Wednesday, September 5, 2012

September, 2012 Political Class Insanity - Part 3: More Dodd-Frank Failures, Americans Subsidizing Cars They Cannot Afford, Amtrak Food Waste, And More

Today is the final of a three part series on the latest insanity from the American political class over the past month or so. So far we have reviewed how people associated with Solyndra were more focused working on how to get more taxpayer money from Washington than they were in putting together a viable company, how employees at GSA were living the good life with high bonuses and high salaries that were totally out of line with their job responsibilities, how California keeps finding money it thought it had already spent and more.

Today will take a look at some the smaller, but still annoying, cases of politicians acting foolishly. The good news is that tomorrow we will run our first ever post of politicians actually doing some sane and reasonable things that do not waste money and do not detract from our freedom. A small glimpse of hope for our future.

However, we have to first slog through the last part of this month's insanity, lunacy, and idiocy from the American political class:

- According to a New York Times article that was summarized in the August 17, 2012 issue of The Week magazine, Amtrak lost $834 million on its food and beverage services over the past ten years or about $83 million a year, or almost a quarter million dollars a day, 365 days a year. Amazing that any organization, even a government organization, can lose so much money so quickly just on food and drinks.

The article blamed the astronomical losses on poor management, waste, and employee theft. Despite being in the train management industry for decades, it is apparent that the political class and the government agencies it operates have learned nothing on how to be efficient and effective. Imagine how much they lose every year on the non-food components of operating a train system. Then imagine how much they would lose if they ever went ahead with their ill conceived and unnecessary high speed train pipe dream.

- As we have discussed many times in this blog, the criminal collapse of the financial services firm, MF Global, is the poster child for how poorly the Dodd-Frank financials services industry reform legislation was written. The collapse of MF Global was one of the biggest bankruptcies in the history of the country and Dodd-Frank's components that were supposed to identify these types of crises before they occurred failed miserably.

Additionally, according to an article in the June 22, 2012 issue of The Week magazine, the bankruptcy trustee charged with trying to recoup the $1.6 billion of customer wealth that was lost has issued a preliminary report. The report indicates that CEO and former prominent member of the political class, Jon Corzine, and other company officers will be implicated in the loss of that customer wealth. It appears that these thieves "willfully used segregated customer accounts to cover its own shortfalls."

Failed legislation and a former politician involved in shady financial dealings. No surprises here.

- We have previously discussed the political cronyism and the insanity involving the Obama administration and Tesla Motors. Tesla recently announced that it had begun production on its first model, Model S. It is a $97,000 all electric sports car. An article in the July 27, 2012 issue of The Week magazine reviewed how stylish and easy to handle the car is, with the ability of the car to go 265 miles on a single battery charge.

The article also reviewed the insanity of the whole subsidy program for Tesla, a program that received a $465 million taxpayer funded loan. Several things wrong with this program:

  • First, why should average taxpayers shell out their tax dollars to fund the development of expensive cars that they will never be able to afford?
  • Why should average taxpayers shell out their tax dollars to fund the car rebates given to the likely wealthy purchasers of all-electric vehicles like Tesla vehicles?
  • Remember, Tesla executives and financial backers have also been heavy contributors to Obama's and other Democrats' election campaigns. This fact might explain the previous two points.
  • The article goes on to explain that the follow up Tesla model will cost $50,000, also far beyond what the average taxpayer and subsidiser of the Tesla loan guarantee can afford.
  • The article states that production and sales of Tesla autos MIGHT get to only 8,000 a year.
  • Let's say they can get to 8,000 a year. This 8,000 a year run rate is only about .05% of the market for total cars sales in the U.S. every year, hardly worth risking half a billion dollars of taxpayer wealth.
Stupid, cronyism program where taxpayer wealth is taken from the poor and middle class and funneled to what the article calls "another six figure toy from President Obama to his rich west coast friends." Well said.

- The June, 2012 AARP bulletin contained an article that reviewed the latest analysis from Pew Center. According to the Pew research, 1.8 million Americans who are on our voter rolls will not be able to vote this November. Why? They are dead.

These 1.8 million records are part of a larger pool of 24 million inaccurate or out-of-date voter records. This comes out to one out of every eight people on our voter roles. Disgraceful. Another example of where the political class and the government entities it operates have learned nothing over the decades and centuries on how to do their jobs effectively and correctly.

