Debunking the Chrysler Dealergate Myth

I have tried to ignore it, but it keeps creeping up all over the internet. I'm not sure where it started exactly but when it makes it to the White House Press Room, it has gone too far. Bloggers across the Internet are promulgating a rather preposterous conspiracy theory that the Obama Administration has not only forced Chrysler to shut down 25% of its dealers nationwide (which is entirely plausible, if not likely) but, further, they have chosen for Chrysler which dealers will be forced out of business based solely on the dealer's party affiliation. In short, Obama is shutting down as many Republican dealers as he can in a covert effort to......well, I'm not really sure. There are so many holes in this theory, it is almost laughable. I don't have the resources or the time that Gateway Pundit or DirectorBlue have, but I will do my best to illustrate how completely ridiculous this proposition is.

Gateway's premise is that Obama, through Chrysler, specifically targeted GOP donors in choosing which dealers to close. As evidence, he presents a list of 40 dealer owners who have received shut down letters and who also donated large sums to Republican candidates and PAC's. The problem is, there were 789 dealerships that were shut down. I don't believe that 40 out of 789 reflects any sort of statistical significance.

In his next post, he presents data reflecting the fact that 76% of Chrysler dealer groups and owners donate to the GOP versus only 26% to Democrats. I'm honestly not certain what the point of this statistic is because it obviously negates the statistical significance of his first post. This would mean that, of the 789 dealers that were closed, approximately 600 were GOP donors. Yet, they find evidence of only 40 that lost their dealerships. If 76% of Chrysler dealers donate to the GOP shouldn't the number shut down be closer to this number instead of the statistically insignificant 5% that he demonstrated in his first post? Immediately, for some mass conspiracy to exist, things aren't quite adding up. And, as an aside, are we really surprised that 76% of business owners in a particular industry donate to the GOP? Isn't that EXACTLY what you would expect. What is gained by shutting down 5% of them? This lacks correlation.

Next, Gateway Pundit presents a map, meticulously constructed, showing the locations of each of the shut down dealers. He posits that the left coast mysteriously managed to survive the cuts; much more so than the rest of the country. Well, statistically this is true. But, based on a visual inspection, the highest concentration of cuts were located in the heavily Democratic northeast. How does he account for this? In short, he doesn't. I don't know why exactly except to say that it doesn't back up the original theory. In fact, it would completely invalidate it.

Here are some facts. For years, Chrysler (and GM) have been attempting to effectively shut down dealers, as this story from Edmunds over a year ago shows. Gateway Pundit cites evidence that Chrysler was against this plan, which may be true of the scope and breadth of what Obama's poorly constructed automotive task force was demanding, but to say that they are against the idea of closing dealerships is inaccurate and reflects a lack of knowledge of the auto industry. Chrysler and GM for years have been lobbying dealers to consolidate their operations into what used to be called "Alpha Points" but are now called "Genesis Stores." Chrysler does not want stand alone stores anymore, opting instead for the brands Chrysler, Jeep, and Dodge to be under the same roof. Making this process difficult are state franchise laws which prohibit Chrysler from shutting down dealers outside of bankruptcy protection. State franchise laws more accurately tie Chrysler's hands from doing anything outside of encouraging dealers to consolidate. This becomes very difficult when single point stores are under the ownership of different individuals or when single point stores are located in rural areas, preventing consolidation. Bankruptcy protection has given Chrysler the opportunity to do what they have wanted to do for the better part of this decade: shut down single point stores and combine them to form Genesis Stores. If you check out Director Blue's list of shut down dealers, you will find that the vast majority of them are: single point stores.

Both Gateway Pundit and Director Blue cite Chrysler's given criteria for shutting down dealers: "sales volume, customer service scores, local market share and average household income in the immediate area." But for some reason they decide not to explore it. They provide exactly NO data or statistics analyzing these categories in respect to dealers that were closed. They seem to present, if I have read all that has been posted, only anecdotal evidence of dealer owners claiming they "can't comprehend how" their dealership was shut down. If we are going to completely negate Chrysler's given reason and propose a completely different, offensive reason, shouldn't we begin by debunking the original reason before we do anything else? The truth of the matter is many of these dealers WERE lagging in terms of sales volume, customer service, and/or local market share. Until this is invalidated, why even entertain any other theory? And that is all this is, a poorly developed, flacidly defended, theory.

