The Trump administration’s efforts to bend California to its will on a variety of fronts have been mixed at best. Last week, for example, a panel of judges from the 9th U.S. Circuit Court of Appeals affirmed yet again that federal funding to state law enforcement agencies couldn’t be linked to their assistance in deporting illegal immigrants. Judges have ruled for the state and against the federal government in cases involving other immigration issues and environmental policies.

But the White House can claim a substantial win on vehicle emissions. Last week, many of the largest automakers in the world sided with President Donald Trump in his view that it’s not good for the U.S. economy for the nation’s largest state to have tougher rules on vehicle emissions and miles per gallon than those set by the federal government.

General Motors, Toyota, Nissan, Mazda, Subaru, Hyundai, Kia and Fiat Chrysler are backing Trump’s attempt to end the waiver that California has had for more than 50 years allowing it to set tougher standards on emissions for vehicles sold in the state. Twelve other states – Connecticut, Delaware, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington – have adopted the Golden State’s rules.

The fight was triggered by the Trump administration’s decision to scrap rules set by President Barack Obama that required automakers to have their vehicles average 55 miles per gallon by 2025. This led California Gov. Gavin Newsom to reach out to automakers to seek their voluntary compliance with tougher standards, winning support in July from Ford, Honda, Volkswagen and BMW for a plan under which their fleets would average 50 miles per gallon by 2026 – weaker than what Obama wanted but much tougher than Trump’s rules, which would set 37 miles per gallon as the industry standard.

Newsom said then that he was “very confident” other automakers would accept California’s standards. Instead, the largest automakers in the U.S., Japan and South Korea have sided with Trump in filing arguments with the U.S. Court of Appeals for the District of Columbia, which is considering a lawsuit from California and 22 other states seeking to uphold the Obama administration’s fuel-efficiency rules.

The automakers and the National Automobile Dealers Association said that they needed “the certainty that states cannot interfere with federal fuel economy standards.”

Newsom, Brown decry Trump’s global warming skepticism

Obama, Newsom and most climate scientists see requiring higher gas mileage standards as the easiest way to reduce the greenhouse gas emissions that build up in the atmosphere and cause global warming. Vehicle emissions in recent years have passed power plant emissions as the single biggest generator of greenhouse gases.

Trump rejects the conventional wisdom about greenhouse gases. As the New York Times reported Saturday, he has “directed the Environmental Protection Agency to roll back nearly every federal policy designed to curb the heat-trapping fossil-fuel pollution that is the chief cause of global warming.”

In the report, Newsom told the Times that the state’s recent history of devastating wildfires was directly related to climate change.

“We’re waging war against the most destructive fires in our state’s history, and Trump is conducting a full-on assault against the antidote,” Newsom said.

Newsom’s predecessor, Jerry Brown, framed the issue even more dramatically in testimony to Congress last week.

“The seas are rising, diseases are spreading, fires are burning, hundreds of thousands of people are leaving their homes,” he said. “California is burning while the deniers fight the standards that can help us all. This is life-and-death stuff.”

New proposed rules unveiled this month by the state’s Department of Motor Vehicles drew sharp complaints from the leading companies in the field — Google, General Motors, Ford, Volkswagen and Honda — as being far too onerous and certain to slow innovation. They are among 18 firms with licenses to test autonomous vehicles in California.

A nascent industry group — The Self-Driving Coalition for Safer Streets, whose members include Lyft, Uber Technologies and Volvo — released a statement that the rules “could greatly delay the benefits that self-driving vehicles can bring to safety and mobility for individuals.”

Among the proposed state rules spurring concern:

• A regulation that would require a one-year delay between testing a vehicle with new technology and its use on public streets and highways.

• A regulation that would require driverless vehicles being tested to have vehicle data recorders whose information is regularly provided to the DMV, which automakers fear could lead to proprietary information leaking out.

• A regulation that allows police to demand that information from the vehicle data recorders be turned over within 24 hours without authorities having to get a subpoena or warrant.

• A requirement that all local governments give their permission before an autonomous vehicle could be used on their roads and highways.

