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Wednesday, October 17, 2012

Hamburgers, Batteries And Debates

"When plunder becomes a way of life for a group of men living together in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it." — Frederic Bastiat, The Law.

Yesterday I posted a blog about the administrative state and the increasing influence and power being exerted by the experts and masterminds who manage that state. Also there was round two of the Obama-Romney debate last night that I will address later.

But first let’s look at the cost of a hamburger and what is costs the taxpayer when you ride the government train called Amtrak. If you take a ride on the train from Boston to Washington D.C., known as the Northeast Corridor you will pay $6.65 for the no so tasty burger. What you may not realize is that the true cost for that burger is $16.15, leaving the taxpayer with a $9.50 deficit. No big deal you say. Wrong. Last year Amtrak lost almost $250 million on its food and beverage service and according to and August 2nd report in the Washington Examiner the government subsidized rail service lost $833 million over the last decade on the food and managed to spend $1.70 for every dollar that they received in revenue. What a way to run a railway!

Why are they losing money on the F&B service? Are they serving burgers made with kobe beef? No. The major reason is the 1,234 union employees serving this food. According to Representative John Mica (R-FL):

“The food service is legally obligated to break even, but Amtrak lost $84 million just last year. “The rail service’s food and beverage operation has 1,234 employees, and taking into account Amtrak’s $84.5 million loss last year, that’s $68, 476 per employee.”

A similar report in the New York Times states Amtrak lost more than $800 million on its food and beverage services over the last 10 years, largely because of waste, employee theft and lack of proper oversight, government auditors have found:

“Joseph H. Boardman, president and chief executive of Amtrak, confirmed the losses but said the railroad was taking steps to address the problem. “We are still looking for ways to improve our cost recovery,” he said.

According to audits by the Government Accountability Office, an investigative arm of Congress, and the railroad’s own inspector general, Amtrak loses about $80 million a year selling food. Since 2002, Amtrak’s food service has lost $834 million.

Amtrak said it was increasing the use of credit cards for food sales to cut down on cash thefts by employees, reducing staff, creating a better system to track inventory and to collect revenue. It has also set up a three-person loss-prevention unit.

Ted Alves, the Amtrak inspector general, testified that the bulk of the losses were on Amtrak’s long-distance routes, which account for 87 percent of the deficit. Last year, Amtrak spent $206 million in providing food services but collected only about $121 million. Long-haul routes do not include the Northeast Corridor between Boston and Washington.”

If McDonalds, Burger King or Jack In The Box can sell a burger for less than two dollars and make a profit how is that Amtrak loses nine bucks on a burger that the customer shells our six buck for. The reason is Amtrak’s use of over-paid employees to pass out the food.

In 1991 when I was working as a GIS consultant for the West German Railroad (Deutsche Bundesbahn) I learned quite a bit about their operations and how the made money. One of the things they do is outsource their food and beverage service to private contractors who run the dining cars and snack trollies. In this manner they do not provide pensions and health care for these employees — that’s left (under German Law) to the contractor. It’s left to the contractor to provide good service and food and make a profit.

To a lot of the people who matter in media and politics "Amtrak" means "the guys who run the Northeast Corridor trains" and it seems unimaginable that they could lose that much on food service. If you delve into the report, however, it's clear that the losses are coming from Amtrak's weird long-haul routes off the NEC rather than from the Boston-D.C. service.

That said, this is no excuse for losing tons of money on food service! If selling food on trains isn't a profit center for the train operator, then the train operator is doing something badly wrong. And Nick Rahall's (D-WV) comments on this make me want to scream:

Representative Nick J. Rahall II, Democrat of West Virginia and the ranking member on the committee, said the hearing was a not-so-veiled attempt by Republicans to get rid of Amtrak food service workers, who number about 1,200.

“It’s a whopper of an idea, trading good-paying jobs for cheaper hamburgers,” Mr. Rahall said.”

