Monday, August 20, 2012

Political Class Insanity - Mid Month Special Edition: The Insanity Cannot Wait!

Usually we do a review of the past month's political class insanity at the beginning of every month. However, we needed this post in the middle of the month to cover the insanity before it built up and blew a gasket. It is amazing how wasteful, stupid, ineffective, and inefficient our political class and the government entities it operates can be. It seems like they have no clue to what they are doing even though they have been doing it in Washington for over two hundred years. Obviously, not a lot of lessons regarding good governance have been learned.

If we did not have to pay so much in taxes to cover up their incompetence it would be pretty funny. I swear, the Three Stooges could do a better job running our government operations than the political clowns we have doing the job today. For example:

- According to an August 15, 2012 Associated Press report, Army general William Ward, who was the first head of the new U.S. Africa Command, is under investigation for allegedly spending hundreds of thousands of dollars improperly on lavish travel, hotels and other items. He has been under investigation for almost a year and a half so the charges to not appear to be of a frivolous nature if it is taking so long to render a verdict on his actions and his punishment, if any.

The numerous allegations allege that he spent hundreds of thousands dollars allowing friends and family members to fly on government planes, and that he spent spent excessive amounts of money on hotel rooms, transportation and other expenses when he traveled as head of Africa Command. The article estimates that the wasteful spending could be in the neighborhood of the $823,000 that GSA employees wasted on themselves when they threw themselves a lavish Las Vegas party and trip, courtesy of taxpayer money.

General Ward apparently got caught but how many other generals, colonels, majors, admirals, etc. are doing the same amount of wasteful spending but have not been caught yet?  Given this instance of waste and many other instances of wasteful military spending, please do not tell them there are not considerable budget cuts that can be made to our military budget without affecting national defense.

- The Orange County Register newspaper out of southern California, in its August 10, 2012 edition, reported on one of the many reasons while California is likely to become the first state in the union to declare state wide bankruptcy. This story comes on the heels of the news we have previously covered in this blog of how major cities in California, e.g. San Bernadino and Stockton, have already filed for bankruptcy.

The Register reported, that according to government documents coming out of Hermosa Beach, California, some "meter maids" in that city are earning nearly $100,000 a year in salary. This is about 60% more than what the average American HOUSEHOLD makes every year. Get this: this small town has ten meter maids on staff to cover the town's only 1.3 square miles, with two of the staff being supervisory personnel who earn the almost $100,000 a year. The other eight earn from between $67,000 or so up to about $84,000, both numbers well above the national household income average.

As expected, the article points out that you do not have to have special skills or training or knowledge or experience to earn these seemingly high salaries:

  1. You have to be able to drive a standard transmission.
  2. You have to able to handle large animals.
  3. You have to read and interpret statutes and regulations.
  4. You have a high school diploma or equivalent.
Certainly not rocket science.

Let's do some simple math. Let's assume that the average salary of the ten employees is $75,000 a year. Thus, the city is paying out about $750,000 a year just in salary, benefits would be extra. If the city gets $25 for each parking violation, then these ten people in total would have to be writing 30,000 parking meter citations a year, more than 80 tickets every day, 365 days a year,  just to cover their salaries. Even if they got $50 for each citation, they would still have to be writing more than 40 tickets a day to cover salaries. Highly unlikely since 1) the city is only 1.3 square miles and 2) there are only 20,000 people in the town. 30,000 citations means that every citizen, on average would be getting 1.5 tickets a year, adults and children alike.

Again, these numbers to not include covering the current benefits these ten city employees receive or their retirement salaries and benefits that the mayor of Hermosa beach says could be about $3 million. Plus, according to the city's treasurer, David Cohn, the town's parking meter operations have been mismanaged, resulting in broken parking meters, a large backlog in disputed parking tickets, and revenue accounting problems.  Insanity: high costs, an unprofitable operation enterprise, and a dysfunctional organization. No wonder local California governments are going bankrupt.

The article points out that it does not have to be that way. It reviewed what happened in another southern California town that outsourced its parking meter functions. When Newport Beach outsourced it parking meter functions, it saw a 24% increase in parking citation revenues and salary savings of about half a million dollars a year.

The article cites other cities that are trimming government waste and excess costs by doing the same thing, using a quote from Indianapolis City Councilman Ben Hunter: "The privatization of the parking meter system in Indianapolis allowed for an immediate upgrade of a poor system."

