Political Class Insanity - July, 2012 Edition, Part 2: Harry Reid and Junk Mail, Subsidizing Big Banks, The Ice Cream Melted, and More

Yesterday we covered the first part of this month's political class insanity, courtesy of the American political class. We learned that although Harry Reid and the Senate have not passed a formal budget in over three years, Mr. Reid has recently introduced some nonsensical legislation to regulate the sport of boxing.

We learned that the Federal Housing Authority gave financial assistance to thousands of American families despite the fact that those same families owed the Federal government and the IRS millions of tax evaded dollars.

We learned that the Obama administration, in just a handful of ill fated alternative energy escapades, created just over 5,000 jobs at a cost of about $1.6 million PER JOB.

We learned that the American taxpayer is annually paying about $140 million a year to maintain an unneeded prison facility at Guantanamo to hold only 169 prisoners, a prison Obama promised to close in 2008.

I can hardly wait to see what today's insanity brings:

- Let's stay with Harry Reid for a while, he can sometimes be as funny as Nancy Pelois when he speaks. Consider a quote from The Hill he made on April 18, as reported in the August, 2012 issue of Reason magazine: "Seniors love getting junk mail. Sometimes it is their only way of communicating or feeling they're part of the real world. Elderly Americans, more than anyone in America, rely on the United States Postal Service."

Come on, Harry, are you kidding me:

• Is there actual research that shows that senior citizens actually LIKE getting junk mail? If so, they can have all of mine.
• By the tone of the statement, it appears he thinks MOST senior citizens like to get junk mail. I highly doubt it.
• Anyway, is that any reason to keep a failing government enterprise intact as it experiences declining revenue, revenue which is never coming back, and high fix costs, a combination that will require tens of billions of dollars from the taxpayers in the coming years unless the entire process is reformed? Just to maintain a junk mail stream? There is a reason they call it "junk."

No wonder he has not been able to develop a formal Senate budget in the past three years, given this view of reality.

- According to the same issue of Reason magazine, Juliet Pries wanted to open a simple ice cream store in a San Francisco neighborhood. No toxic chemicals. No pornography. No medical marijuana outlets. Just a simple ice cream store.

Unfortunately, the local political class is so inept that she claims it took her over two years and thousands of dollars just to get all of the permits she needed for the simple ice cream store and to complete the necessary paperwork required by multiple government entities and bureaucracies.

Could this be a simple example of why businesses and citizens are leaving the state in droves, resulting in a toxic business environment and the billions of dollars the state government is facing as a budget deficit? Why go through this type of hassle to start a business when you can get that business up and running much quicker, much cheaper, and much more hassle-free elsewhere?

- You know you are in trouble when your local political class has screwed up your city so badly that it has to reduce the number of functioning street lights in your city by almost half in order to skimp on electricity and replacement light bulb costs. This situation is actually unfolding in Detroit.

The city's financials are so bad that they are reducing the amount of street lights from about 88,000 to about 46,000. The local politicians actually hope that going dark in some neighborhoods will encourage people to move in order reduce the city's physical footprint. Talk about desperation, using blackouts to force people to move out of their homes.

- According to the June 18, 2012 issue of Business Week, the median net worth of the typical American family, which had been rising since the early 1990s, has quickly and dramatically dropped back to 1989 levels as a result of the Great Recession. Net worth peaked in 2007 and started dropping drastically since then. (By the way, 2007 was the first year that Nancy Pelosi and Harry Reid operated and controlled Congress.)

Thus, Obama's recent statement that the private sector of the economy is doing just fine and the recent comments of his Department of Agriculture Secretary that the economy has turned the corner would probably ring hollow on most American families who have seen over 20 years of household wealth wiped out in just five years.

- According to a recent article by David Rhode in the TheAtlantic.com, and summarized in the May 25, 2012 issue of The Week magazine: "Since 2008 when the biggest banks caused a crisis that decimated the middle class, these banks have actually gotten bigger, with just five banks controlling $8.5 TRILLION in assets - equal to 56% of the nation's economy. These banks remained too big to fail."

Guess that whole 2,500 page Dodd-Frank financial reform legislation missed the mark on this little problem, a problem that the legislation was supposed to fix. Would any politician dare to bail out any of these banks again? I guess it depends on how much those banks and bankers have donated to that politician's election campaign. Speaking of which...

- There was a fascinating article  by Bloomberg on June 18, 2012 that outlined how the American taxpayer, and taxpayers around the world, subsidize their countries' major banks, encouraging risky banker behavior that always seem to lead to bank bailouts. The details of the article can be read at:

http://www.bloomberg.com/news/2012-06-18/dear-mr-dimon-is-your-bank-getting-corporate-welfare-.html

I am not an expert on banking by any stretch but the following excerpt summarizes the insanity quite nicely:

JPMorgan receives a government subsidy worth about $14 billion a year, according to research published by the International Monetary Fund and our own analysis of bank balance sheets. The money helps the bank pay big salaries and bonuses. More important, it distorts markets, fueling crises such as the recent subprime-lending disaster and the sovereign-debt debacle that is now threatening to destroy the euro and sink the global economy.



The article goes on to state that:

• The U.S. taxpayer ends up paying the major U.S. banks about $76 billion a year in similar subsidies.
• This $76 billion is more than what the Federal government spends on education of our kids every year.
• This subsidy estimate is about equal to the annual total profits of these 18 banks, i.e. without the subsidies over the past twelve months, these banks would be a breakeven proposition from a profitability perspective.
• The article states it is difficult to get rid of this taxpayer burden since the banking industry has already made over $285 million in campaign donations in the 2012 election cycle, a cycle that is no where close to ending.

The article proposes a series of logical, easy to understand steps that would fix the situation, noting that: "Like all subsidies, the taxpayer largess distorts supply. If the government supports corn farmers, you get too much corn. If the government subsidizes banks, you get too much credit." And in hindsight, it is now obvious that too much credit created too many easy mortgages which led to the housing bubble which led to the Great Recession.

$76 billion a year in taxpayer wealth down the drain to support bankers who take needless risks while greasing the reelection wheels of incumbent politicians. Insanity.

- A May 27, 2012 report from MSNBC reported that the chief of the National Weather Service had to resign since his organization misappropriated millions of dollars of government money. Apparently $44 million was misused or misallocated so we are not talking about trivial amounts of taxpayer wealth.

The report cited numerous conclusions from government investigators regarding lax financial controls and lax management oversight along with bad accounting practices. It is also possible that come of the activities violated the law. What a mess and likely waste and loss of millions of taxpayer dollars.

- According to a Washington Post report that was summarized in the July 4, 2012 issue of The Week magazine, about 130 Congressional members or their families traded stocks in companies that were lobbying on bills before the 130 lawmakers' committees between 2007 and 2010. 34 members of Congress "recast their financial portfolios during the financial crisis" AFTER secret meetings with top government officials.

As if $170,000 a year in salary and the best benefit packages in the world is not enough for these people. They get to improve their personal wealth without worrying about conflicts of interest or even being successful in their jobs.

That should do it for this month, the insanity is making me crazy. We somehow have to get Step 39 from "Love My Country, Loathe My Government" implemented. Step 39 would impose term limits on all Federal politicians, one and done. That way, maybe we can clean up the whole campaign funding reelection scandal since no one would ever be getting reelected, Harry Reid could go home and wait for his junk mail to arrive, and maybe, just maybe, we could get some people into office who actually cared more about the country than their stock portfolios.

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 our 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 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 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/