General Motors CEO Ed Whitacre should have thought twice about the title of his Wall Street Journal op-ed, “The GM Bailout: Paid Back in Full.” GM did announce that it would repay the $5.8 billion ($4.7 billion to U.S, $1.1 billion to Canada) remaining balance on the loans the automaker received from the U.S. and Canadian governments. GM is making good on the repayment early – the company had until 2015 to repay the full $8.4 billion loan. But the reality is that this accounts for only 10 percent of the full taxpayer bailout.

The loan repayment is a sign of progress for the struggling automaker, an undeniably good thing. With 90 percent of the taxpayer’s funds tied up in government-controlled equity, there’s still a long way to go to right this ship. Real progress will be made when the government turns GM back to the private sector.   …  

The bigger issue is what’s not being returned and that’s the $52 billion in equity, which is 90 percent of what the taxpayers shelled out and allowed the government to take a 61 percent stake in the company. Putting the company back on the stock ticker would require an initial public offering (IPO), something Whitacre says is “a real possibility” because “the stock could be worth a lot.” Others are less optimistic. Paul Ingrassia, author of Crash Course: The American Automobile Industry’s Road from Glory to Disaster says,

“It won’t be easy for an IPO to raise $52 billion for the government shares. That’s more than Ford Motor’s current market capitalization, some $48 billion. And Ford, the only U.S. car company to avoid bankruptcy, already is profitable, which GM isn’t. For GM to show sustained profits means doing business in a new way and breathing new life into long-moribund brands.”

Keep in mind, that’s for 61 percent of the company. There are encouraging signs; GM is cutting costs where possible and sales are up, but they are far from being out of the woods. It’s important to highlight GM’s progress and while Whitacre acknowledged the road ahead will be tough, he shouldn’t mislead the taxpayers by saying the bailout worked and was repaid entirely.

Nicolas Loris is a Research Assistant at The Heritage Foundation’s Roe Institute for Economic Policy Studies. Loris studies energy, environment and regulation issues such as the economic impacts of climate change legislation, a free market approach to nuclear energy and the effects of environmental policy on energy prices and the economy.

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William R. Hawkins

Last month, the Center for Naval Analyses (which now prefers to simply go by its initials CNA) published the disturbing study The Navy at a Tipping Point: Maritime Dominance at Stake? by Daniel Whiteneck, Michael Price, Neil Jenkins, and Peter Swartz. It warned that at its present size, the U.S. Navy cannot sustain its current level of global operations. CNA is a federally funded research and development center serving the Department of the Navy and other defense agencies. The views of its authors do not represent USN or Defense Department policy, but they do seek to inform policy-makers.   …  

CNA was created during World War II. It was that conflict that established the United States as the world’s leading power and committed the U.S. Navy to a global “forward presence” posture to project American influence. In the years since, the USN has varied in size, though the trend has been rapidly downward in recent decades.

In 1947, the fleet still had 842 ships despite demobilization. The dawn of the Cold War brought an expansion to 1,122 ships by the end of the Korean War in 1953. When U.S. combat operations in Vietnam came to a halt in 1973, the fleet was down to 641 ships, with further cuts to 530 ships by 1979. The Reagan administration rebuilt the military, including setting a target for a 600-ship fleet. This effort peaked in 1988 at 594 ships. By 2001, post-Cold War cuts had reduced the Navy to 337 ships. A decade of war, which should have swept away any notion that the new century would be a peaceful one, did not lead to an expansion of naval force levels. By 2009, the Navy had only 286 ships, substantially less than the 315-ship fleet the admirals had set as the minimum needed to fulfill the many missions the Navy is assigned as the country’s “first responder.”

The CNA report states,

The Navy has defined its global presence as sustaining combat credibility in two hubs (WESTPAC and the Mediterranean throughout the Cold War and WESTPAC and the North Arabian Sea/Arabian Gulf since Desert Storm). In Asia, China asserts more influence over regional issues from Korea around to the South China Sea. In the Middle East and Persian Gulf region, Iran is an opportunistic regional power threatening Western-aligned states and Western interests.

To deter a major regional power like Iran or a rising great power like China will require the Navy to possess a dominant set of high-end capabilities against which the enemy knows it cannot prevail. The Navy holds such a position at the moment, but Iran and China are both working to improve their capabilities and change the balance of power.

The just released Defense Intelligence Agency report to Congress on Iran’s Military Power states,

Iran’s military strategy is designed to defend against external or ‘hard’ threats from the United States and Israel. Its principles of military strategy include deterrence, asymmetrical retaliation, and attrition warfare. Iran’s nuclear program and its willingness to keep open the possibility of developing nuclear weapons is an essential part of its deterrent strategy. Iran can conduct limited offensive operations with its strategic ballistic missile program and naval forces.