If done right, the taxpayer can win and government can focus on far fewer and far more important issues, with the hope that they may actually be able resolve a few issues along the way.

- A new report from the Agriculture Department's Inspector General revealed some more government bungling and wasteful spending (http://www.usda.gov/oig/webdocs/88401-0001-12.pdf):

  • The Department's (USDA) may have mismanaged up to $63 million in taxpayer wealth in the area of technology security.
  • The USDA spent more than $2 million on an internship program that only hired one full-time intern.
  • $3 million was spent on technology hardware that was never used.
  • $235,000 was spent on a project that was later canceled due to redundancy, a discovery that was made AFTER the $235,000 had been spent.
  • The Inspector General found that the USDA’s chief information officer, “had not established internal control procedures, such as monitoring and oversight, for project management, and did not adequately plan its projects or how it would utilize resources.”
Oh well, what can you do, it is only taxpayer money. Is there any Federal department or agency that has not foolhardily wasted taxpayer wealth?

- The Cato Institute always does a great job of investigating waste and stupidity in government and showing how these actions reduce our freedom and liberty. They have issued a new analysis report which focuses on the $100 billion a year in taxpayer wealth that our politicians give away as corporate welfare. This welfare is usually payment for financial support for these politicians' reelection efforts.

Their latest wasteful findings can be found at the following link:

http://www.cato.org/pubs/pas/PA703.pdf

Just a small sample of their findings over the years include the following atrocities:
  • A craft brewery in Michigan recently received $220,000 from the Federal government. Why Federal taxpayer money should be used for a single brewery is beyond me. Plus, consider the feelings of other craft breweries around the country: their taxes are being used to support one of their competitors, talk about unfair market practices.
  • Remember Enron? The poster child for criminal accounting practices? According to the Cato report, over the years Enron had received about $3.7 billion in Federal corporate welfare money from a variety of Federal agencies including the Export-Import Bank, the Overseas Private Investment Corporation, the U.S. Trade and Development Agency, the U.S. Maritime Administration, and other agencies. As you recall, the American taxpayer never received any real value from anything Enron ever did including getting a return on its $3.7 billion. Also, isn't amazing how many different Federal entities can give away taxpayer wealth?
  • The Federal Housing Authority (FHA) pays out about $16 billion a year to cover the losses that mortgage lenders and banks incur as a result of issuing mortgages that go bad. Cato obviously makes the case of why should private companies, mortgage brokers, be paid to cover their mistakes to the tune of billions of dollars a year from taxpayers.
  • We have talked about Solyndra many times in this blog, how the Obama administration used and lost over half a billion dollars with an ill-advised loan to Solyndra that was done more for political gain by Obama than advances in green energy. But Solyndra is not alone in cronyism and wasteful spending since according to Cato: "The Washington Post found that “$3.9 billion in Federal grants and financing from the Department of Energy flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers.”" Disgraceful.
- Just in case you were wondering, the government bailout of General Motors is not likely to offset these other wastes of taxpayer wealth. According to an article in the August 13, 2012 issue of the Detroit News, the U.S. Treasury Department recently announced that the Federal government expects to lose more than $25 billion on the $85 billion auto bailout. That's 15% higher than its previous forecast.

Why is this loss getting larger? Since the Federal government still owns over 500 million shares of GM stock and that stock price continues to decrease, the value of the government stake continues to decrease also. The latest calculation was done when the stock price had dropped down to about $22 a share. The stock price would have to be about $53 a share for the Feds to recover all of the taxpayer waste that was given away to GM and its unions.

As reference, understand that the stock price has never gotten within $12 of that $53 target.

Just when you think you have seen the lowest behavior you can imagine from the political class, they exceed our lowest expectation and go even lower.  Taxpayer wealth wasted on breweries and bad energy ventures, government workers that are grossly overpaid for the simple jobs they do poorly, an intern program that cost millions of dollars to hire one intern, etc. And worst of all, as this need for a mid month insanity post has illustrated, it just keeps getting worse and worse. As laid out in "Love My Country, Loathe My Government," term limits cannot be imposed on these people fast enough.

Keep an eye out for our regular monthly political insanity review in two weeks. Can hardly wait.

Please visit our Presidential 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.

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/



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