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corruption Archive

Tuesday

15

November 2011

2

COMMENTS

Should Congressional Insider Trading Be Illegal?

Written by , Posted in Big Government, Economics & the Economy, Waste & Government Reform

A storm has erupted following 60 Minutes coverage of Peter Scheizer’s new book, Throw Them All Out, which highlights, among many other things, instances of “insider trading” by members of Congress. Following the report, many have called on Spencer Bachus (R-AL), Chairman of the House Financial Services Committee, along with other politicians implicated by the book, like former Speaker Nancy Pelosi and current Speaker John Boehner, to resign.

In the past, I have argued that insider trading ought not be a crime, as it brings to the market information that might otherwise remain hidden. Imagine if we were able to learn of Enron’s dishonest bookkeeping much sooner, for instance, if some insider had been legally allowed to capitalize on the fact that they knew the company was lying. Economically, it really makes no sense to criminalize the practice. But politics adds a new dimension.

The addition of political power potentially changes the equation. As an example, if a politician can call a hearing on an issue, stirring up market angst, he can not only capitalize on it with his foreknowledge, but he can then call additional hearings just to create more angst on which he can capitalize. In other words, it potentially impacts the political process itself. The concern here is not misguided economic fairness, but rather the sanctity of the democratic process.

That politicians benefit financially from their political knowledge is not a new idea – we already knew that they consistently out perform average investors. And indeed, there may be some informational benefit and market efficiency reasons for allowing them to continue to do so. But it’s incredibly ironic that while there is a much stronger argument for curtailing the practice amongst politicians than among average market participants, politicians remain the only class immune from insider trading laws. It would make much more sense to constrain politicians, whether it be Congressional rule or legislation, and free the private individuals than our current approach of the other way around.

Ultimately, however, politicians have to answer  to their constituents. Regardless of the legality of their actions, the voters will ultimately decide. The more important issue from where I sit, and one which I think is being largely ignored in coverage of this story, is the degree to which politicians are involved in all manner of economic minutia in the first place. If they constrained their activities to those with Constitutional authority, there would be far less opportunity for financial mischief in the first place.

Monday

9

August 2010

0

COMMENTS

The Circle Of Political Life

Written by , Posted in Waste & Government Reform

Consider this a perverse form of the circle of life.  It goes like this: politicians tax citizens – > politicians use taxes to bailout businesses -> businesses donate money to politicians.

Several companies that escaped financial failure two years ago through massive taxpayer-funded bailouts are spending millions of dollars to make donations to political causes and even some candidates’ campaigns.

General Motors, Chrysler and Citigroup are just three of the biggest bailout recipients who have continued to remain politically active, through their political action committees, federal lobbying or direct donations to the pet projects of lawmakers.

The potential public relations disaster for firms spending big dollars on political causes and federal lobbying after being extended a taxpayer lifeline has led some, such as AIG, Fannie Mae and Freddie Mac, to suspend their political activities until they pay the government back in full.

Sunday

1

August 2010

1

COMMENTS

Ethics Enforcement Is Rrrrrrrrrracist

Written by , Posted in Identity Politics

It’s no surprise, in today’s race obsessed political environment, to find yet another instance in which race is being used to deflect from troubling behavior or bad news.  This time, the entire idea of ethics is being challenged as racist.  You see, there are just too many black members of Congress being investigated for corruption.

Politico reports complaining, and cries of racism, coming from the Congressional Black Caucus regarding the number of their members currently in the spotlight for ethics violations.

The politically charged decisions by veteran Democratic Reps. Charles Rangel of New York and Maxine Waters of California to force public trials by the House ethics committee are raising questions about race and whether black lawmakers face more scrutiny over allegations of ethical or criminal wrongdoing than their white colleagues

…The question of whether black lawmakers are now being singled out for scrutiny has been simmering throughout the 111th Congress, with the Office of Congressional Ethics a focal point of the concerns. At one point earlier this year, all eight lawmakers under formal investigation by the House ethics committee, including Rangel and Waters, were black Democrats. All those investigations originated with the OCE, which can make recommendations — but take no final actions — on such cases.

There’s a “dual standard, one for most members and one for African-Americans,” said one member of the Congressional Black Caucus, speaking on condition of anonymity.

The article continues on without the authors ever once considering the most obvious explanation.  Maybe CBC members are being “disproportionally” investigated because they are disproportionally unethical.

This explanation is not to say that blacks are more likely to be unethical than whites. Rather, I think there are other forces at work.

Politicians, as a general rule, are scum.  It doesn’t matter what race they belong to.  They would almost all commit the worst of crimes if they thought they could get away with them (and many do think this quite often, usually to be proven right).  The question is, in so far as they do hold back from unethical behavior, what is the cause and why might it impact some politicians more than others?

