CAT Got Your Tongue?

In promotion of the stimulus package, President Barack Obama said that in many ways you can measure America's bottom line by looking at Caterpillar's (CAT:NYSE) bottom line. Here you go:



The Presidents appearance at Caterpillar was quite sketchy to begin with, as the CEO of Caterpillar, Jim Owens, was not supporter of the bill but felt pressured to play along. The Heritage Foundation labeled the visit as an "ambush". Caterpillar had just laid off approximately 20,000 workers just weeks before the visit.



Speaking of pressure, Representative Aaron Schock, (R:IL), who was invited to fly out on Air Force One only to be set up to be lobbied for his vote, got called out on national television. Schock did not appreciate it one bit, and did not support the legislation.

The stimulus package was and is a colossal failure for the entire nation in addition to large corporations like Caterpillar, who has continued to shed jobs. Rather than focusing on a hemorrhaging job market, Obama has focused on saddling future generations with another abusive entitlement package in the form of Health Care reform. Sadly, the legislation was only masked as health care reform but is in reality a vehicle for the transfer of wealth.

The ink has failed to dry on the legislation and already several major corporations, who since they are publicly traded must disclose any known adverse factors that can negatively influence earnings, have come out and said they will take sizable charges, including AT&T (T:NYSE), 3M (MMM:NYSE), AK Steel (AKS:NYSE), Verizon (VZ:NYSE), Medtronic (MDT:NYSE), John Deere (DE:NYSE) and our old friend from Peoria, Caterpillar.

There is no free lunch, as I think most everyone learned in high school economics class, and there is a huge cost to be paid to give 30 million new folks health care coverage. One way the federal government aims to pay for this is through additional taxes, but we should have also learned that when you tax something, you get less of it. If goods or services cost more to produce, hindered by excessive taxation and regulation, less will be produced leading to a limitation on choices for the consumer. Perhaps it would be prudent to review the Laffer Curve?

The Health Care reform legislation many are cheering will strangle major corporations and small businesses, kill jobs across America and limit choices for the consumer, not only in health care where private sector providers will be crowded out, but in every sector. Unfortunately, Caterpillar won't be the only business loading up equipment on the hauler, a victim of those who seek wealth transformation and oppose free market capitalism. Our economic situation is unsustainable, and it will be We The People, particularly our children and grandchildren, who will take the biggest hit.

I AM A SHAREHOLDER OF VERIZON AND AT&T.