Saturday, June 06, 2009

GM's dismantling opens doors for foreign carmakers

GM's dismantling opens doors for foreign carmakers

Fri Jun 5, 9:01 pm ET

DETROIT – Roger Penske is inventing a new business model on the ruins of General Motors Corp. The auto racing magnate and mega dealership owner is snapping up Saturn and opening his expanded sales network to foreign automakers looking to sell cars to Americans.

The deal announced Friday is another example of how the cataclysm that hit Detroit's three carmakers is reshaping the global automotive landscape in profound ways, reducing their worldwide influence and — if Saturn turns out as Penske envisions — opening new markets to smaller companies.

"There's no doubt that the automotive deck chairs are changing," said Michael Robinet, vice president of CSM Worldwide, a Detroit-area auto industry consulting firm.

In the shake-up, well-known brands are changing flags quicker than an oil tanker in pirate-infested waters. Italy's Fiat SpA is waiting for U.S. courts to approve its acquisition of Chrysler LLC's assets. GM has worked deals to turn its German subsidiary Adam Opel GmbH over to a Canadian auto parts company with Russian backing. And Hummer may be going Chinese, although state media there reported Friday that the deal has hit regulatory hurdles.

Yet industry experts are doubtful that the flurry of mergers and alliances will be any more durable than failed marriages of the past, proving to be just one big distraction from the underlying issue that made them so vulnerable in the first place: making more cars than people can buy.

Still, Penske, who already runs Penske Automotive Group Inc., the second-largest U.S. dealer network, thinks his business model is different enough to be successful.

GM and Penske expect to close the Saturn deal in the third quarter, with the wounded Detroit automaker continuing to build three models for Saturn to distribute.

Key to its success, though, will be the ability to sign on other global manufacturers to make cars for Saturn, giving it a diverse portfolio of vehicles that will sell whether gasoline prices are high or low.

But by opening the door to automakers not now in the U.S., such as France's Renault, Penske could alter the market here, allowing smaller automakers to compete against Detroit.

Penske, in an interview with The Associated Press, said foreign automakers would be key to his business model, but they will have to match GM quality standards before Saturn's 350-dealer network will distribute their products.

"As people around the world look at that, they have the opportunity to tap us on the shoulder and say 'we have product that we'd like to bring into the U.S.,'" he said.

Other foreign automakers who have succeeded in the U.S. began with a distribution network, then started manufacturing operations, he said.

Honda Motor Co., for example, started selling motorcycles at a few U.S. dealerships in 1959, then imported cars as its dealership ranks grew. But the Japanese company didn't build vehicles in the U.S. until 1979, when it opened a motorcycle plant in Marysville, Ohio, that later grew to build the popular Accord sedan.

Penske said he expects to begin making money immediately on Saturn, which has never been profitable for GM.

"I would expect that the model that we're putting together, the distribution model, will be profitable Day One," he said. "We'll have less costs. We'll not be in the manufacturing side of it."

Fiat's takeover of Chrysler, in its final stages, follows a more traditional logic. CEO Sergio Marchionne has been studying U.S. plants for ways to raise efficiency, and will retool one so he can start making the stylish compact Fiat 500 and a sporty Alfa Romeo or two. Under terms of Chrysler's bankruptcy plan, it will close five more U.S. plants.

In Europe, the Opel deal was reached under enormous political and union pressure to keep open all four German plants — which appeared to be one of the things that knocked Fiat out of political favor with early reports that it would close an engine factory. The winning bidder, Magna International Inc., has pledged to cut just 10,000 GM Europe jobs — a number eventually matched by Fiat.

But that deal is still not final. Fiat restated its interest Friday, although German officials downplayed prospects of Magna failing to complete the takeover.

Marchionne's aim had been to combine Chrysler and Fiat with GM's European business to create a world automotive powerhouse to produce up to 6 million cars a year, his threshold for surviving toughening world market conditions.

Such strategies have raised the obvious question among analysts: If the industry is being strangled by overproduction, why not just let the gasping giants expire?

For years, the U.S. auto manufacturing base has been too large for the market, forcing automakers to overproduce to keep plants running and flooding the market with vehicles. As a result, the Detroit Three especially have been forced to discount vehicles to sell burgeoning inventories.

