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AIG Bonuses – Who Got AIG Lobbyist Money?

Both Chris Dodd (D-Conn) and Democrat President Obama have voiced righteous indignation about the AIG bonus payouts. But when you look a bit deeper, you wonder why both men are complaining — after all, they each had a major part in allowing the payouts to go forward. First, the President, in a press conference, stating they knew where AIG spent all the money (that would include the bonus).

From White House press secretary Robert Gibbs’ briefing two weeks ago, when $30 billion in additional funds were announced for AIG. AIG had at this point designated $165 million in retention bonuses for officers of the Financial Products subsidiary, as well as an additional $121.5 million in executive bonuses.

TAPPER: AIG, is the administration confident that it, that it knows what happened to the tens of billions of dollars previously given to AIG?

GIBBS: Is it confident — I’m sorry?

TAPPER: That they know — that you guys know what happened to the previous billions before you hand over this next $30 billion.

GIBBS: Yes — yes, the — I mean, I don’t think it’s a — well, obviously, you’ve got a huge insurance company that is losing money, not the least of which because of its sheer size and sheer size and decrease in the growth in our economy. It experiences a far bigger drop, largely because of its size. But, again, the steps that — that Treasury and — and others took were to ensure a larger systemic problem wasn’t one that we had to deal with here today in letting something just die.

TAPPER: But in terms of specifically the — I guess it’s like $150 billion before, you guys are confident…

GIBBS: Yes.

So the President says he knew where the money went — and that includes the bonus money. Gee, wonder why he never complained about it until now? We’ll see why after examining Chris Dodd’s role.

While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.

So why is Chris Dodd (D-Conn) upset? He added law exempting bonuses to the stimulus bill. And now he feigns indignation?

So what do Mr. Obama and Mr. Dodd have in common, besides both men knowing those bonuses were to be paid out from the bailout money (one stated he knew where the money was spent, the other specifically exempted bonuses). They’re both number 1-2 in political contributions from AIG, Mr Dodd first at $103,000 and Mr. Obama second at $101,000 (third place was less than $60,000, and then fourth place on drops to $35,000 and less – so Obama/Dodd fed the most at the lobbyist trough. Data from Opensecrets.org).

Citigroup and AIG were top contributors to Dodd, while Goldman Sachs was a top contributor to Obama.

And that’s how they can both encourage and know those bonuses would be paid, and then (for political reasons) feign being upset about it, when they knew it all along. Same old politics in play — do one thing behind closed doors for lobbyist $$$, do another for the public.

That’s change we can’t believe in, just more of the same old-school Washington garbage.

Those who Don’t Know History …

… are doomed to repeat it.

Recall when the Patriot act passed Congress, and the Democrats complained it was rammed through Congress so fast nobody could read it (and we know how well that worked out)? It’s Deja Vu, all over again, only this time, it’s Democrats ramming a spendulous political payback bill thorough Congress so fast nobody can read it (with special “stimulus” spending for Reid’s and Pelosi’s districts — like train lines and mice). What happened to transparency? What happened to 48 hours of public notice? What happened to debate? Just like PAYGO, Democrats abandoned all their campaign promises — after all, they don’t need votes (right now), so why bother with those pesky little promises? Doesn’t everyone know those only applied to campaign season?

The bill just came out of conference committee, and at over 1,000 pages, it must be voted on today? Why the rush? Why no debate? Why can’t they even (gasp!) read the bill — is it too much to ask for Congress to actually read what they’re voting on? (Hint: It’s reported Pelosi wants to jet out of town today — maybe true or not, but even if true, it’s no excuse for a rush on spending trillions).

Would you put your name on a contract without reading it? If not, you’re smarter than the entire Congress, who can’t be bothered to actually read the bill — after all, they’ve got pork to distribute!

Unfortunately, they’re not putting their name on the credit card — it’s ours.

More Stimulus Bait and Switch

The “stimulus” pork fest contains a government takeover of healthcare buried inside. That’s right, according to Bloomberg:

One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and “guide” your doctor’s decisions …

Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.

Medicare now pays for treatments deemed safe and effective. The stimulus bill would change that and apply a cost-effectiveness standard set by the Federal Council (464).

The Federal Council is modeled after a U.K. board discussed in Daschle’s book. This board approves or rejects treatments using a formula that divides the cost of the treatment by the number of years the patient is likely to benefit. Treatments for younger patients are more often approved than treatments for diseases that affect the elderly, such as osteoporosis.

Where’s the pro-choice lobby in blocking this — keep your hands off my body!

But Obama knows one thing — it’s totally impossible to pay for all the pork he promised during the campaign — someone will come up short (while it’s OK for him to heat the White House, he wants everyone else to turn their thermostat down).

In the healthcare debate, many, many people will be shorted to allow Obama’s dream of government run healthcare. And now you know why Mr. Obama is in such a rush to pass this “stimulus” bill — with a takeover of healthcare buried in it, is that what you have in mind?

The stimulus bill has little to do with the economy, and mostly to do with government expansion. That’s why the rush to pass it exists — so few people have a chance to read it. As public support continues to crumble, the more people find out about the garbage performed in Washington, the more fed-up people will become as the “stimulus” package turns out to be the biggest deception of the American people ever (and will actually make the economy worse — if government spending actually “multiplies” [like promoters of the stimulus claim] and creates prosperity why stop at $1 trillion? Why not spend $10 trillion and make everyone rich?).

Remember “Animal Farm” — all animals are equal, but some are more equal than others. This “stimulus” divides the country into the elites who can have whatever they want (heat, healthcare, etc) while the lower class working drones suffer with whatever crumbs the elites feel to drop on the floor.

What’s 200 Million among Friends?

Senator Charles Schumer (D) on the “stimulus” (read: pork spending) bill:

“Why quibble over $200 million?” he asked during an interview on MSNBC’s “Morning Joe.” …

Why? Because it’s not your money Senator. You’re spending my money, my children’s money, my grand-children’s money, and my great-grand-children’s money. Have you no decency and fiscal responsibility Senator?

Congress once again descends to new lows in fiscal responsibility as they’re mortgaging our future to return political campaign favors to ACORN, National Endowment for the arts, unions, and others. In spite of citizen’s desire to not waste money on stimulus that isn’t, Congress thumbs their noses at mere citizens and does it anyway.

Remember when President Bush was in office and the deficit was bad, and his spending disgraceful? Now Mr. Obama takes control (as part of Team RePO), who cares how much Congress spends? It’s a free for all! Everyone on board! No need to rush, plenty of pork to pass around! There’s so much pork, Senator Schumer doesn’t want to quibble over pocket change … like $200 million.

After all, there’s room at the trough for everyone.

Fear used by President to pass Pork Stimulus

“A failure to act, and act now, will turn crisis into a catastrophe.”

– President Obama, Feb. 4.

Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared “we have chosen hope over fear.” Until, that is, you need fear to pass a bill.

Why the rush to pass a bill which won’t have any stimulus for years? Because it’s filled with billions for ACORN and other non-stimulus pork. That’s why it has to be pased NOW NOW NOW. If you don’t give in to the pork, the world will end, or so says Mr. hope-n-change. Besides, if you really find out what’s in it, nobody will want it.

