Category Archives: Economics

Auto Sales Up: Dealers Should Thank the U.S. Government (But They Won’t)

The New York Times reported this week that “October was the best month for new-vehicle sales in more than two years, outside of the brief period in 2009 helped by government rebates.”

Sales for the auto industry were up 13.4 percent over all from a year ago.  Sales for General Motors rose 4.2 percent, sales for Ford Motor Company were up 19.3 percent, and sales for Chrysler jumped 37 percent.

General Motors’ vice president for sales, Don Johnson, was confident that the American Auto industry has recovered from the economic crisis that left them on the brink of total collapse less than two years ago; “Signs are there that the recovery continues and that it will be sustained,” said Johnson. “We don’t see a big risk at all of a double dip.”

It looks like federal intervention saved the U.S. Auto industry.  You would think that American auto dealers would be grateful — out of patriotism or self-interest or both.

Think again.

Those U.S. flags they like to wave at auto dealerships don’t mean “thank you.”

Instead of thanking the federal government, auto dealers continue to be  some of the largest contributors to far-right, anti-government Republicans, who rail against the very programs that pulled them from the brink of collapse.

This right-wing, anti-government hypocrisy on the part of auto dealers is especially true here in Orange County, where auto dealerships — like Irvine Auto Center — have often served as staging locations for Tea Party rallies, and where our local  car-salesman-in-chief, auto dealer and Congressman John Campbell, continues to blast the federal government for providing the money that kept his family auto dealership alive.

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Auto Dealers Ending Their Cash for (Political) Clunkers Program

cash-for-clunkers-we-can-helpThe nation’s largest auto dealers association has apparently decided to end its long standing participation in the Cash for (Political) Clunkers program.

An historically dependable source of income for Republicans in the House and Senate, the National Automobile Dealers Association (NADA) has long contributed about twice as much to Republican election campaigns than to Democrats.

In 2008, the NADA gave $968,000 to Democrats and $1,892,000 to Republicans ($923,000 to House Democrats and $1,679,500 to House Republicans; $45,000 to Senate Democrats and $212,500 to Senate Republicans).

In 2006, the results were similar – the NADA gave $842,600 to Democrats and $1,978,500 to Republicans ($752,600 to House Democrats and $1,827,000 to House Republicans; $90,000 to Senate Democrats and $151,500 to Senate Republicans).

The ratio was also similar in 2004 – the NADA gave $714,500 to Democrats and $1,888,800 to Republicans ($630,500 to House Democrats and $1,698,800 to House Republicans; $84,000 to Senate Democrats and $190,000 to Senate Republicans).

But for the 2010 election, the Auto Dealers’ political contributions have dramatically shifted gears.

So far, the NADA has given $134,300 to Democrats and only $43,000 to Republicans.  This figure includes $101,800 to House Democrats and $43,000 to House Republicans, and $32,500 to Senate Democrats and nothing at all to Senate Republicans.

The reasons for this unprecedented shift in the Auto Dealers’ political allegiance is pretty obvious: The Republicans have told Detroit and the nation’s auto dealers to drop dead, opposing both the Obama administration’s bailout of the U.S. auto industry and it’s hugely popular “Cash for Clunkers” program.

Here in Orange County, Republicans in Congress have benefited enormously in the past from the NADA’s political contributions.

In 2008, John Campbell (R-48th CD) – an auto dealer himself — received $10,000 from the NADA, which was the largest amount they gave to individual campaigns that year.  In  2006, the year that he was elected to his first full term, they gave Campbell $20,000, also the largest amount given to any campaign and twice as much as they gave to anyone else.

Dana Rohrabacher (R-46th CD) received $7,500 from the NADA in 2008, $5,000 in 2006, and $10,000 in 2004.

Ken Calvert (R-44th CD) also received $7,500 from the NADA in 2008, as well as $5,000 in 2006 and $5,000 in 2004.

What did the auto dealers get for their money?

Recently, not much.

