Tag Archives: crony capitalism

GOP Candidates Continue to Toss Money Down Cornhole

Gilligan-s-Island-Mr-and-Mrs-Howell-classic-television-revisited-3727152-435-326The really big difference between Republican and Democrat handout recipients is their ability to be sympathetically photogenic. When pressed, the average Democrat welfare recipient can hide the flat–screen TV, stash the cellphone in a drawer and refrain from cigarette smoking. And it’s not too much trouble to pretend to fill out the job application or limp convincingly to prove the bad back disability claim as long as photographers and media are around.

The Republican dependency class is another genus entirely. Empathy generating photo shoots and news coverage for these check–cashers is simply a non–starter. Hiding the Rolex, wheeling the executive jet inside the hangar, displacing the butler from the servant’s quarters and convincing the first wife to pretend to supervise the caterer is just too difficult to organize.

If Democrat welfare beneficiaries can avoid arrest, making jihad videos and Judge Judy the money continues to arrive completely free of social disapproval.

Not so for GOP crony capitalists. These leeches fight a two front war: Prevent competition and confuse conservatives. They are loud and proud “job creators,” economic mainstays and incubators of breakthrough technology! All the favored crony industry requires for total success is billions of taxpayer dollars in perpetuity while the people who supply the tax dollars maintain a discrete and respectful silence.

And Republican officeholders must pretend the conservative market principles they espouse in campaign commercials somehow don’t apply to this particular crony.

A disappointing number of 2016 GOP presidential candidates recently did just that in Iowa during the quadrennial Pour Money Down the Cornhole Festival otherwise known as the Iowa Ag Summit.

There Republican presidential candidates worship the ethanol subsidy and praise ethanol entrepreneurs for their selfless addiction to subsidies and environmental fairy tales.

The Renewable Fuel Standards law requires all gasoline refined in the US be 10 percent ethanol. Ethanol is the wonder product, made from corn, which makes gasoline more costly while reducing miles per gallon and increasing wear on internal combustion engines.

Diluting perfectly efficient gas with ethanol is like forcing mom to add sawdust to her cake recipe to protect our valuable flour stockpile. Sure the additional roughage keeps dad regular, but wear and tear on teeth and the occasional oven fire — not to mention that Home Depot flavor — doesn’t come close to compensating for the missing wheat.

The same is true for ethanol, all at a cost to taxpayers of $6 billion a year in handouts.

Somehow those facts didn’t make it into the spiel GOP mega contributor and summit sponsor Bruce Rastetter made.

Ethanol supporters would have one believe that before the bill was passed requiring refineries to dilute your gasoline, corn grew wild in Iowa and no one was even aware there was a use for the weed, other than the occasional frontier corn fritter. And even after wise agronomists in Washington started throwing money at corn farmers the fuel market was controlled by sinister forces that prevented innovation.

Just like the whale oil cartel prevented widespread drilling for oil until the early 60’s.

As columnist Paul Driessen wrote Rastetter’s pitch to the assembled candidates was pointed and effective: Failure to support ethanol handouts in Iowa means no victory in the 2016 caucus and no chance for the GOP nomination.

Naturally Big Government Republicans didn’t require much in the way of pressure to crumble. Jeb Bush said corny gasoline reduces the demand for imported oil. Mike Huckabee said it’s a way for the nation to “fuel itself.” (No pun intended.) And Lindsay Graham solemnly stated “Every gallon of ethanol … is one less gallon you have to buy from people who hate your guts,” which makes you wonder when Obama started pumping gas.

Rick Santorum, trying to get someone to pay attention, thought the RFS means something besides oil and natural gas “are allowed into [the energy] stream.” And Scott Walker was a profile in cowardice as he abandoned his 2006 call for an end to ethanol subsidies.

Rick Perry split the difference and wanted to end federal ethanol subsidies, but said that individual states could choose to be a foster parent for corn, which is at least a Constitutionally valid stance and would exempt most states that don’t grow corn and corn lobbyists.

The only candidates claiming to be conservative supporters of market competition and having the courage to tell Iowa voters the subsidy spigot should be turned off were Ted Cruz, Rand Paul and Marco Rubio — although Rubio did refer to corn as “maize.”