And finally, in all of this, where is the motive? Out of the tens and hundreds of millions of dollars donated to political groups and candidates last election, an election that Obama won in a virtual landslide, he has chosen to target the donors of $450,000? What possible reason would he or his administration have to do this? What is there for him to gain? The Fraud Triangle theory states that three things must occur for fraud to take place: Rationalization, Opportunity, and Incentive. Where is the incentive?

Gateway Pundit and Director Blue bury readers in statistics. They have worked hard and researched their case well. But they have forgotten the first rule of statistics: correlation does not equal causation. Logic, and a little better understanding of the industry, present a very different explanation.

No Place Left to Hide: Obama’s Unsustainable Promise

We have begun to see the effects of the spending boondoggle that this Administration is creating. Bloomberg reports today that the dollar has fallen to a 4 month low against the euro and shows no signs of a rebound. The weakening dollar is indicative of the falling confidence investors have in the U.S. economy due to the massive amounts of U.S. government debt being issued to finance a liberal agenda and a Federal Reserve that is printing money like its going out of style. The effects of these policies could be disastrous.

More evidence of the problems with the massive amount of debt President Obama is burdening us with: The Financial Times reported recently that investor demand for Treasuries has reached such a low at the latest Treasury auction that the yield differential between mortgage-backed and U.S. Treasury debt fell to its lowest level since 1992, spurred by the sharp rise in U.S. Treasury yields (yield moves in the opposite direction of demand.) As this, the so-called “riskless” rate rises, companies will be forced to offer even larger yields on their corporate debt. As the financing for projects becomes more expensive, companies by and large will postpone or abandon their investments. The sheer volume of Treasury debt will lead to a “crowding out” effect, taking away investors who would normally invest in private enterprise, the effect of which will make access to capital markets more and more difficult for busineses that rely on this capital to continue their operations. With demand for U.S. debt already falling to historically low levels what will we do when demand for our debt continues to drop even more? The government has not even begun to spend most of the stimulus money yet. How long will investors and foreign governments continue to finance our bad decisions?

When that well runs dry, there is only one place left to get the money to finance President Obama’s mistakes: your pocket and mine.

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes….you will not see any of your taxes increase one single dime." This is a statement from candidate Obama on September 12, 2008.

This promise will prove, and it some cases has already proven, unsustainable. California has all but given us a window into the future this week, as Carol Platt Liebau discusses. Public policy and special interests have spent California into a wall. They now face one of the direst economic and fiscal disasters in history. Ms. Liebau is prophetic: our federal government is heading down the same set of tracks unless we derail this runaway spending train.

The President’s excuses are wearing thin. Laden with a massive deficit from the previous administration, he continues to blame his predecessor. I will be the first to criticize President Bush’s fiscal irresponsibility as well. Make no mistake though: the time for talking about the past and campaigning against Bush is over. It is time to take ownership. The budget deficit for FY 2009 will be larger than the entire budget for FY 2001. That is undeniably the work of Mr. Obama and his liberal Congress. Think about that for a second – the amount that we are spending exceeds the amount we are taking in by the size of the entire federal budget only eight years ago. The enormity of President Obama’s irresponsibility is dumbfounding. The fiscal deficit he was left with may mean that he must make tough choices – it means we cannot buy everything we want. The debt that he inherited demands a heightened sense of fiscal responsibility; one that he has been demonstrably unwilling to provide. This must be stopped before it gets any worse. My fear, however, is that it is already too late.

Opportunism At Its Finest: Democrats on Torture

The debate over torture, or the use of Enhanced Interrogation Techniques (EITs) has reached almost comedic proportions. For months that have stretched into years, Democrats and the American Left has absolutely vilified the Bush administration and its hardworking intelligence officials for participation in such acts. Only now is the truth beginning to come out. Not only did Democrats know about these EITs, they implicitly approved of its use. Now they are calling it illegal forms of torture and threatening investigations, and worse, prosecutions. The outrage is beginning to sound an awful lot like hypocrisy.

