March, 2014 Political Class Insanity, Part 2: A 23 Year Congressional Losing Streak, Stereotyping Hispanics, Still Too Big To Fail and More

Yesterday was the first in this month’s update to our political class insanity series. We do this series at the beginning of every month to catch up on the insanity, lunacy, and wasteful spending of the American political class. Yesterday we focused on a defense budget that is out of control, a government real estate situation that is out of control, and government bureaucrats partying that is out of control. All of this out of control business, of course, comes at the taxpayer expense.

Today’s update includes the following insanity:

1) Remember how the Dodd-Frank financial industry legislation was supposed to be Obama’s second biggest success story behind Obama Care? Well, we know from the numerous posts we do each month that Obama Care has turned into the biggest disaster in the history of Washington.

Well, Dodd-Frank might not be that much of a success either. According to a Moneynews article from February, 19, 2014:

• The 20 largest banks in the country now account for 62% of U.S. deposits.
• This is up from only 46% in 2003, well before the Great Recession and the theory that some banks prior to the recession had become “too big to fail.
• The cited data source for these estimates is Barclays Capital.
• Additionally, the total market cap value of the top 25 banks is 20% larger than it was before the recession.
• Given the huge size of the largest banks and their interconnectivity, the article concludes that the Dodd-Frank legislation would be of little help in avoiding another financial crisis since we still have a too big to fail problem in the U.S. banking industry, despite the legislation.

Thus, we have another piece of legislation that ran for thousands of pages worth of law and regulations that is likely to be useless, much like Obama Care, much like most of what Washington does. Washington suffers from the opposite effect of “too big to fail,” it is “too big to succeed,” in anything it does.

2) In one of the biggest and most ironic screw ups of the political class in the past 20 years, according to a recent article in the Sacramento Bee, was summarized in the January, 21, 2014 issue of The Week magazine:

• 80% of the world’s heroin is produced in Afghanistan.
• Afghanistan also happens to be where the United States fought the longest war in its history.
• Prior to the U.S. invading Afghanistan, the ruling Taliban prohibited the production and use of such drugs.
• The heroin trade now accounts for 15% of Afghanistan’s GDP.

So not only did we not defeat the Taliban in the country despite spending hundreds of billions of dollars and thousands of our armed forces lives and limbs, we created the biggest source of illicit drugs in the world, much of which probably ends up in the bodies of Americans. Major, major screw up on all fronts in this political class misadventure.

3) I love this next piece of insanity, probably because it involves a long term politician from my home state of New Jersey. Congressman Robert Andrews has been a New Jersey Congressman for 23 years, according to a Washington Post article that recently appeared in the Tampa Bay Times. In those 23 years, he has written 643 pieces of legislation. Very impressive, that is almost 28 pieces of legislation every year for 23 years.

However, of those 643 pieces of legislation exactly zero of them got passed and enacted into law. That’s right, the Congressman is 0 for 23 years, 0 for 643 attempts. Name another profession where you can go 23 years without getting anything done and still keep your job, earning over $174,000 a year in the process.

As the Post article points out, he could not even get a courthouse or post office name through Congress, never mind anything of any significance. You would have thought the law of averages would have eventually caught up and given him at least one success over 23 years. This type of performance is a prime example of what we have been talking about through the years: the political class has hijacked, rigged, and contaminated our election processes so much that even people with a 23 year losing streak still get elected over and over again. 

The Congressman is finally stepping down and not running for reelection after his current term, taking a position with a law firm. Hopefully, he is more successful in the court room than he was on the floor of Congress.

4) A special Congressional election in the next Congressional district over from me in the Tampa Bay area is soon to be held to fill the vacant seat of Congressman Bill Young who recently passed away. The Democratic candidate for the seat is a Ms. Alex Sink.