But Penske said the continued restructuring by Chrysler, GM and Ford Motor Co. should solve that problem, at least in the U.S.

"I think there's no question that this re-engineering of the manufacturing base in the U.S. by the Big Three will take capacity out," he said. "But more important, the plants that will survive will be the ones that are most efficient."

Yet London-based Morgan Stanley analyst Adam Jonas said he does not expect worldwide capacity to be significantly changed a year from now. And he questioned the logic of gathering brands under one roof without real synergies.

"Did we just hook up five or six companies that don't mean anything? To get common distributors, development, common planning, common everything, it takes a lot of time, a lot more money and a lot of risk," Jonas said.

Worldwide, analysts say automakers have the capacity to produce 18 million to 20 million more cars than the market demands, leaving many plants grossly underutilized. To make money, automakers have to run their plants above 90 percent capacity, but few are doing that in a depressed global market.

Nearly 70 million cars and light trucks were produced worldwide in 2007, when the latest figures are available from the International Organization of Motor Vehicle Manufacturers.

Ferdinand Dudenhoeffer, director of the Center for Automotive Research in Gelsenkirchen, Germany, said capacity will need to shift to emerging markets such as India and China, not saturated markets like the United States and Europe, where most of the dealmaking is centered.

All the changes brings to mind past unhappy auto mergers: Ford with Land Rover and Jaguar, Chrysler with Germany's Daimler AG, and General Motors with Fiat.

A big exception, Dudenhoeffer said, is Volkswagen AG, which gathers multiple brands from Bentley to Lamborghini to Skoda under one roof. "But it took 20 years to bring them onto the same technical platforms," he said.

Analysts say bigger isn't always better, as evidenced by GM's efforts to shrink itself to become profitable.

"The story of consolidation is not the story which drives the car world," Dudenhoeffer said. "If you look at a company like Porsche, the most successful car companies in the world are small."


Colleen Barry reported from Milan, Italy. AP Auto Writer Dan Strumpf in New York contributed to this report.

Copyright © 2009 Yahoo! Inc. All rights reserved.

Friday, June 05, 2009

GM to sell Saturn brand to Penske dealership chain

GM to sell Saturn brand to Penske dealership chain

By DAN STRUMPF and TOM KRISHER, AP Auto Writers Dan Strumpf And Tom Krisher, Ap Auto Writers 56 mins ago

NEW YORK – General Motors Corp. has a tentative deal to sell its Saturn brand to former race car driver and dealership group owner Roger Penske, both companies said Friday.

Penske has signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn's 350 dealerships, the companies said. Penske told reporters that he expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for the immediate term.

Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter.

Penske Automotive Group also distributes Daimler AG's Smart subcompacts in the U.S., but Smart has its own dealership network and Saturn dealers will continue to exclusively distribute Saturn vehicles, Penske said.

Initially, GM will continue to make cars for Saturn for two years, Penske said. But he also said he is in talks with manufacturers around the world about building Saturn cars in the future.

"We will be we'll be selling as many GM cars — a many GM-produced cars — under the Saturn brand as possible," Penske said.

Penske Automotive owns the second-largest U.S. automobile retail chain by sales. It also owns heavy-duty engine manufacturer Detroit Diesel and has race teams in the IndyCar, NASCAR and Grand-Am series.

Carl F. Galeana, who owns two Saturn dealerships north of Detroit, said Friday he was thrilled that Penske would be the Saturn buyer.

"Roger Penske is an icon in the business world," Galeana said. "I've worked with him personally. Nobody works harder than Roger Penske."

Penske received wide acclaim for heading Detroit's successful effort to host the Super Bowl in 2006.

Galeana said the fact that Penske is interested in Saturn means the brand has value.

"It allows Saturn to get back to its original roots, which is to be an independent car company," he said.

GM, which filed for bankruptcy court protection on Monday, has said it plans to shed its Saturn, Hummer, Pontiac and Saab brands. Earlier this week, GM said it found a buyer for Hummer in China's Sichuan Tengzhong Heavy Industrial Machinery Co.

However, any such deal would require Chinese Commerce Ministry approval, and reports in state-run newspapers Friday said Sichuan Tengzhong had not yet obtained such an approval.


Tom Krisher reported from Detroit.

Copyright © 2009 Yahoo! Inc. All rights reserved.