This conception of government agencies as primarily jobs programs for public sector workers rather than public service providers is really toxic. The point of Amtrak is to provide passenger rail services. Its workforce practices should be designed with that end in mind. If adopting a leaner workforce would allow Amtrak to invest the money needed to run faster trains while holding fares constant, that would be a huge win for American transportation. And over the long run, the only way to have a vibrant railroad workforce in America is to have a vibrant railroad sector. But to have a vibrant railroad sector, Amtrak has to be focused on trying to run a railroad, not trying to create a handful of make-work jobs. If Amtrak was a truly private run operation I am sure their cost structure would be much different.

By now the $500 billion dollar fiasco of Solyndra is a household word. NowiiXVsXHcbdcM Obama has another brewing scandal with the battery manufacturer A123 Systems, a firm that makes batteries for green electric cars that are not selling. Yesterday A123 Systems declared bankruptcy leaving the taxpayers with a $241 million dollar debt. Of course to Obama, who touted this firm two years ago as one of his green energy firms that would employ 400 people, this is chump change. A123 Systems said it would sell its automotive business assets to Johnson Controls Inc. (JCI).

According to a report on Bloomberg:

“The filing may fuel a debate over government financing of alternative-energy and transportation businesses. Federal grants and loans to companies including A123, Fisker Automotive Inc. and Tesla Motors Inc. (TSLA) have drawn scrutiny from congressional Republicans following the September 2011 bankruptcy filing of solar-panel maker Solyndra LLC two years after it received a $535 million loan guarantee from the U.S. Energy Department.

“This action is expected to allow the company to provide for an orderly sale,” A123 said in a press release. Johnson Controls plans to acquire A123’s automotive-business assets in a deal valued at $125 million and will provide financing of $72.5 million to support A123’s operations, according to the release. A deal to sell a majority stake to a Chinese company fell through, A123 said.

Electric-vehicle sales since 2011 totaled fewer than 50,000 through September, just 5 percent of Obama’s target to have 1 million such vehicles on U.S. roads by 2015.

The debtors’ two largest customers are Fisker and AES Energy Storage LLC and its affiliates, which accounted for about 26 percent and 24 percent of their total revenue during the year ended Dec. 31, respectively, court papers show.

Republican presidential candidate Mitt Romney said last month that Obama has picked “losers” for alternative-energy loans and grants. His running mate, Paul Ryan, has called for all green-energy subsidies to be eliminated.

A123 has posted at least 14 straight quarterly losses. Its shares had fallen 85 percent this year to 24 cents as of yesterday’s close in New York.”

In a similar report on Obama’s brilliant record of investing our money President Barack Obama said last Thursday that “we got back every dime we used to rescue the financial system."

According to the Congressional Budget Office, however, the government will lose about $24 billion on the bailout.

According to a report on CNS “We got back every dime we used to rescue the financial system, but we also passed a historic law to end taxpayer-funded Wall Street bailouts for good,” Obama said in Miami Thursday:

“The Congressional Budget Office--based on figures from Obama’s own Office of Management and Budget---gives a different assessment.

“The cost to the federal government of the TARP’s transactions (also referred to as the subsidy cost), including grants for mortgage programs that have not yet been made, will amount to $24 billion,” said the CBO report, which was released on the same day Obama spoke.

TARP is the Troubled Asset Relief Program – the formal name of the government’s financial bailout program passed in October 2008.

CBO said that the cost of TARP “stems largely from assistance to American International Group (AIG), aid to the automotive industry, and grant programs aimed at avoiding home mortgage foreclosures,” noting that the losses will be so large they will eclipse the financial gains the government will realize from bailing out other large financial institutions.

In fact, CBO reported that as of now $65 billion in TARP funds remain outstanding.”

Why Romney did not hit this issue hard last night is beyond me. Red States has a very detailed article entitles; The Pigs At Obama’s Green Energy Trough” that is well worth reading. There is a good expose of the corruption behind the BrightSource project.

Realistically, very few presidential debates have the kind of clear-cut winner that the first Romney-Obama debate did. It’s more productive to look at what each candidate came looking to accomplish.

