CHRYSLER'S CEO: MITT'S A LIAR ...

Mitt Romney is claiming that President Obama's bailout of America's auto industry is insignificant since Jeep - a division of General Motors  - is going to take the money and run to China with 1,500 jobs. The twisted implication is that U.S. auto workers will lose their jobs as a result of the bailout. Executives in Detroit have made it clear that nothing could be further from the truth.

Specifically, GM spokesman Greg Martin dismissively rebuked Romney's campaign ads, observing "We've clearly entered some parallel universe here. No amount of campaign politics at its cynical worst will diminish our record of creating jobs in the U.S. and repatriating profits back to this country." Chrysler's CEO Sergio Marchionne followed up with an e-mail to concerned Jeep employees, writing, "Jeep production will not be move from the United States to China."

To underscore his concern over Romney's blatant attempt to scare and mislead autoworkers, General Motors CEO Marchionne sent the Detroit News a letter to editor. It effectively calls Mitt Romney a liar:

Chrysler Group's production plans for the Jeep brand have become the focus of public debate. 

I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China. 

North American production is critical to achieving our goal of selling 800,000 Jeep vehicles by 2014. In fact, U.S. production of our Jeep models has nearly tripled (it is expected to be up 185%) since 2009 in order to keep up with global demand. 

We also are investing to improve and expand our entire U.S. operations, including our Jeep facilities. The numbers tell the story: 

* We will invest more than $1.7 billion to develop and produce the next generation Jeep SUV, the successor of the Jeep Liberty -- including $500 million directly to tool and expand our Toledo Assembly Complex and will be adding about 1,100 jobs on a second shift by 2013. 

* At our Jefferson North Assembly Plant, where we build the Jeep Grand Cherokee, we have created 2,000 jobs since June 2009 and have invested more than $1.8 billion. 

* In Belvidere, where we build two Jeep models, we have added two shifts since 2009 resulting in an additional 2,600 jobs. 

With the increase in demand for our vehicles, especially Jeep branded vehicles, we have added more than 11,200 U.S. jobs since 2009. Plants producing Jeep branded vehicles alone have seen the number of people invested in the success of the Jeep brand grow to more than 9,300 hourly jobs from 4,700. This will increase by an additional 1,100 as the Liberty successor, which will be produced in Toledo, is introduced for global distribution in the second quarter of 2013. 

Together, we are working to establish a global enterprise and previously announced our intent to return Jeep production to China, the world's largest auto market, in order to satisfy local market demand, which would not otherwise be accessible. Chrysler Group is interested in expanding the customer base for our award-winning Jeep vehicles, which can only be done by establishing local production. This will ultimately help bolster the Jeep brand,and solidify the resilience of U.S. jobs. 

Jeep is one of our truly global brands with uniquely American roots. This will never change. So much so that we committed that the iconic Wrangler nameplate, currently produced in our Toledo, Ohio plant, will never see full production outside the United States. 

Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand. 

It is inaccurate to suggest anything different. 

From The Detroit News: http://www.detroitnews.com/article/20121030/AUTO0101/210300401#ixzz2Atg2oNcR

- Mark 

SEVEN DAYS LEFT ...

For those concerned with Mr. Romney's distortions about President Obama's policies ...

- Mark 

WHAT HAPPENED TO THE BUDGET SURPLUS?

Want to know what happened to more than $5.6 trillion in projected surpluses? This simple 3 minute Center for American Progress clip shows us what happened to the surpluses ... and why we have budget deficits today.

If you want the numbers in simple graph form here they are ...

- Mark 

DECLINING SOCIAL MOBILITY ... AMERICA'S CANARY IN THE MINE?

Tyler Durden at Zero Hedge has an interesting guest post on what's been happening to social mobility in America. Specifically, the chance to improve our lot in life in America is not what it used to be ...