The last requirement drew a sharp response from Ron Medford, the director of safety for Google’s self-driving car project, who wondered why bureaucrats didn’t grasp how much red tape this would create. Medford said the rule was “unworkable,” according to a Reuters report.

Perhaps the only state action that was greeted warmly was regulatory language that suggested the DMV would be willing to accept testing of vehicles without steering wheels more quickly than expected.

Sharp contrast between state, federal approach

The state’s framework is based in many ways on ideas outlined in a federal proposal unveiled in September. That proposal generally won praise from autonomous automakers and from such tech websites as Ars Technica for heeding industry recommendations — especially in how to categorize levels of autonomy in vehicles being developed. Instead of using outdated language crafted by federal officials, the U.S. Department of Transportation adopted what are known as the SAE standards, which classify vehicles from 0 (totally human controlled) to 5 (totally automated).

But the reason the federal proposal won cheers while the California DMV’s plan won jeers is that the federal proposal amounts to a collection of guidelines, not hard rules. The Obama administration also underlined how important it considered autonomous vehicles to be in our future economy by having Jeffrey Zients, director of the National Economic Council, join Transportation Secretary Anthony Foxx at the news conference unveiling the rules. This was reflected in the headline on The New York Times coverage of the event: “Self-Driving Cars Gain Powerful Ally: The Government.”

The California state government sought to offer reassurance that its rules were drafts open to revision and that it wanted and welcomed input from the 18 companies testing autonomous vehicles in the state.

But the assurance didn’t come from Gov. Jerry Brown or one of his top aides. It came from Brian Soublet, deputy director of the California DMV, who said, “The goal is making sure that we can get this life-saving technology out on the streets.’

But Tesla demanded — and won — so many breaks from the state of Nevada that the deal is an affront to any true believer in free-market economics. This is from the Chronicle:

Nevada won the fierce, five-state competition to host Tesla Motors’ planned $5 billion battery factory by offering a package of tax breaks and credits that could be worth $1.2 billion over the next 20 years, according to terms released by state officials Thursday. … Tesla won’t have to pay sales tax for 20 years. The company also won’t have to pay real property, personal property and modified business taxes for 10 years.

The size of the deal and the scope of the tax breaks makes this feel more like South Korean crony capitalism — the government in Seoul is a de facto partner of conglomerates like Samsung and Hyundai — then American capitalism.

But as Dan Morain points out in his Sac Bee column, this is increasingly common:

Nevada is simply following a trend. The Washington, D.C.-based nonprofit organization, Good Jobs First, tracks such giveaways. Tennessee gave Volkswagen $554 million in incentives. Mississippi gave a $1.3 billion package to Nissan in 2000. Oregon gave $2 billion in incentives to Intel.

“Unfortunately, it is common to see subsidies of this size,” Leigh McIlvaine, a research analyst for Good Jobs First. “There seems to be a perception on behalf of companies that they should be paid by the public sector to finance that growth. It is looking like an entitlement.”

California lawmakers are not shy about opening the treasury to help companies. They approved $420 million in tax breaks this summer for Northrop Grumman and Lockheed Martin, on condition that they build new bombers in California.

Milton Friedman: Big biz a foe of free market

I get the argument that Tesla is a unique company, and that Northrop and Lockheed are fairly unique as well, so the argument that these government gifts are hugely unfair to their rivals isn’t as apt as it when it’s made about tax breaks given to specific companies in more competitive industries. But at some point, I share Milton Friedman’s concerns, as noted by the Heartland Institute in 2012, about government and industry acting in synch.

Friedman exemplified the generous spirit behind the desire for free markets: they benefit the less-wealthy by leveling the playing field, allowing people to succeed on their merits instead of through political power bought with big money. Friedman had nothing but contempt for crony capitalism and the use of government to suppress market competition, although he was too polite and good-natured to express that feeling in any way but through sound economic arguments.

Friedman himself put this sentiment another way in a 1977 article for Reason magazine:

The two greatest enemies of free enterprise in the United States … have been, on the one hand, my fellow intellectuals and, on the other hand, the business corporations of this country.