$50 million for the National Endowment for the Arts

$380 million in the Senate bill for the Women, Infants and Children program

$300 million for grants to combat violence against women

$2 billion for federal child-care block grants

$6 billion for university building projects

$15 billion for boosting Pell Grant college scholarships

$4 billion for job-training programs, including $1.2 billion for “youths” up to the age of 24

$1 billion for community-development block grants

$4.2 billion for “neighborhood stabilization activities”

$650 million for digital-TV coupons; $90 million to educate “vulnerable populations”

Best ammendment offered so far: $2 billion to encourage low-income housing. Gee, isn’t subprime mortgages how we got in this mess to begin with? So let’s do more!

The more people find out about the “stimulus”, the more resistance will come. That’s why Mr. hope-n-change switched tactics to fear-fear-fear the-sky-will-fall without all the pork! He knows if you really know where your taxes will end up, nobody will want this pork-fest.

So tell me, how will the country pay back the trillions going to special interest groups? Is that the legacy hope-n-change leaves to the next generation – trillions for special interest groups? After all, following the example of his own cabinet, nobody will bother paying taxes anyway.

The Inconveinent Truth

With all the “stimulus” (read political paybacks) floating around few talk of the incredible inflation these policies will create. And yet Obama wants to add yet trillions more in “stimulus”? The only result of the pork-filled stimulus package will be …. massive inflation.

From the St. Louis Federal Reserve:

St Louis Federal Reserve Money Supply

St Louis Federal Reserve Money Supply

You can’t create trillions of dollars without causing inflation and devaluing the currency. What’s worse, the “stimulus” won’t accomplish anything positive for the economy, it’s only goal is to spend pork — most of the spending doesn’t even happen this year. So why rush it? Only so the political operatives can pay back campaign people quickly.

Thanks to Glenn Beck for finding this chart.

Stimulus Pork – Amtrak, NEA, TV, and Subsidies

The WSJ examined the stimulus bill and what did they find? Mostly pork spending, with very little of what could optimistically called “stimulus”. We’re shocked — it’s no wonder Obama wants Congress to pass this quick so nobody can read it. The more you read, the more pork you find crammed in.

“Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.”

So said White House Chief of Staff Rahm Emanuel in November, and Democrats in Congress are certainly taking his advice to heart. The 647-page, $825 billion House legislation is being sold as an economic “stimulus,” but now that Democrats have finally released the details we understand Rahm’s point much better. This is a political wonder that manages to spend money on just about every pent-up Democratic proposal of the last 40 years.

We’ve looked it over, and even we can’t quite believe it. There’s $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There’s even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

In selling the plan, President Obama has said this bill will make “dramatic investments to revive our flagging economy.” Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There’s another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities.

The National Endowment for the arts qualifies as stimulus? Digital TV? Is that what you had in mind? Oink Oink as everyone in Washington either rushes in to feed at the trough, or uses the bill to payoff political favors. Either way, the little guy gets stuck with a bill while the “stimulus” accomplishes nothing — except saddle the country with yet more debt (and payback political favors).

Of course, that’s one promise Obama will keep — running trillion dollar deficits for his entire term — and he’s off on a good start on that one.

Keeping in mind what the CBO has already stated —- most of the “stimulus” comes after two years — why the rush to pass this pork-fest? Even if it’s needed for economic relief, since the benefits come after two years no rush exists to pass it. Why not send the time and do it right? Perhaps could it be Team RePO (Reid/Pelosi/Obama) know what’s in the bill, and know if the citizens find out it’s not really stimulus but pork and returned political favors, the phones in Washington will melt down?

Nah, hope-n-change promised transparent accountability, so nobody’s trying to pull a fast one, right?

Stimulus Arrives too late According to the CBO

The trillion dollar pork-fest is being sold to citizens as important to get the economy going, but according to the CBO, the pork spending comes too late to do any good.

Less than half the money dedicated to highways, school construction and other infrastructure projects in a massive economic stimulus package unveiled by House Democrats is likely to be spent within the next two years, according to congressional budget analysts, meaning most of the spending would come too late to lift the nation out of recession.

A report by the Congressional Budget Office found that only about $136 billion of the $355 billion that House leaders want to allocate to infrastructure and other so-called discretionary programs would be spent by Oct. 1, 2010. The rest would come in future years, long after the CBO and other economists predict the recession will have ended.

The “stimulus” will be the greatest pork-fest of all time, as each member of Congress (and the President) attempts to return political favors (Acorn, Planned Parenthood, etc), and little of it will actually help. And it’s not to go to “high-skilled people who are already professionals or to white male construction workers”.

The trillion dollar stimulus arrives too late if the goal is the economy. Since the people pushing trillion dollar stimulus packages must surely already know this, what alternative reasons do they have to push the pork-fest, while publicly telling citizens it’s to stimulate the economy? Why are they hiding their real motives for this pork-fest?

The Stimulus will be the greatest pork-fest since TARP — and we all know how well that worked out, as the Rebublicrats fumbled the ball.

Where is presidential leadership on this? Where is change? The new boss is the same as the old boss — different people may sit in different chairs in Washington, but nothing changed — perhaps the greatest hoax of all time (after Piltdown Man) has been the “change” theme.

More Stimulus Pork – Abortion Clinics Count as Stimulus

The Stimulus will be a pork-fest — only Washington Elites believe otherwise. As more proof, consider Pelosi on “This Week” as she said abortion counts as “stimulus”:

STEPHANOPOULOS: Hundreds of millions of dollars to expand family planning services. How is that stimulus?

PELOSI: Well, the family planning services reduce cost. They reduce cost. The states are in terrible fiscal budget crises now and part of what we do for children’s health, education and some of those elements are to help the states meet their financial needs. One of those – one of the initiatives you mentioned, the contraception, will reduce costs to the states and to the federal government.

STEPHANOPOULOS: So no apologies for that?

PELOSI: No apologies …

Remember, “family planning” is code for planned parenthood, whose business is abortion. In Pelosi’s alternate universe, abortion is good for the economy.

In Pelosi’s world, less mouths to feed equals less money states will have to spend. Show me one economist that says that we are in an economic crisis because of a birth control shortage, or one that says more contraception (aka: population control) will get us out of it faster. What’s next? Federally funded euthanasia?

Republicans aren’t the only ones shaking their heads in disbelief at Pelosi’s latest perplexing policy push. She will likely make many Democrats horribly uncomfortable. It’s one thing to be pro-Choice; it’s another to spend tax payer money on abortions at home — and abroad — in the middle of a financial crisis.

Even Pro-Choice Feminists understand this has nothing to do with economic recovery.

As a pro-choice feminist I am sickened by this obscene argument explaining why there are hundreds of millions of dollars for “family planning” services in the so-called stimulus bill. What does Nancy say? “It” (the reduction of children as opposed to the reduction of politicians and bureaucrats) will reduce costs the states have for children’s education, health care, etc. Instead of arguing that families should start paying for their children instead of the state and federal governments, Obama (via Pelosi) argues the number of children are the problem, not the fact that government has simply gotten so massive it is now advocating eliminating those who are a ‘drain’ on “costs.” This argument is a hallmark in socialist-fascist states, and now it’s here.

Don’t forget, Obama already talked of being “punished with a baby” in supporting his stance on abortion, so the attitude of the President and Speaker of the House think children are a burden and a problem.

