Saturday, November 28, 2009

We're Having A Party!

Happy Thanksgiving to all and I hope you all had a good time getting together with friends and family during thsi holiday weekend. Looks like the Obama family also has been partying with friends and family, hosting a major state dinner last week. Michele and Tareq Salahi were in attendance and appeared to have a great time, getting their picture taken with both the President and the Vice President, pictures that they shared with their friends and family on their Facebook pages, according to an MCT News Service article that was published on November 28, 2009 in the Newark Star Ledger.

Unfortunately, the Salahis were not invited to the state dinner, they crashed it. Somehow they were able to get deep into the White House event, mingle with heads of states, brush shoulders with Cabinet members, and as mentioned above, get their picture taken with Obama and Biden. Fortunately, they were not terrorists, racists, or criminals. Imagine what could have happened if they were. Although they passed through a metal detector and were found to be carrying no metal weapons, the detector would not have detected plastic explosives, plastic knives, biological weapons such as anthrax, or if the party crashers were trained assassins who could have killed someone with their hands. Congressman Peter King of New York has called for a Congressional hearing on the issue.

A few observations:
  • If the government and political class cannot even prevent would be assassins from shaking the hand of the President, what makes anyone think they can do anything else effectively in any area of government?
  • Congress, of course, wants an investigation AFTER the fact. Why weren't the Congressional committees responsible for this involved beforehand to make sure this incredibly embarrassing event never took place in the first place? Eventually some poor White House staffer will take the blame for the incident but it is someone in Congress and the Secret Service who should really be held responsible.
  • If the couple had been African American or Mid Eastern instead of Caucasian and blonde, would they have gotten as far? Could their be some sort of subtle racism going on that says if they are white they must be okay?
  • If you cannot protect the President, Vice President, and Cabinet members from an amateur stunt like this, do you really think the political class can protect any of us from terrorists in our own daily lives?

I am very thankful that this was just a stunt and not a assassination attempt. However, it does not make me feel safe or confident that the political class can get anything right. Have a great holiday weekend.

Sunday, November 22, 2009

Who Likes The Obama/Pelosi/Reid Health Care Reform Bills? (Besides Obama/Pelosi/Reid)

I get so tired about talking about the pathetic and dangerous health care reform bills that are before Congress but it seems it is the right thing to do since many, many other Americans do not like the current effort either. Consider the following information that was communicated by a David Broder article of the Washington Post Writers Group as published in the in the St. Petersburg Times today:
  • According to a poll by Quinninpiac University, when asked if President Obama would be able to keep his promise that going forward with the current health care reform bills will not add to the Federal deficit, less than one in five of those polled thought he could keep that promise. Nine out ten Republicans, eight out of ten independents and four out of seven Democrats said that he would not be able to keep his promise and the Federal deficit would increase as a result of these bills. The poll was of a cross section of Americans and was conducted shortly after the Senate voted this weekend to move the proposed Senate bill to the floor for debate.
  • In that same poll, the majority, by a 16 point difference, said they oppose the legislation currently in front of Congress.
  • Mr. Broder cites the findings of the bipartisan budget watchdog group, the Concord Coalition, which says the Senate bill is better than the House version but neither is really a reform bill, they are both a big change in entitlement programs and tax increases.
  • Maya MacGuineas of the bipartisan Committee For A Responsible Federal Budget, also feels that the bills will increase the Federal deficit and that Congress will not have the guts to cut other spending or raise taxes to compensate.
  • Although not bipartisan, Republican budget experts including Douglas Holtz-Eakin, former head of the Congressional Budget Office, identified budget tricks that kept the total costs of the reform bills lower than they actually will be. In fact, in the Senate bill, there is actually language stating that"federal outlays for health care would increase during the 2010-2019 period." This increase will come at a time when the Obama administration has already outspent its 2009 revenue by $1.42 TRILLION. Thus, before the bills are even passed, the Senate acknowledges it will increase the deficits for the foreseeable future.
  • This deficit scenario will get even worse if Congress does not actually follow through with the hundreds of billions of dollars in Medicare cuts, cuts they have never had the stomach to do before, that are called for in these bills.

Less than two days after the Senate voted to move their bill to the floor for debate, without a vote to spare, four non-Republican Senators, Ben Nelson, Mary Landrieu, Blanche Lincoln and Joe Lieberman are already balking and threatening to not vote for the bill after debate and amendments because of the bill's faults.

Combine these facts from Mr. Broder's article and the potential rebellion of the above four Senators, with the poll from the Rasmussen Group last month that showed 54% of Americans were against the current bills, far out polling those that were for it. Add on the fact that the Massachusetts law to provide universal health care to its citizens, along the same lines as the current Federal bills, is already awash in red ink just a few years after it started. (see past posts for details about both). These are bad bills in so many ways:

  • They will break the budget or result in onerous tax increases on all of us, our children and our grandchildren and not just on the rich.
  • They are anti-freedom in that the government will impose its will on it citizens by forcing everyone to pay for health insurance even if they do not need it or are willing to take the risk of not having it.
  • Obama/Pelosi/Reid never identified the root cause(s) of escalating health care costs and crafted legislation to address the root causes. Without identifying the underlying problem, you have little more than a crap shoot of solving the problem.
  • Neither bill addresses tort reform in the medical malpractice area, an area that several states have seen massive drops in health care costs once they instituted tort reform.

The only solution is to start over since the current effort has degenerated into a political morass with the Democrats wanting to pass any kind of bill, regardless of how bad it is, and the Republicans trying to do anything they can to stop them. The problem and the country are now a secondary concern to the political class. It is best to start over again as proposed by Step 28 in "Love My Country, Loathe My Government." We need to get smart Americans involved to tackle this problem and get the politicians and lobbyists out of the equation.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Saturday, November 21, 2009

Turning Wealth Into Waste - Part 2

Yesterday we reviewed a new government report that documented just how poorly the government and political class manages our taxpayer money, i.e. they waste it to incredible levels. Today, lets go back to the article and see what is being done to eliminate or at least downsize the waste.

First up, a quote from Peter Orszag, director of of the Office Of Management and Budget: "We need to protect taxpayer dollars, every dollar that goes to the wrong recipient or in the wrong amount is a dollar not available to help the unemployed worker, or to invest in education or key priorities of the administration."

Comment: I could not agree with him more. Well maybe I could. First off, maybe he is part of the problem since he knows what is going on but has obviously not done anything to stop it. Second, eliminating waste should also benefit average taxpayers by relieving their tax burden, it should not become a new cash register for the administration to start new programs that will just re-waste the savings.

Second, a quote from Senator Tom Carper, who chairs a Senate panel on Federal financial management, who worries that the $98 billion waste estimate "may still be just the tip of the iceberg" since the $98 billion number does not include some other major government spending programs.

Comment: Wow, why stop at $98 billion when we can get it over the $100 billion threshold. Think about it, Obama's official estimate of his health care reform bill is about a TRILLION dollars over ten years or about $100 billion a year. Thus, if the political class had their act together they could finance health care reform without placing any more tax burdens on any other U.S. citizen. Just for the record, I have no doubt that the official TRILLION estimate is off by at least a TRILLION dollars.

Third, another quote from Senator Carper: "It goes without saying that these results would be completely unacceptable in the private sector, as they should be in government, especially at a time of record deficits."