Maybe it’s pointless to worry about this six years after the federal takeover of the banking system, General Motors and Chrysler during the financial crisis, but there’s something really ominous about big government partnering with and/or propping up certain favored big businesses.

The initiatives they work on then become, in the lexicon of 2008, “too big to fail.” It’s not hard to imagine Nevada moving from tax breaks to direct subsidies if the Tesla “gigafactory” struggles to live up to its billing and needs help to survive — taxpayer help.

That is, much, much more taxpayer help.

By John Seiler

Unlike most East Coast commentators, Rush Limbaugh knows something about California. Sacramento, where he launched his radio show in the 1980s, is his adopted home town. What he said on his show about the Stockton bankruptcy is interesting:

“But we’re not in a depression. We’re not even in a recession. We are said to be practically in a booming economy, at least according to the new normal of this [Obama] regime. But the story has now moved on from Stockton going bankrupt. The question now is: Who is going to get paid? Who’s going to be first in line in the bankruptcy, Stockton’s creditors or the city workers — the union city workers or the bondholders? Stockton, by the way, is city of 300,000 people. Last June, they filed Chapter 9 bankruptcy protection.

“The bondholders, people that have muni bonds for Stockton, took them to court. The bondholders argued first that the city hadn’t done everything possible to pay their debts like sell real estate assets. They then argued that the bondholders were being unfairly hit with most of the pain of the bankruptcy. Although bonds account for only 7% of the city’s total budget, the City of Stockton is demanding that the bondholders absorb 44% of the concessions. In other words, the bondholders are being told to forget 44% of what they’re owed. Government unions, on the other hand, were not asked for any concessions in their pension plans. And make no mistake: This is a bankruptcy due to the unfunded future liability of pensions that they can’t possibly pay….

“This is a city in bankruptcy because it cannot pay its promised pensions to union employees.  They just don’t have the money.  So the bondholders have been told that they aren’t gonna be paid back very much so that the union workers of the city can get a sufficient amount of money in the bankruptcy.  Why is that?  Well, it’s real simple, folks.  The bondholders don’t need the money.  They are rich Wall Street maggots.  They’re investors.  They can stand to lose a little money. They ought to lose a little money, find out what it feels like. They’re the parasites anyway, they’re the ones that run around and make all this money on Wall Street and they live all these lavish lives and they need to find out what it’s like here. 

“It’s the same thing that happened with the bondholders at General Motors.  The bondholders come before stockholders in the natural pecking order, in terms of investor importance, you know, where investors rank on the scale.  Bondholders are higher than stockholders.  The bondholders came under personal insult and criticism from President Obama during the GM bankruptcy.  They didn’t need that money, they were greedy, they wanted their money back.  In the case of Stockton, this may well be the first American city to force bondholders to take less than the principle that they’re owed on government bonds. 

“Now, you may be an investor in Stockton municipal bonds.  You may not know it, depending on what kind of IRA or 401(k), what kind of investment plan you have. Somebody invests your money, you don’t know where it all goes. You could be a municipal bondholder in Stockton.  And you’re not a Wall Street person, but you’re not gonna get anywhere near back, as they divvy things up in bankruptcy, what you put in, even though you ought to be first compensated.  Bondholders ought to get it first.  The reason they’re in trouble is they can’t pay these pensions. 

“Stockton is probably not gonna be the only California city to have to file.  Yesterday, the US bankruptcy court in Sacramento, Judge Christopher Klein, sided with the city and allowed them to continue restructuring under Chapter 9, and his ruling could very well mean that Stockton will be the first American city to force bondholders to take less than the principal that they are owed on these bonds.  The same thing when Obama took over General Motors, he told their bondholders to take a hike.  Their legitimate investment was deemed worthless. They were pariahs and greedy for wanting their investment back in a bankruptcy proceeding, and the company was given to the United Auto Workers.  So much the same thing is happening in Stockton….