The answer to the first question is easy.  Politicians are interested in getting elected.  If they think something will harm their electoral chances, they will usually refrain.

The next question, then, is whether there is any reason to believe that black politicians are less likely to be punished by their voters for ethical violations than white politicians.

Black politicians tend to be elected in overwhelmingly black districts, often gerrymandered for the purpose of ensuring “minority” representation.  Their voters, having been inundated with destructive identity politics propaganda for generations, have come to believe that they can only be fairly represented by someone who looks like them.  Race becomes the dominant qualifying criteria in these districts, much more so than other electorates.  White politicians are hardly ever voted for simply for being white (it wouldn’t make sense to do so even if some voters were so inclined, as they are usually running against white opponents).  The same is not true of black politicians. A corrupt black politician is still preferable to a white representative under this racial representation paradigm.

Black politicians are thus taught by their electorates that they are entitled to their positions.  Nothing they do can justify removing them from office, for the simple reason that they can never lose their color, the defining characteristic in the world of  identity politics.

While career politicians who routinely commit ethics violations are ultimately to blame for their actions, the voters who avert their eyes from such behavior have to take their share of the responsibility for creating politicians, like Charlie Rangel, who think that they are above the law.  If the Congressional Black Caucus really wants to know why so many of their members are running afoul of what little ethics enforcement politicians can muster to bring upon themselves, maybe they should start by asking their voters to care more about the character of their representatives, instead of their color.

Sunday

18

October 2009

0

COMMENTS

Sometimes The Truth Slips Out

Written by , Posted in Economics & the Economy, Energy and the Environment

Liberals and other leftists have by necessity gotten quite good at hiding their agenda.  When the people learn just what it is they want to do, it’s almost always soundly rejected.  Their solution to this is never to change their agenda, but to hide it.  Yet sometimes the truth just slips out despite their best efforts.  Here are a couple of recent examples:

Yes, we’re buying votes

The Washington Post collected commentary from economists, pollsters and other politicos regarding the President’s request to provide a one-time $250 check to Social Security recipients. The reason given by the President is that seniors need help because they won’t be getting a cost of living adjustment this year (because there was no inflation and thus no increase in the cost of living).

One democratic pollster strayed from this narrative, however, and let their true motivations slip out.  Acknowledging that the proposal should be adopted “for political reasons,” he suggested the $250 benefit “will go a  long way toward holding on to a voting bloc that will be critical in next year’s midterm election.”  This is what is known as vote-buying, a cynical practice of stealing from Peter to bribe Paul that big government liberals are especially, though not uniquely, prone to.

We need economic pain for environmental gain

Web editor for The Nation, Emily Douglas, let a big one slip at a recent panel discussion on the environment.  When asked how to “reverse our culture of consumerism here in the United States,” Douglas immediately fired back, “make the recession worse.”  Although she claimed later this was a flippant answer, she also confirmed in her closing what many of us have said about the environmental movement for some time: it seeks to sacrifice human well-being in the name of environmental protection.  Its primary target is capitalism, because it has done more than anything to elevate the living standards people throughout the world.

Giving her final thoughts, Douglas stated flatly that she thinks “things should be more expensive” for Americans.  In other words, she wants people to be able to afford less conveniences, and thus to have a lower standard of living.  Sadly, this seems to be the dominant view in the modern environmental movement.

Tuesday

29

September 2009

0

COMMENTS

Suddenly Unfunded Mandates Are All The Rage

Written by , Posted in Health Care, Welfare & Entitlements

When it came to campaigning against George W. Bush, unfunded mandates were despicable.  Now they’re just a convenient way to hide the costs of annexing health care:

The more we inspect Max Baucus’s health-care bill, the worse it looks. Today’s howler: One reason it allegedly “pays for itself” over 10 years is because it would break all 50 state budgets by permanently expanding Medicaid, the joint state-federal program for the poor.

Democrats want to use Medicaid to cover everyone up to at least 133% of the federal poverty level, or about $30,000 for a family of four. Starting in 2014, Mr. Baucus plans to spend $287 billion through 2019—or about one-third of ObamaCare’s total spending—to add some 11 million new people to the Medicaid rolls.

Not every state is hit equally, though. Some states have politically connected crooks to insulate them from the burdens they place on everyone else.

Monday

21

September 2009

0

COMMENTS

ACORN Has No Right To Taxpayer Funds

Written by , Posted in Waste & Government Reform

A curious item in Politico today suggests that there might be a constitutional challenge to the recently passed Defund ACORN Act:

Article 1, Sections 9 and 10, of the Constitution explicitly prohibit the passage of “bills of attainder”: legislation targeted to benefit or penalize an individual or group, most often by excluding it from government service.

Does the House’s Defund ACORN Act, which passed 345-75 last week, constitute a bill of attainder? The case law on the issue is inconclusive, but it’s provided a glimmer for ACORN’s diminishing cadre of defenders.