Romney: Romney came in tonight with three main goals.

One, he wanted to repeat his strong showing from the first debate. He did that – he was vigorous, authoritative, and came across as the same technocratic moderate that he really is.

Two, he wanted to avoid any major gaffes that would foul up the momentum he has going. He did that, too. He never seemed stymied, never really put his foot in his mouth in a harmful way. Even when he bought into the false left-wing premise of a question on gender pay equity, he came away talking about his own experience hiring women in his cabinet (he might have mentioned his female running mate in Massachusetts as well and that Obama pays women in the White House less than men).

Three, he wanted to go in for the kill. On that, Romney failed. He let Obama get away with some flagrant lies, like claiming that Planned Parenthood performs mammograms. He completely botched an obvious attack on Obama’s disastrous and dishonest response on Libya, to the point where even moderator Candy Crowley – who was mostly running interference for Obama on this and on Fast & Furious – had to step in and remind Romney that Obama’s Administration had been dishonest on Libya. Romney forced a confrontation on the facts on oil drilling – one the fact-checkers have to give him – but like John McCain in 2008, he seemed hesitant to really take the fight to Obama on more divisive issues.

It’s true that Obama is now set up to be completely dismantled on Libya in the third debate, if Romney comes loaded for bear. But I suspect that by the time that debate arrives, nobody will be left undecided.

Obama: Obama also came in with goals, four of them.

First, Obama needed to show that he actually still wants the job. He did that – he was much more vigorous tonight, showing some fight and some indignation and squaring off in some true alpha-dog battles with Romney.

Second, Obama needed to give his partisans something to cheer for. He was late sometimes in doing so (especially waiting for his closing to attack Romney on the 47% tape) but did deliver.

Third, Obama needed to lay out something more like a positive second-term agenda. On this, he failed miserably. He has nothing to offer but a stew of “more of the same.” Closing with the 47% attack really underlines the extent to which this is a campaign bereft of positive promise.

Fourth, and perhaps most important, Obama needed to strip the bark off Romney, convince the voters that he was in no way an acceptable alternative. And outside the choir, Obama really didn’t seem to do that. He didn’t dismantle Romney’s agenda, he just disagreed with it. He basically denied the existence of the problems Romney cited on energy policy. Despite pre-debate preening on Romney’s record in Massachusetts, Obama never attacked that record. And despite his heavy reliance to date on attacking Romney as a tax-hiker, Obama spent far more of the debate bashing tax cuts, leaving little doubt which candidate was the low-tax candidate.

Romney’s strongest moments were two. One, he just buried Obama in response to an African-American man who declared himself a disheartened Obama ’08 voter; Romney responded with a blistering indictment of Obama’s economic record. And two, he offered a great answer on American competitiveness. He also came away with a good answer on immigration, albeit one that won’t please many of his own primary supporters.

As Erick Erickson writes in Red States:

“I think Mitt Romney won the debate, but not by much. He flubbed a few good opportunities to really score decisive blows on the President, but definitely drew more blood. The CNN polling and CBS News polling confirm it. While more thought Barack Obama won the debate, largely because his last performance was so bad, clear majorities outside the margin of error thought Mitt Romney would be best on the economy, jobs, the deficit, etc. That suggests Romney did win, but people viewed Obama’s debate performance as an improvement over the first one. In fact, while other areas of the debate may overshadow this point, Romney deftly dispatched Obama on his economic record. That is the one issue that matters. It got so bad, Obama had to trot out Planned Parenthood and Big Bird.


The President tried to claim that the reason gas prices were so low in 2008 was because the economy was so bad. He actually wanted the audience to believe that the economy is going gangbusters now as a reason for $4.00 gasoline — a delusion the undecided voters clearly did not buy. His words — he said that gas prices were so low because of the economy, which clearly means he thinks it is so high now because of the recovery. What recovery? Romney hit him hard on this and the undecided voters reacted favorably to Romney. There is more room for Romney to hit Obama on the airwaves over gas prices.