Thursday, June 04, 2009

Actor David Carradine found dead in Bangkok

Actor David Carradine found dead in Bangkok

29 mins ago, Associated Press

BANGKOK – Actor David Carradine, star of the 1970s TV series "Kung Fu" who also had a wide-ranging career in the movies, has been found dead in the Thai capital, Bangkok. A news report said he was found hanged in his hotel room and was believed to have committed suicide.

A spokesman for the U.S. Embassy, Michael Turner, confirmed the death of the 72-year-old actor. He said the embassy was informed by Thai authorities that Carradine died either late Wednesday or early Thursday, but he could not provide further details out of consideration for his family.

The Web site of the Thai newspaper The Nation cited unidentified police sources as saying Carradine was found Thursday hanged in his luxury hotel room.

It said Carradine was in Bangkok to shoot a movie and had been staying at the hotel since Tuesday.

The newspaper said Carradine could not be contacted after he failed to appear for a meal with the rest of the film crew on Wednesday, and that his body was found by a hotel maid at 10 a.m. Thursday morning. The name of the movie was not immediately available.

It said a preliminary police investigation found that he had hanged himself with a cord used with the room's curtains. It cited police as saying he had been dead at least 12 hours and there was no sign that he had been assaulted.

A police officer at Bangkok's Lumpini precinct station would not confirm the identity of the dead man to The Associated Press, but said the luxury Swissotel Nai Lert Park hotel had reported that a male guest killed himself there.

Carradine was a leading member of a venerable Hollywood acting family that included his father, character actor John Carradine, and brother Keith.

In all, he appeared in more than 100 feature films with such directors as Martin Scorsese, Ingmar Bergman and Hal Ashby.

But he was best known for his role as Kwai Chang Caine, a Shaolin priest traveling the 1800s American frontier West in the TV series "Kung Fu," which aired in 1972-75.

He reprised the role in a mid-1980s TV movie and played Caine's grandson in the 1990s syndicated series "Kung Fu: The Legend Continues."

He returned to the top in recent years as the title character in Quentin Tarantino's two-part saga "Kill Bill."

Copyright © 2009 Yahoo! Inc. All rights reserved.

Wednesday, June 03, 2009

The White House "Jobs-Saved" Deception By Tony Fratto


2 Jun 2009

After nearly twenty years in Washington I thought I've seen every trick ever conceived, but the White House claims of "jobs saved" attributed to the stimulus bill is unrivaled. What causes the jaw to drop is not just the breathtaking deception of the claim, but the gullibility of the Washington press corps to continue reporting it.

News stories from President Obama's event last week hailing the 100-day mark since the stimulus was passed typically repeated the assertion that the stimulus has already "created or saved 150,00 jobs." ("And that's just the beginning," the President crowed.)

Tony Fratto
Former White House Spokesman

Here's an important note to my friends in the news media: the White House has absolutely no earthly clue how many job losses have been prevented because of the stimulus bill. None. Not Christina Romer. Not Jared Bernstein. Not Austen Goolsbee.

Forget that only a trickle of stimulus spending has yet made its way into the real economy. Set aside your views on whether or not the stimulus has any job-saving or -creating impact. And leave for another day the White House's failing to account for changing macroeconomic conditions and seasonal adjustments.

There is only one necessary data point to make the "jobs-saved" claim: an accurate measure of expected employment levels in the future. That baseline data is critical to measure what the employment level would be in the absence of the stimulus. Unfortunately for the White House, they cannot possibly know that measurement within any degree of confidence -- and they know it.

To understand just how unknowable this data point is, it's not necessary to be an economist, a mathematician or a statistician.

You only need to know this: the Bureau of Labor Statistics (BLS) - thousands of the most professional and rigorous counters and analyzers of labor data in the history of mankind - makes TWO revisions of employment data for their ESTIMATE of the PREVIOUS month! And even then the reports are mere estimates - an annual benchmark survey is required to reset the nation's payroll baseline.

That is, the best employment statisticians the world has ever known, people whose lives are dedicated to employment data, conducting labor surveys and research, constantly refining their complex models, have a difficult time telling you how many jobs were created in the PAST!

In fact, monthly BLS revisions of past job creation estimates are routinely off by tens of thousands of jobs, and on occasion by more than a hundred thousand jobs. The annual benchmark surveys always reset employment levels by hundreds of thousands of jobs.