This is certainly not a comfortable topic to discuss. No one likes torture. But then, no one is advocating a position of pro-torture. The argument has never been that torture is good and should be used more frequently. The argument is that EITs are sometimes required, dirty as they may be, in times of dire circumstances. It is unbelievably naive to think that we may never be required to do that which is unpalatable. In life, sometimes we are required to do things that we would rather not have to do, but in order to ensure our survival and our livelihood, we must be willing to do what is necessary against an evil segment of a peaceful religion the likes of which we have never seen. This is not to say that we do anything that is necessary. We weigh the benefits against the costs; the gain against the loss; the fairness; the justness.

This should be done in an open and fair discussion so that a position can be developed and this is exactly what the Bush administration had tried to engage in by developing cohesive legal opinions on the these policies and briefing Congressional leaders on them as far back as 2002. When one raises a position and is unchallenged by their opponents, the only conclusion that one can come to is that they agree. This is what Congressional Democrats left the administration with in these early days of a post-9/11 world, until they decided to pull the rug out from under the administration.

Now for the hypocrisy. Speaker of the House Nancy Pelosi has recently railed against the Bush administration for their participation and legal justification for these EIT policies, even going so far as threatening to investigate and, if she deems appropriate, prosecute egregious offenses. This is all quite ironic considering the fact that she has been aware of and, by her silence, complicit in such methods since 2002.

Speaker Pelosi was told at the 2002 briefing about the use of the EITs and "on a bipartisan basis, asked if the CIA needed more support from Congress to carry out its mission" according to former Rep Porter Goss who was also a part of the briefing. This account is supported by CIA sources who say Speaker Pelosi "questioned whether we were doing enough" to extract information.

There's more. Not only was she informed about the administrations position on EITs, she was also, according to Obama administration officials, informed of its specific application to a named detainee. On May 5, CIA Director Panetta, in a report to Congress, testified regarding the CIA's meeting with Speaker Pelosi calling it a "Briefing on EITs including use of EITs on Abu Zubaydah, background on [legal] authorities, and a description of the particular EITs that had been employed." This is the exact thing that she had denied knowledge of. How convenient. I'm glad the CIA writes things down at least.

Her defense has taken a variety of turns, beginning with the assertion that she did not recollect that meeting at all. Once that was debunked, she stated that, "I can say flat-out, they never told us that these enhanced interrogations were being used." After more sources came forward, including aides from the Speaker's own office and the Panetta report referenced above, her story changed again, morphing into a claim that she was powerless to act.

Powerless? The most powerful person in the House of Representatives is claiming that the Speaker of the House is powerless? Now THAT is a revelation. Granted, she was not the Speaker in 2002, but she was still the most powerful individual in Congress for the Democratic Party. Now I think if I were one of her constituents, I would ask for my money back. How can someone that is elected to such a high office claim that she was powerless to even present a contrarian viewpoint? No one is asking her to physically go out to secret CIA prisons and confront agents face to face and go Jack Bauer on them. She was simply to state her opinion. If she is too scared or weak to do that, as a citizen, I would remove her from office. How can someone like this be trusted with the responsibility of advocating for me if she cannot effectively advocate for herself?

As recently as today, she has changed her story once again, saying that the CIA was dishonest and withheld information from her in their briefings. Even this argument however does not exonerate her from her responsibility as an elected government official to speak for what she believes in.

Do I believe any of Speaker Pelosi's explanation for her actions? I do not. It barely passes the laugh test. She wasn't afraid or powerless; she has been proven to have attended the meetings and even if the CIA withheld information, she had enough to understand the proposals and object if she saw fit. The problem is that she agreed with the President that he should do what was necessary. Ironically, in 2002 she actually asked the CIA if there was more that they could do. She advocated for more enhanced interrogation techniques. Does that sound like the request of someone who fundamentally believes that we were engaging in torture? The heinous part is that, in a quite stunning display of opportunism, she only changed her position when it became politically expedient to do so; when she saw a wave of public opinion that she could capitalize on to hurt the Republicans. How dishonorable.