On the Auto Industry Financing and Restructuring Act, the auto bail out bill, Campbell voted “present” (citing his personal financial interest), while criticizing those who voted in favor.

Calvert voted “No,” calling it the “nationalization of the auto industry,” and Rohrabacher did not bother to vote at all.

On the Consumer Assistance to Recycle and Save (CARS) program (the Cash for Clunkers bill), Campbell did vote “Aye” against his party, (apparently no longer concerned about his personal financial stake in the auto dealer business), as did Calvert, but Rohrabacher voted “No,” complaining that the bill is “nothing more than a subsidy to prop up auto manufacturers, many of which have already received billions in taxpayer money.”

As we get closer to the 2010 campaign, we’ll see whether the auto dealers again make the mistake they’ve made in the past of giving cash to these political clunkers.

So far, it seems that they’ve shifted gears and are driving in another political direction.

Orange County Republicans Shed Crocodile Tears Over the Effects of Prop 13

croctearsRepublican crocodile tears flowed this weekend in Orange County as a group of city officials called F.I.S.T. – “Fight Insane State Theft” – comprised of 14 Orange County mayors and 42 city council members, nearly all of them Republicans – protested Republican Governor Schwarzenegger’s plan to take away billions in state property tax revenue from their cities.

According to the Orange County Register, the group held a rally this past weekend in Placentia, joined by an array of Republican front organizations posing as anti-tax crusaders, including Citizens for a Better Placentia, Fullerton Association of Concerned Taxpayers, and Yorba Linda Residents for Responsible Representation.

The Register notes that the protesters are “particularly concerned about losing funds for roads and other transportation projects.”

But it is the Republicans themselves – and their corporate funded anti-tax allies – who are themselves directly responsible for giving the state the power to take away property tax revenue from California cities.

Prior to 1978, local governments in California (as elsewhere in the nation) could set their own property tax rates and spend the money that they raised on local needs.

But the Republicans did not trust local governments or local voters with the power to tax local property or to spend that revenue as they thought appropriate.

So they decided to give the state the sole power to set property taxes and to give the state legislature the sole power to decide how that money would be spent.

Prop 13 took away the cities’ power to set property tax rates or levy property taxes, and gave all such power to the state — where it would be subject to Prop 13’s strict limits and the 2/3 rule – in other words, subject to the statewide anti-tax minority’s veto, regardless of the wishes or needs of local officials or voters.

Now our local Republican elected officials and Republican anti-tax front groups are outraged about “losing funds for roads and other transportation projects”  — which, by the way, tend to benefit large landowners and developers more than local citizens — because the state wants to spend that money elsewhere.

This latest instance of Orange County Republican hypocrisy reminds me of an exchange from Samuel Beckett’s play Waiting for Godot:

Estragon: We’ve no rights any more?
Laugh of Vladimir, stifled as before, less the smile.
Vladimir: You’d make me laugh if it wasn’t prohibited.
Estragon: We’ve lost our rights?
Vladimir: (distinctly). We got rid of them.

So I ask our Orange County Republicans: Having given up our rights, are you now ready to amend Prop 13 to return the property tax power to local governments and local voters?

When Republicans Raise Taxes They Don’t Call Them Taxes

toll

The Orange County Transportation Corridor Agencies, dominated by local Republican politicians such as Jerry Amante (“Toll Road Jerry”) of Tustin and Orange County Supervisors Pat Bates and Chris Norby, has announced that tolls on the 73, 241, 261, and 133 toll roads will go up by 25 cents on July 5, and the monthly account maintenance fee for those with FasTrak will double from $1 to $2 per transponder.

But this post isn’t about Orange County’s transportation problems or the specific problems of the County’s toll road boondoggle.

It’s about taxes.

Local Republicans have made their political living by claiming to oppose tax increases – any tax increase, for any reason, come hell or high water.

But more and more often, these same Republicans are raising the costs of public services.

Toll increases are one example.

Tuition increases for community colleges and state universities are another.

The rule – or rather the ruse – is that Republicans don’t call these increases in the cost of public services taxes.