Candy Crowley should not have tried to referee the Libya answer as she moderated. Herding the cats was a difficult enough task. Interjecting on the Libya story made her part of the story in a way she should not have become. But for all the people heaping aspersions on her (full disclosure: I am a political contributor for CNN and have long thought the world of Candy Crowley even before I had a relationship with CNN), they should be thanking her. It was her interjection to clarify what was and was not said that muddied the water on what the President actually said”

Dick Morris has a similar take on the outcome of the debate when he writes:

“Fundamentally, Romney’s smooth, polished, dignified, articulate, sincere, and compassionate manner in the debate puts to rest eight months of Obama negative attacks on his character. Barack Obama is about to learn the lesson Jimmy Carter learned in 1980 when he lost to Reagan — and found his lead collapsing after the debates. When a president with a failed record tries to win by attacking and demonizing his opponent, he can succeed only if there are no debates. Since neither Goldwater (1964) nor McGovern (1972) had the chance to show themselves to America in debates, the negative characterization of them by first Johnson and then Nixon stuck. But Ronald Reagan’s debate performance nullified Carter’s attacks and showed him not to be the war-mongering madman the president had accused him of being. Similarly, Obama’s portrayal of Romney as insensitive, elitist, incapable of understanding the problems of the average person, a tax cheat, and a cold blooded capitalist all fell before Romney’s real persona as it came through on television.

And once Obama is stripped of his negative messaging, he has nothing to say. His defense of his economic record and his energy drilling essentially boiled down to asking people what they wanted to believe — their own eyes or Obama’s speeches.”

Since last night Crowley has issued a statement claiming Romney was rights and she was mistaken in her remarks. According to a report on Fox News this morning Crowley said; "He was right in the main. I just think he picked the wrong word.”

“The moderator in Tuesday night's presidential debate, after appearing to side with President Obama on the question of whether he called the Libya strike a terror attack from the start, conceded afterward that Mitt Romney was "right" on the broader point -- that the administration for days insisted it was a spontaneous act.

"He was right in the main. I just think he picked the wrong word," Candy Crowley said of Romney on CNN shortly after the debate ended.

Crowley was referring to the tense exchange in the final half-hour of the debate, when Romney questioned whether Obama had called the attack an "act of terror" rather than "spontaneous" violence that grew out of a protest against an anti-Islam video.


Obama, indicating he thought he had just gotten a boost from the moderator, then chimed in: "Can you say that a little louder, Candy?"

However, Obama didn't explicitly label the Benghazi strike terrorism in those Sept. 12 remarks. What he did say is: "No acts of terror will ever shake the resolve of this great nation."

Crowley, during and following the debate, pointed out that despite Obama's Sept. 12 remarks his administration was peddling a different story to the public. She said it took two weeks for officials to say more definitively that the attack was more than an out-of-control protest.

And she continued to clarify on CNN that Romney was making a legitimate point.

"Right after that I did turn around and say, 'but you are totally correct that they spent two weeks telling us that this was about a tape'," she said.”

In the baseball playoffs, the tie goes to the runner. In debates, ties are decided by the moderator and that’s what happened during the Tuesday night presidential debate at Hofstra University in New York. CNN’s Candy Crowley made her presence felt as a moderator in a major way on two points, but none larger than the issue of Libya.

The terrorist attack that killed Ambassador Chris Stevens and four others in Benghazi has become a sore point for Obama, but Crowley made sure she called Romney out before Obama could tag him.

When Romney said Obama had not called the attack an act of terror for 14 days, Crowley interrupted and said: “It -- it -- it -- he did in fact, sir. So let me -- let me call it an act of terror.”

Naturally, Obama asked her to restate her point and she did. “Can you sayCandyCrowley that a little louder, Candy?” asked the president. “He — he did call it an act of terror. It did as well take — it did as well take two weeks or so for the whole idea there being a riot out there about this tape to come out. You are correct about that,” she continued.