There’s an old song about moonshiners called “White Lightening” with a refrain that goes “Mighty, mighty pleasin’ my pappy’s corn squeezin’s.” Until Republicans can stop “pleasin’” crony capitalists with subsidies at the expense of the public, taxpayers will continue to be subject to regular “squeezin.”

Buying Political Influence – Who Should Scare Us More, The Koch Brothers or George Soros?

obama-puppet-teleprompter-george-soros-junkie-sad-hill-news

Judging from Senate Majority Leader Harry Reid’s nearly daily diatribes on the floor of the U.S. Senate, George W. Bush has been retired as the most despised villain, and the cause of all the evils that plague the world. Bush has been replaced by the Koch (a Dutch name, pronounced “Coke”) brothers who are often maligned by the left for their pecuniary influence in politics. Since those on the left are not equally malevolent toward George Soros, who does the same thing, it’s clearly not the money in politics that bothers them — it’s the ideology.

The Washington Post’s Pulitzer Prize winning Fact Check granted a “Four Pinocchio” rating to Reid’s latest round of attacks. The Post says Reid is “setting a high standard for deceptive speech,” and concludes that Reid’s party is “reaching blindly” for someone to cast the blame of their own failures on. The paper, critical of the falsity of Reid’s claim, chides him with, “If you want to join a gun fight, don’t fire blanks.”

charles-and-david-kochDavid and Charles Koch are brothers who run Koch Industries, an oil refinery business that is the second largest private firm in the country. The brothers are tied at number 6 on Forbes top billionaires list with personal net worth of about $41 billion each. They’ve expanded and maintained their fortunes by successfully providing the refined product that keeps America moving – oil.

George Soros is chairman of Soros Fund Management, a hedge fund company. Soros is number 27 on Forbes list with a net worth of $23 billion. He’s made his fortune in large part by selling short against international currencies and collapsing financial institutions. In 1997 he was dubbed “the man who broke the Bank of England,” and he was blamed by the Malaysian Prime Minister for collapsing their currency during the Asian financial crisis. He was also convicted of illegal financial dealings in France. His big bet now is collapsing the U.S. dollar and the free enterprise system.

Economist Paul Krugman has been critical of Soros, and others like him, “who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is ‘Soroi’.”

The Koch brothers and Soros spend lavishly in politics. They support individual candidates, contribute to political party campaign funds, lobby politicians, bankroll political action committees, and have established foundations and think tanks to influence politics.

george-soros-economic-terrorist-obama-politics-1344236489The Kochs spend by far the most, but the bulk of it goes to lobbying. The Open Society Institute is one of George Soros’ organizations, and they provide part of the funding of OpenSecrets.org, so even realizing that their data may be skewed toward a more pejorative coverage of the Kochs, I’m going to rely on their data. According to Open Secrets, the Koch brothers have spent, or as liberals typically describe it, “invested” over $50 million in lobbying from 1998-2010. During that same time, Soros and his primary Lobbying organization, Open Society Policy Center, spent about $13 million.

Donations to federal candidates, parties, and political action committees give a smaller advantage to the Kochs. They invested $2.58 million vs. Soros’ $1.74 million from 1989 to 2010. When extended to include the past four years, the Koch brothers have contributed $18 million in political donations. This sounds like a great number, until we look at the 58 organizations ahead of them, including 18 different unions, according to Open Secrets. Those unions political contributions total over $638 million, almost all of whose funds go to liberal candidates, and is more than 35 times more than the Kochs donate. Among those are the American Federation of State, County & Municipal Employees $60,667,379, the National Education Association $53,594,488, the United Auto Workers $41,667,858, and the Service Employees International Union $38,395,690

But from here the money for political influence gets a little more shady. From 2001 to 2010, the Koch brothers invested $1.5 million in other political groups, called 527 organizations, compared to Soros’ whopping $32.5 million.

The proliferation and expanded influence of 527s was made possible by the problematic McCain-Feingold Campaign Finance Reform of 2002, so named because of the tax code, Section 527, that they fall under. As described by Benjamin Dangl, the groups “operate as shadow political campaigns working indirectly for or against a particular candidate.” Once contributed funds get to these groups, they can go anywhere, and the audit trail is virtually non-existent. Some are run totally above board and are very straightforward in their objectives. Many others are not. As Dangl says, “Prominent think tanks and campaign finance reform lobbyists say 527s are ‘illegal loopholes’ that enable the privatization of political campaigns.”

