Sunday, July 5, 2015

July, 2015, Part 1:Political Class insanity: Expensive Helter Skelter Bombing, Lining Up The Next Bank Bailouts, and More

At the beginning of each month we take a week or so to review the latest insanity from the American political class. Insanity from them includes a wide range of very depressing actions which can include wasteful spending, idiotic quotes, an inefficient and ineffective government bureaucracy, failed economic policies, etc. Every month we continue to prove that we are being served by the worst set of politicians ever.

And as you will see, this month’s review and discussions do nothing to prove that this thesis is wrong in any way:

1) Many Americans, and possibly a majority of Americans, were against the political class using billions and billions of taxpayer dollars to bailout their Wall Street financial backers during the Great Recession. Most, like me, would have let them crash and burn since their greed and incompetence was what made their companies go to the brink of extinction and caused the great suffering of the Great Recession.

Despite that reality, it does not seem like the politicians are listening or if they really care. According to a Wall Street Journal article that was summarized in the June 5, 2015 issue of The Week magazine, the U.S. government (really the American taxpayer) currently stands behind 60% of the financial industry’s total liabilities. This total is a whopping $26 TRILLION.

This obligation includes both explicit and implicit backing, based on previous bailouts. And given that Fannie Mae and Freddie Mac were the main culprits in the collapse of the housing industry which led directly to the Great Recession, it does not feel good that the American taxpayer, via the Federal government, is still backing $5 TRILLION of their liabilities.

To put these insane numbers in perspective, the American political class has put each American family on the hook for:
  1. Each American family on average is responsible for over $215,000 of the $26 TRILLION.
  2. Each American family on average is still responsible for over $41,000 of the $5 TRILLION Fannie and Freddie liabilities.
The more things change the more things stay the same, especially if the politicians in Washington still try and take care of their political backers vs. doing the right thing for regular Americans.

2) According to the New York Times in an article that was summarized in the June 5, 2015 issue of The Week magazine, the American taxpayer via the Pentagon is spending about $8.6 million a day to bomb ISIS positions in Iraq and Syria. Combine this fact with the reality that the President has readily admitted that he does not have a final strategy for dealing with the ISIS terrorists. Thus, it would seem that maybe he should focus on finally getting a viable strategy in place since without one, spending $8.6 million a day, over $2.1 billion so far, seems like a waste of money if you do not know what your end game is.

3) According to, as summarized in the May 15, 2015 issue of The Week magazine, in the poorer neighborhoods of Baltimore, the infant mortality rate is about 20 per 1,000, which makes it worse than the rate in the West Bank, Honduras, and Venezuela. One has to think that possibly spending $8.6 million a day within this country for problems like this is more worthwhile than randomly bombing targets in Iraq for no overarching strategic reason at all.

4) According to the July, 2015 issue of Reason magazine, back in February Hillary Clinton put forth the following quote: “I don’t throw anything away. I am like two steps short of a hoarder.” In light of the fact she had recently deleted a whopping 30,000 emails of hers in an attempt to thwart a Congressional investigation into possibly shady dealings in her State Department, it appears that she and I have a substantially different definition of what a hoarder is. 

5) We have often made the case that government bureaucracies have gotten so big and often so unnecessary that the bureaucrats who operate them make up regulations and take actions solely for the purpose of preserving their unneeded jobs. Such was the case of a recent directive by the Consumer Product Safety Commission. They put out an alert that required Kroger to recall a certain type of children’s hooded sweatshirt since according to the commission, “The sweatshirt zipper pull can detach, posing a choking hazard to young children.”

Great work, government bureaucrats. We certainly do not want kids choking. Even if it cost $1.4 million to recall the sweatshirts, certainly worth it for child safety.

Or was it? The basis of the recall was that ONE, yes ONE, zipper pull out of 140,000 sweatshirts had detached, resulting in NO ONE getting hurt. Really? Does not this government entity have better things to do than worrying about a one in 140,000 chance of maybe something bad happening? 

This probability is approaching the chances of being struck by lightning, which according to the National Lightning Safety Institute is just a little higher at one in 280,000. And if they do not have anything better to do, than maybe it is time to save some taxpayer money and downsize or terminate this unnecessary government function.

6) When Obama took office, he made a big deal about minimizing the impact of lobbyists in his administration. As always with this President, this high rhetoric was quickly abolished by low actions. it is no secret that high powered lobbyists almost immediately took high ranking positions in his administration.

And a Washington Times article by Tammy Bruce, that was summarized in the April 10, 2015 issue of The Week magazine, pointed out how lobbyists and corporate interests had easy access, and probably easy influence, in the Obama administration. According to Ms. Bruce, thanks to a secret Federal Trade Commission (FTC) report that was accidentally sent to the Wall Street Journal (you really cannot make this incompetence stuff up it is so unreal, accidentally sent to the Wall Street Journal, geez) we now know how cozy the Obama administration was with Google during the time that the FTC was investigating Google for antitrust violations.

Since 2009, when Obama took office, Google executives and lobbyists had averaged an astounding one White House visit per week over the past six years. Given that visitation rate, is it just a coincidence that while the FTC staff had recommended in 2012 that the government put together an antitrust lawsuit against Google, the FTC commissioners vetoed such an action? Is it just a coincidence that former Google CEO Eric Schmidt personally handled customized voter turnout software for Obama’s 2008 Presidential campaign?

Or as Ms. Bruce concluded, “If you help Barack Obama with what he wants, the rule of law will bend, or even break, for you.”

7) In a little piece of political sanity in the enormous sea of political class insanity, and a very sad commentary on the country’s tax code, the National Football League announced that it would voluntarily give up its tax exempt status. While the 32 teams in the NFL have always had to pay taxes, somehow, the league office, which takes in over $300 million a year, somehow was able to be tax exempt on those revenues. 

Which raises two obvious, and depressing questions:
  1. Why has this condition existed for so long?
  2. And why did the league give up the status, why didn’t the Washington political class tax action long before this to ensure that a private, for profit enterprise like the NFL office paid its fair share of taxes?
That will do it for today, a good start to the bad news coming out of the American political class. Letting a for profit entity not pay taxes on $300 million in annual revenue for years, letting Google lobby the heck out of the Feds, creating sweatshirt crises when there is no crisis, expensive helter skelter bombing in Iraq and Syria, and the potential of another banker bailout. And we are just getting started.

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