And we're supposed to believe that the Council of Economic advisors have acquired the clairvoyant ability to estimate payrolls in the future? Please.

Romer, Goolsbee and Bernstein are smart people, and yet they haven't learned from even their recent misadventures with payroll data projections -- having already experienced the folly of attempting to project the range of possible jobs levels if the stimulus were passed. Projecting job creation with any degree of accuracy was always inherantly impossible, and should never have been taken seriously.

If I -- or even my predecessors in the Clinton Administration -- had tried to pull off this ridiculous gimmick we would have been run out of town. I don't even believe it's possible to look back and accurately measure the "job-saving" impact of Bush or Clinton Administration policies, let alone to measure in real time, or project into the future.

Health Care Lottery


By INVESTOR'S BUSINESS DAILY | Posted Tuesday, June 02, 2009 4:20 PM PT

Medicine: It's now or never, President Obama warned last week, for nationalizing health care. For the sake of all Americans, let's hope it's never.

Read More: Health Care

Returning to Washington on Air Force One from a West Coast fundraising trip, Obama was overheard asking supporters to push Congress to pass legislation that will turn the U.S. health care system into one that looks much like those that are ruining lives in Canada or Great Britain.

"If we don't get it done this year, we're not going to get it done," he said. "We're going to need to mobilize all of you."

America had better hope that Washington can't get this done. When elected officials and bureaucrats give themselves the power to take over private activities, the results tend to be disastrous.

The latest evidence that government can't run a health care system can be found in our Northwest corner. There, the administrator of the Washington State Health Care Authority will decide this week how to throw 36,000 Washingtonians out of the government's health insurance program that subsidizes the working poor.

The agency is looking at five options that will slash program participants from 100,000 to 64,000 due to the state's knotty budget problems. One possibility is a lottery. Other options include purging the rolls of those who've been in the system the longest and lowering the income level at which participants become eligible. Making the situation even more dire is the fact that there are 25,000 applicants waiting to be enrolled.

Anyone who believes a government-run system open to all won't have rationing is naive, ignorant or dishonest. Rationing by bureaucracy is a trait of socialist health care systems everywhere.

It can't be helped. The demand for health care when it is "free" and open to all places a strain on the system it cannot bear. When people don't have to pay for health care directly from their pockets, they will overuse the system. With no financial disincentives to hold them back, they will visit emergency rooms and doctor's offices with conditions so mild they wouldn't seek treatment for them if they had to pay or were billed at the time of service.

The high demand requires the custodians of the system to ration care. There aren't enough medical care professionals and money to take care of the hordes who are asking for treatment.

Some socialist systems survive, and even appear to be sound — at least for a while. But they are ultimately unsustainable. Dangerous and sometimes deadly wait times in Great Britain, Canada and Sweden are typical of government-run health care.

While Swedish medicine is among the finest in the world, obtaining it has become a problem. Health Consumer Powerhouse's Euro-Canada Health Consumer Index 2008 said that Sweden's system is "really bad (and worsening!) at accessibility and service."

With Swedes already paying more than half their incomes in taxes to support the welfare state (the care is hardly free), that country's health care system is headed for collapse just as the U.S. Social Security and Medicare programs are on track for their own train wrecks.

As public awareness of the failures of socialist medicine grows, we expect those who have been demanding a national or single-payer system will move on to France as the model we should follow.

But France's system, which is funded by a mix of public (80%) and private (20%) financing, is more like America's than Britain's. It's akin to Medicare for everybody with co-payments ranging from 10% to 40%. And it's expensive. The government has had to hike taxes in recent years to try to keep up with the public financing part of the system, which has been running deficits since 1985.

No country is going to solve its health care issues until government gets out of the business. People should be left free to sort out their medical problems for themselves without the state forcing them into a system they'd rather not be in or taxing them to pay for treatment used on others. When the options are now or never for national health care, never is the way to go.

Tuesday, June 02, 2009

Proof Positive That Judge Sotomayor California Speech Is Stained With Racist Ideas By Herb Denenberg

There Is No Evidence That Sotomayor's Infamous Racist Statement Was A Mere Bad Choice Of Words


If President Obama would announce that 2+2=6, the mainstream media would dutifully report that, and probably praise the rare insight of the Messiah and use this as evidence of his bringing hope and change. By like token, when the Obama administration claims that Judge Sonia Sotomayor’s now famous and blatantly racist statement is merely a product of bad word choice (or some other equally incredible explanation), the mainstream media would salute and swallow an obvious lie whole.