The groups that these men contribute to tell an even more significant tale than the sheer dollar volume they pump into our dysfunctional crony-capitalist, or corporatist political system. Since the Koch brothers are ideological libertarians, they’re driven by the classical-liberal Jeffersonian philosophy that America was founded on. Perhaps nothing defines this self-defined mission for the brothers better than the mission statement on the Cato Institute website, which states, “The mission of the Cato Institute is to originate, disseminate, and increase understanding of public policies based on the principles of individual liberty, limited government, free markets, and peace.”

The Cato Institute, the Koch’s crown jewel, was established 40 years ago with seed money from Charles Koch, and his brother David still serves on the Board of the organization. Cato is recognized as the sixth most influential think tank in the nation, and number 14 internationally, with its scholarly and empirically documented research.

They also have contributed significantly to the Reason Foundation, publisher of Reason Magazine, applying reason and logic to economic and personal liberty issues. Nobel laureate Milton Friedman strongly supported the Foundation. And with a grant of $30 million, the Koch brothers were instrumental in the establishment of the Mercatus Center at George Mason University, with similar objectives.

obama-puppet-teleprompter-george-soros-junkie-sad-hill-newsGeorge Soros runs the Open Society Institute and the Soros.org website, and contributes heavily to many organizations that ideologically are aligned with leftist causes, including Moveon.org. He is reviled abroad for his shady efforts to foment revolution and collapse currencies. His “foundations have been accused of shielding spies and breaking currency laws, and he’s invested over $400 million in institutions of higher education to promulgate and teach his extremist ideology.

In short, the Kochs and Soros are heavily invested in politics and are, by all standards, prototypical “one percenters” in income, net worth, and political influence. And it would appear, at least ostensibly, that all three are playing the influence-for-money game according to the rules established by congress. There is near universal contempt for the crony capitalism and corrupt corporatism that has tainted our political institutions, and politicians, and adulterated our free-market system. But congress has created the rules these players play by. Blaming the Kochs and Soros for using their resources to buy influence is like blaming collegiate athletes for the rules established by the NCAA.

Since most of the Koch’s political money goes into lobbying, their funds are well documented, as required by congressional accounting rules. With most of Soros’ political “investments” going into 527s, the funds are less traceable, and has earned Soros the dubious honor of being dubbed the “Godfather to the left.”

The classical-liberal principles of individual freedom and free markets that are so fully embraced and advanced by Charles and David Koch are the very principles the nation was founded upon. They are the principles that made America great. The progressive socialistic agenda advanced by Soros is antithetical to America’s founding precepts, and is heavily invested in the failure of not only the U.S. dollar, but the collapse of the U.S. economic system.

As distasteful as the pay-for-influence system is, the ideological objectives and uses of that influence should be of even greater concern. Should we fear those who support the ideals that made America great, or the one who seeks to destroy and fundamentally transform the country?

Associated Press award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, Idaho and is a graduate of Idaho State University with degrees in Political Science and History and coursework completed toward a Master’s in Public Administration.  He can be reached at [email protected].

Poverty of the Perfect

By Michael J. Lewinski 12/31/13

A life of poverty is not the legacy any parent would willfully choose for their offspring. Yet, for our generation, such an outcome has become the default option. With the deliberate exporting of U. S. industry and the financialization of the economy, our national economy has been transformed into a business model that is detrimental to the well-being of working and middle class Americans.

Discarding the moral restraints of an ethical approach to business while embracing an indifference to the diminished standard of living and loss of economic opportunities for average Americans, an ever growing class of Crony Capitalists and incompetent politicians have sucked the life out of main-street. Enabled by government and its’ attendant institutions, the too big to fail unjustly prosper while the real creators of wealth suffer. Funneling wealth to the well connected through the Federal Reserve, an amoral oligarchy could care less about the destruction of the American economy.

Beyond the damage Crony Capitalists have been inflicting on the economy, our youth’s future is continuously being imperiled by wrong headed government policies that discourage the creation of the nation’s wealth. Through a stifling regulatory regime, capital diminishing taxes, and dependency generating social policies, a Progressive elite of central planners destroy jobs and undermine the entrepreneurial spirit in the name of an elusive, unattainable economic and social justice.