“Here’s an example, just one example of a circumstance that illustrates why Stockton, California, is bankrupt. The average firefighter — and we love firemen here. Don’t misunderstand. But the average firefighter in Stockton costs the city $157,000 a year in pay and benefits, and this firefighter can retire at age 50 with a pension equal to 90% of his highest year’s salary and free lifetime health benefits. You can’t afford that, folks.”

By John Seiler

It’s official: California is broke. According to a new report by state Auditor Elaine Howle:

“unrestricted net assets totaled a negative $127.2 billion. Restricted net assets are dedicated for specified uses and are not available to fund current activities. Almost half of the negative $127.2 billion consists of $57.5 billion in outstanding bonded debt issued to build capital assets for school districts and other local governmental entities. The bonded debt reduces the unrestricted net assets; however, local governments, not the State, record the capital assets that would offset this reduction.”

So, the state owes $127 billion.

By comparison, General Motors was $173 billion in debt when it filed bankruptcy in 2009.

And Lehman Bros. went belly up in 2008 with $613 billion in debt, sparking the financial crisis from which we still haven’t recovered. The recent stock-market record prices only reflect the debased value of the dollar.

If you look around California, you can see the decay everywhere. The “freeways” are clogged. A friend of mine who recently drove around Texas said the traffic moved smoothly almost everywhere.

The roads in California are crumbling. Yesterday I was shocked at how Harbor Boulevard in Orange County had deteriorated. The macadam was cracked and crumbling in many places.

How can that happen in a county where the median home price is more than $400,000? It happens because the government at all levels is exceedingly badly run. Everything costs too much and goes to the wrong areas, such as pension spiking.

San Francisco is even wealthier that Orange County, with a median home price well above $700,000. Yet when I visited there last November, Pelosiland looked run down.

Voters have only themselves to blame for passing absurd bond measures that run up debt and electing delinquent legislators caring only to pad the pockets of the government-worker unions.

It’s a shame because the physical beauty of the state remains breathtaking. But the government part should be taken to bankruptcy court.

By Katy Grimes

In an bizarre twist on reality, the United Auto Workers union found itself bargaining as an employer, but got a taste of their own medicine when 74 of the union’s own workers at the UAW-General Motors Center for Human Resources rejected the union’s latest contract proposal.

Pot, meet kettle.

But this rejection isn’t the first. Workers rejected the last contract, and have been working since 2012 without benefit of a contract, the Detroit Free Press reported.

The workers have filed three different Unfair Labor Practice complaints with the Federal Labor Relations Board, alleging UAW-GM leaders failed to pay the OPEIU bargaining team, proposed to change workers’ health care plan and stopped bargaining at one point.

The primary sticking point to current negotiations is over health coverage: OPEIU workers want guaranteed health care and retirement coverage through 2016.

I can’t imagine why any employer might find making such health care guarantees to be problematic with Obamacare on the horizon — especially given the current frightful economic and political climate.

“Will the picket signs say ‘UAW striking against the evil UAW’? one reader comment asked?

Read the story here. You can’t make this up.

By John Seiler

Surprise! The government-run company decided not to challenge the government tax increase. Government Motors, the leader of companies that were going to opposed the massive, $1 billion tax on out-of-state businesses called Proposition 39, has led a surrender.

The Contra Costa Times reported:

“The Yes on Prop. 39 campaign sort of declared victory today, announcing it would pull its television and radio ads after hearing that the companies once opposing the measure will do so no longer….

“The committee backing Prop. 39 today said it has been informed by General Motors, International Paper and Kimberly-Clark that they won’t oppose the measure any further. Chrysler and Procter & Gamble, the two other companies that once were part of a coalition opposed to closing the loophole, also recently stated that they would not oppose Proposition 39.”

More good reasons not to buy junkers from Government Motors, which still has $25 billion invested in it by the U.S. Government. Chrysler also got a massive government bailout, its second in 30 years (for now), but currently is not owned by the government.

This also shows how the whole election system is rigged. California is a banana republic with imported bananas.

By John Seiler

One reason the American economic “recovery” is so weak is that, when General Motors went bankrupt in 2009, President Obama stole the company’s assets from bondholders to give to the UAW union. Yes, he did steal them.

