywhere.

Hot Air has the text of the law, titled:

AN ACT EXEMPTING FROM FEDERAL REGULATION UNDER THE COMMERCE CLAUSE OF THE CONSTITUTION OF THE UNITED STATES A FIREARM, A FIREARM ACCESSORY, OR AMMUNITION MANUFACTURED AND RETAINED IN MONTANA; AND PROVIDING AN APPLICABILITY DATE. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

This is defiance as a thing of art:

It is a determination to keep fighting for one’s freedom no matter how hopeless things might look:

And why is this level of defiance necessary? An image worth a thousand curses suffices by way of explanation:

Don’t think this isn’t a direct response to Barack Hussein.

Gun and ammunition sales have soared out of naked fear of Obama.

And for good reason: Obama is pushing a treaty to ban reloading. Liberals are trying to regulate the components of ammunition as explosives and thus restrict ammunition. Liberals in California are nakedly attempting to circumvent the 2nd Amendment by regulating ammunition, hence making guns useless.

And the liberal campaign to deprive Americans of their 2nd Amendment guarantees (even as they discover “penumbras and emanations” in the Constitution that let them kill babies) is only a distant side issue in the massive government takeover of American society. Obama’s massive spending – more than every president from George Washington to George W. Bush COMBINED – will leave this country with an insurmountable national debt that would exceed 82 percent of the overall economy by 2019 and threaten this country’s very survival. We are now on the hook for $12.8 TRILLION dollars in government spending and commitments in the brave new world of the Obama economy.

We’ve got a president who is firing CEOs, stacking boards of directors, changing the rules for the auto manufacturers’ bankruptcy filings in order to favor the unions that supported him over the secured creditors. And if they don’t like it, they are met with frightening threats from the administration and death threats from union members. If that isn’t bad enough, we’ve also got card check on the horizon, which would allow union thugs to intimidate workers into unionizing with the union allowed to know exactly how each worker voted.

We’ve got a president who won’t let banks repay bailout loans (which in many cases were literally forced on them in the first place) so he can continue to impose onerous terms and conditions on them and control what they do and how they do it.

We’ve got a president who is planning to nationalize health care – and the one-sixth of our economy that it represents – even as he moves to impose costly and burdensome cap-and-trade regulations that would (in Obama’s own words) necessarily cause energy prices to soar.

And we’ve got a president who is attempting to nationalize student loans such that private lenders are phased out altogether. If Obama gets his way, the government will loan directly to families and students, making them directly indebted to the federal government. The government will necessarily get to decide which students, which schools, and which academic programs get loans.  An option for students is to repay their loans by means of “national service,” which already precludes any type of religious service whatsoever. The potential of liberal big government harnessing student labor to staff liberal organizations such as ACORN is becoming all-too real.

We have a new administration that moved to criminalize political differences by targeting Bush officials as war criminals, even as returning veterans and pro-life Americans are labeled as “rightwing extremists” in a DHS report sent out to the nation’s law enforcement agencies and police departments.

I’ve been saying something over and over in different ways. What the liberals are doing now will ultimately result in a “rightwing” backlash. What is true in physics is true in politics: for every action there is an equal and opposite reaction. Liberals are pushing and pushing and pushing through one new massive spending program and one new policy after another that will change and undermine this country forever afterward.

Under Obama, terrorism is now called an “overseas contingency operation” and terror attacks are now nothing more than “man-caused disasters.”  In attacking the CIA as a means to attack Bush, Obama has created a depressed, sullen, and angry morale which promises to transfer into “cover your ass” caution and bureaucratic gamesmanship.  He has undermined our security to a shocking degree.  If we are attacked, this country will swing so far to the right so fast it will be absolutely unreal.

But even if we are not attacked, our country will likely implode under its own weight: trillions of dollars of reckless spending will have that effect as our dollar devalues and our interest payments on the debt begin to soar when inflation begins to take its toll.  Ultimately our taxes will skyrocket due to all of this spending.  CBS News has an article from March entitled, “If China Stops Lending Us Money, Look Out.”  Well, guess what?  They’re doing exactly that.  They’re canceling our credit card.

In a poll of chief executive officers taken prior to the election, 74 percent of the executives said they feared “that an Obama presidency would be disastrous for the country.”  And some of the CEOs predicted that “some of his programs would bankrupt the country within three years, if implemented.”  And with the Congress in nearly total Democratic control, they ARE being implemented.

When Obama and the Democrats bankrupt the country and undermine our entire social structure with massive spending programs and massive bureaucracies that cannot be undone, which direction will the country turn?  And how complete will that turnaround be?

Liberals are ignoring one ominous warning of popular outrage after another, claiming that conservatism and the Republican Party are dead.  And they will likely ignore what is going on in Montana – which is led by a Democrat governor – as well.  They are doing so to both their party’s and their country’s peril.

Montana, you’ve done a great thing for liberty, which is freedom from the growing tyranny of the smiley-face-fascist nanny state.

The backlash against big government liberal tyranny is beginning.  And it will become larger and hotter as Obama’s policies take their toll.  Let us hope that the spark turns into a fire before – rather than after – Obama has done too much damage to recover from.