In a mad dash for the perfect, central planners, devoid of any practical experience in the world of business, and often in life itself, seeks to micro-manage the economy and the national life with a vast bureaucracy charged with every manner of idealistic goals and objectives while completely ignoring the expansion and growth of the economy. Harboring a great disdain for the common man, and loathing the results of free markets responding to the independent choices and actions of free people, Progressives are rapidly transforming a formerly productive, vibrant economy into a barren wasteland of reduced sustenance and opportunity for this generation, and even more-so, for the next.

Such is the default option for a distracted citizenry no longer behaving like Americans.

Friend of Obama? Here’s a Contract for $$$

phone

A frequent visitor to the White House and larger contributor to the Obama campaign got his kickback this week. The CEO of TracPhone Fredrick J Pollak, along with several others, was just issued a contract to provide taxpayer paid phones to internet to job seekers. If the program meets expectations it may bring in $100 Million per month to the communications company.

Apparently, when Barrack Obama campaigned on ‘no more sweetheart deals’ and getting rid of crony capitalism he was only talking about deals by Republicans.

As mentioned in the interview, one must ask why this administration does not promote using current programs and free internet already provided for by taxpayers at the local libraries?

In any case: more free stuff to entice low information voters…

Is General Motors Truly Back on Top of Auto World?

General Motors Corporation recently laid claim to being the world’s largest automaker, as headlined in The Detroit News  last month.  “General Motors Co. says it sold more than 9 million cars and trucks worldwide last year — a 7.6 percent increase that allowed the company to reclaim the title of world’s largest automaker.” After GM posted it’s profits and sales figures boasting of reclaiming to be the world’s largest automaker, German manufacturer Volkswagon released a statement saying that when trucks are added into the equation, that Volkswagon, not GM took over the title as largest automaker in the world.  Also of note is the fact that the massive earthquake and subsequent tsunami that struck Japan last march disrupted Toyota’s manufacturing and distribution systems, and after Toyota was back up to speed, flooding in Thailand forced key parts suppliers to suspend shipments, opening the door for other manufacturers to overtake Toyota’s title of world’s top automaker that it had held since overtaking GM in 2008.

Motor Trend published Volkswagon’s claims as follows: (emphasis added)

Now Volkswagen is disputing the claims and suggesting that it bested GM last  year. According to Automotive News, Volkswagen’s 8.16-million figure  doesn’t include sales from commercial  truck divisions MAN and Scania. Once those figures are added, it will  significantly bolster VW’s annual sales tally.

On top of that, GM’s sales figure was padded with about one million sales by  Chinese automakers SAIC Motor Corp. and Wuling Motors Co. — companies with which  GM has joint ventures, but in which the American company does not have a  controlling stake. If those sales were excluded and VW’s truck figures added,  Volkswagen would probably steal the global sales crown from GM.

2011 Automotive Company U.S. sales  fast facts:

GM- U.S. sales rose by 13% over 2010 numbers,  while Volkswagon’s U.S. sales rose by 23.3%.  Chrysler sales rose by 26%, and Ford’s sales rose by 11% over 2010. Imports BMW and Merceces Benz were also up 13%,  according to KHSLTV.

GM’s Chevy volt sales took a nosedive from  previously reported anemic sales due to the reports of the car exploding in a fireball during testing. GM sold 7700 Volts in 2011 and only 603 volts were sold in Jan. 2012. This was well short of stated goals of 10,000 in 2011 and has forced GM to walk back there stated goal of selling 45,000 Volts in 2012.

Due to under-performing GM stock prices, the U.S. taxpayer is currently estimated to be on the hook for almost $24 billion dollars in losses.

GM Avoids Paying Taxes on Profits thanks to Obama and Geitner adding illegal exemptions into TARP deal. Pay-to-Play 101.

GM to date has not mentioned the total of $45 billion dollars in tax write-offs given to them in the Obama/Geitner TARP deal. The Harvard Law School Forum  published the following little-know facts  about GM’s deal:

New GM has the factories, offices, designs and some of the workers that Old GM had. It also acquired some $18 billion worth of its NOLs (the losses themselves were $45 billion). It could not use them to reduce its corporate income tax liability immediately – it earned no income against which to apply them. But in 2010 New GM did finally turn a profit. Presumably, it will now start using its NOL’s (net operating losses) to avoid its corporate tax. (emphasis added)

The problem lies within certain “notices” written by the Treasury where GM/U.S. Treasury will not have to abide by  tax laws that other companies who sell stock do.