Comment: Not only would these results be unacceptable, they would probably be grounds for dismissal if not criminal charges. Why are people like Carper just recognizing these problems now? They have not just sprung up overnight, the political class has been asleep at the wheel and has allowed the government they are supposed to run to just waste away tremendous amounts of the nation's wealth without any ramifications for themselves or those in positions of power in the government.

Finally, according to the article and report: "under executive order, every agency would have to maintain a Web site that tracks improper payments, error rates and outstanding payments. If an agency doesn't meet targets for reducing error rates for two years in a row, the agency director and responsible official will have to directly report to OMB to explain the delinquency and new actions they will take."

Comment: Boy, that will solve the problem, a website reporting system! I don't think so. There are numerous problems with this so-called solution:
  • Nothing will happen for at least two years which means another several hundred billion dollars worth of waste will occur before the remedial process even begins to kick in. The problem needs to be addressed now, not two plus years from now.
  • The article does not say who will set the targets. If each agency is allowed to set its own targets, you know they will be set so that everyone in the agency looks good and the targets are easily meetable. An outside auditor group should set the targets and establish the criteria for success and failure.
  • Similarly, it looks like each agency will maintain their own website and input their own data. Does anyone see the problem with this arrangement? The agency sets the goals, the agency inputs the data and the agency manages the reporting process via the agency's own website. I would have loved to have had that kind of appraisal process when I was working in corporate America, I would have been an "A" rated superstar performer every year.

All of these steps and attitudes are totally inadequate when it comes to getting wasteful spending under control. "Love My Country, Loathe My Government" would address many of these problems directly and would reduce the problem far quicker and far more effectively:

Step 1 - this step puts the Federal government on an immediate financial diet with the objective of reducing Federal spending level by 50% in a five year period, setting an annual 10% reduction target. By just reducing the size of government spending, the amount of waste should also drop dramatically.

Step 34 - this step would hold Congressional members sitting on all Congressional committees and subcommittees accountable for the waste and if they failed to prevent or decrease waste according to certain standards. If they would not stem the flow of wasted dollars, they would be removed from those committee posts for incompetence. All of this waste is occurring and no one from the political class has 1) called for immediate, drastic measures to get it under control, 2) proposed drastic measures to get it under control and 3) stood up and taken responsibility for waste in the areas they are accountable for.

Step 46 - this step would impose all of the onerous reporting and accounting standards that private companies in America have to adhere to under the Sarbanes-Oxley Act. This law was passed in response to the accounting shenanigans that occurred in the late 1990s by companies such as Worldcom and Enron. These procedures should be applied to Federal government spending until they have the accounting and financial discipline to not waste taxpayer money. What is good for the rest of America should be good for the government and the political class that runs that government.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Friday, November 20, 2009

Turning Wealth Into Waste

Yesterday we discussed a new government report that highlighted the tremendous amount of waste in the Medicare area. Today we will cover waste on a broader base as outlined by a new government report that was summarized in a November 18, 2009 news article that appeared on Earthlink's news page.

According to the government report, the Federal government wastes $98 billion a year due to improper payments. This comes down to about $750 for every family in America every year. The report detailed the improper waste department by department:
  • Agriculture wasted $4.3 billion or about 5.9 percent of its total department budget.
  • Defense wasted $849 million or .5% of its total department budget (more on this below).
  • Education wasted $599 million, 2.1 % of its budget.
  • Health and Human Services wasted $55.1 billion or 9.4% of its budget.
  • Homeland Security wasted $644.5 million or 3.7% of its budget.
  • Housing and Urban Development wasted $1 billion or 3.5% of its budget.
  • Labor wasted $12.3 billion or 9.9% of its budget.
  • Transportation wasted $1.5 billion or 3% of its budget.
  • Veterans Affairs wasted $1.2 billion or 2.7% of its budget.
  • Social Security wasted $8.0 billion or 1.2% of its budget.
  • And the big winner: Treasury wasted $12.3 billion or a whopping 25.5% of its budget.

A couple of observations:

  • If someone or some department in private industry had lost/wasted 25.5% of its total budget on improper payments, like the Treasury Department did, there would sure to be firings, investigations and possible criminal liabilities.
  • I am sorry but I simply do not believe the defense number of only .5% of its budget. With troops and facilities all over the world requiring probably thousands upon thousands of contracts with outside vendors (combined with the old stories about $700 hammers, $400 toilet seats, etc.), it is highly probable this number is bogus.
  • The report identified the Homeland Security grant program and the Disaster Relief Fund Vendor Payments program in the Homeland Security organization as the main culprits in that department's waste. Has anyone in any position of responsibility been fired for this waste of taxpayer dollars?
  • Similarly, in the Transportation department, much of the improper payments were attributed to the Federal Highway Administration planning and construction program. Has anyone been fired in this program?

But lets not stop here, this is probably just one leg of a three legged stool. These numbers appear to be due to improper payments, leg number one of the stool. It does not appear to include waste for programs that have little or no use for the American taxpayer. As mentioned in Appendix A of the book, "Love My Country, Loathe My Government," the following are just a small handful of useless government programs that while they may not include improper payments, they are a complete waste of Federal tax dollars, the second leg of waste in our stool:

  • $250,000 of Federal money to research asparagus industry labor costs.
  • $70,000 of Federal money for a Paper Industry Hall Of Fame.
  • $300,000 of Federal money for a feasibility study for the world's first fully enclosed motor speedway in Ohio.
  • $2,500,000 of Federal money for fish waste research in Alaska.

This list could go on forever but you get the idea. The $98 billion waste in improper payments is just the beginning, wasted tax dollars on useless Federal programs adds on to this number. This second set of waste includes not only the smallish programs listed above but the massive Federal programs like TARP that wastes untold billions of dollars. See some of our previous posts on how TARP and the Stimulus Program turned wealth into waste.

And finally, the third leg of the stool, outright fraud from a tax perspective. As outlined in "Love My Country, Loathe My Government," an article in Money magazine in 2006 quoted an IRS source that said the difference in what private citizens owed under the current tax code and what was actually collected differed by almost $200 billion a year to the short side. The article did not estimate how much businesses were also shortchanging the IRS.

If we just take a wild stab and say that the IRS is short $100 billion on business taxes, combine that with the $200 billion they are short on private citizen taxes and add in the $98 billion in waste of improper payments, you get almost $400 billion wasted every year or over $3,000 per U.S. household. This does not include the second leg of the stool, the money spent and wasted on Federal programs that get nothing done for the vast majority of Americans. It is mind boggling. And that does not end the bad news. Tomorrow we will discuss some of the reactions to this waste report as stated by government bureaucrats and members of the political class, now their comments are mind boggling. Also tomorrow, we will show how many of the steps in "Love My Country, Loathe My Government" would effectively address and minimize or eliminate many sources of wasted taxpayer dollars as compared to the lame plans the political class has in mind for fixing the problem.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Thursday, November 19, 2009

Medicare Fraud - Billions Today, Trillions Tomorrow?

Yesterday we examined the dismal future of the nation's health care system and financials if the current Obama health care reform bill is passed. Hospitals and nursing homes opting out of Medicare because of reduced costs which would restrict medical care access, increased doctors' fees caused by increasing the number of insured by 30 million, skyrocketing deficits, etc. Today, let's look at how government runs its health care responsibilities in the present time and what implications that has for the future.

