Category: insider corruption

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insider corruption

Is Congress the “One Percent”?

Splitting the country between the “99 percent” and the “1 percent” scapegoats successful people. Being rich is a good thing . . . unless the wealth is obtained dishonestly.

Which brings me to Congress.

Last Sunday, 60 Minutes featured Peter Schweizer, author of Throw Them All Out, a new book detailing what he calls “soft corruption” — unethical behavior that may not quite qualify as illegal.

Schweizer points out that members of Congress are not covered by laws against insider trading, thus legally able to “leverage” the information they receive to “enrich themselves.” At the cusp of the 2008 financial meltdown, Rep. Spencer Bacchus (R-Ala.) was receiving special briefings from the Treasury Secretary and the Chairman of the Federal Reserve and “buying option funds that would go up in value if the market went down.”

Bacchus is hardly alone. During the healthcare debate, numerous congressmen traded healthcare stocks.

Then there are IPOs — initial public offerings of stock — which are usually available only to major investors. Somehow Speaker Nancy Pelosi was cut in on a least eight IPOs, including a lucrative one from VISA . . . at a time major credit card legislation was pending in the House.

None of “our” representatives deigned to openly discuss their amazing financial acumen. But as 60 Minutes correspondent Steve Croft confirmed, “Most former congressmen and senators manage to leave Washington, if they ever leave Washington, with more money in their pockets than they had when they arrived.”

Funny, they haven’t done nearly so well handling the country’s finances.

This is Common Sense. I’m Paul Jacob.

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government transparency insider corruption

Mad About Power

“There’s no such thing as too much power.”

That’s the word from Democrat Herb Wesson, former Speaker of the California Assembly. Wesson was defending the Speaker’s awesome control over the purse strings.

In a story headlined, “The power of one: Perez controls Assembly with money,” the Sacramento Bee reports: “Assembly Speaker John A. Pérez single-handedly doles out millions in public funds each year to his 80 members: No vote, no committee, no debate.”

The article was vague on details, because the Speaker refused open records requests from the Bee and the Los Angeles Times. In August, the newspapers filed suit to see the legislative records.

Assemblyman Anthony Portantino charges that Speaker Pérez cut his staff as retribution for voting against this year’s state budget — although the state constitution makes it a crime to coerce a member’s vote. Assemblyman Tony Mendoza admitted that his office budget was slashed by $80,000 when the Speaker demoted him from the Rules Committee, but he wouldn’t discuss it with reporters.

Were a special interest group to similarly bribe legislators, Californians would be up in arms. But a politician? We’ll see how this plays out.

“It’s a very difficult house to run,” argues Mr. Wesson, “and you have to have the leverage that the speaker has.” Steve Maviglio, former spokesperson for two Assembly Speakers, echoes that sentiment, claiming that without a healthy bribery power, the legislative chamber would descend into “absolute chaos.”

Extreme. But some “chaos” must be better than the current all-too-orderly system of corruption.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets insider corruption too much government video

Saving “Capitalism”

Excellent testimony by Prof. Russ Roberts of George Mason University about the government bailout of the financial sector. Naming Bush, Obama and Congress, Prof. Roberts charges: “You’ve helped risk-takers continue to expect that the rules that apply to the rest of us don’t apply to people with the right connections. You’ve saved the system, but it’s a system not worth saving. It’s not capitalism; it is crony capitalism.”

Let’s keep this common sense in mind.

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free trade & free markets insider corruption national politics & policies

The Clipping and Culling Crisis

I just came across a paper on an old bout of hyperinflation — the “Kipper- und Wipperzeit” financial crisis in 17th century Germany — worth studying, considering that today’s smart money is on the radical debasement of today’s already-undermined dollar.

The Kipper- und Wipperzeit hyperinflation started out as a government program to bilk the people of wealth, but got out of hand. It became a free-for-all.

Back before credit money and fiat money, governments made special deals with miners and minters and the like, to coin money to spec. Those insiders put less metal into the coins than before, but called the coins the same. Debasement, pure and simple: Theft — fraud, to be exact.

It helped make a few major fortunes, fund some wars and the like.

But apparently moneylenders caught on, and began “clipping” the coins. Minters employed subcontractors to look for better-quality coins in circulation, paying for them in clipped coins. Soon everyone was clipping coins, and then culling them (hence the term “Kipper- und Wipperzeit” — “clipping and culling time”) to hoard the highest-value coins (with the most metal) and pawn off into the general circulation the lowest-value coins (with the least). Gresham’s Law in action led to spiraling prices and the breakdown of trade.

