Wednesday, August 5, 2015

August, 2015, Part 4, Political Class Insanity: Death Of The Export-Import Bank,CIA Spies On Congress 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) In past posts we have always supported the termination of the Export-Import Bank. This is a Federal government entity that takes American taxpayer money and gives it out as loans to foreigners to purchase American made products. There are a number of things wrong with this type of government operation:
  • Why are we giving and risking taxpayer wealth with foreign companies, let them buy American goods with their own money or their governments’ own money.
  • Contrary to what Export-Import fans say, most of the money and loans go to supporting very large American companies such a GE, Boeing, etc. We should let those companies’ stockholders finance purchases of their companies' products, not taxpayers since it is the stockholders that will see any advantage of doing so, not the taxpayer.
  • Giving U.S. taxpayer-backed loans to foreign companies to purchase American products disadvantages American companies that compete with those foreign companies since domestic companies cannot get Export-Import loans.
Fortunately, the bank's charter recently expired and hopefully it will stay dead in future Congressional sessions. As an example of why it should stay dead, consider the highlights from the following Washington Examiner story by Timothy Carney from June 18, 2015:
  • Apparently, the bank has given a $650 million, U.S. taxpayer backed loan to the richest woman in Australia.
  • Gina Rinehart owns Roy HIll mining in Australia and is also the richest woman in that country. Despite that wealth status, the Export-Import bank loaned her company $650 million to purchase equipment made by GE and Caterpillar.
  • But a U.S.mining company, Cliff’s Natural Resources, an American company that competes with Roy HIll, does not get any financial support and taxpayer backed plans from the Export-Import bank, putting it at a competitive disadvantage.
  • The loan also disadvantages the U.S. domestic steel industry since Roy HIll sends a lot of its mined ore to China which turns it into steel which impacts worod wide steel prices. 
How perverted has Washington become where we send U.S. taxpayer money half way around the world to support foreign companies owned by very rich people but do not extend that opportunity to domestic companies? If selling equipment to Roy Hill is so important, than let the stockholders at Caterpillar and GE finance the purchases.

Hopefully, with the recent death of the program, this type of financial insanity will stop and that the Export-Import Bank will not rise from the dead. But zombie people do rise fom the dead as do zombie govenrment programs so who knows.

2) Recently released CIA reports from the CIA inspector general now show that the White House is possibly involved with the CIA’s spying on personnel in the U.S. Senate. The reports show that CIA Director John Brennan met with White House chief of staff Denis McDonough and discussed the intention to search the computers being used by Senate staffers working for Senator Dianne Feinstein to investigate the use of torture by the CIA on suspected terrorists.

The report said that Brennan had ordered CIA investigators to use “whatever means necessary” to ascertain how Senate investigators had obtained “certain sensitive internal documents.” At that time, Feinstein’s Senate committee was conducting its own investigation into the CIA’s enhanced interrogation techniques.

While the CIA spying on Congress is bad enough, the inspector general analysis shows that White House personnel knew that the spying was going on and did nothing to stop it. Obviously, if this is true, than Feinstein’s argument that the CIA had “likely violated the constitutional separation of powers,” is a very valid and very serious Constitutional violation, a violation that the White House might also be guilty of.

The inspector general concluded that the five CIA employees who conducted the search had “engaged in wrongdoing,” according to the Huffington Post, but, as always with government lawbreakers, that their actions were not punishable. At about the same time the inspector general report was made public, a CIA Accountability Review Board report asserted that Brennan, who denied telling CIA employees to use “whatever means necessary,” failed to “appreciate what forensic techniques were necessary to answer his questions.”

Violate the Constitution, very bad, but no punishment. Smoke a cigarette in your own home in NYC, and you could soon be a criminal. Down the rabbit hole of political class insanity we fall.

3) The Government Accountability Office is kind of like the Federal government’s auditor function, going around and identifying and fixing what is wrong with government functions. Someone in that entity was recently caught doing their job well when they identified thousands of Medicaid beneficiaries and hundreds of medical providers that were involved in ripping off the American taxpayer during 2012, the last year complete data is available:
  • The ripoffs included receiving improper and fraudulent payments.
  • The fraud amounted to $18.3 million in just four states, New Jersey, Michigan, Florida, and Arizona.
  • About 8,600 Medicaid beneficiaries had improperly collected benefits from more than one state.
  • 200 dead Medicaid beneficiaries had received upwards of $9.6 million AFTER they had died.
Makes you wonder who is watching the taxpayer money since in just a few paragraphs we saw that the Federal government is sending hundreds of millions of dollars in taxpayer wealth to the richest woman in Australia, millions of taxpayer dollars to dead people, and millions of dollars to live people who are double dipping. Pathetic fiscal management.

4) But it is not just the Federal government that gives taxpayer money to rich people. Wisconsin Governor and Republican candidate for President, Scott Walker, wants to give some Wisconsin state taxpayer money to rich, billionaire basketball team owners. Apparently, according to a recent Washington Examiner article, Walker and other state politicians want to give a quarter-billion dollars in taxpayer money to the billionaire owners of the NBA’s Milwaukee Bucks, who are threatening to leave Wisconsin unless they get a new, subsidized basketball arena.

According to the article, the owners do not even live in the state but state politicians have negotiated a financial deal where state and local taxpayers would pay for half the cost of a new $500 million arena for the NBA team. The state would borrow $55 million to fund the arena, costing the state taxpayers $80 million over 20 years when interest is included. City and county governments would cover the rest.

Walker is claiming that this is a good $250 million investment and good use of taxpayer money for the local and state economies. But the article points out that it is nearly unanimous among economists that stadium subsidies do not pay for themselves, and the research suggests that losing a sports team doesn't hurt a city's economy:
  • Economists Dennis Coates and Brad Humphreys: "Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city's economy."
  • Economist Ray Keating: "The lone beneficiaries of sports subsidies are team owners and players."
  • Examiner article: “One reason is the substitution effect: Milwaukeeans who have a basketball team will spend less money on other types of leisure. The money spent in and around the fancy new arena wouldn't have just sat under mattresses.”
If it is one thing American politicians like to do is give away our money, in this case to billionaire out of state basketball team owners. That will do it for today’s insanity, but more insanity sure to follow in the next few days, can hardly wait to see who our politicians give our taxpayer money to tomorrow.

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