The basis of tonight's post is an AP article that appeared in the St. Petersburg Times on November 15, 2009 which reported on a new federal auditing report on Medicare. Highlights of the AP article including the following:
  • The Federal government has paid out more than $47 billion in questionable Medicare claims.
  • Many of the claims for treatment showed little correlation to the patient's condition. Examples cited included paying for blood glucose strips to treat sexual impotence and diabetic shoes for leg amputees.
  • Suspect claims included paying for prescriptions written by doctors who were no longer alive.
  • This is not the first time these types of mismanagement accusations have been made by government auditors. According to the article, Medicare fraud has been cited by auditors for 20 years and despite past "aggressive actions", no discernible progress has been made to reduce suspect payments.
  • The report found that sometimes brokers go door-to-door looking for new citizens that barely speak English to "buy" their Medicare number for hundreds of dollars and then use the numbers to commit fraud.
  • If questionable payments are $47 billion a year and the annual Medicare budget is $440 billion a year, as reported in the article, then the fraud rate is at an unbelievably high rate of almost 11%.

And this program has been around for decades and the political class has not been able to get fraud under control. Imagine how much money will be wasted if and when Obama and Democrats start spending TRILLIONS of dollars on health care reform.

The article did say that the Obama administration was going to announce efforts to counteract fraud this week including "a government-wide Web site aimed at providing a full account of health care spending and improper payments made by various agencies." Wow, now I feel better. I am sure this website will scare the illegal brokers to death and they will immediately stop their fraud activities.

The bottom line is that the political class and the government it runs is incapable of efficiently and cost effectively running any kind of major (or minor) program. An 11% fraud rate is totally unacceptable. Imagine what could be done with that kind of wasted money:

  • if returned to the taxpayer, every U.S. household would get a check for about $361.
  • if an average teacher's salary is about $50,000 a year, you could put 94,000 teachers to work for ten years.
  • imagine how many bullet proof vests and armored personnel carriers could be bought for our troops in war zones.

The waste boggles the mind and now Obama and the Democrats want to exponentially increase the waste with the currently proposed health care reform bill. The way to solve the health care cost problem was reviewed yesterday and I will not repeat the solution again today as laid out in "Love My Country, Loathe My Government", Step 28. However, you can bet that any solution to fraud in the current system will not be solved by a website, it needs to be addressed by criminal investigations and prosecutions.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Wednesday, November 18, 2009

The Health Care Reform Bill That Does Not Reform

The House of Representatives health care reform bill that barely passed the House a little while ago has been analyzed by Richard Foster of the Centers For Medicare and Medicaid Services. His results were published in the St. Petersburg Times on November 15, 2009 as a Washington Post story. His findings and report are not pretty:
  • The current House bill, that the Obama administration supports, would be funded largely by cutting future Medicare budgets by $500 billion. According to Mr. Foster, this would sharply reduce benefits for some senior citizens and reduce access to health care for MILLIONS of others. (Did someone say death panels?)
  • The funding cuts are so large that some hospitals and nursing homes would likely opt out of the program because of the reduced fees they would recover from the government.
  • Mr. Foster felt that Congress could intervene to reduce some or most of the reduced funding but that would undermine the whole concept of the current House bill of financing this health care reform, whose cost is estimated to be over a TRILLION dollars, via cuts to Medicare.
  • Furthermore, the report questions whether the country even has enough medical resources to accommodate a reform effort that would add more than 30 million more people to the ranks of the insured, many of them through the Medicaid program. In such a scenario, increased demand for limited resources, providers of health care services are likely to increase, yes increase, their fees and only take patients with the best paying, private care insurance plans, causing severe access problems for those less affluent and fortunate. Costs would go up, the exact opposite of what is desired. Remember your basic college economics - supply and demand and price are all related.

Not a pretty picture and all because this whole Obama care effort did not do what this blog has called for from the beginning: you have to first understand the root cause(s) of rising health care costs and only then can you put together a plan to reduce or eliminate the root causes. This bill does nothing of the sort. It does not identify and address root causes, all it does is move money around from one pot of government funding to another while increasing tax burdens on the rich. There is not mechanism or process to actually reduce costs, it is only a shell game. This bill does not address the potential cost savings from tort reform, significant savings that several states have realized from tort reform in their state health care industry, it does not address fraud, it does not address relaxing the selling of insurance across state lines, and any number of other, high potential root causes.

What has happened is that the whole process has devolved into a political game of chicken with Obama and the Democrats trying to pass any kind of bill, even a bad one that bankrupts the country without reducing health care costs but enables them to claim victory, while the Republicans will do anything to prevent any kind of bill from passing, even a bad one, while health care costs continue to spiral upward, Quite pathetic behavior from both parties.

The only solution is one that this blog and the book, "Love My Country, Loathe My Government", has proposed from Day 1 under Step 28: given how bad the political class has mucked up the waters of health care reform, the only solution is to start over with the creation of a panel consisting of smart Americans, a panel well versed in all aspects of the health care industry, who can address the problem of root causes in the health care industry without lobbyists, politicians, and re-election campaign managers interfering. That is how America went to the moon, using smart Americans in NASA, how America developed the atomic bomb in World War II, using smart Americans in the Manhattan Project, etc. The only way for the government to do anything effective is to get out of the way. They should do the same thing here: better to have no health care reform bill than to have a very bad health care reform bill, which is where we are now.

And if this post depresses you, wait until tomorrow's post where we will review a recent AP report that showed how bad Medicare fraud and waste is.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Tuesday, November 17, 2009

You Can Fool Some Of The People All Of the Time...

I was going to follow up yesterday's final Cash For Clunkers post by talking about distressing new health care reform numbers but I will put that discussion off for one day and talk about an observation that hit me today. It neatly tied together three events that illustrate a trend that I have been harping on for years:
  • While at the gym this morning, I was on a stationary bike and had to watch the morning CNN news show that was on the monitor in front of me. There is no sound from these TVs, just closed caption. One of the main, and continuing, stories during the news broadcast was about Sarah Palin, ex governor of Alaska and John McCain's VP candidate in last year's Presidential election, and her new book. The hilarious thing I observed is that in almost every case, whenever the CNN news people mentioned Palin they only used here last name. When the talked about her appearance on the Oprah Winfrey show, they referred to Oprah Winfrey by using both her first and last name. When they discussed the infamous Palin interview with Katie Couric last year, they used Ms. Couric's first and last name. For most of the morning, the CNN staff used only Palin's last name but everybody else's full name, a very subtle form of disrespect.
  • This CNN disrespect reminded of Peter Jennings broadcast of the 2004 Presidential election when he was going through the preliminary results and trying to add some insights to how the election was unfolding. According to my recollection, when he referred to Senator John Kerry, he almost always said "Senator Kerry." When he referred to President Bush, he almost always used just Bush's last name. A hypothetical example would go like this: "Senator Kerry must win Ohio to have any chance of winning the election while Bush could lose Ohio and still win the election." The preceding is not a direct quote but was similar to what Jennings was saying that night. Again, a subtle form of disrespect and slanting of the news, much like CNN did to Palin this morning.
  • Both of these instances reminded me of a short blurb in the September 25, 2009 issue of The Week ( magazine. The article referenced market survey results from Pew Research which found that only 29% of the survey respondents felt that today's news organizations "generally get the facts straight" while 63% believe that news stories are often inaccurate. I find the word "generally" interesting since it implies that the percentage of time the news organizations exactly get the facts straight is less than 29%. Also, the research found that 60% of the respondents say news organizations are politically biased.