The Stimulus will be 95% pork, and 5% for working people, and Madam Speaker defends it. When you’re thinking of helping the economy, be honest, did funding abortion (oops, “family planning”) clinics ever enter into your mind? We thought not. Instead, Pelosi and her cohorts on Team RePO (Reid/Pelosi/Obama) will attempt to use the “Stimulus” as the greatest far-left social program in the country’s history.

How can funding contraception and abortion be considered in any way funding economic recovery? Pelosi can’t be serious, so what’s her real motive?

Pork in Washington? We’re shocked — no change there, and all the flowery rhetoric can’t change reality.

TARP Pork for Barney Frank

Everyone (well, everyone not in Washington) knew TARP I would turn out to be a pork-fest. And Congress just gave $350 billion more in pork for TARP II. But for those who thought Bush was the problem, and hope-n-change will be completely accountable and transparent, consider what the Wall Street Journal just discovered about the criteria for TARP funds — lobbying Congress and the Democratic majority.

Troubled OneUnited Bank in Boston didn’t look much like a candidate for aid from the Treasury Department’s bank bailout fund last fall.

The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives’ use.

Nonetheless, in December OneUnited got a $12 million injection from the Treasury’s Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.

Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.

Barney Frank … you know, the same one who was supposed to regulate Fannie and Freddie, took their lobbying money, told you how safe and sound they were …. right up until they collapsed.

THAT Barney Frank.

So how will hope-n-change monitor those of his own party? He won’t (and can’t even if he tried). TARP II (and the soon-to-come stimulus, also known as the Generational Theft Act of 2009) is and will be pork-fests for Congress as they seek to return favors and institute social policy. If you’re connected, you can get bailout/TARP/Stimulus money so you can keep driving your Porsche — courtesy of Barney Frank and majority members of Congress — while everyone else (well, the 50% left of the country paying income taxes) pays for it.

Thanks guys — this is yet another demonstration of why gridlock in Congress is good — the less these guys do the better it’s for everyone.

The country has a hangover from the drunken spending spree of Congress. And like any hangover, it won’t go away with any magic cures — you’ve just got to suffer through it and come out the other side (and hopefully learn your previous binges don’t produce good results). The country got into this mess by Congress deficit spending and expansion of easy credit (sub-prime mortgages given to people who everyone knew couldn’t pay via NINJA loans [no income, no job] and the Community Reinvestment Act).

And how do the Washington elites plan to get the country out of this mess? Deficit spending and credit expansion.

Huh?

Why TARP, Bailout 2.0, and Stimulus is Doomed to Failure

As hope rides into Washington on a white horse, what chance does hope-n-change have for success? Consider the words from long ago:

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulged, or undergo such incessant changes, that no man, who knows what the law is to-day, can guess, what it will be to-morrow. Law is defined to be a rule of action : but how can that be a rule, which is little known, and less fixed? (James Madison, The Federalist, page 350)

As Obama, Frank, Pelosi, Reid, et al, complain they had no idea the first TARP funds would be wasted, did they not take the time to read the bill they voted for? By their reactions, apparently not, as TARP was (is) a pork-fest of staggering proportions, and accomplished nothing.

As a revenue bill starting in the Senate (unconstitutional), switched to the auto companies against the language in the bill (in what way are they “financial” institutions), and then spent on pork (golf courses for UAW) — how does Obama/Frank/Pelosi dare feign indignation at it? They wrote it and voted for it. Oh well, we’re sure with the next $350 billion of taxpayer money they’ll do better.

And now Mr. Obama wants to up the ante — not just $750 billion for TARP, but trillions for “stimulus” to “save or create” 3 million jobs (note the weasel word “save” — a completely unquantifiable statistic. If the economy tanks, they’ll still claim to have “saved” 3 million jobs). Absurd.

The only stimulus coming is pork — as has been seen with TARP, Congress has no idea what they pass, and then are shocked — shocked! — when it works exactly like they wrote. As Michelle Malkin says, call it what it is, The Generational Theft Act of 2009 as Congress spends trillions on pork to be paid back in the future — how high will taxes go to pay for this pork-fest?

The economy has a hangover from the drunken spending of Congress; nothing can be done except to suffer through it. Think about it — what got the economy into this mess? Deficit spending and the forcing of (by Congress) easy credit given to people who they knew couldn’t pay. And how do our fearless leaders expect to save us from doom? Deficit spending and easy credit.

TARP was a pork-fest with no accountability — Congress wrote it that way, it worked that way. And Team RePO wants to double down with another trillion dollars (or more) of taxpayer money?

Yeah, great idea guys. Maybe this time read it before you vote for it.

Obama to Double Federal Deficit

Obama states he’ll run trillion dollar Federal deficits for years to come. To put that in perspective, President Bush is perhaps the most fiscally irresponsible spender in history — running up deficits of over $470 billion. But incoming President Obama takes fiscal responsibility to new lows — going from irresponsible to reckless in doubling the Federal deficit.

Change you can believe in? No, change will be all that is left as sooner or later massive inflation arrives reducing everything to pocket change. You can not borrow your way out of debt — a “stimulus package” is simply borrowing against future production — it must be paid sooner or later (hopefully for Mr. Obama if the bill comes after he leaves office).

There’s simply no way to continue to spend and spend and spend massive deficits without paying the piper. Our prediction: Obama’s administration will not only double the deficit, he’ll double the debt (by adding over $10 trillion in deficit spending during his administration), hoping the bill waits for his successor. But kicking the can down the road is not viable fiscal policy (for all those Bush-haters saying Obama has to “clean up the mess” left by Bush, repeat again You can not borrow your way out of debt — there’s no excuse to continue irresponsible fiscal policy which makes the situation worse).

The rapid increase of the deficit under Obama will make the ponzi scheme of Madoff look minuscule by comparison. Obama is in a bad situation — he promised massive new spending, free healthcare, social programs, welfare (disguised as refundable tax credits), and so on, but with a bad economy he can’t pay for it. But no problem, just crank up the printing presses and presto!

The debt passed to children and grandchildren is massive. Of course that’s nothing new, as politicians have been doing it forever. But the kick-the-can scale Obama proposes, and the complacent attitude of Congressional leaders (and Obama disciples) is astonishing. If President Bush was bad for massive spending (true), how can many times more deficit spending by Obama be our savior (it’s not)?

We hope Mr. Obama changes course (that would be change we could believe in), but with a liberal Democratic Congress passing massive deficit spending a liberal Democratic President wants, how can this train wreck be averted?

From the we-can’t-make-this-up Department

Look who’s at the bailout trough:

As the 2009 AVN Adult Expo opens in Las Vegas this week, Girls Gone Wild CEO Joe Francis and Hustler magazine publisher Larry Flynt are petitioning the newly convened 111th Congress to provide a financial bailout for the adult entertainment industry along the lines of what is being sought by the Big Three automakers, a spokesperson for Francis announced today.

Adult industry leaders Flynt and Francis sent a joint request to Congress asking for $5 billion in federal assistance, “Just to see us through hard times,” Francis said.

And of course, the taxpayer foots the bill. First UAW golf courses, now $5 billion for the adult industry. And the taxpayer pays, and pays, and pays — once the bailout begins, everyone wants a part of it. As usual, “bailouts” turn to pork-fests as everyone wants a spot in line at the trough.

It’s only $5 billion, right?

