- Back in the mid-1980s, Congress demanded that the Defense Department seal the U.S./Mexican border within 45 days in order to address the problem of illegal aliens and illegal drug trafficking. Didn't really solve the problem, given that millions of illegal aliens have since come over the border along with untold tons of illegal drugs more than two decades after their proposed solution.
- Back in the mid-1970s, the U.S. struggled economically as a result of a number of oil shocks and energy crises. As a result, Congress tried to solve the problem of energy independence by creating the Department of Energy.
That problem solution did not work out real well either. Decades later we still do not have a coherent national energy program and we do not have energy independence. However, we do have another giant Federal government bureaucracy that eats up tens of billions of dollars a year without ever really contributing anything to the lives of Americans, least of all finding a remedy for our energy problems.
- As a result of corporate accounting scandals at a very small number of American companies back in the 1990s, the political class passed the Sarbannes-Oxley legislation. The law made all U.S. companies develop extensive accounting processes and accountability documents to theoretically prevent future accounting scandals. It was intended to produce advanced warnings if a company was not following generally accepted accounting principles for the intent of defrauding investors or was in dire financial straits.
However, at the onset of the Great Recession, financial companies like Lehman Brothers and Bear Sterns went bankrupt within a matter of weeks even though there were no advance warnings from the Sarbannes-Oxley processes, i.e. the legislation was a failure at producing advance warnings of dire financial straits.
This failure was proven further when the Treasury Department decided to do "stress tests" of U.S. banks to determine if they were in good financial shape as a result of the Great Recession. Wasn't that was the Sarbannes-Oxley solution was supposed to do?
- Almost thirty years ago, President Reagan commissioned an expert panel to examine the deep problems and pitfalls of the public education system in the United States. Their resulting 1982 analysis and report, "A Nation At Risk," addressed the problems of under educating of kids. The panel's recommendations laid out a detailed blueprint for fixing our schools' problems.
Despite having a detailed problem solution presented to them, the politicians in 1982 and beyond could not even execute the blueprint to fix our schools' problems, resulting in the continuing under educating of our children today.
- As a result of the Great Recession and the failure of Sarbannes-Oxley to foretell when financial services companies accounting results did not match up with their dire financial situation, the political class in Washington passed the Dodd-Frank financial services reform legislation that was supposed to do what the Sarbannes-Oxley legislation did not do, i.e. spot bad accounting and financial hanky-panky.
However, shortly after the legislation was enacted into law, MF Global, a large financial services firm, went belly up in bankruptcy, making it the 8th largest bankruptcy in U.S. history. Unfortunately, none of the prior solutions from the political class in this area, Sarbannes-Oxley, stress tests, and Dodd-Frank identified the oncoming bankruptcy before it happened. As a result, we have another example of political class solutions that do not work.
Even worse, MF Global accounting hanky-panky may have criminally destroyed over $1 billion in customer wealth by commingling company funds with client funds. This is the exact type of misbehavior all of the political class "solutions" was supposed to prevent. Two years into the Dodd-Frank legislation, the results are not encouraging if the 8th largest bankruptcy gets missed by the legislation.
- In 2008, the political class in Congress passed legislation that was intended to cut down on the massive fraud that goes on every day in the Federal food stamp program. We covered one of the typical frauds in a previous post where we reported how food stamp recipients will use their food stamps to buy cases of bottled water, go outside the store and empty the bottles, and then bring the bottles back inside for a cash refund of their bottle deposit.
The 2008 legislation was written to cut down on this type of blatant fraud. However, even though Congress passed the legislation in 2008 and the President signed it right away, the government bureaucracy has never gotten around to writing the rules, procedures, and guidelines for implementing the legislation.
This has resulted in the food stamp fraud continuing, two years after Congress thinks they solved the problem. Thus, laws are passed that theoretically contain solutions but never get implemented by the bloated Federal bureaucracy.
- But the best solution/non-solution situation is currently gathering steam in Congress and it is a doozy. A few months ago we reported on a CBS "60 Minutes" report that illustrated numerous examples in Congress where politicians abuse their positions of power. They use the insider information they come across during their days of governing to personally enrich themselves, turning their Congressional insider trading information into personal wealth.
Apparently, members of Congress do not have to put their financial holdings into a blind trust once in office like the President, Vice President, and other high ranking government officials have to do. They are free to day trade on their financial accounts as much or as little as they please with no constraints on leveraging sensitive, secret information they come across as politicians. A gross, despicable conflict of interest if ever there was one.
However, the report did get Americans aroused so much and so infuriated that Congress is proposing new ethics rules to curb such abuses, as reported in a January 29, 2012 Associated Press report. The Senate version of the legislation would subject any Congressional member to a ban on insider stock trading in additional to opening violators up to Congressional, ethical, and criminal investigative proceedings.
President Obama signaled his support for the legislation by stating recently: "The House and Senate should send me a bill that bans insider trading by members of Congress and I will sign it immediately. They should limit an elected official from owning stocks in industries they impact."
Great concept but the politicians are already at work creating tunnels around the currently proposed solution. The 60 Minutes report did not stop at Congressional members using insider information to trade on stocks. The report had at least one report where a high ranking member of Congress used his insider trading information to profit off of real estate deals.
The report also showed that while members of Congress already cannot receive outright stock grants from companies, they are allowed to participate in lucrative IPOs of the same companies. The report showed how Nancy Pelosi earned hundreds of thousands of dollars in a two day period by having access to the VISA IPO offering. Apparently, Ms. Pelosi had also had IPO access to nine other IPO offerings.
No where in the Associated Press article does it appear that Congress is willing to cut itself off from IPO access like it should Whether a politician gets an outright grant of a company's stock or access to the company's IPO, both actions are nothing more than an outright bribe.
The article does report that the House version of this bill would go further than the Senate version by banning real estate deals based on insider information. However, I would bet that this extra bit of control on Congressional enrichment never sees itself into the final legislation.
Thus, follow along on this escapade of the political class where they make much ado about solving a problem but leave themselves giant loopholes to drive through. In this case, IPOs and real estate deals, which will allow them to continue their obsessions with enriching themselves vs. making the country a better place to live. Just like food stamps and water bottle fraud, bad financial services regulations, bad public schools, non-existent energy programs, and leaky borders, it is highly likely that this solution from our politicians will also turn into another non-solution.
For this type of lousy service, we pay over three TRILLION dollars a year. Disgraceful.
We invite all readers of this blog to visit our new website, "The United States Of Purple," at:
http://www.unitedstatesofpurple.com/
The United States of Purple is a new grass roots approach to filling the office of President of The United States by focusing on the restoration of freedom in the United States, focusing on problem solving skills and results vs. personal political enrichment, and imposing term limits on all future Federal politicians. No more red states, no more blue states, just one United States Of America under the banner of Purple.
The United States Of Purple's website also provides you the formal opportunity to sign a petition to begin the process of implementing a Constitutional amendment to impose fixed term limits on all Federally elected politicians. Only by turning out the existing political class can we have a chance of addressing and finally resolving the major issues of or times.
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 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 respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment
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