Both capitalism and democracy promise the opportunity for upward mobility. Capitalism offers upward mobility to anyone with a profitable idea or productive skillset and work ethic. Democracy implicitly promises a "level playing field" of meritocracy, where talent, drive and hard work open opportunities for advancement. Crony capitalism offers wealth to the class that already possesses it. Feudalism bestows "rights" to wealth to a favored few. In a way, upward mobility is a real-world test of a nation's economic and social order: if upward mobility exits in name only, then that nation is neither capitalist nor democratic. Stripped of propaganda and misleading labels, it is a feudal society or a crony-capitalist economy masquerading as a capitalist democracy.  The wealth that could have been transferred to the next generation has been consumed suporting a "middle class" lifestyle and providing the next generation with what was once the basis for advancement: a university education, healthcare insurance, a reliable vehicle, etc. Now that jobs are hard to find and compensation is low, the next generation still needs the accumulated wealth of the household to get by. That is not upward mobility, it is downward mobility, on a vast and largely unnoticed scale.

If upward mobility in America is increasingly restricted (and it is) the implications for our nation are not good.

As I pointed out in my book (and here and here), the moral justification of capitalism rests on one simple principle: If you work hard you can get ahead. This what brought the world to America, and is the cornerstone of our society. If the conditions that enable us to work hard and get ahead are undermined one must ask, what's the point?

You can read the entire post here.

- Mark 

OUR MONEY MACHINE

In the FYI category ...

The Federal Reserve has submitted its order for new money this year. They want 7.8 billion in new notes which adds up to $472.9 billion. Here's what's been ordered, by denomination.

Most of the new notes are $100 bills because people overseas are holding them, presumably as financial security.

In the larger scheme of things, people around the world holding dollars (for whatever reason) is good news. It helps us stave off the problems associated with creating as many dollars as we do (i.e. inflation). While interesting, this is a story better left for another post.

- Mark

IS SYRIA REALLY IRAN'S ROUTE TO THE SEA?

Mitt said it again. 

During the Republican primaries in February Mitt Romney said that Syria is Iran's "key ally." OK, no problem here. Then he claimed that Syria is also Iran's route to the sea (start at 1:30:15). Huh? Has Mitt ever seen a map of Iran and where it lies in relation to the Syria and the Mediterranean?

Hey, I have an idea. Let's take a look ...

Well, at the beginning of tonight's debate on foreign policy he made the same assertion. If you look closely (well, you don't really have to look that closely) the real story here is that Syria does not even have a border with Iran ...

Sigh ...

As I pointed out in July, there's not much to say here except to remind everyone what happened the last time we elected a guy who didn't know much about the outside world.

- Mark

EXPLAINING THE FED'S CASH MACHINE (for Wall Street)

I know this is off of every body's radar screen, for now. But Congress has been asleep at the switch while the American taxpayer has been put on the hook for trillions in financial guarantees to Wall Street. As a public service, I'm going to remind everyone how trillions in obligations have been dumped on to our lap.

Let's start with this. Through the Federal Reserve and Treasury Department - who get their resources from the U.S. taxpayer - we have covered over $4.7 trillion in bets and obligations for the financial sector since the 2008 market collapse.

The key here is keeping in mind that this $4.7 trillion is not included in the TARP (Bush) and the Stimulus (Obama) programs that cost us a little over $1.5 trillion.  But wait. It gets better. In addition to the $4.7 trillion the Fed and the Treasury have put us on the hook for, as of today, they have underwritten an additional $13 trillion ... which you and I backstop.

That's a total of $17.7 trillion for you and me. How much is this, you ask? Think about this. It would be the functional equivalent of you going out to spend all the money you earn in a year in just one month. Nice.

Think about it. Our nation's GDP (what we produce) is expected to hit about $15.7 trillion in goods and services this year. You would think that our representatives in Congress might want to ask how and why the Federal Reserve and Treasury have been able to put us on the hook for $17.7 trillion.

Fortunately, several members of Congress have been asking questions.

To date Rep. Ron Paul (R-TX) and former Rep. Alan Grayson (D-FL) are on record for pressing the Fed on the topic (and more). Former Rep. Grayson was especially good at questioning the Fed's Inspector General about trillions (much of it in credits) that suddenly appeared on its books.