A bill of attainder is basically a congressional finding of guilt.  Congress could not, for instance, determine that Joe Bob committed treason and then send him to hang.  That’s properly considered a judicial function.

There is no application to the present situation. Congress has neither concluded guilt nor imposed punishment on ACORN. As is so often said, Congress has “the power of the purse,” which means they have the authority to fund constitutionally permitted programs and policies as they see fit. They also must have the authority to defund them. Moreover, they can do so at their prerogative without offering any sort of explanation beyond what their constituents demand.

Some seem confused by the fact that Congress acted on the appearance of criminality by ACORN. Therefore, they conclude, ACORN was “punished” by having its funding revoked without a trial.  This is mistaken. While it was the appearance of criminality that politically forced the hand of Congress, the actual commission of a crime was not relevant to the legality of the legislation. They no more had to conclude ACORN’s guilt of anything than they would have to first show the commission of a crime before halting funding for the F-22, or any other government program. It was more than enough that Congress had finally lost faith in the ability of ACORN to carry out its charge in receiving federal dollars.

As it works with government agencies ACORN is expected to execute certain functions with a degree of competency. Congress has a responsibility for oversight to ensure that they fulfill these obligations.  Their determinations are not the equivalent of criminal findings as dealt with by bills of attainder.

Tuesday

3

February 2009

0

COMMENTS

What’s Good For Thee…

Written by , Posted in Taxes

Representative John Carter proposes to equalize the law for elected officials and the rest of us.  That’s right, what’s good for the tax-cheating liberal goose should be good for the gander.  Or something.

H.R. 735: Rangel Rule Act of 2009

‘Any individual who is a citizen of the United States and who writes ‘Rangel Rule’ on the top of the first page of the return of tax imposed by chapter 1 for any taxable year shall be exempt from any requirement to pay interest, and from any penalty, addition to tax, or additional amount, with respect to such return.’.

Tuesday

9

December 2008

0

COMMENTS

Shocker: Gov. Blagojevich(D) Arrested

Written by , Posted in Waste & Government Reform

No one familiar with Chicago politics will be surprised:

Illinois Gov. Rod Blagojevich was arrested at his North Side home Tuesday morning. His chief of staff John Harris was taken into federal custody as well.

The criminal complaint by the FBI agents said the two had been arrested on federal corruption charges. Each were arrested on two charges of conspiracy to commit mail and wire fraud and solicitation of bribery.

Blagojevich and Harris will have an initial appearance in U.S. District Court Tuesday.

The arrest is the latest step in a three-year probe of “pay-to-play politics” in the governor’s administration. A statement by U.S. attorney Patrick Fitzgerald said Blagojevich and Harris “allegedly conspired to sell U.S. Senate appointment, engaged in pay-to-play schemes and threatened to withhold state assistance to Tribune Company for Wrigley Field to induce purge of newspaper editorial writers.”

Federal authorities were permitted by a judge to record the governor secretly before the November election after raising concerns that a replacement for President-elect Barack Obama would be tainted.

Fitzgerald’s office said the 76-page FBI affidavit alleges that Blagojevich was taped conspiring to sell or trade Obama’s vacated U.S. Senate seat for financial and other personal benefits for himself and his wife.

According to the affidavit, Blagojevich floated the idea of “a substantial salary for himself at a either a nonprofit foundation or an organization affiliated with labor unions;” a corporate board seat for his wife worth as much as $150,000 a year; promises of campaign funds, including cash up front; and a Cabinet post or ambassadorship for himself.

Blagojevich also tried to get critical columnists fired from the Chicago Tribune.

In addition, the charges allege that Blagojevich tried to influence the composition of The Chicago Tribune editorial board in exchange for state aid to the Tribune Company, which owns the newspaper.

Fitzgerald said Blagojevich was recorded in wiretaps as saying, “Fire all those bleeping people, get them the bleep out of there and get us some support.”

Sadly, the larger lesson from this aspect of the story will likely be ignored.  Government involvement in business is dangerous and prone to corruption.  When a political body supplies funds, it inevitably attaches strings.  This is true whether it’s the federal government giving money to the states, or government giving money to business.   It becomes particularly problematic in the latter case, as government has the force of law behind it to create a further uneven playing field.  Politicians seem incapable of restraining themselves from exploiting this kind of arrangement.

But many of the same people in the media who will likely, and rightfully, condemn this attack on their freedom to criticize government without fear or coercive reprisals are, at this very moment, cheerleading the democrats’ efforts to gain controlling stakes in automotive and other industries.  Does anyone really think Nancy Pelosi, Harry Reid and Barney Frank will be any better at keeping their grubby hands of private enterprise than Gov. Blagojevich?