You know what I’m talking about, I presume. In a lecture at the University of California (Berkeley) in 2001, she said, “I would hope that a wise Latina woman with the richness of her experience would more often than not reach a better conclusion than a white male who hasn’t lived that life.”

The White House immediately tried to explain that away, with shifting explanations as their attempts to make 2+2=6 didn’t fly. First, they said don’t judge a career by a single sentence. After three days of failure to sell that approach, it was that she misspoke or just used poor choice of words. That failed to, and more recently she is being victimized by those who would take her words out of context. (That’s an Obama favorite. You’ll recall when the racist and bigot Rev. Jeremiah “God Damn America” Wright had to be explained away, it was all about judging him from a few snippets out of context (rather than all of his racist, bigoted, anti-American sermons).


Let me explain why none of those explanations fly. If you read the whole speech, it is all about how being a Latina or a minority makes a difference in judging. But when you read even a few sentences around the blatant racism, it is crystal clear what she meant. Here’s that sentence with a little more context:

“Justice O’Connor has often been cited as saying that a wise old man and a wise old woman will reach the same conclusion in deciding cases. I am not so sure Justice O’Connor is the author of that line since Professor Resnik attributes that line to Supreme Court Justice Coyle. I am also not so sure that I agree with that statement. First, as Professor Martha Minnow has noted, there can never be a universal definition of wise. Second, I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.” It is quite clear she’s saying the Latina woman will reach a better conclusion, not a different conclusion.

The context reinforces the clear meaning. President Obama claims she was just trying to make the point that life experience may influence the judging process. But she was setting up the conclusion with a “wise Latina woman with the richness of her experience” to suggest what is concluded – a better conclusion than a white male. Notice he is not a “wise” white male and his experience, however rich, is totally discounted in this logic.


Then if you read the whole speech, it is all about how gender and race make a difference in judging, just as that infamous statement indicates. For example, she writes, “I further accept that our experiences as women and people of color affect our decisions.” She asserts that “experience or inherent physiological or cultural differences” may make a difference in judging. She concedes even “nine white men” can understand “the values and needs of a people from a different group.” But she then says that takes time and effort. And some will not take the time and effort. Others simply have experiences that limit their ability to understand others. So, she concludes, “One must accept the proposition that a difference there will be by the presence of women and people of color on the bench. Personal experiences affect the facts judges choose to see. My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar. I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage.” Don’t you think it is time to explain those judging differences based on gender and Latina heritage?

When you read the language of the speech, such as that just quoted, and the rest of the speech, you conclude that Sotomayor thinks for a just result, each group would have to be judged by their own, as others simply do not, will not, could not, or are slow to understand the “experience of others.” She’s making the case for identity politics and the Balkanization of the Court. We’d have to have a specially impaneled Supreme Court for each case, to make sure that the justices understood the litigants involved. This ridiculous result perhaps suggests that the Sotomayor analysis is on the ridiculous side. It shows the folly of identity politics and appointments based on race, gender, religion, etc.


Judge Sotomayor also rejects the notion of the neutral and impartial judge. In Sotomayor’s view, the judge’s decision-making process is overwhelmed by race, gender, experience, and other variables. In the speech, she writes,

“The aspiration of impartiality is just that – it’s an aspiration because it denies the fact that we are by our experiences making different choices than others. Not all women or people of color, in all or some circumstances or indeed in any particular case or circumstance but enough people of color in enough cases, will make a difference in the judging process.”

To prove her point, she cites a Minnesota case in which three women in the majority agreed to grant a protective order against a father’s visitation rights when the father abused his child. Two men dissented. This case, in Sotomayor’s view, apparently proves that women make the right decisions and men the wrong decisions. This great scholar doesn’t give the citation of the case (for the benefit of those who want to check her reasoning), and we must presume that there was no explanation to the judging other than gender. I would hope her legal opinions evidence better scholarship and better logic than that.