To his credit, even Terry Phillips (I-CA), Majority Whip Kevin McCarthy's (R-CA) opponent in Bakersfield, brought up the issue in their only debate in Bakersfield (Rep. McCarthy ignored the topic).

But - as you can imagine - no one in a real position of power wants to have this discussion. With former representative Alan Grayson out of office (for the moment), Bernie Sanders (I-VT) acting as a voice in the wilderness, and Rep. Ron Paul effectively marginalized by his own party the Fed's cash machine is largely ignored.

At the very least we can ask, where's the money going, right? So let's do that  ...

The simplest way to put it is that there is a veritable cash machine for Wall Street, and it's operated and funded by the Federal Reserve and the Treasury Department. You can try and walk through the maze of credits, guarantees, and loan programs here. Created after the 2008 market collapse among the programs created to cover the bets of Wall Street and the financial sector include

* $3.3 trillion in federal guarantees for private mutual funds.
* Over $2 trillion to underwrite toxic financial crap and "private" business ventures (TALF and PPIP).
* At least $1.8 trillion in Federal Reserve guarantees for short term business loans (or "commercial paper").

If you're wondering what these programs are all about welcome to the club.

Most Americans (and members of Congress) don't have a clue about any of this either (if you want to know a little more about these market subsidizing programs check out this, this, and this). But let's be clear here. These programs were essentially created to underwrite market stupidity and create a perpetual bailout culture that make it appear that the market is recovering. It's not.

The market is being being resuscitated by a life support cash machine that you and I pay for, but only a small group on Wall Street are using to get fabulously rich.

And, as a reminder, that cash machine is stuffed with $17.7 trillion in taxpayer backed guarantees.

The worst part of all of this is that these guarantees aren't directed to build bridges, roads, schools and dams. These guarantees were created to prop up and backstop incredibly stupid market bets made by market players who are more interested in creating paper empires (which we knew about as far back as the Clinton administration).

The focus is not in making hard investments in the American economy, but in extracting wealth from middle class taxpayers. Oh, it's also going to prop up the financial stupidity of our nation's financial mandarins.

With Congress asleep at the switch, this is what's behind the Fed's cash machine.

- Mark 

THE McCARTHY-PHILLIPS DEBATE

On October 21 Bakersfield's KGET 17 aired a previously recorded debate between Congressman Kevin McCarthy (R-Bakersfield) and his challenger Terry Phillips (Independent).

Terry Phillips, a former correspondent for CBS, won the debate. He consistently called Rep. McCarthy on the political games he and other members of Congress play when they present legislation so they can say they introduced a bill (only to see them stalled because of poison pills and a lack of genuine bi-partisanship).

The debate was an hour long so if you're looking for some highlights you can fast forward to the following:

* THE BUDGET: Phillips talks about mandatory cuts and the "fiscal cliff" that's looming over America by reminding everyone that Rep. McCarthy voted for the Budget Control Act (45:10), which mandates across the board cuts, including in defense spending (sequestration).

* GAME PLAYING IN CONGRESS: Phillips calls Rep. McCarthy out on the "poison pill" stuffed legislation and faux bi-partisan bills that are a regularly part of the political games being played in Washington.

* PHILLIPS' PARTY AFFILIATION: Republican consultant and McCarthy supporter Cathy Abernathy tries to goad Phillips into identifying with a party (43.06), but Phillips dismisses her with one of the best answers of the night (he also dismisses Abernathy's leading question at 17:40).

* PLAYING GAMES, II: Phillips takes a look at funding for our veterans, and reminds everyone that the Iraq and Afghanistan veterans have given Rep. McCarthy a "D" rating on his votes (36:15) and that (2) simply because a bill gets passed in the House is not the same as actually doing something. In fact, Phillips makes it clear that passing bills in the House when you know they're not going anywhere in the Senate is simply playing games (35:10 and 34:07).