Oregon Leads in Stupidity – Again (This Time on Gas Taxes)

Governor Kulongoski proposes installing GPS units in all cars, dropping the per-gallon gas tax, and replacing it with a per-mile tax, with each vehicle tracked by GPS. Why would he do something so obviously wrong? We’ll see in a minute, but first, the reasons against such a proposal.

  1. It decreases conservation at a time gas conservation should be encouraged. They’ve actually said the per-mile GPS idea needs to exist because people drive too many fuel-efficient vehicles. Imagine that — Oregon government wants to penalize saving gas. Visualize the adds — help the state of Oregon — drive a Hummer!
  2. Massive new state bureaucracy. Since none of the infrastructure exists to collect the GPS data, the state will spend millions installing equipment and new employees to handle it.
  3. Increase price of new cars for unneeded new equipment. As the auto industry stumbles, Oregon wants to make it harder on them to sell new cars. Great!
  4. The tracking data will be abused as the state monitors every citizen’s movements. Stalkers, divorce conflicts — the possibility for abuse is limitless.
  5. GPS use fades in mountains, tunnels, in cities or any number of other situations. It’s not reliable for the proposed usage. And suppose your GPS says you drove hundreds of miles in a cross-town commute due to a GPS flaw. Is the guy who fills up your tank going to arbitrate the dispute between you and the state while he fills the tank?

And so on. If people drive more fuel-saving cars, isn’t that a good thing? Why create a massive new bureaucracy which actually encourages people to drive Hummers to pay less tax? Insane. To see the obvious absurdity of the idea, consider the proposed $0.012/mile tax verses the current $0.24/gallon tax. A car which gets 20 MPG is the break-even point. Any vehicle getting above 20MPG pays more in taxes, while gas-guzzlers pay less (obviously, if you play with the numbers a bit, the break-even point moves, but the problem of penalizing fuel-efficiency remains). And you thought Oregon was a green state? Nope, they’ll penalize you if you conserve gas or use alternate fuel vehicles.

Two simple solutions. First, just raise the gas tax. Simple and easy. No new bureaucracy required. Or use the revolutionary new technology called an odometer — when the cars registration is renewed, take a look at the odometer, and pay accordingly. Simple, quick, and easy. No tracking of citizens, no new bureaucracy, no new expenses.

With all the negatives (and no positives) for this crazy idea, why propose it? Only one reason — the state of Oregon feels the need to monitor all it’s citizens movements — when, where, and how much.

That’s not tinfoil paranoia, but reality. Why else propose such a ridiculous idea with so many negatives, costs, and new bureaucracy, while passing on simple solutions? Why the Oregon governor feels the need to monitor his citizens movements is unknown, but if that’s not the primary motivation we’d like to know what is. It can’t be additional road fees, as much simpler ways exist to solve the problem.

Any ideas?

Pay-to-Play, UAW Style

The UAW states its members have sacrificed enough, and urges taxpayer bailout money. But they’re not telling you it’s so they can keep a special UAW golf course.

Owned and operated by the United Auto Workers union, Black Lake is a public course that provides UAW members and retirees substantial discounts from the regular greens fees.

Auto workers pay UAW dues, which subsidizes golf facilities for UAW members. When the UAW asks for more money, they’re not really telling you it’s so they can keep their golf facility open.

Taxpayer money — to fund UAW golf courses. Is this what you had in mind when bailout talk began — funding a UAW golf facility?

While other (non UAW) workers have reductions in pay, layoffs and other problems, UAW leadership wants your taxpayer money to fund their golf course.

Hat tip: Money pit: The UAW’s gold-plated golf course

UAW Sinks Auto Bailout – TARP Limited to Financial Institutions

The UAW torpedoed the auto bailout by refusing to make reasonable concessions and reduce labor costs (and having the chutzpah to ask taxpayers to subsidize their benefits). If the big three pay 40% more in labor costs than other auto companies, how will they *ever* become competitive again? They can’t.

The UAW *must* accept a package comparable with Toyota and Honda, or one of two things will happen:

  1. The big three go bankrupt – not reorganization, liquidation. Kaput. No more jobs.
  2. Taxpayers forever subsidize UAW workers with bailout 2.0, 3.0 and so on forever.

Naturally, the UAW favors option #2, but they may get #1 instead. They’re counting on President Bush to do what he said he wouldn’t do – bailout the auto companies. Where the money will come from is unknown, but it can’t be from the $700 billion TARP fund, as that fund is for financial institutions only – auto companies don’t quality for TARP funds (at least legally under the TARP law).

By refusing a congressional gift, the UAW may just disappear. At the least, they’re dooming car companies to never be competitive again as they slowly fade into oblivion.

Corker’s amendment demanded concessions from the UAW as tangible evidence that the industry was willing to make fundamental structural reforms before risking taxpayer money on loans to failing businesses. But the UAW refused to accept pay parity with non-union foreign automakers by the end of 2009. That pay scale — among the best hourly wages in America at $26-an-hour plus benefits, totaling $48-an-hour — was not good enough for the coddled union, who demanded that their current $73-an-hour contract package be paid until it expires in 2011.

Auto Bailout – More Taxpayer Money down the Black Hole

The best line so far about the government bailout for the auto industry – “Bringing Fannie and Freddie Style Accountability to the Auto Industry” by Newt Gingrich, who went on to say:

One of the reasons was House Financial Services Committee Chairman Barney Frank (D-Mass.). Frank fought tenaciously against the regulation that would have held Fannie and Freddie executives accountable and might have averted the financial crisis.

Now Chairman Frank wants to bring his particular style of crony capitalism to the auto industry.

On “Face the Nation” this Sunday, Chairman Frank announced that not only would he push for a taxpayer bailout of the Detroit Three during the special session of Congress this week, but he would also create a government oversight board for the three companies — in effect, a board of directors made up of predatory politicians.

I believe that it would be a mistake for the taxpayers to be forced to bail out Detroit. Companies at which union workers make $71 an hour in wages and benefits — compared to just $47 an hour at Toyota’s U.S. plants — are not going to be saved by a $25 billion government check.

So the people who brought you the Fannie/Freddie mess want to do for the auto industry what they did for the mortgage and banking industry. That guarantees bailout 2.0, 3.0, 4.0 and so on. Barney Frank not only can’t admit he failed spectacularly with Fannie and Freddie (saying they were fiscally sound right until they collapsed), he brazenly wants to do bring his failed Fannie/Freddie strategy to the auto industry. How many trillions will your failed oversight cost taxpayers, Mr. Frank?

But in January, there’s a new sheriff in town — Mr. hope-n-change rides in. Will Obama support actual change, or go along with the Democratic congress for more of the failed policies which got us into this mess in the first place? We hope Obama really does work for change, and tells Congress NO! That would take guts, and go against his own party, but we’ll quickly find out if we elected hope-n-change, or more-of-the-same. We’ve already had two years of Democratic-controlled policies, how well is that working out for you?

President-elect Obama won an historic victory two weeks ago on the promise of delivering change to the American people. Bailing out the Detroit auto dinosaurs is not change. It is crony capitalism in service of a failed status quo.

President-elect Obama should stand up to congressional Democrats and say “no” — “no” to saddling future generations of Americans with the bill for today’s crony capitalism.

That would be change we could believe in.