I think Ms. Sotomayor doesn’t understand what the judicial process is all about. At its core is impartiality. That’s what judges are sworn to do and trained to do. Every judge in every case may not perfectly succeed. But Judge Sotomayor produces no evidence to indicate that the impartial and neutral judge is merely a fictional construct. Such judges and judging are what runs the system and justifies its power and respect. And the infamous statement and the whole speech suggest her judicial philosophy is heavily infected by a failure to follow a philosophy of impartial judging and a dedication to identity politics and a surrender to a judicial process focused on race and gender.


The mainstream media paint Obama’s Supreme Court nomination as a great legal mind, with Obama himself saying “her judicial craftsmanship and precision in the law” will produce great results on the court. So you wonder why we can’t assume she says what she means and means what she says.

I presume you know where I’m going. Obama and an army of Democrats are trying to explain her now infamous statement. I think that this great legal mind said exactly what she meant, and it is hard to imagine that she merely tried to say, in Obama’s own words, “That breadth of experience, that knowledge of how the world works, is part of what we want for a justice who’s going to be effective.” This is got to be one of Obama’s biggest lies since his other whopper when he claimed that he really didn’t know what Rev. Jeremiah “God Damn America” Wright was all about, even after attending his church for 20 years and closely associating with him in many ways.

You can also conclude Sotomayor meant exactly what she said, when you consider the setting of the statement. It was not an off-the-cuff comment or some extemporaneous speech. This was a formal lecture prepared in advance and delivered at a major university. These lectures are on the record and are typically published. The Sotomayor speech was the Judge Mario G. Olmos Memorial Lecture and was published in the La Raza Law Journal.

A lecture of this kind is carefully prepared from a written text for future publication and is about as far as you can get from off-the-cuff. Every word and sentence is typically carefully considered. So the notion of poor word choice or miscommunication is much harder to accept as an explanation of pure racism. And you wonder if she “misspoke,” why she didn’t correct the text after delivery and prior to publication. No, I’m afraid that speech is exactly what Sotomayor believes.


There are other troubling statements in the speech. Consider this one:

“I willingly accept that we who judge must not deny the differences resulting from experience and heritage, but attempt, as the Supreme Court suggests, continuously to judge when those opinions, sympathies, and prejudices are appropriate.” Since when are prejudices (judgments before the fact) appropriate in a judicial opinion?


The Firefighter’s case out of New Haven suggests that her expressed judicial theories may explain some of her judicial decisions. In the Firefighers case she joined a majority that gave short shrift to white firemen and one Hispanic fireman denied promotion because no blacks passed the qualifying test. This decision has come under heavy criticism, not just because it seems to justify reverse discrimination against whites. But the process that Sotomayor was part of looks like an attempt to bury the case and permit the reverse discrimination. The decision did not consider the critically important constitutional issues and dismissed them without reasons. That is contrary to the processes usually followed in this kind of important case, where a detailed explanation and opinion would be in order.

This isn’t the only off-the-wall decision that needs explanation. There is also Sotomayor’s decision on the Second Amendment, denying any right under state law to keep and bear arms.


There’s something quite fishy about the Obama explanation and that of his spokesman, Robert Gibbs. Gibbs tried to explain it as poor word choice. Neither one of them indicated that they had talked to Sotomayor, Obama suggesting we are supposed to believe him on faith and Gibbs claiming he talked to people who talked to Sotomayor. Neither one could explain why they didn’t just talk to Sotomayor and let her explain the statement. I can only imagine she needed more time to construct a credible explanation.

There’s something else that is quite fishy about the Obama/Gibbs attempt to explain away what is clearly an outrageous racist remark. The White House story has been changing. The White House first tried to explain the comment away by saying critics should not dwell on one sentence from a speech. This seems to admit this is what she said and this is what she meant. But after pumping that story for three days, they shifted to the “choice-of-words” theory and have recently latched on to the out-of-context excuse. When all that doesn’t fly, I’m sure they’ll have a third equally incredible explanation…perhaps specially prepared for the confirmation hearing. If you’re telling the truth, it doesn’t keep changing every third day.


President Obama dismisses all the Sotomayor criticism as “nonsense.” The White House has also suggested that it is somehow off base even to criticize Sotomayor. Of course, this is all from the President and the new White House that is supposed to represent post-racial politics. But this appointment suggests that Obama and his appointee are deep into identity politics and are playing the race card. You should recall that Obama played the race card on more than one occasion during the campaign, and this appointment suggests he will keep playing it. This all helps show Obama knew that the Sotomayor appointment would deliver what he was after in Supreme Court judging – he wants judges who follow empathy and their feelings rather than the Constitution and the intent of the Founders.