Thus, democracy has gotten a lot harder in this country when the majority of people do not believe that free press in this country are unbiased. Who do you believe if you cannot believe news broadcasts that are supposed to be giving you the facts (I am referring only to new broadcasts, not the talking head shows on cable and broadcast TV) and not slanting the "facts" and news to suit their slanted views? As we see from above, this slanting can be very subtle, i.e. giving respect to "your side" by using their full name and dissing "the other side" by slandering them with just their last name. It can be slanted by stressing certain news stories that make "the other side" look bad and ignoring or downplaying news stories that would make your side look bad. Very, very sad that we do not believe that we can turn on a newscast and feel confident that 1) they got the story right ("generally") and 2) it is not slanted.

This all ties into the first paragraph on page 181 in "Love My Country, Loathe My Government":

With regards to media, look for different and varied ways of getting your news. Understand that most major news outlets today are not unbiased, and each has its own political slant and favorite wing of the political class. If you do not diversify your information sources, you will continue to be fed the same messages that the political class wants you to hear, messages that divert your attention from the real needs of the country, and allow the political class to proceed with their freedom and power grab.Without actively looking for different ways to get your information, you will be forced to live with what the political class wants you to hear as forced through the media outlets they want you to use. You will become a warrior in their tribal fight against other Americans.

At the end of the movie, "the American President", the Michael Douglas character, the President of the United States, states that "America is not easy." The press and its biased reporting make America harder, harder to get the facts and harder to correctly act on those facts. But hard cannot stop us from being free, the political class is depending us to find America too hard.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Monday, November 16, 2009

Cash For Clunkers - The Final Chapter

I have been meaning to do this final post on Cash For Clunkers for a few weeks but other opportunities kept getting in the way. In previous posts, we reviewed how bad this program was. Like most rebate programs, it did not create much new demand, it merely shifted demand from one time period to another. The high level of car sales in the U.S. in August and the abysmal sales in September, after the program ended, proved that point. Thus, the American taxpayer basically gave $4,500 checks to their neighbors to buy a new car. By destroying the trade in sales, the government created a void in the used car market, forcing lower income people to either continue driving older, more gas guzzling cars or purchase a new car, a new car whose production required high degrees of energy and resources to be used vs. just buying a good used car. Both of these choices are bad for the environment, contrary to the avowed purpose of the program. Finally, the program logistics were a disaster from a processing perspective.

And as a final slap in the face, an article from the AP that appeared online on Earthlink's news page analyzed the sales results from the program. Highlights of their analysis included the following:
  • The most common transactions of the program involved replacing old Ford and Chevy pick up trucks with new ones that barely got better gas mileage.
  • The single most common deal involved Ford 150 trucks. People who brought in an old 150 were seventeen times more likely to just get another Ford 150 truck than a fuel efficient Toyota Prius. The new Ford trucks get about 2 MPG better gas mileage, hardly a significant environmental gain.
  • The program spend more than a half million dollars on deals where the new vehicle got the same or WORSE gas mileage than the vehicle being traded in.
  • One in seven of the sales the AP looked at got less than 20 miles a gallon.
  • In at least fifteen deals, owners who traded in large pick up trucks got rebates to offset their Hummer H3 purchases, major gas guzzlers.
  • A driver in Virginia traded in a ten year old Ford Explorer that gets about 15 MPG for a $28,000 Jeep Commander that gets 16 MPG.

Thus, another government program that fails to live up to its objectives:

  • It did not significantly increase car sales volumes while it theoretically removed money from all taxpayers who could have spent it on other parts of the economy. Remember, the government does not create wealth or jobs, it merely takes wealth from taxpayers and redistributes it. Thus, the money that was basically given away to buyers to get a deal on a new vehicle may have been better spent by other taxpayers in other product categories.
  • From an environmental perspective it was also a disaster. Many, many deals resulted in worse, the same or marginally better mileage performance. You have to question why the trucks and Hummers were even allowed in the program. If you want to make an environmental statement and impact, no vehicle with less than at least 20 MPG rating should have been included in the program.

And, as with previous posts, if the political class cannot even run a simple rebate program efficiently, who really believes that it can effectively run the health care industry in this country like the current House approved health care reform bill tries to do? Be scared, be very, very scared. Check tomorrow's post where we will review how the Cash For Clunkers government ineptness will be manifest itself in the health care industry.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Saturday, November 14, 2009

The Obama 5% Solution That Solves Nothing

One of my very favorite Mark Twain quotes goes something like this: "Sometimes I wonder whether the world is being run by smart people who are putting us on or imbeciles who really mean it." After reading a recent Federal government budget article that was posted on the Earthlink news page on November 13, I am still not quite sure who we are dealing with in Washington.

According to the article, the Obama administration has alerted domestic parts of the Federal government that they should plan for a budget freeze or even a five percent decrease in their budget (heavens, 5%, how will they survive!). This edict came down in an attempt to cut the deficit spending catastrophe this Congress and administration has gotten us into. It was also timed to coincide with Obama's trip to the Far East in an apparent lame attempt to convince the Chinese, the largest purchasers of America's debt, that the American political class was getting it's financial house in order.

On the same day the article appeared, the government reported on the latest budget and spending results for October and the entire 2009 fiscal year that ended at the end of September. In October, the Federal government spent $176.4 billion more than it collected in revenue (not including new debt). For the entire fiscal year, the Federal government spent $3.53 TRILLION on tax and other receipts of $2.11 TRILLION, requiring the government to finance through deficit spending another $1.42 TRILLION. The 2009 deficit of $1.42 TRILLION was $958 billion more than the previous record year of deficits (2008).

As I like to do, let's have some fun with math:
  • In October, the Federal government spent almost $4 million a MINUTE that it did not have and had to finance. As an example, in the time it takes you to read this final post, your government would be another $4 million in the hole.
  • On an annual basis, the Federal government spent about $2.7 million a MINUTE that it did not have.
  • If you had spent a $1,000 a day, a figure that most of his could probably live comfortably on, since the day Christ was born, you would still not have spent a billion dollars. In 2009, the federal government covered that ground within three hours.
  • To cover just the budget shortfall of $1.42 TRILLION, every one of the 130 million US households would have to kick in almost $11,000 just to cover the deficit, before paying regular taxes. Each household would theoretically pay another $27,000 to cover the remaining part of the Federal budget.
  • In fiscal year 2009, the Federal government spent 67% more than it took in via taxes and other revenue sources. As an example, if you are a typical US household making about $57,000 a year, you would of had to spend about $95,000 to keep up with the government. As you all know, that kind of spending lifestyle will not get you far.

But thank goodness the President is stepping up to get the budget under control by boldly looking for a freeze in spending and maybe a 5% decrease. Will that solve the problem? More math:

  • In the best case where he gets a 5% decrease across the board, he would get the budget of the Federal government from $3.53 TRILLION to a miserly $3.34 TRILLION. This would theoretically leave the country with a $1.24 TRILLION deficit that would still be a record deficit by far.
  • If each US household had to cover the reduced deficit, each one would be on the hook for just under $10,000 just to cover the spending overrun, hardly a bargain.

There are three problems that arise with this analysis as I read the article. First, the 5% is for domestic agencies which implies that defense, Social Security, and Medicare and other categories of government spending would not be under the 5% edict. Second, the article says it could be as much as 5% which means it will not be a 5% across the board cut. Finally, the article correctly points out that reducing government spending in an election year such as 2010 is usually not done. Bottom line: this 5% target will probably never see the light of day and thus, will have no effect on Federal government spending.