Conservatives were outraged, arguing that Crowley’s interruption spoiled a key Romney point. They weren’t the only ones. Even Politico’s Mike Allen called the Crowley point “arguable” and pointed to the transcript of Obama’s statement saying it “generally” referred to “acts of terror.” CNN’s John King called the Obama statement a “generic” comment about terror, not specifically calling the Libya attack a terrorist act.

In the run-up to the second presidential debate, CNN’s Candy Crowley declared that she would not just be a “fly on the wall” as she played the tiny role of moderator, that she would step in whenever she chose to say, “Hey, wait a second, what about X, Y, Z?”

And boy did she, cutting off Republican Mitt Romney repeatedly and often throwing the floor to President Obama with an open “let me give the president a chance here.”

More, she alone decided the topics for the debate, picking questions from the 80 so-called “undecided” voters chosen by the Gallup polling organization. Her selections were tailor-made for Mr. Obama — Mitt Romney’s tax plan, women’s rights and contraception, outsourcing, immigration, the Libya debacle (which gave Mr. Obama to finally say that the buck stops with him, not, as Hillary Clinton said, with her).

She even chose this question, directed to both men: “I do attribute much of America’s economic and international problems to the failings and missteps of the Bush administration. Since both of you are Republicans, I fear the return to the policies of those years should you win this election. What is the biggest difference between you and George W. Bush, and how do you differentiate yourself from George W. Bush?” Undecided my butt. This was just another chance for Obama and the left to blame Bush — how sad. To be fair and balanced Crowley should had found a person to ask if Obama was following the policies of Jimmy Carter, after all he was a Democrat.

Ms. Crowley, who called Mr. Romney’s selection of Rep. Paul Ryan as running mate a “ticket death wish,” asserted her unilateral power at the outset, telling the audience before the cameras went on that she planned to “give the debate direction and ensure the candidates give answers to the questions.”

After both candidates answered Question One, she blurted: “Let me get a more immediate answer” — whatever that means. But when Mr. Romney sought to correct falsehoods told by the president, she cut him off: “We have all these folks here.” In the end, Mr. Obama would get 9 percent more time.

Obama falsely said that he had called the murders in Benghazi a terrorist act the day after September 11. Gov. Romney was seemingly bewildered about what to say. Obama further told the outrageous untruth that in a democracy, the President should not be criticized over a defense/foreign policy disaster.

Let's look at the facts:

Obama gave a lengthy speech on September 12th , after the murders in Libya, in which he first of all apologized to the Muslims for that infamous video. Then he talked about the terrorism of September 11, 2001, and his visits to some graves of some victims. It was in that context that he mentioned terrorist acts — NOT in the context of the killings in Libya. Those, he was still blaming on an inflamed mob and that video. For Obama to take his own words out of context to excuse his inexcusable kowtow to the Islamists was disgraceful, deceptive, but frankly, not surprising. But for Gov. Romney to not catch him on it and whip him was a disappointment. Gov. Romney might have said, "Sir, you were covering up for the al Qaeda affiliates most of September and you are still covering up for your incompetence. It is insulting to the nation."

Even worse is Obama's anti-Constitutional pretention that no one is allowed to criticize him on foreign policy or else it's "playing politics."

To this, Mr. Romney should have said that it is the essence of a free people that the elected officials can and must be criticized for their mistakes. Otherwise, we do not have a democracy.

If this is how Obama misunderstands the First Amendment, he should not be in high office.

But Mr. Romney missed that moment, too.

Something went wrong last night. Romney was not on the beam on Libya. But the dishonesty and shameless obfuscation of Obama were genuinely frightening. Look, Secretary of State Clinton has already apologized, so we know something went badly wrong in Benghazi. Only Obama is still saying he didn't do anything wrong. Obama is smooth, but he is in a box now, and let's hope that Gov. Romney does not let him out next time.


  1. the President should not be criticized over a defense/foreign policy disaster.

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  2. he major reason is the 1,234 union employees serving this food. According to Representative John Mica...

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