Tehran’s deterrent strategy is not defensive in any strategic sense, as it is meant to protect the expansion of Iranian influence throughout the region. Its use of state-sponsored terrorism in Lebanon, Gaza and Iraq requires protection of the theocratic state.

The CNA notes, the Middle East “is still the source of global oil and natural gas resources and reserves for America, its allies, and its adversaries. It is at the geographic center for radical Islamic terrorists and state sponsors who aim to attack the U.S. and its allies. It is the potential ground for WMD proliferation if Iran continues its nuclear program and Arab regional actors reply. In this environment, U.S. allies will continue to demand visible and credible signs of U.S. commitment to regional stability.”

In Asia “the United States remains the guarantor of regional stability for its allies (Japan, South Korea, and Australia) and is engaged in developing relationships with the Association of Southeast Asian Nations (ASEAN) countries eager to balance a growing Chinese power. On the other side of the Straits of Malacca, the U.S. and India are engaged in greater cooperation and coordination on economic, political, and military aspects of the relationship.” says the CNA. China is placing a high priority on developing naval as well as air and space power to make it harder for the U.S. to fulfill its security guarantees.

The April issue of the U.S. Naval Institute’s Proceedings magazine has China as its theme. In his essay “Scanning the Horizon for New Historical Missions” Nan Li, an associate professor at the U.S. Naval War College, writes, “China has considered construction of aircraft carriers, and openly debated the establishment of overseas bases for maintaining a naval presence in the ‘far oceans.’” Retired Cmdr. Peter Dutton, a specialist in international law, looks at Beijing’s attempts to establish a jurisdiction akin to sovereignty over the entire South China Sea, an area that runs from Malaysia to Taiwan and from the Philippines to Vietnam. It is a major transit route for oil shipments and other trade. Strategic thinkers Craig Hooper and Christopher Albon discuss China’s development of anti-ship ballistic missiles designed to attack aircraft carriers or other high-value naval targets. They believe “Precise, conventionally armed ballistic missiles are poised to become important components of the global arsenal. They are very dangerous” because they are “no-notice, first-strike enabling weapons.” The accuracy of Chinese ASBM and cruise missiles will be greatly enhanced by the satellite surveillance systems discussed by Andrew Erickson of the NWC’s China Maritime Studies Institute. Other innovative Chinese weapons are examined in other essays.

The economic and technological resources available to the United States still exceed what is available to America’s adversaries, but the CNA doubts that sufficient funds will be made available to turn potential strength into real power.

The first and largest constraint is the future of the federal budget, highlighted by expanding social spending, high deficits, and the need to rein in all discretionary spending….Within that broad limit, the Navy will find that the downward pressure on ship numbers will be serious….The ability to rapidly create a force structure is also hampered because the lower budgets mean a shrinking industrial base to support a larger fleet.

The industrial base issue is particularly serious. The U.S. has only a handful of shipyards capable of constructing warships, and low build rates have put several of them in financial jeopardy. Though America conducts the largest seaborne trade in the world, both exports and imports, it has allowed foreign ships to take control of it. The U.S. thus does not have a commercial shipbuilding industry to provide a reserve industrial capacity for naval mobilization. In contrast, China has set the goal of creating the world’s largest shipbuilding industry, using its state-owned shipping line as an economic foundation. In so doing, Beijing is simply following the pattern of other great maritime powers in history who understood how the control of trade and the control of the seas work to reinforce each other. As the CNA report states,

China’s economic growth will continue to underwrite military/naval modernization and increases in capacity. China is behaving exactly as every growing nation has behaved since the dawn of the Maritime Age in the 1400s. Countries with growing economies and greater political power have translated this into larger and more modern navies as a sign of their power and intent to play a prominent role in global politics.

The point the CNA argues is that “When you are no longer present in one or two areas of vital national interest with dominant maritime forces, you are at the ‘tipping point.’” The shrinking size of the U.S. Navy over the last 20 years calls into question whether there are enough fleet assets to maintain two “hubs” in the Persian Gulf and Western Pacific with the dominant forces necessary to overawe the rising power of Iran and China. The CNA authors already believe that some reductions are inevitable because the fleet is stretched too thin and deployments have become too long between ship rotations. If the Navy is forced to downsize further, then major combat units will have to be withdrawn from one or both “hub” regions because the Navy will not have the bench strength to keep them on station.