Now, I always get a kick of many Democrats and liberals who claim that they are the more compassionate, caring, and tolerant of the two major parties. I never believed it, viewing most politicians, regardless of party, to usually be focused on themselves and not the most compassionate, caring, or tolerant of people.

Which brings us back to candidate Sink, who was recently quoted in the Washington Free Beacon: 

“Immigration reform is important in our country,” she said. “We have a lot of employers over on the beaches that rely upon workers and especially in this high-growth environment, where are you going to get people to work to clean our hotel rooms or do our landscaping? We don’t need to put those employers in a position of hiring undocumented and illegal workers.”

I wonder if that is the same view as President Obama and why he is so hot on addressing illegal immigration: we need these people to clean up our messes in hotel rooms and to pick the weeds in our garden beds? How much more degrading, stereotyping, and condescending can a politician get to assume that all Hispanic immigrants are good for nothing more than maid and garden service?

Ms. Sink’s own words out of her own mouth can be viewed at:

http://freebeacon.com/florida-democrat-without-immigration-reform-where-will-we-get-our-landscapers-and-maids/

5) The lunacy does not just come from elected politicians, sometimes government employees, such as the members of the Federal Reserve Board, also get into the lunacy and insanity game. 

Before we get into the details of this little bit of Fed insanity, consider the following graph which has the historical average selling price of U.S. homes on both an inflation adjusted basis and raw data basis (double click on graph for larger image):




Up until the 1990s, the average selling price of a house in the U.S., when adjusted for inflation, was relatively flat with possibly a little bit of an upward trend (red line). For the unadjusted data, there was a more pronounced upward trend but nothing radical, just a gentle, slowing increasing upward tendency.

However, beginning around the year 2000, both graphs go crazy as we see a major housing bubble get created which burst in 2008, leaving us with the Great Recession. No one in Congress, no one in the White House, no one in the Treasury Department, and no one in the Federal Reserve took time to look at such a simple graph to see such a pronounced asset bubble in housing. 

Now back to the latest insanity news form the Fed. Yahoo Finance reported recently that the Fed has released the minutes of its meetings from 2008. In a January Fed meeting that year, despite the data in the simple graph above, Fed Board member Dave Reifschneider stated: "We are not forecasting a recession. While the model estimates of the probability of recession have moved up, they are not uniform in their assessment that a recession is at hand." 

“Not forecasting a recession.” Looks like Mr. Reifschneider, and the rest of the Fed, missed this forecast by just a touch since by the time that year was over, the Great Recession resulted in some of Wall Street's oldest and more famous investment houses and banks ending up in the dustbin of history: Lehman Brothers, Bear Stearns, Merrill Lynch, Washington Mutual and a host of other financial powerhouses no longer existed. Additionally, the country was facing the worst economic downturn since the Great Depression. It seems no one looked at our graph. “Not forecasting a recession.”

This is why I tend to disbelieve everything Washington tells me, regardless of who tells me. The Fed told the country in early 2008 that there was not a recession forecasted but then the worst recession in just about our whole history crashed down within months.

Nancy Pelosi told me that Obama Care would create millions of jobs, it did not. 

President Obama told me that if you like your current health care plan you could keep it, Americans could not. 

Kathleen Sebelius told me EVERY economist agrees that Obama Care is not hindering job creation, but I checked it out and find that over 400 companies have already publicly acknowledged that they are cutting jobs, cutting hours, of cutting hiring as a direct result of Obama Care. 

The President and his economic advisors told me that if his economic stimulus plan was not passed, the unemployment rate could go as high as 8% but even though it was passed, the unemployment rate set a record for most consecutive months above 8%. 

Former Vice President Al Gore predicted that the polar ice cap could totally melt by the year 2013 but the ice cap has gotten larger and larger over the past few years.

Broken promises, lousy and lazy forecasting, stereotyping Hispanics, a 23 year losing streak, heroin all around, and still too big to fail. Inanity from the political class in so many different ways. More lunacy and idiocy tomorrow.

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