California legislators: same game, same result

California's legislature passed a deadline yesterday without acting. They were told by the state's controller that the state would run out of cash in July and would be $2.78 billion in the red by July 31st.

According to the LAT, state Assembly Speaker Karen Bass, a Democrat from Los Angeles, responded yesterday by announcing that she intends to push for $1 billion in new taxes on tobacco and oil. State Senate President Pro-Tem Darrell Steinberg, also a Democrat, said yesterday, according to the LAT, that the Senate next week will take up the issue of whether to postpone $2 billion of tax breaks for corporations that were passed last February but that haven't taken effect yet.

We've been down this road before. Democrats don't have the votes to raise taxes. Republicans won't help them. Why waste time negotiating over something that isn't going to happen?

The legislature has been fiddling around with the budget deficit, currently $24 billion, for more than a year, refusing to face up to its responsibilities, refusing to face facts. Legislators need to quit fiddling and solve this problem -- now.

LAT: N. Korea has U.S. in tight spot

"The imprisoned journalists face a harsh fate if not freed. But Pyongyang may demand nuclear concessions to do so." That is the LAT's take on North Korea's treatment of the two woman journalists, U.S. citizens, who were tried, convicted and sentenced to 12 years in jail by a North Korea court.

The Obama administration ought to take the opposite tack: Warn North Korea that their actions have consequences. Demand that the two women be released immediately. Don't threaten North Korea but inform them clearly that the U.S. will act boldly to protect its citizens. Show some backbone, in other words.

The U.S. is a superpower. It has nothing to fear from a penny ante dictatorship that can't feed its own people. It's time the U.S. behaved like a superpower.

California government doesn't stop growing

The Orange County Register told us last Friday that California's government added 1,362 full time positions in the first quarter of 2009, this while the state was near bankruptcy. Go figure.

Update bankruptcies

The Chrysler bankruptcy isn't a done deal. Justice Ruth Bader Ginsburg has put a stop to it temporarily. Good. The proposed deal with Fiat needs to be examined.

To the question where the Obama administration will get $30 billion for post-bankruptcy GM financing, the answer is that it's TARP money. But TARP money was intended for banks. Is it legal to use it for Chrysler and GM? We'll see.

After Government Motors, Government Healthcare

Obama expects to install a government run healthcare system this year. If he doesn't get it this year then he will not get it at all, some say. If he does get it this year, or any year, we're all in trouble.

But here's an idea: Why not form a government conglomerate? Call it Government, Inc. Make Government Motors a wholly-owned subsidiary. Make Medicare a subsidiary too and offer government health insurance to all. Throw in energy and the environment. Call if Government Energy and Government Enviro. Appoint Rahm Emanuel as CEO. Larry Summers could be chairman. Plug Geithner in there somewhere.

Sounds workable. No?

LAT: Bin Laden is scared of Obama

A headline on the front page of today's LAT suggests that Osama bin Laden's message yesterday was issued out of fright of what Obama would say in Cairo. Dream on.

The Economist: Obama no true leftist

The Economist argues this week that no true leftist would be as reluctant as Obama to nationalize banks or as coldly calculating as Obama in letting Chrysler and GM sink into bankruptcy. Accordingly, The Economist judges, Obama is not a leftist.

It seems a stretch. Citibank has been nationalized, effectively, as has AIG. Freddie Mac and Fannie Mae certainly have been nationalized. Bankruptcy has not been especially painful for either Chrysler or GM. Chrysler is already out. The administration expects that GM's bankruptcy will last only 3 months. At worst, the two companies have dumped or will dump some dealers and some vehicle lines. But they also will have been relieved of much debt and all shareholders. The UAW has escaped nearly unscarred.

Add GM

The president isn't being honest when he says his administration has no wish to run GM. They already are running GM. They negotiated the arrangement with creditors and the UAW. They're promising to finance GM post bankruptcy. They're helping to pick the board of directors. Rest assured that no director will be chosen who is not acceptable to Obama. The president's suggestion that these things aren't happening or don't amount to running GM is just false.

More GM

What did Obama's administration accomplished with the GM bankruptcy? Couldn't the same objectives have been accomplished through the regular Chapter 11 process? Answer: No, the UAW would have had to give up more in a normal Chapter 11 proceeding. As it is, the UAW gave up very little. That was Obama's aim.

GM bankruptcy

The Obama has promised to provide $30 billion of post-bankruptcy financing. Query: Where is Obama getting that money? The president doesn't have the power to commit the government to expenditures not appropriated by Congress. When did Congress appropriate the $30 billion? Or is this something Obama believes he is sure to get from Congress but hasn't got yet? For that matter, has Congress approved Obama's guarantee of automobile warranties?