Given that the latest approval rating for the U.S. Congress and the current President are at their lowest levels ever, it seems that a lot of America agrees with this assertion and observation. To prove our point, take a look at the following recent instances of insanity and see if you do not disagree:
1) The Federal government’s Export-Import bank is a Federal agency that supplies low cost loans and loan guarantees to other countries and companies in other countries in an attempt to have them purchase U.S. goods and services. The prime example and beneficiary of the Export-Import Bank is Boeing. Foreign airline carriers can get low cost loans from the American taxpayer to purchase airplanes from Boeing. This helps Boeing sell planes overseas and theoretically helps Boeing hire more American workers at its domestic airplane manufacturing plants.
But the questions that should be asked is why aren’t Boeing and Boeing shareholders doing this work, making these loans, taking these risks? Shouldn’t that be part of their business plan and responsibility? Why should the American taxpayer put their wealth at risk?
All good questions and pertinent since later this year the renewal of the chart for the Export-Import Bank is up for renewal and it is getting a lot of Washington attention. Some in Washington want to terminate the program since it is a prime example of crony capitalism at the expense of the American taxpayer. Others, most likely campaign funding recipients from companies like Boeing, want to keep the program alive and funded.
But let’s ask a different question: how well run is the operation? Not too well according to recent news reports:
- The Wall Street Journal recently reported that four employees of the Export-Import Bank have been removed in recent months because of allegations of kickbacks, steering Federal contracts to favored firms, and other corruption.
- The Heritage Foundation identified at least 74 instances in the past five years where bank executives were forced to act on the basis of “integrity” investigations by the Office of Inspector General.
- Dozens of other fraud cases involving Export-Import beneficiaries have been referred to the Department of Justice for prosecution.
- In a 2013 report to Congress, the Office of Inspector General (IG) characterized the Export-Import Banke as exhibiting “weaknesses in governance and internal controls for business operations.”
- The latest updated report to Congress noted the dismissal of two bank employees and a letter of reprimand against another in a six-month period as a result of the IG’s investigations.
- According to a 2013 government survey, only 42% of bank employees agreed with the statement: “My organization’s leaders maintain high standards of honesty and integrity.”
- Only half of those surveyed agreed they can disclose a suspected violation of any law, rule or regulation without fear of reprisal.
- These results are not surprising since as of March 31, 2014, 47 criminal judgments and 42 pleas were obtained in the preceding six months.
- One example of the corruption and incompetence revolves around the fact that the bank approved a whopping 96 loan transactions in a two-year period for Gangland, USA, which purported to export electronics from Miami to South America. However, according to prosecutors, company owner Jose L. Quijano received more than $3.6 million in fraudulent loans from the bank.
- The bank approved 18 loans involving $13.6 million to Leopoldo Parra, who pleaded guilty in 2012 to wire fraud and conspiracy to commit money laundering. According to prosecutors, Parra and his co-conspirators fraudulently obtained the loan proceeds and used them for personal gain.
Additionally, an in-depth article from Forbes in early May, 2014 pointed out that about 70% of the bank’s activity is solely dedicated to supporting Boeing, the bank only affects about 2% of the nation’s exports, it is likely a net negative to the Federal deficit, and it disadvantages many domestic companies. (http://www.forbes.com/sites/dougbandow/2014/05/05/close-the-export-import-bank-cut-federal-liabilities-kill-corporate-welfare-promote-free-trade/2/)
Shut it down and make companies like Boeing pay for their own customer financing and risk, regardless of how it affects campaign contributions to incumbent politicians.
2) This falls into the good news/bad news situation. More than four years after the Great Recession ended, the economy is still struggling to recover, making this post recession recovery the worst ever. Seems the Washington political class still has no clue when it comes to generating economic growth despite record lengths of time with record low interest rates, an $800 billion failed economic stimulus plan, and an energy revolution going on that helped reduce energy costs over the past several years.
But here’s some good economic news: last month, new home sales nationally surged by 18.6%. The bad news: those sales levels are still a whopping 63% below the levels enjoyed before the recession. They are also still way below where they were in the early 2000s, before the housing bubble starting to grow. The following chart summarizes the dire housing situation, courtesy of the political class:
New Home Sales Surge By 18.6% In May, Now Only 63% Below Pre-Crisis Highs

There can be no doubt that when it comes to economics and economic policy, our current politicians are insanely ignorant and ineffective.
3) Despite being years away from the latest recession, a recent survey from Bankrate of consumers found that just one in four Americans has no emergency savings in their household. Additionally, sixty-seven percent of the survey respondents have saved less than the recommended six months’ worth of expenses and half have saved less than three months’ expenses. The percentage of Americans with at least three months’ expenses in savings declined from 45% last year to just 40% this year.
According to Greg McBride, Bankrate’s chief financial analyst: “Americans continue to show a stunning lack of progress in accumulating sufficient emergency savings. Even among the highest-income households -- those with annual income of $75,000 or above -- fewer than half (46%) currently have a six-month savings cushion."
Given that the economy shrank a whopping 2.9% in the first quarter of this year, historically we are due for another recession soon, over twenty million Americans are still unemployed or underemployed, and we just proved that the political class has no idea how to manage economic policies and growth strategies, many Americans and their families are likely to be facing some severe financial times in the near future.
4) Let’s finish up today with another expensive example of wasteful spending of taxpayer wealth, courtesy of government incompetence and the political inability to operate a bureaucracy. Medicaid, the health care organization that the Obama administration wants to significantly increase in size, wrongly paid out more than $14 billion in 2013 to managed care organizations.
The fraudulently paid out expenses were often for treatments and services that were not necessary, were never performed or were not eligible for Medicaid funding and coverage. To put the fraud in perspective, according to the Government Accountability Office (GAO), $14 billion could have been used to pay for the brand new airport being built in Beijing, China and was equal to the how much the U.S. government spent on training Iraq’s military over the past eleven years. $14 billion is a lot of money, all of which vanished to do the ineptness of the Federal government.
According to the GAO, government entities at both the state and Federal levels have recovered "only a small portion" of the fraudulently paid out taxpayer wealth. Thus, the GAO has "little confidence that Medicaid can fix its processes and as Obama Care expands Medicaid enrollees, even more dollars will be "vulnerable to improper payments."
What sane person or organization expands its operations before fixing its operations that are currently losing billions of dollars to fraud and incompetence? The Federal government and the political class that operates it, of course.
That will do it for the insanity today. We now know that the Export-Import Bank needs to fade into history, given the rampant cronyism of its operations, politicians make very bad economists as measured by the pitiful state of the housing industry and the pitiful state of Americans’ saving profile, and Medicaid is still a hotbed of wasteful spending and criminal fraud, a situation that is likely to get worst going forward. More insanity tomorrow.
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:
Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
http://www.youtube.com/watch?v=08j0sYUOb5w
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