To solve this problem, the Treasury issued a series of “Notices.” The Sec. 382 rules, it declared, simply did not apply to itself. When it sold its shares in New GM, its buyers might increase their ownership stake by 50 percentage points, but they would not trigger the Sec. 382 limits. The tax code offered no exception for government-owned shares, and the Treasury did not purport to find one. Instead, it just declared that the law did not apply. Treasury issued several similar “Notices” for AIG and Citigroup. Through the TARP transactions, both of these firms experienced ownership changes over 50%. By law, they lost their NOLs. By “Notice,” the Treasury announced that it would let them keep the losses. (that allows GM and the Obama-supporting UAW, to avoid paying approx. $45 billion dollars in taxes.)

In an article titled  Can the Treasury Exempt its Own Companies from Tax? The $45 Billion GM NOL Carryforward, the author of the above-linked report worked with Eric B.Rasmussan to expose just how the U.S. Treasury and the Obama administration illegally gave the GM Unions tax exempt status as the GM bailout moved forward: (emphasis added for clarity)

 We do not address the wisdom of the bailouts. Neither do we ask whether giving a multi-billion-dollar tax break to an automobile or financial company makes sense. Instead, we focus on the propriety of the Treasury’s manufacturing a tax break. We find two aspects of the transaction especially troubling:

  • a. The GM Notice transfers a large amount of money to one of the largest contributors to the administration’s party, the UAW. The UAW was merely an unsecured creditor to GM – yet through the reorganization it emerged with a much larger equity stake than its interest warranted. Through this Notice, the government now transferred vast sums of money to it.

 

  • b. The GM Notice hides the real cost of the TARP bailout. Involving as it does very complex provisions of the corporate tax code, the Notice escapes virtually all public scrutiny. Yet at root it cuts the firm’s future taxable income by $45 billion. The true total cost of the TARP transactions does not involve only the direct outlay; it also includes the $45 billion in future income that the Treasury freed from tax.

Finally the report further states that in order to avoid public outcry about the huge transfer of cash to the Obama-supporting UAW, they did it through a legally unauthorized exemption.

Had the administration given such a large amount of cash to the UAW, the public would have complained massively. The administration gave it through a legally unauthorized Sec. 382 exemption, and no one noticed.

We conclude the article by exploring procedural reforms Congress might adopt to prevent a recurrence of what happened with GM. We urge it to give legislators standing to contest in court any tax benefits that the Treasury provides.

Understanding these truths about how the Obama administration and the Treasury have transferred billions of taxpayer dollars to the crony-capitalists at GM and the UAW also debunks the rosy picture the media is painting about GM’s current boasting of a planned $10 billion dollars in profits in 2012. The stock held by the U.S. Treasury, bought and paid for with tax dollars is currently worth about half of what it needs to be to break even and recuperate the bailout cash. When Obama and the Liberal Democrats preach about evil corporations and successful business owners not paying their fair share of taxes today, they somehow refuse to mention GM and their $45 billion-dollar tax  exemption gift that was given to them as a down-payment for the United Auto Workers reelect Obama 2012 campaign.

Footnotes: Do Americans want four more years of  these types of taxpayer abuse and Liberal crony-capitalism? Barack Obama claims to have saved a million autoworker jobs while refusing to discuss how much it cost the taxpayer in real-time total dollars. While Obama-supporting Union workers at GM rake in record salaries and benefits, along with huge bonuses, the rest of America is stuck dealing with skyrocketing energy prices and an overall massive increase in the cost of everyday necessities, while the average wage increase for 2011 was a measly 1.9%, according to this BLS report.  Unemployment is still  stubbornly high , and now the Obama-led Democrats want to hand out another extension of  an already record high time limit of federal U/E benefits at taxpayer expense. America is being systemically collapsed under the weight of trillions of dollars in debt, and now we will soon see Obama and company raise the debt limit another trillion-plus dollars. The big news last week was that GM is the “largest” automaker in the world, (which is debunked here) and the “new GM success” is being used to promote Obama’s reelection. Had Ford Motor Company got a $45 billion-dollar tax exemption, ( like GM)  their profits would in fact, surpass GM’s 2011 earnings by tens of billions od dollars.  It is about time the American people demand an end to big corporations such as GM being allowed to steal billions of taxpayer dollars in order to give them to reelect Obama cronies and assorted union bed-pals. That starts with defeating Barack Obama in 2012.