A decline in American forward-deployed naval power will call into question Washington’s credibility. It will also open opportunities for rival powers to move into the vacuum left by a U.S. retreat. Most damaging, both allies and adversaries will know that America is not being forced to fall back, but is choosing to fall back. The United States is still the richest, most advanced nation on the planet, but if its leaders act like the country is weak and irresolute, other governments will not hesitate to treat America accordingly.

FamilySecurityMatters.org Contributing Editor William R. Hawkins is a consultant specializing in international economic and national security issues. He is a former economics professor and Republican Congressional staff member.

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“Radical Islam: A Threat America Must Take Seriously”

will take place THIS SATURDAY, from 10:00 AM to 5:00 PM Eastern Daylight Time.

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ACT! for America

Alan Caruba

I rarely make predictions. Events can change the entire direction of a nation in the blink of an eye. It happened in my lifetime with Pearl Harbor, the assassination of John F. Kennedy, the resignation of Richard M. Nixon, and with 9/11.

As this is being written, air traffic to, from, and throughout Europe is barely recovering because of an Icelandic volcano and no one really knows how long that will continue.

So, barring any catastrophic natural events or wars, I will look into my crystal ball and narrow my predictions to the period between now and the midterm election on November 2, 2010.   …  

Having forced a healthcare program on America that 85% of the voters did not want, the Obama White House now knows it can do the same with other major pieces of legislation intended to “transform” America into a socialist wreck comparable to European nations, one of which, Greece, is bankrupt while two others, Spain and Italy, are close to it.

The Obama administration is getting ready to put a chokehold on the nation’s financial sector by claiming it needs more regulation. It is a lie. Few sectors of the nation are more heavily regulated by the government. What is needed is more effective enforcement of existing regulations. Had that been the case there would have been no Bernie Madoff and the 2008 crisis brought about by Freddie Mac and Fannie Mae could have been avoided.

The next piece of legislation to be imposed on Americans before November will be Cap-and-Trade, a law based on a “global warming” crisis that is not happening. It will impose “caps” on how much energy industries, businesses, and finally individuals can use and it will institute a “trade” mechanism in bogus carbon credits that will make a few companies, utilities, and individuals very rich while bleeding Americans by taxing energy use at every level.

The era of abundant and affordable energy will end and, with it, the economy of the nation. Companies that manufacture goods will move offshore to friendlier places such as China and India. Both were exempted in the United Nations’ Kyoto Protocol intended to force greenhouse emission caps on industrialized nations like America and Europe.

The coal industry, responsible for providing the source of half of all the electricity generated in America, will be under attack in every way at the government’s disposal. Mountain top mining will be the next target. Beyond that, all coal-fired plants will encounter a regulatory hell. There will be no offshore exploration for new sources of oil and natural gas.

When the brown-outs and black-outs begin, the nation will be five to ten years from providing new sources of electrical power whether it’s coal, natural gas, or nuclear. By then billions in government (your money) subsidies will have been wasted on “green” or “clean” or “alternative” energy in the form of wind and solar. They currently represent about one percent of all the electricity generated in America.

By the midterm elections, the unemployment rate will have likely increased. A growing, permanent class of the unemployed will be maintained with endless extensions of government support.

The southern border from Texas to California is becoming a war zone. There’s a reason the State of Arizona just passed a law allowing its citizens to carry concealed weapons and another law to empower its law enforcement authorities to rid the State of illegal aliens. Do not be surprised by the rise of southwestern state militias to deal with the constant invasion. Watch for an effort to pass an amnesty law as well.

What Americans have not caught onto as yet is that the Obama administration’s policies and actions are now fully controlled by people who did not have to go before the U.S. Senate for approval. They are Obama’s “czars” and they wield as much influence or more than constitutionally appointed cabinet secretaries.

So the real question between now and November is “How much damage can the Obama White House inflict?” and the answer is a lot.

© Alan Caruba, 2010

Alan Caruba writes a daily post at Warning Signs. A business and science writer, he is the founder of The National Anxiety Center

Please spread this, by any means you can. attach the description of the witness if possible:…

Basij shots to death a young woman in Tehran’s Saturday June 20th protests At 19:05 June 20th Place: Karekar Ave., at the corner crossing Khosravi St. and Salehi st. A young woman who was standing aside with her father watching the protests was shot by a basij member hiding on the rooftop of a civilian house. He had clear shot at the girl and could not miss her. However, he aimed straight her heart. I am a doctor, so I rushed to try to save her. But the impact of the gunshot was so fierce that the bullet had blasted inside the victim’s chest, and she died in less than 2 minutes. The protests were going on about 1 kilometers away in the main street and some of the protesting crowd were running from tear gass used among them, towards Salehi St. The film is shot by my friend who was standing beside me. Please let the world know.