Despite this national embarrassment, Attorney General Eric Holder and the Obama administration have been hassling and trying to block numerous states from the simple act of fixing what is wrong. One part of the government is trying to fix what it broke while another part of the government is trying to prevent the fixing to be done. Insanity.

- In another recent example of why Dodd-Frank is a disaster, an article from the July 30, 2012 issue of Business Week reviewed the rise and fall of the Peregrine Financial Group in Cedar Falls, Iowa. For nearly twenty years, the management of Peregrine had appeared to be a very successful investment company.

In reality, however, the management had actually been running a scam, a scam that had allowed the owner, Russell Wasendorf, to skim $200 million from his customers. The deal finally came unraveled this year but not before Wasendorf had unsuccessfully tried to kill himself.

The suicide note found next to his body contained the confession that he had used fake documents and bogus account statements over the twenty years to carry out his fraud. He was able to avoid detection from both industry overseers and the SEC by using a post office box that he doctored up to look like the address of a bank branch and he confessed to using simple tools like Photoshop, EXCEL, scanners,  and regular printers to doctor up the necessary documents.

When the Feds finally got access to his accounts, they found that Peregrine only had of $6.3 million of real wealth while the fake documents showed that the scam was presenting $221.7 million on hand. Another embarrassment for Dodd-Frank, the SEC, whose annual $13 billion budget does not appear to be worth what we are paying it, other state and Federal regulatory entities, and the political class which cannot seem to do anything right.

- According to a CNNMoney.com article that was summarized in the June 22, 2012 issue of The Week magazine, the average American family's net worth dropped almost 40% from 2007 to 2010, according to the Federal Reserve Board. The loss in dollars went from $126,400 to $77,300.

This drop wiped out 18 years worth of financial gain by the average American family. Coincidentally, the Democrats took over both the House and Senate in Congress in the beginning of 2007 and the Presidency in early 2008. Just saying.

- Just when you think you have identified all of the stupid spending items in the Obama economic stimulus plan, you find another boneheaded waste of money. According to government records analyzed by the Taxpayers Protection Alliance, the Obama administration gave MSNBC almost half a million dollars worth of advertising money to hype the false success of the stimulus program.

Given that MSNBC is usually nothing more than a PR extension of the Obama political machine, this appears to be nothing more than a political payoff for favorable coverage on the TV network. It certainly cannot be construed as a worthwhile use of taxpayer money, hyping one's own failures. How much better use could half a million dollars been put to helping out unemployed Americans from a job training perspective rather than idiotic TV advertising?

- Reason magazine is always a great source for political class insanity. The latest issue had the following gems of idiocy:

1) This past May there was a grisly assault in Miami of one man against another that is too graphic to describe here. The attacker was reportedly on a synthetic stimulant known as "bath salts." The political class was so taken back by the attack and the bath salts report that for once in their lives jumped into action. Legislation quickly was written and approved that would ban the sale of the chemicals that go into typical bath salt production.

However, the day after the ban legislation passed the final Congressional hurdles, the Miami area medical examiner came out with the toxicology tests of the attacker. It seems that the attacker had not a trace of bath salts or any other drug in his body with the exception of marijuana. Thus, even when the political class acts quickly, they still act foolishly, using misinformation and, as always, never understanding root causes of a problem.

2) Jacob Clark was recently summoned for jury duty for the second time in the past seven years. No big deal except for the fact that Jacob is nine years old. The first time he was called for duty was when he was two years old. Still do not think we have a voter registration problem?

3) Tim Morris of Virginia recently got a voter registration form for his dog Mozart. Not only is Mozart a dog who should not be allowed to vote, Mozart has the double embarrassment of having been dead for two years. Still do not think we have a voter registration problem?

These instances of political class insanity would be funny if they were not so serious and wasteful. We have gotten to a point where government has gotten so large and so unwieldy that it cannot help but trip over itself, resulting in the idiocy we report on every month.

That is why Step 1 from "Love My Country, Loathe My Government" is so important. Step 1 would reduce Federal government spending by 10% a year for five years. Not only would such a plan get us to a balanced budget, it would also force politicians to focus on far fewer but far more important issues. Hopefully, this focus would resolve some major issues without the embarrassing missteps we have reviewed over the past three days.

As promised, tomorrow we will issue our first "Political Class" SANITY post where we actually congratulate politicians for doing some things right. The examples are small in statue and small in number but we have to start somewhere.



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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