Obama Imposes Suicide-Pact Bankruptcy On Chrysler

The government is preparing the way for a “Dr. Kevorkian”-style bankruptcy for Chrysler.  A couple of paragraphs from the New York Times story should suffice:

U.S. Is Said to Push Chrysler to Prepare for Chapter 11

DETROIT — The Treasury Department is directing Chrysler to prepare a Chapter 11 bankruptcy filing that could come as soon as next week, people with direct knowledge of the action said Thursday.

The Treasury has an agreement in principle with the United Automobile Workers union, whose members’ pensions and retiree health care benefits would be protected as a condition of the bankruptcy filing, said these people, who asked for anonymity because they were not authorized to discuss the case.

You know, I’m old enough to remember a time way, way back when businesses were actually allowed to attend to their own financial affairs.

And they’ve got a guy who was either too dishonest or too stupid to pay his own tax bill organizing the thing: “Turbo Tax Tim” Geithner.

That’s bad enough, but then the snowball starts rolling straight to hell.

The government isn’t making its arrangements with Chrysler; it is rather making them with the United Auto Workers, and then imposing the conditions onto Chrysler.

This is tantamount to saying that Chrysler will never come out of bankruptcy, given the fact that the company needs to be able to escape its legacy costs if it is to ever have any chance of ever being viable.

Would Italian Fiat want this gold-plated turd?  Not very likely.  The Obama administration’s kissy-kiss with the UAW on a bankruptcy deal (and who ever would have seen THAT coming) is frankly akin to a bridal consultant pushing a bride-to-be to gain 500 pounds and have her face chewed off by a deranged chimpanzee in order to prepare her for her nuptials.  The bridal consultant, the chimp, and the bride; the Obama administration, the UAW, and the company: neither situation is going to end well.

Realize this: Obams imposing a suicide pack onto Chrysler.  There is no way the company will be able to attract private investment as long as the unions get to dictate terms.  And realize this: the green cars that the Obama administration wants to impose on the American auto industry aren’t profitable.  Which is why no American money wants anything to do with Barack Hussein’s GM or Chrysler (and very soon Ford).  That leaves us hoping that some foreign country’s investors are more stupid than ours are.

This is nothing less than a suicide pact.  There’s a spaceship hidden behind big labor’s version of the Hale-Bopp comet, and the Obama administration wants Chrysler and GM to prepare to board.

The NY Times article continues:

The only major question that remains unresolved is what happens to Chrysler’s lenders, who hold $6.9 billion in company debt. The government’s most recent offer, presented Wednesday, would give the company’s lenders about 22 cents on the dollar, or $1.5 billion, and a 5 percent equity stake in a reorganized Chrysler. Earlier this week, a steering committee of the lenders proposed that they receive 65 cents on the dollar, or $4.5 billion, and a 40 percent equity stake.

If no agreement is reached between the government and Chrysler’s lenders, a nasty legal fight could emerge in bankruptcy. The creditors’ claims are backed by most of the company’s collateral, including plants, brands and equipment, and the senior lenders will argue that they have first claim on those assets — even over and above the government’s debt….

Some analysts questioned whether the Treasury’s steps to prepare a bankruptcy case were an effort to put more pressure on lenders, with which it has exchanged proposals meant to reduce Chrysler’s debt. Chrysler faces an April 30 deadline from the Treasury, while G.M. faces a June 1 deadline in its own efforts to draft a new restructuring plan.

Let me put the first sentence of the last paragraph another way: “Some analysts questioned whether the father-in-law’s steps to prepare a shotgun wedding was an effort to put more pressure on the boyfriend…”

This is an administration that is clearly hungry for power, and which clearly intends to use that power for political purposes.  Why won’t they allow banks to repay bailout money?  They want to be able to control the banks, and thereby control the banks lending policies.

As the Wall Street Journal’s Stuart Varney puts it:

Think about it: If Rick Wagoner can be fired and compact cars can be mandated, why can’t a bank with a vault full of TARP money be told where to lend? And since politics drives this administration, why can’t special loans and terms be offered to favored constituents, favored industries, or even favored regions? Our prosperity has never been based on the political allocation of credit — until now.

Obama is paying unions back for supporting his presidency by putting the UAW at the head of the line in bankruptcy negotiations.  It is nothing short of political patronage.  Do you seriously think there’s even a chance that he won’t similarly use his power over the banking industry to impose liberal policies and reward liberal constituents?

Obama shares a number of the underlying characteristics that would tend to define one as a fascist, as Jonah Goldberg saw at least as far back as February of 2008.  But we’re not talking about mere “underlying characteristics” or tendencies anymore.  We’re talking about overt fascism.  Sheldon Richman defined fascism as follows:

Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the “national interest”–that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.

What the hell else are you going to call what Obama is doing but fascism?

Fascism came out of the political left; and liberals are leading us right back into a fascist hell all over again.

Which leads to the last observation: the suicide-pact that the Obama adminstration is forcing onto Chrysler is a microcosm for the suicide-pact that our society and our country are going to experience.  This government takeover of the American way of life won’t just result in a fascistic redefinition of America.  The federal government and federal reserve have committed over $12.8 TRILLION so far in bailouts and stimulus.  And we’re nowhere near done with this madness, because our leaders believe they can sepnd their way out of debt.  Massive inflation – and a death spiral – will necessarily follow.