GMAC Financial Services, the former financial arm of General Motors, is set to receive yet more federal bailout funds as the year draws to a close. According to a Reuters report, GMAC will get roughly $3.5 billion in additional federal government money to help cover losses on the mortgage market. Mortgage-related assets, considered the key to GMAC’s return to profitability, comprise roughly a third of GMAC’s total $178 billion balance sheet.
Little noticed (so far) by the American public, a Christmas Eve announcement by the Obama administration to expand the amount of bailout monies available to ailing mortgage giants Fannie Mae and Freddie Mac is already stirring controversy among Capitol Hill lawmakers sick of fueling the bailout gravy train at the expense of an increasingly restive voter base.
Transportation Secretary Ray LaHood announced on December 21 that beginning this spring the federal government is going to impose hefty fines on airlines that keep passengers stranded on the tarmac without food, water, or letting them get off the plane. LaHood called this “President Obama's Passenger Bill of Rights.”
Ford Motor Company disclosed on December 21 that it is offering to buy out 41,000 United Auto Workers (UAW) union members with early retirement deals as the company attempts to reduce payroll costs and return to profitability by 2011.
The Federal Reserve decided on December 16 to keep interest rates at historic lows near zero percent. The Fed released a statement declaring that even though there are signs of improvement, economic conditions “are likely to warrant exceptionally low levels of the federal funds rate for an extended period.”
“The Buck knife saved my leg and maybe my life at least once when I carelessly caught a pant leg in the anchor winch.” So writes “Old Fool,” the retired aviator and mariner who writes a colorful blog on various and sundry things at www.oldfool.org.
The Obama administration has recently reduced by 60,000 the number of jobs created or preserved by stimulus funds. The acknowledged overstatement of jobs underscores the problem with all government statistics: There is an inherent bias to report success and no real incentive to report problems.