Crap Sandwich Bailout Bait and Switch

The classic bailout bait-and-switch. Remember how it was sold to the public (and Congress) with the idea to buy up troubled mortgage assets? Now, after the bill was signed, Secretary Paulson says he’s going to ignore what the bill said and spend the $700 billion however he wants.

This is just one problem with the bailout — it gives the Treasury Secretary unlimited power to spend $700 billion of our money any way he wants with no accountability whatsoever (can you say Freddie meltdown 2.0?). Should we thus be surprised when he decides to ignore the bill’s intentions?

This bailout disaster will end up with more corruption, payoffs, and back-room deals making the Fannie/Freddie meltdown look like childs play. And Team RePO (Reid/Pelosi/Obama) wants more bailout? Grab your walllet.

Treasury Secretary Henry Paulson said Wednesday that original plan to purchase distressed mortgage assets from Wall Street firms is not the best use of the $700 billion financial rescue package, and officials will now focus on direct capital injections into the struggling financial firms.

This comes after Paulson said buying troubled assets — the plan originally advertised to the public — would take too much time in a financial crisis that continues to test the patience of investors, government and the public.

So Paulson decides a handout (oops, “direct capital injection”) is best, and doesn’t even want to buy any assets. It’s pure handouts, and completely contradictory to what the public and Congress was told. Is it any wonder more companies and states are lining up at the federal trough for this pork-fest?

Neither party wants to investigate the financial meltdown they caused. Democrats look to take advantage of their financial creation to pass more socialist programs, while Republicans don’t want to touch it as it might uncover their shady business ties. Both parties don’t want the public to know the truth — it’s Congress’ fault (for the last two years Democratic controlled) for this mess. Simply put, Democrats forced banks to make home loans they knew would end up in default (via the Community Reinvestment Act), and Republicans saw a chance to make a buck by passing off the stinking festering pile of goo off to other (federal) banks so they could keep the profits.

The Crap Sandwich bailout — brought to you by the Democratic Congress overseeing Fannie Mae and Freddie Mac (and told you how financially sound they were right up until they collapsed) — and that worked out so well, let’s do bailout 2.0! How many trillions have already been spent by Democratic-controlled Congress without any results? And their solution — spend more!

Have no fear, citizens, Team RePO is on the job! (Hopefully, Obama won’t go along with Reid/Pelosi on more crappy bailout as he’s supposed to be for the little guy, but this remains to be seen)

Democrats to Eliminate 401k Retirement Accounts

This is so bizarre, reckless, and bad for regular people we can’t make this up if we wanted to:

Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401(k) system, including the elimination of most of the $80 billion in annual tax breaks that 401(k) investors receive.

House Education and Labor Committee Chairman George Miller, D-California, and Rep. Jim McDermott, D-Washington, chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, are looking at redirecting those tax breaks to a new system of guaranteed retirement accounts to which all workers would be obliged to contribute.

“system of guaranteed retirement accounts to which all workers would be obliged to contribute. “

Gee, that sounds like … wait for it … Social Security! And we all know how well that worked out — it’s bankrupt in 2017 and will require either massive tax increases, or massive cuts in benefits (or both). And just like the Fannie and Freddie collapse, the politicians tell us the system is fine and won’t be bankrupt (of course, what happens in 2017 when taxes taken in can’t pay benefits they don’t want to talk about) — and just like Fannie/Freddie all those same politicians will say “we never saw this coming…”, and it will be deja vu, all over again. How many trillions will the next bailout cost?

And those guys want to start a new retirement plan? We can see the ads now “The new Secure Community Retirement Wealth Distribution (SCReWeD for short) — brought to you by the same people who brought you subprime mortgages, Social Security insolvency, trillion dollar bailouts, and the Fannie and Freddie collapse”. Something tells us there won’t exactly be truth when they try and sell this mess to voters.

Whether this new scam (oops, plan) replaces social security (unlikely) or be a new tax on top of social security (probably) isn’t clear, but combine the House Democrats with a Senate majority and a friendly Obama administration signing any stinking pile of festering goo they send him, do you really want to find out? How high can your taxes go? How fast can your retirement be raided? (Gingrich was correct recently calling them “Team RePO” for Reid/Pelosi/Obama)

But it gets worse when you see how the plan actually works:

Under Ghilarducci’s [Teresa Ghilarducci, professor of economic-policy analysis at the New School for Social Research in New York] plan, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3 percent a year, adjusted for inflation.

So they kill your 401k, force you to pay a tax (oops, contribution) of 5% more of your salary to the government, and only offer investments in government IOU’s (oops, bonds) paying 3% per year (unless they change the rate later). Yeah, that’s a safe investment — I’ll take the stock market and it’s long-term returns, thank you very much — even with the current downturn.

“I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted, Ghilarducci said.

She has been in contact with Miller and McDermott about her plan, and they are interested in pursuing it, she said.

Just like Obama told Joe the plumber he wanted to “spread the wealth around” (not exactly true, Obama didn’t mean spread the wealth around, but spread Joe’s wealth around), only this time not only raise your taxes and spread your income around, raid your retirement savings and spread that around as well. More specifically, make sure everyone is beholden to the government for retirement, and remove choice. Aren’t the Democrats supposed to be pro-choice? Only if it involves abortion and throwing babies in the trash if they’re born alive (oops, “survived a medical procedure”).

When it comes to your retirement, no choice allowed, and instead of making your own decisions you’ll only get what the government chooses you should get — and they can change it anytime they like, as often as they wish, as you don’t really own anything, just a bag of IOU’s.

“I have altered our agreement, pray I don’t alter it further.” — Darth Vader

Even worse, Obama with a Democrat controlled Congress passes legislation at will like insane proposals like this — only which have a majority Democratic leadership and President behind them (Team RePO at work).

For more, just Google for “George Miller Jim McDermott 401k” for lots more; it really is as bad as it looks.

When Tax Cuts Aren’t Tax Cuts

How socialist income redistribution is disguised by political candidates for votes

One of the biggest challenges facing both John McCain and Barack Obama in their commitment to provide tax relief to working-class Americans is the simple fact that millions of them already pay no personal income taxes.

According to the most recent IRS statistics for 2006, some 45.6 million tax filers — one-third of all filers — have no tax liability after taking their credits and deductions. For good or ill, this is a dramatic 57 percent increase since 2000 in the number of Americans who pay no personal income taxes.

Tax Foundation estimates show that if all of the Obama tax provisions were enacted in 2009, the number of these “nonpayers” would rise by about 16 million, to 63 million overall. If all of the McCain tax proposals were enacted in 2009, the number of nonpayers would rise by about 15 million, to a total of 62 million overall.

Most tax credits can only reduce a taxpayer’s amount due to zero, but the EITC and the child tax credit were also made refundable, meaning that taxpayers are eligible to receive a check even if they have paid no income tax during the year. Those tax returns have become, in effect, a claim form for a subsidy delivered through the tax system rather than a direct payment from a traditional government program like welfare or farm supports.

Both the McCain and Obama plans would increase this number by expanding existing tax benefits or creating new ones. Senator McCain is proposing one expanded provision — the dependent exemption — and one new credit, a $5,000 refundable health care tax credit. The Obama plan contains seven new provisions, including a new “Making Work Pay Credit,” a “Universal Mortgage Credit,” and a plan to eliminate income taxes for seniors earning under $50,000.

