- On Sunday, a story on the "60 Minutes" television show revealed that Congressional members, and only Congressional members, are exempt from stock market insider trading laws and regulations. This allows them to do something that enriches themselves but which is not available to any other U.S. citizen: use insider information and Congressional actions for their personal financial benefit without repercussions.
We reviewed the many instances of such corrupt and immoral behavior earlier this week when we reviewed the "60 Minutes" revelations, and other acts of government insider trading from previous posts, to illustrate how corrupt these Congressional politicians have become. Not a dream assignment for a public relations chief, trying to prove that sitting politicians are not treated better and differently than the rest of America in the face of such overwhelming immoral evidence.
- Yesterday, we reviewed how many, many government agencies and regulators were again delinquent, ignorant, or incompetent when it came to not foreseeing the collapse of MF Global, a financial industry company, headed by ex-politician Jon Corzine.
Despite all of the economic pain caused by dozens of government agencies missing the coming onslaught of the Great Recession and all of the hot air the political class huffed and puffed when they implemented the Dodd-Frank financial industries reform legislation, none of these past events were enough to foresee the collapse of MF Global and the potential loss of $600 million of investor assets that executives of the company may have illegally used and lost.
Not a dream assignment for a public relations chief. Such a person would be stuck trying to prove that all the kings' horses, i.e. the many, many agencies of the Federal government, are no better off regulating and minimizing economic danger today then they were three years ago when the markets crashed in 2008, with MF Global being the latest unforeseen economic disaster.
And, as an aside, according to news reports today, the collapse of MF Global is the 8th largest financial institution to collapse in the history of the United States. Thus, this was not a little mom and pop operation that went sour somewhere out in the boondocks. This was a major financial services institution and it collapsed, possibly taking $600 million worth of client assets with it, before anyone in the Federal government was aware of what was happening. Imagine trying to spin this situation from a public relations perspective.
- Which brings us to the latest theoretical disaster and headache a Federal government public relations chief would have to deal with. Congressional hearings were held this week that involved Fannie Mae and Freddie Mac executives testifying before enraged members of both House of Representatives and Senate committees.
Because of lax accounting procedures, rampant political patronage, risky and unsafe investment practices, and pure incompetence in manging their business, Fannie Mae and Freddie Mac operations have already cost the American taxpayer about $170 billion. These billions are never going to be recovered and are likely to grow steadily if nothing else changes as these two entities need regular infusion of more taxpayer money to stay solvent.
However, despite losing billions and billions of dollars every month n the past few years, the management of both government entities recently rewarded their top ten executives with $13 million in bonus money. Please note this was not their salary, it was their BONUS rewards beyond their salary. Only in government work can you waste away billions dollars of taxpayer money and get rewarded with millions of dollars of more taxpayer money.
According to an Associated Press report from November 18, 2011, these top executives in both Fannie and Freddie received over $35 million over the past two years in both bonus and regular salary payments. They received this despite the fact that the Federal government expects the $170 billion loss to grow to $220 billion within three years and the fact that in October, Fannie asked for another $7.8 billion in more bailout money while Freddie asked for an additional $6 billion.
What would have made a chief public relations really crazy, beyond this disgraceful waste of taxpayer money, was a quote from one of those testifying, Edward DeMarco, the acting director of the FHFA, which regulates Fannie and Freddie. He testified that the Federal taxpayer support does not mean the Fannie and Freddie are government entities: "Fannie Mae and Freddie Mac employees are not government employees and these are not government agencies. They remain private corporations."
Excuse me, but if you have already cost the American taxpayer $170 billion (about $1,500 per U.S. household), if you require billions of dollars of additional taxpayer support every month, and if without this past and ongoing support you would have collapsed long ago, you are not a private company, you are a public albatross and burden on the American taxpayer.
The theoretical public relations chief could not even hide behind the bailout of private sector financial companies on this one. The $170 billion dwarfs the bailout sum any other private company or bank received, most of which were paid back. Fannie and Freddie are never paying us back. A public relations nightmare.
But those testifying before Congress are not the only ones to hold at fault. The political class knew long ago that Fannie and Freddie were a corrupt shell game where taxpayer assets were used to fulfill selfish political class needs and ambitions. That is why they were never serious candidates for reformation, the political campaign money that flowed from them to the politicians running for re-election was too lucrative.
It is only when they collapsed and starting becoming a public relations nightmare did the political class work up some outrage. While this outrage is a good thing, I predict two bad things will eventually occur. First, the outrage will subside and these ten executives will walk away with and be allowed to keep the millions of dollars bonus paid for their nickel-dime results.
Second, once the outrage subsides, the political class will never get around to doing the real hard, but necessary, work that needs to be done: find a way to efficiently terminate both Fannie and Freddie and also terminate the Federal government's interference in the U.S. housing market.
The historical political class interference in the housing market has cost us at least $170 billion and the Great Recession, it is now time to go in a completely different direction. It could not get any worse than the expensive jams our politicians have gotten us into today, just ask any public relations chief.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available, at http://www.loathemygovernment.com. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respectfreedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.loathemygovernment.com/
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http://www.robertringer.com/
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http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/
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