Now, is the Obama adminstration really smart or is it a Mark Twain imbecile? Either way, we are screwed. If it is really smart, then it must be betting that we and the rest of the world are imbeciles since anyone who does the simple math we did above would realize that this edict is nothing more than a lame public relations stunt designed to fool the Chinese and other purchasers of US debt instruments that we are really working to reduce the deficit and fool voters into thinking that this administration is serious about deficit reduction. If it is an imbecile, than we are really, really screwed since it did not do or did not understand the simple math above that proves his 5% edict is useless.

This imbecile view is consistent with an order the Obama adminstration gave earlier in the year and which was debunked by this blog where he wanted to find $100 million in spending cuts. As you may recall, $100 million in spending cuts would be worth about $.77 per household. If Obama and his economic people really believe they are reducing deficit spending with these two lame orders, than the country will hit financial Armageddon very, very quickly since this type of spending does not even account for the coming tidal wave of baby boomers who will be swamping both Social Security and Medicare very quickly.

That is why several steps in "Love My Country, Loathe My Government" are so very important. Step One must be implemented immediately, i.e. begin reducing government's size by 10% a year for the next five years. Steps 9, 10, 11, and 12 are also critical in getting the future entitlement programs under control with the least amount of pain. Anything short of these bold steps will not rein in out of control Federal spending which will eventually crush the economy and financial well being of every American. Cheap 5% public relations stunts will solve nothing.

Final note: the Democrats have been in charge of Congress for the past three years. Under the Constitution, Congress is responsible for authorizing all government spending. Thus, while Bush has a lot to blamed for in creating this record deficit spending, it has been the Democrats who have controlled the purse strings for three years, and the Presidency for almost a year, under whose watch these dangerous deficits arose. Bottom line: everyone in the political class is to blame.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Friday, November 13, 2009

Congressional Corruption Bonus Post

On November 1oth and 11th we discussed the list of the fifteen most corrupt politicians in Washington as nominated by CREW organization, Citizens For Responsibility and Ethics In Washington. I had thought that those two posts would cover us, at least for a little while, regarding news on Congressional corruption. How wrong I was. Rather than being finished with covering Congressional corruption. another instance of greed drops into your lap.

According to a news article that appeared on the Earthlink news list this evening, ex-Congressman William Jefferson was sentenced to thirteen years in jail for accepting bribes, the longest term ever imposed on a Congressman on bribery charges. He had been convicted last summer, being found guilty on eleven counts including bribery and racketeering, for taking almost a half million dollars in bribes and seeking more in exchange for facilitating business deals in Africa. In addition to the jail sentence, he has to return the bribe money which may have to be satisfied by seizing personal assets. Mr. Jefferson had represented New Orleans in Congress for almost 20 years.

You may recall that the Congressman had taken some of his loot and stashed it in his freezer, lending credibility to the old saying, "cold cash." The FBI found the frozen money when they raided his home after a businesswoman felt she had been cheated by Jefferson in a business deal and turned to the FBI.

The prosecutor wanted 30 years for the sentence but the judge opted for less, thirteen years, that put the sentence more in line with previous corrupted politicians' jail terms:
  • Congressman Randy Cunningham of California received a sentence of eight years for taking $2.4 million in bribes from defense contractors.
  • Congressman Bob Ney of Ohio received two and a half years in jail for taking bribes from a lobbyist.
  • Congressman James Traficant of Ohio received a seven year sentence for bribery and racketeering.

The prosecutor pointed out that Mr. Jefferson stood to get hundreds of millions of dollars if all of his eleven bribery schemes were fully successful.

Three observations come to mind:

  • How well was the Congressman serving his constituents in New Orleans and the rest of the country if he was involved with almost a dozen bribery schemes? Guess many of the nation's problems (Iraq, Afghanistan, failing public schools, drug addiction plague, Social Security and Medicare going bankrupt, etc.) were just not important enough for him.
  • I remember that when the arrest and the frozen money came to light, the Speaker of the House and others in Congress were upset and mad that the executive branch had dared to arrest a fellow member of the legislative branch of government. While their protestations died off quickly when they realized the depth of the crimes, it did leave a bad taste in many of our mouths. It was almost like the political class was offended that the Bush Justice Department dared to go after a criminal that just happened to be a politician (or is it a politician that happened to be a criminal.)
  • His defense attorney at the sentencing hearing wanted the judge to consider the fact that Mr. Jefferson had lifted himself up from poverty to become a Congressman, as if that was good enough to just forget about the eleven counts of bribery and racketeering he was found guilty of. Fortunately, the judge felt that the sentence of thirteen years was justified by the amount of public corruption that had occurred.

What can you say? This sense of entitlement that the political class has developed in this country is just pathetic and repulsive. Their salaries put them in the top 5% of earners in this country. They get untold number of perks including free leased cars (House Of Representitives only), great offices, large staffs, national and international recognition, lucrative positions in private business can easily be obtained after serving their terms (Congressional, not prison), etc. but it never seems to be enough.

This is the type of behavior that "Love My Country, Loathe My Country" seeks to address and reverse. As with the previous corruption posts and examples, term limits looks to be a very important Step to implement since Mr. Jefferson, much like Murtha, Rangel and others, have been around the Washington scene for a very long time. Under Step 5, reducing fraud that is rampant in many government programs, one of the sub tasks is to audit the tax returns of everyone member of Congress and high ranking members of the executive branch in order to seek out suspicious behavior.

When Nancy Pelosi became Speaker of the House several years ago, she spoke of "lowering the swamp" relative to Congressional corruption and cleaning up Washington. I guess the pump is broken because it still looks like the swamp is at high tide.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Stpes To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Thursday, November 12, 2009

Mars Attacks!

After some heavy duty news about how corrupt many of our DC politicians have possibly become, let's take a step back and look at two extreme cases of national security. One instance is pretty funny (but still a waste of taxpayer money) but the second instance is much scarier.

In the December issue of Reason magazine (, Jeff Winkler has written an article called "Miniature Monsters Attack America." Apparently there is a role playing game on the market called Monsterpocalypse where players of the game try to conquer the world using miniature, intergalatic collectible monsters. As this is an obvious threat to national security, the Department of Homeland Security seized the first shipment of the strategy guide for the game in July. According to a company spokesman, the company marketing the game was never notified of the reason for the seizure and the release of the game was delayed but not terminated. Whew, saved again! According to Mr. Winkler this is not the first type of game-related seizure. Secret Service agents seized copies of a guide to GURPS Cyperpunk in 1990 since it claimed the game's rules were a "handbook of computer crime."Besides wasting the taxpayer money on seizing game guides, the bigger question is whether the government and political class really know what they are doing in this area relative to "real" threats to our security.

On a more serious note, the article, "The Right To A Guilty Verdict" by Jacob Sullum in the October issue of Reason magazine discussed Obama's latest position on what to do with the accused terrorists in Guantanamo. According to Mr. Sullum, "In July, the Defense Department's top lawyer declared that the President has the authority to detain people accused of belonging to or assisting terrorist groups even after they're acquitted." In other words, even if there is no proof that someone was involved in terroristic activities, the government can still keep them in custody forever long as it pleases. The administration has already declared that almost hundred of the current detainees will not even be given a trial, never mind being given a trial and still held forever even if declared innocent.