About one-third of tax filers pay no income tax at all. So how can Obama claim to cut taxes for “95%”? He can’t (at least honestly). Not only does his plan increase the number of people who pay no tax at all from about 1/3 to almost 1/2, but additionally gives handouts to those who pay no taxes at all. That’s welfare under a different name. But you can’t put lipstick on the pig and change the pig — welfare disguised as tax cuts is still welfare.

Both McCain’s and Obama’s plans are socialist. If someone pays zero tax, it’s mathematically impossible to cut it — yet both candidates call their Robin Hood programs “tax cuts”.

McCain had it right earlier to criticize Obama’s plans — Obama calls them “tax cuts”, but any third grader knows better (McCain was correct, but the criticism applies to his plan as well). Obama’s plan is socialist income redistribution (take money from those who earned it and give it to others — “spread the wealth around”); it has to be disguised because if Obama is honest and calls his plan what it is (a giant expansion of welfare — even Clinton knew welfare was broken, and the country should “end welfare as we know it”, not expand a broken system which encourages people to live out of the public trough), it would be rejected as the giant welfare program it is.

Is it really good public policy to have half the country not support the government? How much should the “rich” pay? Do the rich pay their fair share? What happens when the majority of people pay no taxes, and in fact receive welfare payments from the Federal government?

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. [Quote attributed to several people, but commonly Sir Alex Fraser Tytler (1742-1813)]

If voters really want socialist programs and are willing to vote for them (knowing those policies will eventually cause the country to collapse — think of current mess with Fannie/Freddie multiplied hundreds of times), let’s at least be honest about it — instead of hiding the truth in attempts to fool people into supporting something they’d really be against if they knew the truth. (Corollary: Why do liberals fear being called liberals?)

At least if people have information they’ll know voting for these proposals guarantees a more serious financial meltdown later which makes current events look like child’s play — and we haven’t even begun to talk about Social security bankrupt and the ignoring of warnings about Social Security’s (and other entitlements) destructive impact on the economy of the future.

There is no free lunch — the bill for these handouts will come due, and no amount of “soak the rich” can possibly pay for it. Candidates are simply destroying the future (after they’re out of office) to buy votes today. We don’t completely blame Democrats — they don’t have the big spending reputation for nothing, after all — it’s the Republicans which continue to go along with the big-government, lets-try-a-free-lunch Democrats which guarantees we’ll have many more financial messes to deal with making the current trillion dollar bailout look like pocket change.

There is no free lunch, and promising one is dishonest.

Why European-Style Healthcare Doesn’t Work

Too many people (Obama included) want healthcare to be more like Europe — you know, where everyone gets healthcare for free. But peel the onion a bit and you’ll find tidbits like this (from the London Telegraph), and ask yourself, do you really want this? This is the future of Obama-care and other socialized solutions:

Doctors are calling for NHS treatment to be withheld from patients who are too old or who lead unhealthy lives.

Smokers, heavy drinkers, the obese and the elderly should be barred from receiving some operations, according to doctors, with most saying the health service cannot afford to provide free care to everyone.

Fertility treatment and “social” abortions are also on the list of procedures that many doctors say should not be funded by the state.

Oops. No abortions either. Nobody will be happy with a system like this. No abortion-on-demand, treatment rationing, and in the end more financial mess which will require another “bailout”.

There is no free lunch.

Senate to Vote on Pork-Laden Earmarked Bailout Package

They just can’t help themselves when it comes to stuffing pork in any and all bills, with both new waste, and renewals of old waste. Is it any wonder these bozos aren’t trusted, and Congress has single-digit approval ratings? The only bipartisan agreement comes on stuffing pork and earmarks at every opportunity — the one thing both parties agree on. Disgusting — and at 451 pages long, what are the odds any of the Senators actually reading the bill?

New Tax earmarks in Bailout bill

  • Film and Television Productions (Sec. 502)
  • Wooden Arrows designed for use by children (Sec. 503)
  • 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504)

Tax earmark “extenders” in the bailout bill.

  • Virgin Island and Puerto Rican Rum (Section 308)
  • American Samoa (Sec. 309)
  • Mine Rescue Teams (Sec. 310)
  • Mine Safety Equipment (Sec. 311)
  • Domestic Production Activities in Puerto Rico (Sec. 312)
  • Indian Tribes (Sec. 314, 315)
  • Railroads (Sec. 316)
  • Auto Racing Tracks (317)
  • District of Columbia (Sec. 322)
  • Wool Research (Sec. 325)

What does ANY of that have to do with saving the economy? It doesn’t. Of course, this isn’t the final bill, but which is more likely — Congress will do the right thing and strip this pork from the bill, or to guarantee its passage they’ll load it up with even more pork earmarks?

Obama supports pork and earmarks, but here’s a chance for McCain to take a stand and — at the very least — make a speech proclaiming all these earmarks, and who they’re from. It’s unlikely the Senate won’t pass this pork-fest, but at least McCain could be on record.

Let’s hope the House doesn’t pass the pork-fest as well, and the House Republicans don’t knuckle under to pressure and demand the earmarks be removed, as well as protecting taxpayers from paying the $700 billion of the bill. They have the right idea — loans not bailouts. Let’s hope the House remembers it’s backbone and opposes this disaster (which will likely be laden with even more pork by the time the Senate passes it).

Obama says He’s to Blame for Bailout Failure

OK, that’s not exactly what he said, so let’s go to the tape

“Here are the facts: For two weeks I was on the phone everyday with Secretary Paulson and the congressional leaders making sure that the principles that have been ultimately adopted were incorporated in the bill,” Obama said.

Since he was taking credit for shaping the bill — now that it’s failed will he put out a statement saying he’s to blame for not crafting an acceptable solution? Don’t hold your breath.

Willing to take credit, but not accepting responsibility.

Reid, Pelosi and Schumer Fail on Bailout for Economy

Harry the-war-is-lost Reid is trying to shift blame for his failure to move the “bailout” proposal forward. That might work for people who don’t realize it’s the Democrats holding the majority in both the House and Senate; Reid and Pelosi can pass whatever pork bailout bill they want, and the President will surely sign it. They don’t need any Republicans to do so. If a bill isn’t passed, it’s because the Democrats don’t want it passed. Democrats are the majority, they’re responsible for passing the bill and can do so at any time. What Reid meant was he doesn’t want to pass the bill right now, but he’s not the only blame-shifter.

“We need to get the president to get the Republican House in order,” Sen. Charles Schumer, D-N.Y., added while on the Senate floor. “Without Republican cooperation, we cannot pass this bill.”

Totally false, plain and simple. Democrats hold majorities in both houses, they don’t need any Republican support to pass this bill, other than the President (who will support it). The only possibility (and a remote one) is a possible Senate filibuster (Pelosi can pass it whenever she wants), which won’t happen. Even if it does, they’d only need a handful of fiscally irresponsible Republicans to go along (which they’d get).

Why won’t Democrats act? What are they waiting for? Could it be they’re posturing for political reasons? Or do Reid/Pelosi simply don’t know they hold the majority, and don’t realize they can pass anything they want? Is it possible Reid/Pelosi/Schumer know the majority of Americans are against the bailout, and want to spread the blame around come November?

Schumer/Read/Pelosi don’t need Republicans to pass the bill, they need them for cover for the upcoming election (so in a sense, Schumer is right, they can’t pass the bill without the cover of Republicans for their pork — they can pass it without Republicans votes, but they’re hoping the blame game works. Politics as usual).