They call them tolls, or fees, or tuition increases.

But they are taxes by another name.

And they are all regressive taxes – taxes that disproportionately hit working people and the middle class.

So I ask my Republican readers: What happened to your no tax pledge?

Foreclosure King Rules Orange County Republican Party

vulture_funds_gr1With Orange County’s real estate and mortgage industry-driven economy in shambles and local home foreclosures on the rise, you might think that our Republican politicians would want to distance themselves from those who are profiting from the misery of Orange County voters who have lost or are about to lose their homes.

Not so.

The Orange County Business Journal recently featured a glowing cover article on local Republican contributor, fundraiser, and king-maker Dale Dykema, founder and chief executive of Santa Ana-based T.D. Service Financial Corp, which bills itself as “one of the nation’s largest and most successful” foreclosure processing firms.

Not surprisingly, Dykema’s firm is “looking at record profits this year amid the foreclosure wave.”

According to the Business Journal, Dykema has helped lenders foreclose on more than 450,000 homes, and expects the current foreclosure crisis to make this his best year ever, with his company taking in more than $70 million in foreclosure fees.

Dykema also expects his good fortune to continue as the local economy tanks.

As Dykema told the Business Journal, “It takes time for the foreclosures to hit after the economy dropped. I wouldn’t be surprised if we hit a peak next year for this time around.”

The focus of the Business Journal article, however, was not on Dykema’s success as a foreclosure-profiteer or his record profits, but on his role as an Orange County GOP king-maker.

Dykema, the Business Journal explained, “has helped GOP congressmen get elected with money and campaign advice. His beneficiaries include nearly all of the county’s congressional delegation: John Campbell, Ed Royce, Dana Rohrbacher, Ken Calvert, John Lewis, as well as former congressman and Securities and Exchange Commission Chairman Chris Cox.”

According to the Campaign Money website, Dykema contributed $54,450 to Republicans in 2008.   He is also responsible for raising many thousands more from others.

Of course, all of the current GOP congressmen on this list voted against the stimulus legislation intended to relieve the economic crisis from which Dykema is profiting.

All of them oppose efforts to help homeowners avoid foreclosure.

And all of them, including former congressman Chris Cox, were instrumental in creating the deregulated mortgage mess that lead to the foreclosure crisis in the first place.

Amidst the rubble of Orange County’s housing market, Dykema and his Orange County Republican cronies can be proud of helping at least one business expand:

Dykema’s.

Biting the Hand that Feeds You: More Republican Hypocrisy

hypocrites_r_us2“And having looked to Government for bread, on the very first scarcity they will turn and bite the hand that fed them.”
Edmund Burke, Thoughts and Details on Scarcity

You might think that Orange County’s Republican elected officials would be caught between a rock and hard place in the current economic crisis.

With the local economy in shambles, home values crashing, foreclosures on the rise, unemployment skyrocketing and good jobs scarcer than Republican fans of Arnold Schwarzenegger, you might think that the staunch and total opposition of Orange County Republicans to President Obama’s stimulus efforts would be, at the least, a political embarrassment.

But then you would underestimate the shameless hypocrisy of Orange County’s Republican establishment.

In her most recent online newsletter, Republican Orange County Supervisor Pat Bates (District 5) makes the following incredible claim:

“Orange County Projects Receive Stimulus Funds

A number of significant environmental enhancement and flood management projects in Orange County will receive vital support from the American Recovery and Reinvestment Act of 2009, better known as the Federal stimulus program.

The U.S. Army Corps of Engineers has announced more than $50 million will be spent in Orange County on projects selected based on their anticipated economic and environmental return. The projects selected for funding include:

  • $26,550,000 to complete channel improvements on the lower Santa Ana River within Orange County
  • $1,000,000 for mitigation related to the Seven Oaks Dam, which provides flood protection to Orange, San Bernardino and Riverside Counties
  • $17,363,000 to complete plans and specifications and award a construction contract for the environmental restoration of Upper Newport Bay
  • $5,265,000 for needed maintenance for the Santa Ana River, Carbon Canyon Dam, Prado Dam and Fullerton Dam
  • $500,000 for a Dana Point Harbor breakwater study to identify and recommend any repairs to the breakwater/jetties and improve water quality.