There are three major problems with this position:
  • Although Obama constantly criticized the previous administration about holding people indefinitely at Guantanamo, his policy basically reinforces the Bush position that the US government can hold people forever against their will. Hardly the type of freedom loving image that Obama claims he wants to project to the world. In fact, by trying hard to show how good the United States is, this position makes him look like a hypocrite. America should stand for the principle, "innocent until proven guilty", it always used to stand for. Now, under this Obama policy, guilt or innocent is immaterial.
  • This policy will also make it difficult for Obama to criticize the detention policies of other nations such as North Korea, Iran, communist China and the like since we are doing the same thing they are doing.
  • Finally, we all know that the political class never can contain themselves. While today the government says it can detain foreigners forever, it is only a short jump to where it will start holding Americans in detention forever, on either real or bogus charges of terrorism. At that point, America will no longer continue to exist as a free, democratic country.

Thus, while mistakenly seizing Mars Attacks! toy monster creatures guides for ridiculous reasons is funny, it will not be funny of those same government agents start seizing you with equally ridiculous accusations.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Stpes To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Wednesday, November 11, 2009

Congressional Corruption - Part 2

Yesterday we reviewed some of the corruption accusations against half of the top 15 most corrupt members of Congress as designated by the Citizens For Ethics and Responsibility In Washington CREW). Their website goes into great details of the possible ethics and laws that these fifteen elected officials may have violated. Today we will do the rest of the list. As with yesterday's post, tonight's post reminds all readers that most of the accusations against these Congress people are only that at this point in time and they should be presumed innocent until proven guilty.

Nathan Deal, Georgia - Congressman Deal and a partner own a lucrative multi million business that through a no-bid contract provides services to the state of Georgia in the salvaged vehicles market. A local Georgia Commissioner took over responsibility for the state's operations in this area and found it to be too costly, deciding the best course of action was to do away with the no bid status and go to competitive bidding to reduce the costs to the state. Congressman Deal and his staff allegedly tried to coerce the Commissioner to reverse his stance, in face-to-face meetings, but when that was unsuccessful and the changes were passed by the state House of representatives, Congressman Deal's chief of staff used the Congressman's email to lobby against the change to competitive bidding, lobbying that was eventually successful. Congressman Deal is a nine term member of Congress.

John Ensign, Nevada - Senator Ensign's main problem is that he had an affair with a former member of his campaign staff, who happened to be married to his friend and a top aide to the Senator. Both husband and wife left their jobs with the Senator and his re-election organization. At this point, money started flying everywhere in payments to both the husband and wife, the Senator's parents got involved in making payments, payments were made to the husband and wife's children. etc. All very complicated. Bottom line is that the Senator and the payments may have been in violation of a number of laws and Congressional rules.

Jesse Jackson, Jr., Illinois - No surprise Illinois keeps popping up on his list and no surprise it is again related to ex-Governor Blagojevich. CREW reports that Congressman Jackson was trying to make deals to raise money for the Governor if the Governor would nominate Jackson for the vacant Senate seat of President Obama. The amount discussed was $1.5 million and this smoke triggered an Office Of Congressional Ethics (OCE) probe. The Department of Justice is also involved in the investigation to see if Illinois state law was violated if the Congressman offered anything of value to the Governor in exchange for the Senate seat. Mr. Jackson is an eight term Congressman.

Jerry Lewis, California - According to CREW, Mr. Lewis is also in trouble for dealing with those pesky lobbyists. As an important member of the Appropriations Committee, the Congressman allegedly approved millions of dollars in earmarks specifically for the clients of the lobbying firm of Copeland Lowery. In return, Mr. Lowery, his partners, and their families contributed almost a half million to the Congressman's election campaign committee. Although Copeland Lowery eventually renamed itself Innovative Federal Strategies (IFS), the Congressman continued to approve earmarks for an approximate total of over $270 million for the clients of IFs in 2008 and 2009.

In 2007, Environmental Systems Research Institute was awarded a Federal contract worth over $55 million and in 2008 it received contracts worth over $4 million. The founders of the company donated $7,200 to the Congressman's campaign for re-election in 2008. In 2009, the Congressman requested $12 million in earmarks for the company. Mr. Lewis is a sixteen term Congressman.

Mitch McConnell, Kentucky - The Senator is having corruption issues in three areas. First, his former chief legal counsel and then chief of staff, opened a lobbying firm in 2003. Coincidentally, many of the lobbyist's firms have received earmarks courtesy of Mr. McConnell. The Senator also influenced legislation to positively impact another client (UPS) of the lobbying firm. According to CREW, many of this firms have made contributions to the Senator's re-election committee.

Second, the Senator founded the non-profit McConnell Center For Political Leadership at the University of Louisville in 1991. Some of the biggest contributors to the Center were Ashland and UPS (see previous paragraph) and some of the donations to the Center were actually donated through the Senator's DC office. The big stink in this case was that the Senator and the Center fought to keep its donor list secret, a fight that they eventually lost for those donating on a going forward basis. Once the court fight was lost, donations dropped dramatically.

Finally, BAE systems, a British defense contractor, has either been investigated or is under investigation by the British, the Austrians and the US Justice Department for bribing various members of the Saudi Royal family. Nevertheless, the Senator requested three earmarks for BAE worth $17 million dollars. To no one's surprise, employees of BAE have donated thousands of dollars to the Senator's re-election campaign.

Laura Richardson, California - Ms. Richardson's problems stem not so much from lobbyists but from the management of her own personal finances. According to the CREW website, she has defaulted on loans at least eight times and has not made mortgage payments on property. She did not fully comply with House financial disclosure requirements and a home of hers in Sacramento was declared a public nuisance for having debris on the driveway, rotting fruit in her back yard, and unmowed grass. To be honest, this case seems very weak vs. the other politicians, seems Ms. Richardson' problems are more of a self destruction type than a self enrichment type.

Don Young, Alaska - Much like Mr. Rangel and Mr. Murtha, Mr. Young's corruption issues are way too long to go into detail in this post. The dossier for his potential infractions can be found on the CREW website. In summary, Mr. Young has issues in the following areas:
  • The Justice Department is investigating whether Congressman Young earmarked $10 million for a road project in exchange for campaign contributions.
  • Congressman Young earmarked over $400 million for two unneeded Alaskan bridges even though his daughter and son-in-law owned land close to the proposed bridges. The value of the land would likely rise if the bridges are built.
  • The Congressman is the subject of a criminal probe into whether or not he accepted stuff illegally form the VECO corporation. VECO employees have contributed $89,500 to the Congressman's campaign committee.
  • The Congressman has received campaign contributions from the construction firm, PBS&J, in the past. This firm has had several executives convicted for trying to get around campaign election laws including its president who pleaded guilty. This was the firm that had received a Federal grant to to a cost estimate of the proposed Alaskan bridges.
  • The Congressman's ties to convicted lobbyist Jack Abramoff are being investigated by a grand jury and the Justice Department in Wisconsin is investigating a potential deal that occurred between the Congressman and convicted businessman Dennis Trotha. Mr. Trotha, his family and his business contributed to the Congressman's campaign committee while the Congressman inserted an amendment to a transportation bill that benefited Mr. Trotha's trucking company.

The Congressman has been in office for nineteen terms.