Big shock: Politicians are corrupt. So what do we do about it?

Clearly not satisfied with their sky high approval ratings, members of Congress seem to be doing everything they can to convince that final 12% of Americans who support them to reconsider. Last week, Peter Schweizer revealed in his new book that a lot of them have been using their offices to engage in insider trading. For example, while most American citizens were debating the merits of Obamacare, John Kerry was busy making sure it benefitted his stock portfolio:

[A]t least $200,000 of stock in medical device manufacturer ResMed was purchased in the $20 to $25 per share range. After Obamacare passed, ResMed jumped to $34, an increase of as much as 71%. “ResMed was a winner in the health care reform legislation—as Reuters declared—thanks in part to John Kerry’s efforts,” says Schweizer. The reason: earlier versions of the Obamacare bill would have slapped companies like ResMed with an “industry fee” tax. Kerry opposed the higher taxes on medical device companies and helped delay the taxes until 2013.

The sickest part is that John Kerry’s behavior here isn’t the exception in Congress – it’s the rule. But as disgusting as that is, there are two important lessons that can be learned from this situation: 1) members of Congress currently have way too much power, and 2) all of our laws must apply to all Americans in the exact same way.

1.) Members of Congress currently have way too much power.

“The Experience of every Age convinces us, that we must not judge Men by what they ought to do, but what they will do; and all History affords us but few Instances of Men trusted with great Power without abusing it, when with security they could”

John Trenchard, Cato’s letters #60

Right now, Congress has an unimaginable amount of power to impact industries throughout the economy both positively and negatively. But beyond that, individual congressmen who land positions on powerful committees can have an incredible influence on each bill – almost single-handedly. Giving politicians that kind of power is exactly what leads to corruption like the current insider-trading scandal.

Getting this Congressional power back under control may seem like a Herculean task, but the solution is really simple. It doesn’t even require some massive government “reform” bill. All Congress would have to do is… abide by the Constitution we already wrote and ratified in this country. How’s that for a radical idea?

When our Constitution was written, the federal government was mainly intended to handle national defense, foreign diplomacy, and ensuring the free flow of trade between the states. This is a point that James Madison made clear:

“The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite. The former will be exercised principally on external objects as war, peace, negotiation, and foreign commerce […]”

Federalist #45

Very clear:

“The powers of the general government relate to external objects, and are but few. But the powers in the states relate to those great objects which immediately concern the prosperity of the people.”

Remarks at the Virginia Ratification Convention

Notice how straightforward Madison is – the federal government is designed to focus primarily on “war, peace, negotiation, and foreign commerce.” Domestic issues were supposed to be handled almost entirely by state and local governments – which are much more effective in those areas.

But for some reason, today’s Congress wastes the vast majority of its time messing around with domestic legislation that it has no real authority to pass. If members of Congress could manage to limit themselves to exercising the powers that were actually granted to them in the Constitution, they wouldn’t have had the inside information they used to make these immoral trades in the first place. Problem solved.

Isn’t it amazing what can happen when the Constitution is read and applied?

Of course, there will be those who say, “The government will still be responsible for funding the military. So Congress will still have insider information about all of those massive defense contracts.”

That’s true, defense spending will still be an area of concern. But if Congress were to actually limit itself to Constitutionally mandated actions, federal spending would be a fraction of what it is today. In that case, it would be much easier for citizen groups to follow and analyze which members of Congress are benefitting inappropriately from insider information.

That wouldn’t completely solve the problem though. That’s where Lesson 2 comes in.

2.) All of our laws must apply to all Americans in exactly the same way.

“The Experience of all Ages may convince us, that Men, when they are above Fear, grow for the most part above Honesty and Shame.”

John Trenchard, Cato’s letters #61

Part of the reason insider-trading became such a common practice is Congress exempted itself from laws that made it illegal. So at some point, the politicians in Washington must have actually gotten together and said, “Wow, this insider-trading is really dishonest. No one should be allowed to make a fortune off of unknowing investors like that… you know, except us.”