It’s interesting as Obama tries to paint McCain as agreeing with Bush, it’s Obama and the Democrats who walk in lockstep with the President to give $700 Billion of your money to Wall Street (tax and spend yielding to tax and giveaway). Is that what you want? Do you agree with Obama in giving handouts of $700 billion of your money to failing companies? Is Obama correct in taking your money and giving it to corporations who bungled their management? If you’re paying your mortgage on time, do you agree with Obama those exercising fiscal irresponsibility should be rewarded?

It’s McCain and a minority of Republicans who want something different (along with most of the American people). Will Democrats team up with the President to ram a pork bill through? Or will sanity reign and a reasonable approach (loans instead of bailouts and rewards which leave the taxpayer footing the bill) supported by others have a chance?

We’ll see what happens, but don’t buy the lie Reid and Pelosi need any Republicans to go along. They do not as they’re the majority (even if they fail to act like it). Since Obama aligns with Reid 95% of the time, is this the leadership the country looks forward to in an Obama administration? Do you want politics put first? Or country first?

In Washington, it’s a showdown between the representatives of Wall Street and the representatives of Main Street. But have you noticed that the old partisan alliances are reversed? It’s the Democrats who are now the Wall Street Party. And Republicans — with the conspicuous exception of President Bush — are now the Main Street Party.

Consider: President Bush proposed the $700 billion plan; after days of hiding behind the Secretary of Goldman Sachs, Henry Paulson, Bush finally emerged from the sidelines Wednesday night to tout the plan in prime time. Just this morning, he spoke again in favor of his plan, while again taking no questions from pesky reporters.

But the Congressional Democrats, who mostly despise Bush, are also mostly for the Bush plan. Sure, they made some cosmetic changes in the bailout proposal, but they have never wavered in their basic endorsement.

So who’s against the plan? It’s Congressional Republicans who are getting in the way. They are the heroes of the hour. Although outnumbered, these brave Capitol Hill GOPers have stopped official Washington in its tracks.

Why? Because the Democratic majority, supporting the bailout, doesn’t actually dare to vote for it unless they know that most Republicans will vote for it, too. And that’s because the Democrats fear that this bailout legislation is deeply unpopular with the country. So the only way that Democrats can vote for the bill and be safe this November is if Republicans also put their names on the legislative dotted line. Not a profile in courage for Democrats, of course, but it’s smart practical politics for them to demand some ‘cover.’

Reid/Pelosi know they can pass the bill anytime they want. They’re hoping first nobody realizes that, and second, they can stall long enough to cover their collective #!&$ for a bill the American people don’t want.

Bill Clinton on Fannie and Freddie, and the Debate

CHRIS CUOMO, ABC NEWS: A little surprising for you to hear the Democrats saying, “This came out of nowhere, this is all about the Republicans. We had nothing to do with this.” Nancy Pelosi saying it. She signed the ’99 Gramm Bill. She knew what was going on with the SEC. They’re all sophisticated people. Is that playing politics in this situation?

BILL CLINTON: Well, maybe everybody does that a little bit. I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.

And on President Bush’s speech:

The former president thought Bush’s address Wednesday night on the economic crisis had a “positive reaction”.

“I thought it was the clearest statement of why we’re in the fix we’re in, at least what the nature of it is and why some national action is needed,” Clinton said.

And on McCain suspending campaign activities (and perhaps the debate) to focus on the bill in Congress:

“We know he didn’t do it because he’s afraid because Sen. McCain wanted more debates,” Clinton said, adding that he was “encouraged” by the joint statement from McCain and Sen. Barack Obama.

Obama says call me if you need me because I’m busy with my own business of trying to get elected — don’t bother me with the financial meltdown of the country, I’m busy right now. McCain says deal with the crisis — country first, self-interests second.

Which characteristic do you want in a President?

Obama and Earmarks – where’s that $100,000 again?

Oh yeah, it went to the wife of a campaign volunteer, instead of where it was supposed to.

A $100,000 state grant for a botanic garden in Englewood that then-state Sen. Barack Obama awarded in 2001 to a group headed by a onetime campaign volunteer is now under investigation by the Illinois attorney general amid new questions, prompted by Chicago Sun-Times reports, about whether the money might have been misspent.

The garden was never built. And now state records obtained by the Sun-Times show $65,000 of the grant money went to the wife of Kenny B. Smith, the Obama 2000 congressional campaign volunteer who heads the Chicago Better Housing Association, which was in charge of the project for the blighted South Side neighborhood.

Earmarks you can believe in!

The Financial Crisis – Deficit of Decency

Here’s a view of the real financial crisis facing the country, and it can’t be solved by bailouts or regulations.

It’s not AIG, Lehman, Fannie Mae or Freddie Mac, or even Enron and MCI. It’s not the national debt, budget deficits or politician’s plans for staggering tax increases which will surely damage the already fragile economy. Make no mistake, all those are bad, but they’re only symptoms of the real disease, the cancer eating away at our society — that cancer is as Zell Miller said “A Deficit of Decency” — more specifically, a lack of ethics.

First off, don’t confuse morality with ethics; morality being just an idea of right and wrong, generally coming from some absolute source (many people mistake the concept of morality for “good” morals — i.e. don’t cheat on your wife, but murderers have morality as well, it’s just bad), while ethics is “my word is my bond”. It’s possible to act ethically, but not morally.

For example, few would disagree a crime syndicate performing shake-downs of an innocent business lacks morality (“Gee, that’s a nice business you have there, it would be a shame if something happened to it”); they’re acting immorally, however, the ethics surpass those of politicians and wall street — you can be sure they’ll do what they say and won’t change, if fact, you can count on it.

Ethics and morality aren’t the same, even though they share similarities.

Perhaps the confusion comes as younger people (30 or below) don’t remember a time when a handshake was enough to seal a deal (or a time when the Interweb thingy didn’t exist either, but we digress). Believe it or not, a time existed when your word was sufficient, and people (gasp) did what they promised. They many not have acted with good morals, but their ethics were unquestionable.

That was the prevailing attitude for many, many years. Most business circles were fairly small; you simply couldn’t get away with breaking your word. Perhaps not because people didn’t want to, but because the community simply didn’t tolerate it. Ethical behavior was demanded if you desired to stay in business.

But today, even if you have a contract, it’s who has the most lawyers and $$$ to fight. It’s not about holding up your promise, it’s about grabbing as much money as possible in the fastest way possible. Ethics is thrown under the bus, even as candidates promise “change”, but don’t want you to look behind the curtain to see it’s just business as usual and the ethics continue to disappear.

That’s the real problem in Washington — a lack of ethics. When double-talking politicians try to dodge real questions with slick-talking nuance instead of solutions, and then act differently when the teleprompter turns off, that’s a lack of ethics. The goal in politics becomes how to fool people with slick oratory, but then after election turn against the flowery rhetoric and act oppositely — in their own interests instead of serving the country.

Sacrificing for a greater good (or your country) has become a concept ridiculed and scorned. Just compare the campaigns — one says to act in your own self-interest (thus, vote for the guy promising the most handouts), while the other says country first. But that’s the political arena — the ethics problem infects all corners of society equally; as the Federal bailouts continue, every one actually increases the likelihood of more bailouts. Here’s why.

