Saturday, April 15, 2017

April, 2017, Part 8, Political Class Insanity: Idiocy In Germany, MIscounting In California, Corruption In Maryland, and More

It is the beginning of another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

Today and for all of the insanity posts this month, let’s start off with a welcome piece of honest political dialog. It comes from a State Department spokesperson. Mark Toner, who is about to start the daily State Department press briefing. In a joking matter, he makes the following quote: "Welcome to the State Department. I think we have some interns in the back. Welcome. Good to see you in this exercise in transparency and democracy."

He then burst out laughing at his own quote, indicating he also knew what a joke the Obama administration has been, especially Mr. Toner’s State Department, when it comes to cover ups, lack of transparency, denial of Freedom of Information Act requests, the prosecution of whistle blowers, etc. But at least it was a little refreshing to finally hear some actual honesty out of Washington as we see from the actual clip of the news conference:

With that context of honesty, let’s see what other insanity has been going down:

1) California is probably the most socialistic state in the union. They have the most generous welfare programs and have no qualms about giving taxpayer wealth to illegal immigrants. But they are starting to run into the insight of Margaret Thatcher: “The problem with socialism is that you eventually run out of other people’s money to spend.”

This is especially true when a state’s accounting processes are so fouled up that they find out after the fact that they spend almost $2 billion more than they thought they had spent:

  • The Associated Press recently reported that California had miscalculated the expenses of their Medicaid program, Medi-Cal, by $1.9 billion last year.
  • This more than doubled the original estimated 2016 budget deficit of $1.6 billion.
  • The state spokesman claimed that this was an “accounting error,” obviously a really BIG accounting error.
  • The original deficit of $1.6 billion was driven by a shortfall in tax revenue which has now been exploded even bigger by this “accounting” screw up, a screw up that surprised state politicians: “It makes you wonder what else is not right. … When something like this happens, the trust factor gets eroded, and you lose confidence in what’s being provided to you,” said Sen. John Moorlach, a Republican from Costa Mesa who serves on the Senate budget committee.

This example and the article shows how expensive Medicaid has gotten over time. Not only did the program spend almost $2 billion more than it thought it had, overall it spends a whopping $100 billion a YEAR on total Medicaid expenses, expenses that cover a whopping one third of all Californians. Obviously, operating a program that spends $100 billion a year leaves a lot less for other state government programs such as infrastructure, education, etc.
Oh, by the way, the state government also screwed up the accounting for another medical program, the Coordinated Care Initiative. In that case, they double counted some of the savings which created another budget deficit, this valued at $913 million. This is what kills the credibility of any politician, when major accounting errors lose billions of dollars. Insane.
2) Let’ stay out on the west coast. While California politicians were losing billions of dollars, the Seattle mayor was allegedly doing something even more despicable. According to the Seattle Times:
  • A 46 year old Washington citizen has sued Seattle Mayor Ed Murray, accusing the mayor of raping and molesting him over several years beginning back in 1986.
  • The accuser was 15 years old at the time.
  • The lawsuit says Murray abused the teen on numerous occasions for payments of $10 to $20.
  • NBC News reported that this is not the first time that Murray has been accused of abusing youths, that the abuse had happened in at least two other instances.
Obviously, the good mayor is assumed innocent until proven otherwise.
3) Let’s jump to the east coast for the next piece of insanity, proving that political class insanity infects the entire country. According to a recent Justice Department arrest warrant, Maryland State Senator Nathaniel Thomas Oaks of Baltimore, Maryland was charged with wire fraud for allegedly accepting illegal payments in exchange for using his official position to benefit an individual on business-related matters.
I will not go through the details of the scam and the FBI investigation but given that the Justice Department saw fit to arrest the good senator, it does not look good for him. If convicted, he faces upwards of 20 years in prison. Another hit against the integrity and credibility of the American political class.
4) But it is not just state government operations that are screwed up. The latest Federal government screw up comes to us courtesy of the Federal Housing and Urban Development (HUD) agency:
  • The inspector general for HUD did a multi year audit of HUD and their findings were not good.
  • Their report found “pervasive material errors” in HUD’s 2015 and 2016 financial statements.
  • The total errors in the statements totalled a whopping $516.4 billion that were miscounted.
  • But these were not the only problems since the audit by the inspector general found a number of “unresolved audit matters” including the auditors’ inability to “obtain sufficient, appropriate evidence to express an opinion.”
  • In addition, “this audit report contains 11 material weaknesses, 7 significant deficiencies, and 5 instances of noncompliance with applicable laws and regulations.”
What a mess. A organization that has been around for decades and it still cannot count accurately, massively failing an audit of its books. And if you cannot balance books in a sufficient way to pass the auditors’ review, who knows how many billions of other dollars are being lost from criminal fraud and inefficiencies? Insane.
5) But political class insanity is not restricted to America. Let’s go overseas for this piece of political class insanity:
  • German Chancellor Angela Merkel has been a big advocate of allowing millions of Muslim refugees and immigrants to come into Germany.
  • However, she recently admitted that by allowing so many refugees and immigrants into the country that German may have also admitted dedicated terrorists: “There is no doubt that among the so many people who have sought shelter in our country were also persons who have become the focus of the security authorities.”
  • Great, realizing your mistake after an untold number of terrorists have entered your country does not provide a sense of relief.
  • But then Merkel tries to lamely justify her grave mistake on immigration by asserting that: “We should not forget that our country was already in the sights of Islamic terrorism before the many refugees came to us.”
  • In other words, “Hey, it’s okay I let terrorists in without thinking, we were already one of their enemies.”
Unfortunately, Germany has been the victim of some of the people that Merkel’s administration allowed into the country so it is little solace to the families of those that have been killed by terror attacks that Merkel now realizes the error of her ways.
That will do it for today’s political class insanity from across the world, from self inflicted terrorism in German to corruption in Maryland to potential perversion in Seattle to miscounting in California. Never underestimate politicians in their ability to surprise us with their idiocy, greed, and other forms of insanity.

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