In long-established bankruptcy law in America, bondholders are the first in line to receive the assets of a bankrupt company. Obama changed that, putting the unions first. Bondholders got only about 5 percent on their invested dollars.

What that did was to weaken the value of all bonds in America, including bonds held by middle-class retirees, pension funds and mutual funds. Formerly one of the most secure investments, now nobody knows if the bonds might be de-vauled by Obama, or his successor in the Kremlin, just on a whim. American bonds now are as trustworthy as Venezuelan bonds or Albanian bonds.

The New GM also was supposed to pay back all of the $49.5 billion bailout money the taxpayers were forced to inject into it. But the Detroit News just reported:

“General Motors Co. stock fell 1.2 percent Wednesday, closing at $18.80, down $0.22, on worries about Europe — the first time the Detroit automaker’s stock has closed below $19 a share since its initial public offering.

“The Detroit automaker has seen its share price tumble by more than 52 percent since it reached a high closing price in January 2011 of $38.90, just after going public in November 2010. The company has shed more than $30 billion in market capitalization over the last 18 months, and now is worth about $29 billion….

“GM’s low stock price has prevented the Treasury from exiting the automaker. It still holds 500 million shares of stock in the company as part of its $49.5 billion bailout, or a 32 percent stake.

“It needs about $53 a share in order to break even on its GM bailout. At current prices, it would lose $17.25 billion on the bailout.

So we were totally ripped off!

And let’s not forget that Government Motors also perpetrated the flammable Chevy Volt car. For Obama and eco-freaks, it’s the future of electric cars. But each Volt sold costs taxpayers $250,000. That’s more than the price for a new Ferrari California!

What should have happened was that GM should not have been bailed out, and not forced to build the Volt. By now, the company long would have recovered under completely private ownership, saving tens of thousands of jobs instead of burning them.

Last fall, Government Motors assaulted the John and Ken radio show by pulling ads from the show because the talk show hosts favored restricting immigration. I wrote it about it then. If Government Motors had been a private company, that would have been no problem. Private companies can do what they want. But Government Motors, formerly General Motors, is owned 32 percent by the U.S. government.

Now, Government Motors is assaulting the Heartland Institute, a conservative think tank, because it’s a skeptic on global warming. Reported the Los Angeles Times:

“Citing its corporate stance that climate change is real, General Motors announced Wednesday that its General Motors Foundation would no longer be funding the Heartland Institute, a free-market think tank that has attacked human-caused global warming as ‘junk science.'”

Again, if GM were General Motors, a private company, no problem. But it’s Government Motors. It’s run by the fanatical “climate change” Obama administration.

It was just last month that global-warming fanatic Peter Gleick admitted he tricked Heartland into turning over to him internal documents, a clear violation of privacy laws.

GM even admitted its decision was based on the Gleick deception. The Times:

“The development is fallout from the release of Heartland Institute funding documents in February, which showed that GM contributed $15,000 to Heartland in 2010 and 2011. Peter Gleick, president of the Pacific Institute and a MacArthur “genius” grant recipient, revealed in February that he had assumed a false identity to obtain some of those documents.

“In a statement released to the press, Heartland Institute President Joseph Bast said: ‘The General Motors Foundation has been a supporter of The Heartland Institute for some 20 years. We regret the loss of their support, particularly since it was prompted by false claims contained in a fake memo circulated by disgraced climate scientist Peter Gleick.’”

It’s clear that the Government Motors action is payback for the Gleick scandal. The Obama regime is the head “climate change” advocacy regime in the world. It controls Government Motors. So it’s using Government Motors to undercut Heartland.

GM is the Yugo of American car companies.

If Government Motors is so concerned about “climate change,” it should go out of business and tell people to walk.

———————————————————-

Correction: The article was corrected on the percentage of GM owned by the government. Relying on Wikipedia, I originally posted it at 61 percent. It’s now 32 percent, as a reader (below) pointed out. However, GM also is partly owned by the UAW, now basically part of the U.S. government, and by the Canadian government. — John Seiler