When members of Congress are able to act as if they are a privileged class, it’s no wonder why so much of the legislation they pass is complete garbage. They know that they don’t have to live under the laws that they enact, so they are free to make a joke of our legislative process without feeling the effects.

The law that was just passed made the market tank? Don’t worry about Congress, they had insider information so they sold their stocks ahead of time. Obamacare is a disaster? No problem, they made sure they can keep their federal health plan instead. Unemployment is really high? Not to worry, they’ve got lucrative Congressional pensions.

The answer to all of this is to require all laws to apply to every American the same way – including public officials – similar to what Friedrich von Hayek suggests in The Road to Serfdom. No more exemptions. No more loopholes. No more waivers. If it’s wrong for private investors to engage in insider trading (and it is), then it’s wrong for members of Congress to engage in insider trading.

This requirement would also have another benefit besides simply eliminating Congress’ ability to write itself “Get out of jail free” cards. Much of the problem with Congressional insider trading stems from lobbyists and crony capitalists who are trying to “encourage” politicians to give them special tax breaks or legal advantages over their competition (see: Nancy Pelosi and the Visa IPO).

But when laws have to be applied generally, it makes it much more difficult for members of Congress to give those special interests what they want. If Congress isn’t able to give out valuable special favors, there’s no reason for crony capitalists to give politicians access to insider information and exclusive IPOs.

Whenever members of government are abusing their offices, lessons need to be learned from those situations and changes need to be made. In this case, Congressmen are using power not authorized by the Constitution and are exempting themselves from legal consequences to gain an unfair advantage in the stock market.

That cannot be tolerated. If our public officials are allowed to act as if they are above the law it will destroy this country. Members of Congress who are engaging in insider trading need to be held accountable and soon. Otherwise, no “Get out of jail free card” in the world will be able to clean up the mess they’re making.

Obama's "Apparatchik" Administration

President Obama, in his 2011 State of the Union speech, said, “This is our generation’s Sputnik moment.” Substituting the word “apparatchik” – government by party leaders, bureaucrats and the well-connected – for “Sputnik” would have been much closer to the truth.

Obama’s green jobs agenda spends billions of taxpayer dollars to destroy existing jobs and replace them with jobs in politically-favored businesses. It’s crony capitalism that is building a political power structure based on false claims about clean green jobs. If Spain’s experience with solar farms is any guide, subsidizing renewable energy in the U.S. may destroy two jobs for every one created.

The late Professor Frederick Seitz, president of Rockefeller University, president of the U.S. National Academy of Sciences, and a recipient of the National Medal of Science, said, “The United States is very close to adopting an international agreement that would ration the use of energy and of technologies that depend upon coal, oil, and natural gas and some other organic compounds. … This treaty is, in our opinion, based upon flawed ideas. Research data on climate change do not show that human use of hydrocarbons is harmful.” The international agreement to which he referred was the Kyoto Protocol. Global warming alarmists have resorted to fixing data, hiding data, and other things to keep people from learning the truth. The climate is cooling, and it’s been cooling since 1998. Eventually, the truth will prevail, but in the meantime, President Obama continues to retard progress to develop current energy sources. Under orders from Obama, the Environmental Protection Agency (EPA) is moving ahead with regulations to reduce CO2 emissions.

To say that the U.S. is rich in energy resources is an understatement. The U.S. has been blessed with enough resources to meet our energy needs and to export our surpluses, but they have not developed. Instead, liberals would rather see our economy go down the tubes than develop what they consider “dirty energy.” The U.S. has 22,450,000,000 barrels of proven oil reserves, and 250 trillion cubic feet of proven natural gas reserves. The U.S. has more energy in natural gas than the entire Middle East has in oil. There no reason for the United States to import oil and gas from other nations.

Green energy alternatives may satisfy our energy needs some day, but today green energy is little more than a way for President Obama to dole out federal dollars to his favorites at the expense of coal, oil, and natural gas producers. Today’s science and technology do not exist in green energy areas to meet even a small part of our current energy needs.

Said Jerry Bower in his Forbes blog, “What is the difference between crony capitalism and socialism? Not much.”