The approval of funding for these projects is great news for Orange County. Orange County residents will directly benefit from these improvements and the Federal support is greatly appreciated. Our success is the result of great teamwork involving our County staff, our representatives in Washington and many city and community leaders.”

In informing her constituents of this “great news,” Bates does not mention the fact that all of “our [Republican] representatives in Washington” voted against Obama’s economic stimulus legislation, including these very projects.

Nor does she mention the fact that all of Orange County’s Republican “city and community leaders” have been vocally attacking the stimulus package as an evil socialist plot to destroy capitalism.

And Bates does not mention the fact that every penny of the more than $50 million that she is so grateful that Orange County will receive from the stimulus package will come from — dare we say it – taxes.

What Bates should have said is the “great teamwork involving our Republican County staff, our Republican representatives in Washington and many Republican city and community leaders failed to prevent President Obama and the Democrats from passing the federal stimulus package – and thank God for that.”

Of course, Bates won’t say it.

But the voters in Orange County should.

Democrats Should Be Joining the Tea Parties

obama-taxes1

Democrats are responding to the growing nationwide phenomena of anti-tax “tea parties” protests by mocking them and by pointing out that they are prompted and run by right-wing organizations.

Neither response is a winning political strategy.

It is pure political stupidity — and bad economic policy — for Democrats to treat the tax protests with derision or contempt.

Rather than mocking the aims of the tea parties, Democrats should follow the lead of presidential candidate Barack Obama, who promised to “provide a tax cut for working families” and “restore fairness to the tax code and provide 95 percent of working Americans the tax relief they need.”

Obama also promised to provide tax relief for small businesses and startups by  eliminating “all capital gains taxes on startup and small businesses to encourage innovation and job creation.”

What Obama recognized – and Democrats already seem to have forgotten – is that working families are in fact being over-taxed while the super rich have gotten a free ride – and that voters will cast their ballots for the party and the candidates who they believe will create a fairer tax code and reduce their tax burden.

And while it is certainly legitimate to point out that the anti-tax tea parties are being manipulated and guided by right-wing groups and talk-show hosts whose agendas are not the same as working and middle class voters, this point is devoid of political impact unless it is accompanied by a commitment to do a better job than these groups of protecting working class and middle class economic interests.

For too long, Democrats – especially in California – have allowed Republicans to dominate and set the terms of the tax debate.

As a result, Democrats have allowed Republicans to paint them as the party of higher taxes – and have allowed the super rich to pretend to defend the economic interests of working families and the middle class while in fact shifting the costs of government to those who are least able to afford it.

Instead of responding to the tax protests with mockery and contempt, Democrats need to insist on talking about the kinds of taxes that the government imposes and who pays them.

We should insist that all taxes be progressive and focused on overturning the Republican’s outrageous favoritism of the super rich.

Especially in the midst of the current recession, we should oppose any increases whatsoever in regressive taxes – such as the sales tax, the automobile tax, and the gasoline tax – that disproportionately hit working and middle class families, unless and until the state and federal tax code is revised to require that the super rich pay their fair share.

Of course these tax protest “tea parties” are a Republican sham — the Republican anti-tax activists not interested in reducing the tax burden on the middle class and working families, but in keeping the Bush tax breaks for the rich — but that does not mean that the underlying middle class protest — even rage — at their tax burden should be ridiculed. On the contrary, it means that the Democrats should insist on seizing the debate and turning it against the Republicans — as Obama did.

Democrats can win the tax debate – if they take the tax protest “tea parties” seriously.

Related posts:

Why I Love Conservative Talk Radio’s John and Ken Show

The Charge of the Democrat Light Brigade: California Democrats Caught in Republican Tax Trap

Why the Republican Anti-Tax Movement Doesn’t Care About the Taxes that YOU Pay