A great example of calculated, “clever” government policy spilling into the general population, leading first to rampant moral corruption and then ruin.

Something to remember, as clever folks contemplate “monetizing” today’s sovereign debt.

This is Common Sense. I’m Paul Jacob.

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free trade & free markets insider corruption too much government

Medallions “Stink of Tyranny”

Not long ago on Townhall.com I briefly told the tale of two journalists, both arrested for taking pictures at a public meeting. This stunk of tyranny, to me. “Government cameras on citizens? Dangerous. Citizen lenses trained on government? Essential safety devices.”

What I didn’t mention was that the public meeting was for the District of Columbia’s taxi-cab commission. The commission oversees what was once a remarkably free system of taxis, but has become more regulated while also earning a reputation for corruption. Pete Tucker, one of the reporters, was on the scene to cover a breaking story related to that corruption: The commission’s proposal to regulate the industry using the over-used and idiotic “medallion” system, familiar to New Yorkers and far too many other city-dwellers.

Well, Tucker’s work has reached the completion stage, now, with Reason TV’s video about the medallion system up on YouTube. It’s an eye-opener.

The gist of the piece may be familiar: Government regulation helps bigger businesses at the expense of smaller ones . . . as well as consumers. You may have read similar tales from economists such as those in the French Liberal School (Frédéric Bastiat), the Chicago School (Milton Friedman), the Austrian School (Ludwig von Mises), and Public Choice (James Buchanan). Courtesy of the Reason video, now you can see ordinary citizens making the case. One said, “We know tyranny when we smell it.”

The stench is also of corruption, which has driven the politics behind the new regulatory scheme.

This is Common Sense. I’m Paul Jacob.

Categories
education and schooling insider corruption media and media people national politics & policies

Cheaters Never Prosper?

The cheating scandal in the Atlanta Public Schools is ugly — 178 administrators, principals and teachers were caught changing answers on standardized tests. Nearly 80 percent of the schools investigated were found to be guilty.

One school held weekend pizza parties to organize the fraud. Former Superintendent Beverly Hall — named the National Superintendent of Year in 2009 — “is accused of encouraging the cheating.” Hall made hundreds of thousands of dollars in bonuses for the fraudulent test scores.

Meanwhile, one teacher fearing retaliation if she blew the whistle, declared, “APS is run like the mob.”

Yet much of the media spin is excuse-making:

  • On NBC’s Nightly News, Brian Williams called it “the risk of high-stakes testing.”
  • CBS Evening News informed us that, “Educator Diane Ravitch blames it on a federal law that links funding with test performance.”
  • ABC News reported that, “Many in the community are pointing the finger at No Child Left Behind, the federal policy that made test scores king.”
  • One expert said, “[S]ome educators feel pressured to get the scores they need by hook or by crook.”

I’ve been a consistent critic of No Child Left Behind and deplore the federal micro-managing of schools. But cheating is wrong. And the fault lies with the cheaters — not with those demanding better performance.

Paul Landerman, a former Atlanta teacher fired for reporting the cheating, told NBC, “The greatest value inside that system is loyalty to the system.”

System first. Your kids? Somewhere after that.

That’s the opposite of Common Sense. I’m Paul Jacob.

Categories
insider corruption

In the Money

The economy is down, but some businesses are still bustling. Take the business of running local government in Washington, D.C. Money must be rolling in. The mayor just asked the city council to raise the highest compensation level he is permitted to pay employees by $100,000.

No, not to $100,000. Mayor Vincent Gray wants to raise the top salary by $100,000 — from $179,000 to $279,000.

One council member called the new mayor “tone deaf”; another said the idea is DOA. “These [salaries] are in excess of federal Cabinet officials,” a third pointed out.

Sounds like the council is putting its collective feet down. It just isn’t going to overpay for manpower, right?

Well, not really.

The mayor stuck the new pay levels into a bill already asking the council to okay salaries for the police, fire and school system heads, all of which exceed the current legal limit. News reports say the council is “likely” to approve those.

That how DC “works.” Pay limits are set in law, and then, when the mayor wants to overpay, he has to get the council to approve the higher pay.

While allowing higher pay in some cases, the council is unlikely to make it easier for the mayor to overpay without their deliberated say-so. Why? To provide fiscal accountability? Or, more cynically, to give the council more political leverage to get more political spoils?