* GOP OBSTRUCTIONISM: At 32:03 in the clip Phillips reminds Rep. McCarthy that the GOP got together on the night of the inauguration and pledged to stonewall the President. McCarthy tries to deny that this happened, then claims that that the GOP was only going to propose legislation in response to what the administration does, and then backs off when Phillips asks whether Draper is not telling the truth (30:45).

* ACKNOWLEDGING THE "PARTY OF NO": An interesting comment from Rep. McCarthy: "I get frustrated with my own party that just says no ..." (30:31).

* AMERICAN GREATNESS: When asked about budget constraints and why we should pursue high speed rail in the central valley Phillips reminds everyone about the great things America did when we faced even bigger challenges during the Civil War and the Great Depression (26:40).

* THE FEDS CASH MACHINE: Phillips reminds Kevin McCarthy that the Federal Reserve is lending and putting the American taxpayer on the hook for trillions in credits and other guarantees (16:40; which I've written about numerous times). Despite claiming to be concerned over bloated budgets, after the topic is changed by the moderators, Rep. McCarthy ignores the reference.

- Mark 

AMERICA'S ON GOING TRIBUTE TO IGNORANCE

It never ends. First we're treated to America's tribute to ignorance, Kentucky's Creation Museum. Well, hold on to your cowboy hats. We're seeing another attack on science and reason, only this time it's from Texas.

In the clip below (from Upworthy) we learn that if you live and go to school in Texas you might just learn that dinosaurs were on Noah's Ark. Check it out here ...

At least we can now take a guess at what happened to the unicorns. In all likelihood, the dinosaurs ate them.

And if the dinosaurs didn't eat them it's probably because the animals were sorted alphabetically and the tigers got them ("T" does come before "U"). Here's an artists depiction of the unicorns last moments on earth.

I know, I know, this is all pretty silly. But then again, maybe not. Ignorance and stupidity seems to have marbled its way throughout American society.

Consider the following examples, straight from the halls of Congress. It demonstrates that having a seat in Congress is no guarantee that you will understand basic rules of science. Let's start with Rep. Hank Johnson (D-GA), who once asked whether the island of Guam might "tip over" (1:15 into the clip)...

Here's how Rep. Johnson's worst nightmare might actually play out ...

If you think this is bad, think about this. Rep. Todd Akins (R-Missouri) - who sits on the House Committee on Science and Technology - seems to believe that women can choose to reject a pregnancy naturally ("shut that thing down"). But only in cases of legitimate rape, of course. The Daily Show helps us understand this, and other nuances of "modern" science (and history) in America.

At the end of the day, even Japan's Godzilla thinks that this approach to science in America is absurd (hey, if dinosaurs can be on Noah's Ark Godzilla can Facepalm America's ongoing tribute to ignorance) ...

Sigh ...

- Mark

FACT CHECK, PLEASE ...

From Z-Facts we get another way to look at the real forces behind our budget deficits ...

The graph below (also from Z-Facts) also makes it clear that the size of our federal workforce is not growing.

A key observation here is that federal job growth under both President Reagan (200,000) and President Obama (38,000) held at about the same percentage relative to our general population growth.

So, you might ask after looking at these charts, why do we keep hearing about Obama's deficit problem and growing government?

In the case of our "growing government," as Z-Fact points out, it's "pretty simple." Because the Republicans want to cut government programs "so we can grow the economy" (cough, cough) they need Americans to believe that the federal government is too big. However, the size of the federal government in the 1950s and 1960s was much larger (as a proportion of the population) when economic growth was much stronger than it is today.

The reality is the financial titans behind the GOP want to reduce their tax burden, so they've gotten their political oompa loompas in Congress and the right wing noise machine to convince a large number of Americans that the government is out of control. The reality is, as the graphs above make clear, the real culprits behind our budget mess are: (1) tax cuts, (2) increased military spending, (3) and the economic fallout from the 2008 market crash.

Throw in the fact that our "growing government" is really a myth (actually, it's a lie) one needs to ask, Why do many Americans believe we need to cut government and enact more tax cuts?

Oh ...

 - Mark