I feel like I need a shower. Pretty disgusting and wasteful behavior. Both today's and yesterday's post reinforce the need to institute several steps from "Love My Country, Loathe My Government." Yesterday we talked about the step that involves instituting term limits, especially in the case of the CREW Fifteen since the majority of the worst offenders had been in office for a very long time. Step 7 also applies here since that Step would restrict campaign donations to only individual Americans, no contributions from companies, PACs, unions, or lobbyists. The current system rewards campaign contributions (really bribes) from powerful entities that fly in the face of individual freedom and representative government. The FEC has also got to be strengthened as outlined in Step 8 to get the situation under control as soon as possible. Thus, if you think you live in a free country, get over it. Only the lobbyists and elected representatives get stuff for free, we get stuck with the bill in the form of wasted tax dollars and government inefficiency.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Stpes To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Tuesday, November 10, 2009

Congressional Corruption - The Top 15, Part 1

Yesterday we discussed some good old fashioned Congressional corruption. Since it is too global a target to cover in one day I am going to devote two more posts to it. The basis of this post is from the website of CREW, Citizens For Responsibility and Ethics In Washington. CREW has posted their top 15 most corrupt DC politicians on their website. We will take a quick look at half tonight and half tomorrow to get a full spectrum of alleged corruption.

Quick disclaimer - rather than use "alleged" many, many times tonight and tomorrow, let's just do a blanket disclaimer upfront and assume that all of the incidents of corruption that are on the CREW website and listed below should be preceded by the word "alleged" even if it does not appear. Also, the following is just a sampling of the alleged corruption, to put all of the accusations into this post would be too long. Thus, assume you are just getting a sampling, you can go to the CREW website to see the complete dossiers.

Roland Burris, Illinois - You did not think we could do a corruption post and not have someone from Illinois involved, did you? Senator Burris took over President's Obama's Senate seat when he was elected President. He received the seat by appointment by ex Governor Rod Blagojevich who is currently under indictment for trying to sell the seat to the highest bidder among other accusations.

Although Senator Burris claimed there was nothing nefarious about his appointment, he offered at least three different explanations under oath about how he got the seat. Unfortunately, Federal wiretaps offered a different picture since they included an incident where Burris offered to raise money for the Governor in exchange for the appointment. He is also heard offering to get his attorney to also make a monetary contribution, potentially in violation of state law.

Vern Buchanan, Florida - Congressman Buchanan is alleged to have coerced employees at his various car dealerships to contribute to his election campaign fund which is against current election law. In one incident, an employee has stated that that Congressman offered use of his Vail, Colorado home in exchange for a contribution. Mr. Buchanan is also said to have used cars from his dealerships' inventory for election purposes, another violation of election law.

Ken Calvert, California - one accusation in this situation is that the Congressman used Federal earmarks to financially increase the value of land he owned, violating the ban against using his position in Congress to enhance his own financial standard. He is alleged to have purchased a parcel of land for $550,000, pushed through local earmarks worth over $9 million which enabled him to sell the original parcel for $985,000 less than a year later despite making no improvements. Mr. Calvert is also under investigation by a Federal grand jury for possibly pushing through at least thirteen earmarks in support of the Copeland Lowery lobbying firm, worth over $90 million, and then accepting campaign contributions from the firm. He is a nine term Congressman.

Charles Rangel, New York - there is way too much detail to go into here but I will list the topics of corruption that CREW has on its website and you can go into the detail and dossiers they have posted online. By far, Mr. Rangel gets the most press from CREW:
  • Improper rental arrangements on multiple rent controlled apartments in NYC.
  • Improper Use Of Congressional Stationery - violation of House rules.
  • Dominican Republic Villa - non-declaration of rental income on financial disclosure forms for seven years, possibly hiding $75,000 in income.
  • Nabors Industries - Possibly preserved a tax loophole for Nabors in exchange for a contribution to the Rangel Center.
  • Caribbean Trip - possible violation of House rules.
  • Financial Disclosures - non-disclosure of assets and unearned income in violation of House rules.
  • Improper Vehicle Storage - violation of House rules.
  • Ongoing Ethics Probe - covering just about everything listed above and more. By the way, Mr. Rangel is a twenty term Congressman.
John Murtha, Pennsylvania - Mr. Murtha is also a favorite of those that follow political corruption. Like Mr. Rangel, there is far too many details to go into based on the CREW dossiers but the following is a good summary:
  • Issues tied to his association with the PMA lobbying groups (see yesterday's post).
  • Issues tied to his association with Kuchera Industries, a former defense contractor.
  • Issues tied to his association with defense executives and former military personnel convicted of skimming money from government contracts.
  • Issues tied to his association with his brother's lobbying clients.
  • And finally, allegations that his chief of staff threatened a political opponent.

Mr. Murtha is a nineteen term Congressman. None of these these issues even touch on the massive earmarks spent on the John Murtha airport in Pennsylvania (see a previous post on the wasteful spending that has involved.)

Pete Visclosky, Indiana - Mr. Visclosky is also closely tied to the troubles of the defunct PMA lobbying firm which is alleged to have received many earmarks courtesy of Congressman Visclosky. According to CREW, PMA was usually the biggest contributor to the Congressman's campaign funds and in exchange was rewarded with over $30 million in earmarks for PMA clients. In addition, Mr. Visclosky was instrumental in getting $6.9 million in funding for the Purdue Research Park Northwest Indiana. The facility was supposed to be a place where fledgling companies could get a good start in establishing their business, moving out of the Park once they were up and running. However, the Park is now 25% empty and most of the rented space is rented by former PMA clients whose employees also are contributors to the Congressman's campaign funds. Mr. Visclosky is a thirteen term Congressman.

Maxine Walters, California - Ms. Walters main ethics problem is as a senior member of the House Financial Services Committee, she should not have been involved in arranging a meeting between Treasury officials and OneUnited Bank, an institution she has financial ties to. The bank eventually received $12.1 million in TARP funds after a second meeting Ms. Walters arranged. She never disclosed her financial stake in the bank in her correspondence with the Treasury department. She is a ten term member of congress.

Alan Mollohan, West Virginia - According to CREW, Mr. Mollohon ethics problems stem "from misuse of his position on the Appropriations Committee, from which he has steered hundreds of millions of dollars in earmarks to family, friends, former employees and corporations in exchange for contributions to his campaign and political action committees." The Congressman is also alleged to have misreported his assets on financial disclosure forms and he is currently under investigation by the Justice Department. And finally, not showing any discretion, the Congressman requested a $1 million earmark to allow the Federal government to expand a wilderness area abutting his property, likely increasing the value of his property. He is a fourteen term Congressman.

It is enough to make you sick. Not only are these actions wasteful of taxpayer money, obvious conflicts of interest, self-serving, and in many cases just plain illegal, there seems to be no sense of regret or remorse, these people seem to view these actions as some sort of entitlement. It is these types of situations that led to the definition of political class in the book, "Love My Country, Loathe My Government." Politicians today see themselves as above the law and above the rest of us. Rather than serving the citizens of this country, they are serving themselves.

The above examples involve both male and female, Republicans and Democrats, the House and the Senate, East Coast, West Coast, the South and the Midwest. The overriding commonality on most of these people is the fact that they have been serving in Congress for a very long time. That is why Step 39 in "Love My Country, Loathe My Government" is so important. We must have term limits for both Congressmen and Senators in order for them to become so good at ripping off the system, the country, and the taxpayers in their unethical and illegal schemes.

Visit our website at to order an autographed copy of the book, "Love My Country, Loathe My Government -Fifty First Steps To Restoring Our Freedom and Destroying The American Political Class" and to sign up for the cause. The book is also available online at Amazon and Barnes And Noble.

Monday, November 9, 2009

One Man's Ethics Is Another Man's Campaign Contribution

Let's give health care reform a rest and talk about good old-fashioned Congressional greed. The following post reviews an article by Washington Post writer Carol Leonning with a dateline of October 30, 2009. Please remember when reading the following that none of the mentioned Congress people have been accused or found guilty of any ethics violations.