If you live in a hurricane area, and the floods ravage your house or destroy it but you don’t have insurance, the government pays you anyway. So why have insurance? Your house gets rebuilt no matter if you paid for insurance or not — each bailout increases incentive for homeowners in bad areas not to get insurance. After all, they’ll get paid anyway.

If you bought a ARM or sub-prime mortgage and got stuck with something you knew you couldn’t afford, once again, a bailout is coming your way. So why should others play by the rules and put 20% down? It doesn’t matter as financial ethics becomes discouraged, and the rewards go the people who deliberately skirted responsibility.

If AIG/Lehman/Fannie/Freddie used poor business practices in pursuit of profits, it doesn’t matter as — you guessed it — another bailout heads their way (and sometimes promotions to political campaigns for those involved). There’s even a phrase floating around — they’re “too big to fail”; what motivation do they thus have to act ethically instead of plundering the company leaving shareholders, employees (and taxpayers) left to clean up the mess while they jet off to their vacation homes?

And in elections, they guy who promises the most from the public trough gets the most support. Elections become not about serving the country (“ask not what your country can do for you, but what you can do for your country”), but who promises the most $$$ from the public treasury. It doesn’t take a rocket scientist to determine this pattern can’t continue.

Just take a look at who took the most lobbyist money in the recent Fannie/Freddie collapse, who was on the committee charged with oversight of Fannie and Freddie, and then where those executives ended up after plundering the companies, leaving taxpayers to foot the bill. Should we trust them with advising the president so they can do to the country what they did to Fannie Mae and Freddie Mac?

A democracy can’t exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy … [author unknown, though commonly attributed to Sir Alex Fraser Tytler in 1801]

Of course, who pays for all these bailouts for unethical behavior? The hard-working taxpayer playing by the rules — you know, ethically. They get the privilege of paying for everyone else’s ethical lapses.

The solution is a return to ethical behavior — and that can’t be legislated (in contrast, the only thing which can be legislated is morality — right and wrong. All laws are someones view of what’s right and wrong). But once those laws exist, there’s always people willing to employ legions of lawyers looking for a way to skirt both the spirit and letter of the law and plunder the company while passing the bill to others for their behavior. In other words, unethical.

Each bailout or rescue increases the incentive for unethical behavior — and that’s the real issue facing the country. As money flows from lobbyists to politicians, who then look the other way as companies are destroyed, is it any wonder failures are increasing? No amount of new regulation or financial bailouts will solve the problem. The real issue is where is personal responsibility?

It’s not the billions being spent right now which ultimately will ensure doom, it’s the degradation of ethics which will haunt the country for generations.

Fannie, Freddie and Obama

So who’s in the pocket of lobbyists? As Obama bloviated about economic issues, what does he do behind the scenes? It’s quite a different picture that what he tells the crowds…

When Barack Obama came to congress in 2005 with his extraordinarily inquisitive mind, he had every reason to know that Fannie and Freddie were bad news. So what did the relentless agent of change blessed with the magnificent judgment do? He instantly became the twins’ favorite kissing cousin in congress. Since 1988, only Chris Dodd has raised more money from Fannie and Freddie than Obama, and Dodd had 20 years to shake down the twins where Obama has had only four.

But Obama’s relationship with the twins runs still deeper. The two Fannie CEOs who did the most to corrupt the company, Franklin Raines and Jim Johnson, have close ties with Obama. Raines is one of Obama’s ranking economic advisors. Jim Johnson was actually in charge of vetting Obama’s potential running mates until Obama responded to public pressure and threw Johnson under the bus where he now resides comfortably with Tony Rezko.

Obama’s dealings with Fannie and Freddie are consistent with his pattern. He talks a big game about change, and yet his actions belie the bravado. It’s not that Obama merely fails to live up to his reformer rhetoric. Both in Chicago and in Washington, he somehow wound up keeping close company with the least desirable denizens. In both locales, he showed a bewildering combination of poor judgment and rank hypocrisy.

(more…)

Money Market Fund Busts the Buck

Lost in all the AIG/Fannie/Freddie/Lehman news is perhaps something considerably more important for the average American.

Extraordinary events are piling up on Wall Street so fast, it’s hard to know where to focus. Forgetting the prospective bailout of AIG for a moment, since every media outlet is on that one, the most shocking development of the day for me is news that a $60 billion money market fund “broke the buck” on Monday due to losses in Lehman Brothers paper that it held. So much for the safety of “cash”.

The Reserve Primary Money Fund (RPFXX) has become the first money-market fund in more than a decade to lose money because its board was forced to write down $785 million worth of LEH debt to zero. The fund reportedly has seen assets plunge by 60% to $23 billion in the past two days after holders got wind of the fact that it would have to cut its net asset value to less than its usual $1 per share.

This is perhaps more significant than AIG, Fannie/Freddie, Lehman and so on. For those desiring safety, money market funds are considered the best. Unlike normal mutual funds, their share value is always $1. There’s no guarantee of maintaining $1/share of course, but the idea money market fund’s could be money losers has the chance to alter the financial landscape, if it spreads to other money market funds.

AIG and so on won’t affect the average person much, but if money market funds begin to be losers, that impacts main street a whole lot more than AIG and the others, and has been lost in all the shouting over AIG and sub-prime mortgages.

Pelosi’s Big Wind

House Speaker Nancy Pelosi recently called congressional Republicans who want up-or-down drilling votes “hand maidens of the oil companies.” Let’s call Pelosi what she is: House girl of the Big Wind boondogglers.

Though she seemingly backtracked on labeling drilling a “hoax” this week, Pelosi refuses to consider GOP energy proposals that don’t include massive government subsidies for so-called eco-alternatives that have never panned out.

Which brings us to Madame Speaker’s 2007 financial disclosure form. Schedule III lists “Assets and ‘Unearned Income'” of between $100,001-$250,000 from Clean Energy Fuels Corp. — Public Common Stock.

As reported on dontgomovement.com, Speaker Pelosi bought between $50,000 and $100,000 worth of stock in Pickens’ CLNE Corp. in May 2007 on the day of the initial public offering:

“She, and other investors, stand to gain a substantial return on their investment if gasoline prices stay high, and municipal, state and even the Federal governments start using natural gas as their primary fuel source. If gasoline prices fall? Alternative fuels and the cost to convert fleets over to them become less and less attractive.”

CLNE also happens to be the sponsor of Proposition 10, a ballot initiative in Pelosi’s home state of California to dole out a combined $10 billion in state and federal funds for renewable energy incentives — namely, natural gas and wind.

Methinks Madam Speaker doth protest too much by calling others in the pocket of “big oil”, while she has vested interests in something else.

And what about the citizen Pelosi holds hostage to high gas prices? She won’t even allow a vote or debate on the issue, instead taking a vacation (but has time for TV interviews). Here’s a novel idea, get back to Washington and do your job.

Is it any wonder Congress under Reid/Pelosi has the lowest approval rating …. ever (in single digits) — much less than half of one of the most unpopular presidents ever. Pelosi has been saying Democrats have a plan to lower gas prices. Where is it? Will it materialize after her vacation? What is she waiting for?

So much for leadership. But of course, if someone has a financial interest in a certain outcome, nobody should be surprised if they don’t represent what the vast majority of citizens want.

Drill here, drill now, pay less.

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