This week more has come out. Senator Schumer is quoted as saying:

"We ought to be reasonable about this. I think there are probably very few people in this room or in America who would say that torture should never, ever be used, particularly if thousands of lives are at stake.....If we knew that there was a nuclear bomb hidden in an American city and we believed that some kind of torture, fairly severe maybe, would give us a chance of finding that bomb before it went off, my guess is most Americans and most senators, maybe all, would say, Do what you have to do."

Does Speaker Pelosi think Sen. Schumer is unfit for office? Should he be investigated too?

I know that this is a controversial issue and one that should be discussed with the full breadth of openness and reason. What I cannot understand and do not subscribe to is the vitriolic, self-righteous condemnation of Democrats who are as complicit as anyone else in the Bush administration with regard to the policies that were developed and employed in a post-9/11 world. I know there is hatred for President Bush that has permeated not only our government but our society as a whole, some justified, some over the top. But this is not a justifiable reason for the shape that this debate has taken on. I am all for a lively and honest debate of relevant issues, but do not come to me with your fake outrage. Honestly, should we expect anything less from our elected officials on both sides of the aisle?

Where's the Change?

Former Bush administration Press Secretary Scott Mcclellan wrote a book that was deeply lauded in liberal circles for calling out the President on many issues that no one in the tightly controlled Bush "inner circle" had thus far not challenged. In What Happened, Mcclellan claims that, among other things, the Bush administration continued the Clintonista politics of selling the issues rather than governing them. We were told that the President largely ignored facts in favor of persuasion used to convince the public that they should agree with him. The "permanent campaign" is the term that he uses to describe such tactics. Candidate Obama promised us change; President Obama assured us change. I for one, although a committed conservative, was ready for a change.

Here we are, 127 days after President Obama was sworn in and the paint is beginning to dry on this administration. And time after time after time, our inexperienced President provides us with what can only politely be called his version of the truth. In what can only be seen as efforts to perpetuate this notion of a "permanent campaign" we are told only what the President wants us to hear, instead of being given all of the facts. This is not governing.

After multiple attempts to bail out the failed company, Chrysler declared bankruptcy at the beginning of this month. In the President's press conference making the announcement, he vilifies the secured debt holders of a company in shambles:

"Now, while many stakeholders made sacrifices and worked constructively, I have to tell you, some did not. In particular, a group of investment firms and hedge funds decided to hold out for the prospect of an unjustified taxpayer-funded bailout.
They were hoping that everybody else would make sacrifices and they would have to make none. Some demanded twice the return that other lenders were getting.
I don’t stand with them. I stand with Chrysler’s employees and their families and communities. I stand with Chrysler’s management, its dealers, and its suppliers."

What the President fails to mention is that, before his government began giving away free money (now that they are in Bankruptcy, Chrysler will not ever pay back the $7 billion in loans they received) Chrysler sought out financing through the place all companies do: free capital markets. These investors took enormous risk by investing in a company that had been failing for years; the only way they could justify it to their investors and boards of directors was through the security of knowing that, as secured debt holders, they would be among the first to be paid back in a bankruptcy that was looking more and more likely. The President failed to mention that his administration strong-armed the other debt holders, who had received TARP funds, into submission to his administration's demands. Demands that required these investors to take a more severe loss than the one he asked his friends at the United Auto Workers' Union to take. The non-TARP debt holders refused to sell out their own shareholders in this fleecing of the private sector; shareholders for whom the have a legally mandated duty to act in their interest, only to be publicly flogged by the leader of the free world for doing exactly what they are required to do. But Mr. Obama had his scapegoat and he was not going to miss the opportunity to blame someone other than himself and his own failed policies.

Just yesterday, as you can read about on Despina Karra's blog, the President announced trillions of dollars in health care savings for the American people. He failed to mention that this savings had already been figured into his budget; a budget that, with this savings that is hypothetical at best, still pushes us into record deficits that this country has never seen before. But he stands up and announces it to a public that is largely unaware of this fact.

The evidence goes on. Take a look at his Cap and Trade policy as well as his heroic announcement to close the corporate tax loopholes that will put all American multinationals at a competitive disadvantage and cost us jobs. Half truths at best, concealment of the truth at worst. For a President that campaigned almost exclusively as a change; an alternative to the lies of the previous administration, you would think that he would make every effort to avoid even the perception of hiding information from the public. But as the paint dries, its a very different picture that is emerging.