Did I mention that I’m pretty cynical about the motivations of politicians?

This is Common Sense. I’m Paul Jacob.

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ideological culture insider corruption political challengers

The Wicked Witch Is Dead

Many is the time I’ve compared various politicians to The Wizard of Oz’s man behind the curtain. They’re not bad men; they’re just not very good wizards.

But today brings a different connection to Oz: I can’t get the song, “Ding-dong, the Witch Is Dead!” out of my head.

Tuesday, Oklahoma’s Democratic Party primary voters ended Attorney General Drew Edmondson’s gubernatorial bid.

Regular readers of Common Sense know I’m no fan of Mr. Edmondson, who attempted to bully and threaten two others and me, the Oklahoma Three, for daring to push a petition to put a state spending cap on the ballot. Edmondson indicted us, in 2007, on a phony felony charge that carried a ten-year prison term. After a year and a half of Edmondson delaying to deny us our day in court, the trumped-up charge was dismissed.

We certainly weren’t the only victims of Edmondson’s put-politics-before-justice philosophy. A Competitive Enterprise Institute report judged Edmondson to be the third worst AG in the nation for, among other things, abusing “the power of [his] office for political ends.”

At CapitolBeatOK.com, Patrick McGuigan detailed much of Edmondson’s bad behavior, helping hasten the day that Oklahomans would be free of him. In January 2011 that day will come for the man once described as “Barney Fife with bullets — and no Andy.”

Justice is finally sweeping down the plains.

Oh, wrong movie. Here: You-know-who has just met his opportune bucket of water.

This is Common Sense. I’m Paul Jacob.

Categories
ideological culture insider corruption

Lott of Chutzpah

Some people you can always count on. Like former congressmen and current lobbyist Trent Lott.

Count on Lott to confirm that he’s a true-blue partisan of gravy-train politics-as-usual, a dyed-in-the-wool establishmentarian committed to extinguishing each faint, flickering chance to downsize Leviathan.

The man is a rock.

“We don’t need a lot of Jim DeMint disciples,” Lott with calm, sneering authority recently told the Washington Post, as his granite-hard jaw jutted with stern, rectitudinous integrity. “As  soon as they get here, we need to co-opt them.”

What kind of creature is a “Jim DeMint disciple”? What terrible deeds will these zombie-like Jim-DeMintians perpetrate if the heroic former congressmen and his redoubtable cohorts fail to co-opt them in time?

The creatures are affiliated with the Tea Party rebellion against the super-escalating scope and reach of the federal government, as manifested in the looming takeover of the medical industry, trillion-dollar annual budget deficits, etc. Senate candidate Rand Paul told the Post that the goals of Jim-DeMintian Tea Party sympathizers like himself have something to do with fighting for term limits, a balanced budget amendment, and legislation that is consistent with the Constitution.

Sounds like if they make any headway we can expect more freedom, more real wealth, less red ink, less Washington-based strangling of everybody.

Hence, Trent Lott to the rescue.

Thanks a lot, Lott.

This is Common Sense. I’m Paul Jacob.

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Common Sense insider corruption political challengers

Vote Absurdly If You Wish

Today is Election Day, with primaries or runoffs in 12 states. Let’s hope at least a few incumbents fall, from both parties.

Most Americans would cheer that. But we’ll then hear TV talking heads and pundits in the press tell us how crazily we’ve voted.

In 1994, ABC News anchorman Peter Jennings condescendingly reported that “The voters had a temper tantrum last week. . . . Parenting and governing don’t have to be dirty words: the nation can’t be run by an angry two-year-old.”

Were our choice so limited, I’d say give the two-year olds a shot.

Jennings’s snooty attitude has been echoed again and again this year. Mike Allen, Politico’s chief political writer, said after Utah’s Senator Bennett flamed out in a GOP convention, “There was no reason for his state to turn on him. Nobody delivers for Utah the way he does.”

Allen went on to rant about Senate Majority Leader Harry Reid’s unpopularity in his home state: “Voters are not thinking . . . the idea of Nevada kicking out Harry Reid is absurd! He’s the #1 senator: #1 out of 100. Nobody delivers for Nevada like Harry Reid.”

Apparently, Mr. Allen knows best. Utah and Nevada voters? Fools, the lot of them — for not liking all the presents their big-shot politicians delivered for them.

Common sense, on the other hand, has it that anyone who votes to please the Washington press corps is truly crazy.

This is Common Sense. I’m Paul Jacob.