Herb Denenberg is a former Pennsylvania Insurance Commissioner, professor at the Wharton School, and Pennsylvania Public Utility Commissioner. He is a member of the Institute of Medicine of the National Academy of Sciences and is a board member of the Center for Safe Medication Use. He is an adjunct professor of insurance and information science and technology at Cabrini College. You can write Herb at POB 7301,St. Davids, PA e-mail him at or reach him at his two Web sites: or

A Matter Of Law


By INVESTOR'S BUSINESS DAILY | Posted Monday, June 01, 2009 4:20 PM PT

Economy: With General Motors' long-awaited "pre-packaged bankruptcy" finally here, America is on the verge of a new era — one where government, not investors and consumers, is the final arbiter of success.

Read More: Economy

GM's bankruptcy pushes bondholders aside in favor of the U.S. government and the UAW. Though bondholders hold $27 billion in debt, they'll get just 10% of stock.

How's that compare with the other "stakeholders?" For spending $50 billion to bail out GM, the government will get 60% of the equity in the new GM; the UAW, which along with other unions gave millions to Democrats, will be repaid for its loyalty with 17.5% of the stock for $10 billion of unsecured debts.

So the government, with roughly two times what private bondholders have on the table, gets a stake five times bigger. And the union, with about a third as much "invested," gets a 70% bigger stake. Even the Canadian government, with its $9.5 billion "invested," ends up with 12%.

They call it "restructuring." We call it theft. Never in our memory has there been a more thorough, systematic effort to disenfranchise the shareholders and bondholders of a major American firm.

It will make investors — domestic and foreign alike — think twice about investing in an American stock or bond in the coming years. Why invest if your money and rights as an investor can be arbitrarily stripped from you, as they were in GM's case?

But our real issue with this isn't that people will lose money. It's that we don't believe the government's actions are even legal.

The White House has basically been manipulating GM into bankruptcy since early this year, putting 31-year-old Brian Deese, a Yale law student, in charge of GM's restructuring. "It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism," the New York Times said with tongue in cheek (we think).

It used to be that the "rules of American capitalism" came from 200 years of U.S. case law, the Constitution and legitimate federal regulation. But no more. Instead, the job's been given to someone not yet out of law school. This shows shocking contempt for GM, once the world's pre-eminent industrial company, for American capitalism and the rule of law.

We don't think this travesty passes constitutional muster and hope to see it vigorously challenged in federal court soon.

Our Constitution is very specific. It limits the executive branch's rights to those enumerated therein. The rest it grants to the people and the states. It also requires due process under the law, especially when government "takings" are involved.

That's why in 1952, when President Harry S. Truman tried to seize control of the U.S. steel industry during a debilitating strike, the Supreme Court made him back down. And Truman had a real emergency on his hands: the Korean War.

We pored over Article II of the Constitution, known as the Executive Powers Clause. Nowhere is the White House granted the right to override the time-tested bankruptcy process, to use Treasury money raised by taxing Americans to buy or bail out companies, to fire CEOs, to micromanage corporate policy, or to abrogate lawful contracts made by private parties.

Yet, our government has done these things and more — leading to a corrupt GM bankruptcy. The damage to our system of corporate capitalism and the rule of law is severe. Next stop: Federal court?

Thugs Vs. Voters


By INVESTOR'S BUSINESS DAILY | Posted Monday, June 01, 2009 4:20 PM PT

Voting Rights: It's more than disturbing to see the Justice Department drop a case against armed bullies practicing intimidation tactics last Election Day. No American should ever fear to vote.

Read More: Judges & Courts

The Washington Times reports that political staffers at Attorney General Eric Holder's Justice Department have trumped careerists and ordered that a complaint be dropped against three members of the New Black Panther Party for Self-Defense who used a billy club to harass voters in Philadelphia on the day of last year's November elections.

The incident became a sensation on Election Day itself, thanks to quickly posted YouTube video showing two of the threatening men dressed in paramilitary garb.