But that’s just my opinion.

The Department of Energy's and Obama's Record

The Solyndra Scandal

The Solyndra Scandal just won’t go away, much to President Obama’s chagrin. And new revelations are coming out almost daily.

DOE’s Purpose

From the Department of Energy (DOE) itself we get its loan programs purpose: “The Department of Energy’s Loan Programs enable DOE to work with private companies and lenders to mitigate the financing risks associated with building out commercial-scale clean energy projects, thereby encouraging the broader and more rapid growth of the sector.”

Will someone please tell me just what business DOE, or the government, for that matter, has “mitigating financial risk?” I thought that it was the jobs of private sector managers to mitigate financial risk through study, evaluation, and, if no market for the proposed product and/or service existed, turn down the proposal. Was not this country founded on the principle of free enterprise, where people are free to succeed or fail on their own, without government?

DOE’s Record So Far – Projects That Have Received DOE Loans

  • Vogtle Nuclear Power Plant, the nation’s first nuclear power plant in the last three decades, but produces electricity at triple the cost of current rates. And all it cost us taxpayers was $8.33 billion.
  • Shepherds Flat Wind Farm, the world’s largest wind farm. It produces electricity, but not at a cost-effective price.
  • POET’s Project Liberty, a cellulosic ethanol power plant. Yet a cost comparison study between corn based and cellulosic ethanol has found that corn is still the cheapest way to make ethanol. Further, there are still problemswith ethanol.
  • Project Amp is a large rooftop solar project. While solar generated power is falling, it is still higherthan coal or natural gas generated electricity.
  • Agua Calentia, a 290 MW photovoltaic generation facility in Arizona, received a $967 million loan guaranteefrom DOE, despite the fact that solar generated power costs more than coal or natural gas generated power.
  • DOE has given loans for several concentrating solar power (CSP) generation facilities, such as the $1.2 billion loan to SunPower, currently building the California Valley Solar Ranch. 
  • DOE is supporting solar manufacturing plants that will help reduce the cost of solar power, such as Solopower and 1366 Technologies that got $150 million from DOE the day after Solyndra was raided by the FBI. And though not mentioned by name, let’s not forget the most famous solar manufacturer, Solyndra. (BTW, Solopower uses the same technology as Solyndra)

Boy, DOE sure can pick ‘em!

Whether He Likes It Or Not, This Is Obama’s DOE and Green Jobs Situation

  • The Obama administration said a $38.6 billion DOE loan guarantee programwould create or save 65,000 jobs. The program has created 3,545 new, permanent jobs after giving out almost half the allocated amount of loan money. As of September, 2011, DOE had dispensed $18.1 billion. Just so you know, that’s $5,105,782 per job.
  • President Obama pledged in 2008, while a presidential candidate, to create five million green jobs over 10 years. That pledge was overly optimistic. A study by the Brookings Institute found clean-technology jobs accounted for just 2 percent of employment nationwide, while the nationwide unemployment rate is currently over 9 percent, about 13.9 million people.
  • The green jobs and new jobs record is even more depressing when you consider that almost any job can be considered a new green job. For example, anything that helps put America on the path to a cleaner and more efficient future can be considered a green job. That means jobs in the public transit sector (drive an electric motor bus), jobs in green building (janitor in a green building), or jobs in energy efficiency (making light weight, high strength steel) can be considered new green jobs. (Building an SUV? Blue-collar. Building a hybrid? Green-collar) The category can get imprecise. There can be temptation towards green-jobs inflation, because the idea is that environmentalism can actually add green jobs is key to this argument. Obama has said that he wants to create 5 million new green jobs, but it’s impossible to sayhow many of those jobs will be new, and how many will be shifted over from less green industries. 
  • Money to help support the renewable energy industry from the 2009 stimulus bill continues to go overseas. In fact, more than 80 percent of the first $1 billion in grants to wind energy companies went to foreign firms. The largest grant made under the DOE program so far, a $178 million payment, went to Babcock & Brown, a bankrupt Australian company that built a Texas wind farm using turbines made by a Japanese company. All this from a president who chastises companies for out-sourcing.

When government steps in to pick winners and losers based on politics it promotes crony capitalism. A restrained federal government is essential to stopping the crony capitalism that’s ruining our markets.

But that’s just my opinion.