Ms. Leonning reports that seven Congressional members of a powerful Pentagon appropriations subcommittee are under investigation by two different Congressional ethics entities regarding the potentially shady relationships between themselves and a powerful lobbying business, PMA. The concern is that these subcommittee members helped steer taxpayer funds to PMA clients' companies in exchange for donations to their campaign funds. These Congressmen and Congresswoman were identified by a document obtained by the Post and include:
  • Chairman John Murtha - Democrat from Pennsylvania
  • Peter Visclosky - Democrat from Indiana
  • James Moran - Democrat from Virginia
  • Norm Dicks - Democrat from Washington
  • Marcy Kaptur - Democrat from Ohio
  • Bill Young - Republican from Florida
  • Todd Tiahart - Republican from Kansas
The document also outlines an allegation that PMA threatened a California Republican Congressman who did not support funding for a PMA client. The threat involved moving jobs out of the the Congressman's district. According to the article, PMA had been under Federal investigation for a while and had been raided by the FBI over a year ago.

According to the document, the Office Of Congressional Ethics was looking into allegations that these subcommittee members were "accepting contributions or other items of value from PMA's PAC in exchange for an official act." These "acts" apparently involve having these seven Congress people steer more than $200 million in taxpayer funds into earmarks for PMA clients over the past two years. In exchange for this alleged steering, these seven members of Congress received $6.2 milion in campaign contributions. The article believes that PMA's influence over the panel has caused it to become one of the top ten lobbying firms in the country, generating $114 million in lobbying fees, according to the article which cites the Center For Responsive Politics.

Again, no one has been accused or proven guilty of misbehaving in this matter. However, some of these names are not new to those who read this blog and the book, "Love My Country, Loathe My Government":
  • John Murtha has been in the news any number of times over the years, mostly for steering taxpayer funds into pork barrel projects in his home district. A previous post discussed how hundreds of millions of dollars had been used to build a local airport named after Mr. Murtha in the middle of nowhere in central Pennsylvania, an airport that handles just a handful of flights each day and only to and from DC.
  • Marcy Kaptur is mentioned in the Appendix in "Love My Country, Loathe My Government." Last year as the economy and financial system were collapsing, the St. Petersburg Times reported that Ms. Kaptur was in a Congressional Budget committee meeting that was hearing testimony from Federal Reserve Chairman Ben Bernanke. Ms. Kaptur did not know who Mr. Bernanke was, confusing him with Treasury Secretary Paulson. The biggest financial crisis since the Great Depression and the Congresswoman did not know who the main government players in the federal government were relative to the economy.

Four things to ponder

  1. Do you really want these kinds of people controlling the health care in this country? If one lobbying firm can theoretically influence seven Congress people this easily, imagine how many lobbying firms will influence trillions of dollars of health care spending.
  2. This would never happen if Step 6 in "Love My Country, Loathe My Government" was implemented. Step 6 would restrict campaign donations to only those individual citizens who are affected by the election. No companies, no PACs, no unions, and no lobbying firms would be allowed to contribute anything to any election campaign fund.
  3. Apparently the Post found the document when a low level Congressional employee accidentally left the investigation document on a file sharing network when working from home. The poor employee was fired for his or her oversight while members of Congress who may have wasted hundreds of millions of dollars of taxpayer funds continue to be paid their relatively plush salaries.
  4. If these allegations are true, it is sad how cheaply Congress people can be bought. According to the document, lobbying expense is only 3.1% of the value of the earmark ($6.2 million in campaign donations divided by the $200 million in earmark value).

Sunday, November 8, 2009

Health Care Reform That Does Not Reform

The following was posted on my Facebook page earlier today: Yesterday the House Of Representatives increased our taxes, reduced our Medicare benefits, increased our future health care premiums, criminalized personal choice, and reduced our freedom WITHOUT solving the health care crisis.

I made this statement based on the information I believe to be true as of today. Since I have not read the entire 2000 page document (and I doubt most, if not all, Congressmen and Senators have not read it either), I may be wrong about the following conclusions and will admit where I am wrong if and when that becomes apparent. However, as of now, I stand by these statements:

  • Increased our taxes - the legislation imposes a 5.4% tax on incomes over $500,000 for individuals and $1,000,000 for couples. It is my understanding that these figures are not indexed for inflation so at some point in the future it will ensnare more and more American taxpayers, much like the non-indexed alternative minimum tax disaster does today. It is also likely to increase unemployment since money that the rich may have spent on themselves will now be siphoned off to the government health care needs. Real life example - I know of a friend that works really hard building and expanding his insurance and brokerage business. He does really well financially but probably works harder at the business than anyone I know. He has already stopped having the services of a weekly cleaning lady and no longer goes to his favorite restaurant every Wednesday in anticipation of higher taxes in the future. Thus, this administration's policies, along with this bill, have already contributed to the high unemployment rate in this country.
  • Reduced Our Medicare benefits - a major piece of this bill will be financed by a $400 billion reduction in Medicare funding. With doctors and hospitals today increasingly not taking Medicare patients because of inadequate Medicare compensation, imagine how bad it will be when this bill takes hundreds of billions of dollars out of the system.
  • Increased our future health care premiums - this legislation will require insurance companies to take on new customers regardless of pre-existing conditions. Thus, costs to insurance companies will increase and no doubt those costs will be passed on to the rest of us in higher premiums. Thus, a person who drinks heavily, eats poorly, and does not exercise, which has resulted in diabetes, heart disease, and cirrhosis of the liver, will have this poor health life style subsidized by those of us that take care of ourselves.
  • Criminalized personal choice - Let's assume you are a brand new college graduate. You are just starting out on your own and have a lot of expenses possibly including a new car, wardrobe for your new job, furniture for an apartment, and the continuing need to pay down your college loans. As a new employee, you will be pretty low down on the salary scale. All of this will put a financial strain on you but you are young, healthy, and are willing to take the risk that you do not have to shoulder the additional burden of paying for health care. Unfortunately, that last decision will now make you a criminal and subject you to heavy fines and/or jail time under this legislation. All because you made the personal choice to take your limited financial resources and pay for other debts. Too bad, pay up for insurance or the government will put you in jail.
  • Reduced our freedom - whenever the government increases our taxes or criminalizes the very private decisions on heath care insurance, freedom and liberty suffers under the burden of a heavy handed government.

Given all of this downside to this legislation, the truly pathetic thing is that it will not fix the problem of rising health care costs in this country. It does not address or reform the tort system in the medical area that drives up malpractice insurance because of outsized malpractice lawsuits and the huge cost of defensive medicine. It does not look into such programs as consumer driven insurance plans (see yesterday's post) where the responsibility for personal health is driven down to the individual to make the health care decisions that are right and cost efficient for them. It does not look into controlling fraud which we know from examples outlined in "Love My Country, Loathe My Government" are currently a major drain and waste of taxpayer resources and are liable to be much larger as the government inefficiently and incompetently manages more health affairs of its citizens.

And finally, do we really think that the political class can solve this issue with legislation and more oversight? They have not solved anything for the past four decades, from the War on Drugs to failing public schools to stupid foreign military entanglements to a non-existent national energy strategy. What makes anyone think they can pull this off. The only solution is start over and follow Step 28 in "Love My Country, Loathe My Government" and fund and support an expert panel to identify the root causes of the health care issue and THEN come up with remedies. This legislation did not even take the time to identify and quantify the root causes. Pathetic.

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