After months of work, Justice officials were on the verge of applying sanctions against the three this month, according to the Times, but "their superiors ordered them to reverse course, according to interviews and documents." 

Two had their lawsuit dismissed with no penalty imposed, while the third man was banned from taking a weapon to a polling place in the future. Records indicate that the three men had refused to appear in court.

An interesting aspect to the case is that civil rights activist and former Bobby Kennedy aide Bartle Bull, working as an official poll watcher on the day, accused the Panthers of making themselves "an intimidating presence" in a sworn statement.

"In all my experience in politics, in civil rights litigation and in my efforts in the 1960s to secure the right to vote in Mississippi," according to Bull, "I have never encountered or heard of another instance in the United States where armed and uniformed men blocked the entrance to a polling location." 

The Justice complaint called the incident part of a national operation to have New Black Panther members stationed at various polling places.

Voter intimidation has obviously played a big role in American history. Southern states had long used literacy tests and other means to keep blacks from casting ballots. The 1965 Voting Rights Act authorized the federal government to stop any "test or device . . . used for the purpose or with the effect of denying or abridging the right of any citizen of the United States to vote on account of race or color."

The alleged behavior of the Panthers, however, is more akin to the physical bullying the Ku Klux Klan practiced during elections, memorably depicted in the final scenes of D.W. Griffith's propagandistic 1915 film, "The Birth of a Nation."

The fundamental legitimacy of our representative government depends on Americans' ability to exercise their power to vote with full peace of mind. There must be zero tolerance for anyone threatening that with physical violence. Our new attorney general takes this matter far too lightly.

Monday, June 01, 2009

Washington Times Editorial: Middle East fertility wars: Jewish babies threaten the peace process


June 1, 2009

What does Hillary Rodham Clinton have against Jewish babies? Last week, the secretary of state issued a demarche to Tel Aviv stating that Washington "wants to see a stop to [West Bank] settlements - not some settlements, not outposts, not natural-growth exceptions." The euphemism "natural growth" refers to children. About 9,600 babies were born in West Bank settlements in 2007, and the State Department views these bundles of joy as a threat to its precious peace process.

The demographic issue is central to the Israeli-Palestinian dispute. Some Israelis fear that they will be overwhelmed by a rapidly growing Palestinian population, so to the settler population, having children is a patriotic act. The new arrivals require larger houses, schools, playgrounds and other facilities, hence the need for the settlement growth that is upsetting Foggy Bottom.

The no-baby declaration came as welcome news to Palestinians, who are rapidly losing their advantage in the breeding battle. Aggressive international family-planning programs contributed to Palestinian fertility rates dropping almost 30 percent between 2003 and 2008, to 3.31 children born per woman. This compares to 2.77 births in Israel, which experienced a 10 percent increase over the same five-year time period. If these trends continue, Israelis will be outpacing Palestinians in a few years.

For this and religious reasons, abortion is a crime in the Palestinian Authority unless the physical health of the mother is endangered. Palestinians generally are what in American parlance would be called "pro-life." A 2008 study by showed that just 38 percent of Palestinians say abortion should be an individual decision, compared to a global average of 52 percent. Most support some form of government restrictions.

The Obama administration has taken a despicable stand in favor of promoting abortion overseas. On his third day in office, President Obama rescinded the 1985 Mexico City Policy, which stipulated that U.S. Agency for International Development family-planning assistance would be given only to foreign nongovernmental organizations that would pledge not to perform or actively promote abortion as a method of family planning. Mr. Obama also seeks to return U.S. financial support to the United Nations Population Fund, which promotes controversial "family planning" efforts in the developing world.

Many Palestinians view such internationally sanctioned family-planning efforts as a conscious plot to reduce their numbers. In a report in the Hamas-run daily newspaper Filastin, Sari Hanafi, the director of the Palestinian Diaspora and Refugee Center, quoted a colleague who said that "the United States seems to have two ways to control population growth in Palestine: one through the Apache gunships and the other through family planning programs."

The State Department would do well to stay out of this issue. The West Bank settlers in particular will not respond well to finger-wagging from the United States over how many children they choose to have. Behind the euphemism "natural growth" are thousands of babies, girls and boys, who are objects of love and adoration of their doting parents. Secretary Clinton's devotion to the peace process is a much less powerful force than the love of Israeli parents for their children.