Posts tagged taxpayer

“On average, each Fortune 100 company received about $200 million in (taxpayer funded subsidies.)”

0

 

Source: http://www.againstcronycapitalism.org

By

“On average, each Fortune 100 company received about $200 million in (taxpayer funded subsidies.)”

 

corpoarate-welfare-cc1-484x565

 

Think about that. On average each of the largest 100 companies in the world receives $200 million from the US taxpayer, each year. Some more than others of course.

This is not capitalism. This is crony capitalism and it is dangerous to our economy and our society. If small government people are going to talk about how free markets are preferable to the incestuous system we have now they need to go after corporate welfare.

Each member of the House and Senate should be held accountable on a day to day basis. Who voted for what? And not only on whether a lawmaker voted to make a bill law, but also if a member voted to move something into (or out of) committee. What were the committee votes? What maneuvering happened?

If we want a less crony capitalist government it’s going to take some monitoring (and perhaps at least equally as important, reporting). We have the technology.

 

(From The National Review)
 
So who are the major corporate-welfare queens? The biggest grant recipients were
General Electric ($380 million), followed by General Motors ($370 million), Boeing ($264 million), Archer Daniels Midland ($174 million), and United Technologies ($160 million).
 
Double- and triple-dipper Archer Daniels Midland got just under $1 billion for USDA farm-program loans, and this doesn’t include ethanol subsidies. Another $10 billion was doled out through federal insurance, often in the form of surety bonds. The No. 1 federal insurance program was the Export-Import Bank, with Wells Fargo and JPMorgan Chase both receiving more than $3 billion in such aid and Citigroup and Bank of America receiving more than $1.5 billion in taxpayer backstop insurance. (Remember, this doesn’t include TARP money.) Deere, American Express, and even Walmart reeled in federal insurance as well. Amazingly, all but one of the Fortune 100 stood in the federal soup line to take at least some form of corporate-welfare benefit. In other words, as Open the Books founder Adam Andrzejewski puts it: “Mitt Romney had it wrong. When it comes to the Fortune 100, it’s 99 percent, not 47 percent, on some form of the government’s gravy train.”

Click here for the article.


Image credit: http://www.againstcronycapitalism.org
 

Black Budget Spending with CAFR Expert WALTER BURIEN

0

 

Black Budget Spending with CAFR Expert WALTER BURIEN

 

3-6-2014 8-54-59 PM

 

YouTube Preview Image

Produced by NextNewsNetwork

Published on Mar 6, 2014

Every year, the Federal Government spends trillions of dollars. Budgets of states, counties and cities also put out vast sums of money for goods and services. Official agencies are required to document their spending, so these expenses can be viewed by the public. One of the statements used to fill this requirement are called Comprehensive annual financial reports, or CAFR’s.

Although designed to deliver information to the public, these reports are usually so large and confusing, they can not be understood by most people. It takes years to learn how to properly interpret one of these massive statements.

Walter Burien is an expert on CAFR reports. He is a former Navy veteran and has worked trading commodity futures.

Burien is our guest on the show today. He is here to talk to us about CAFR’s, and what they mean to ordinary Americans. We will discuss black-budget spending, as well as the causes behind greater levels of spending.

Download your free Next News “Heroes & Villains” Poster here: http://nextnewsnetwork.com/the-2013-h…

 

Audit: School employee used nearly $500,000 on iTunes, jewelry

0

 

Source: http://tennessee.watchdog.org

By Chris Butler

Audit: School employee used nearly $500,000 on iTunes, jewelry

 

A former Alcoa City School District employee who oversaw federal funds took nearly $500,000 in taxpayer money to use for herself, according to an audit Tennessee Comptroller Justin Wilson released Tuesday.

The former employee spent the money on her home mortgage, food, jewelry, clothing and iTunes songs, Wilson said. She even invested some of that money in a local gym, according to the audit.

Justin Wilson

Justin Wilson

Unlike many other state audits involving theft of taxpayer money, in which authorities already have indicted the accused government employee, officials haven’t arrested the employee yet, and they haven’t publicly identified her.

“Due to the fact that federal money is involved, this matter has been referred to the U.S. Attorney’s Office in Knoxville,” said Cortney Dugger, spokesman for Tennessee Ninth Judicial District, in a statement to Tennessee Watchdog.

Dugger couldn’t say whether local or federal officials, or both, would prosecute the case, assuming an arrest is made.

Director of Schools Brian Bell didn’t return Tennessee Watchdog’s messages seeking comment Tuesday, and neither did anyone at Knoxville’s U.S. State Attorney’s Office.

According to the audit, the former school district employee, who assisted the school district’s federal projects administrator, diverted the half-million dollars from the district and two professional organizations — the Tennessee Attendance Supervisors Steering Committee and the East Tennessee Attendance Supervisors Association — where  she served as treasurer .

The audit also said the school district reimbursed her for 70 work-related trips that she didn’t actually take.

The Tennessee Bureau of Investigation assisted with the investigation, which covered almost six years, comptroller spokesman Blake Fontenay said in a news release.

The audit also said the school district and the two professional organizations didn’t properly oversee how the employee spent taxpayer money.

Contact Christopher Butler at chris@tennesseewatchdog.org. or follow him and submit story ideas on his official Facebook page.

Your new landlord lives on Wall Street

0

 

Source: http://www.againstcronycapitalism.org

By

Your new landlord lives on Wall Street

 

Probably not Wall Street renting this one.

Probably not Wall Street renting this one.

 

In the wake of the housing crash, wide swathes of the desert Southwest, Florida, Atlanta, parts of California, and other places were littered with relatively new homes which were empty. The pre-seeded lawn turf often hadn’t even taken root before the foreclosures began.

Each vacant home represented a personal economic disaster for someone. Families moved in with grandparents. Pets were left in shelters which were filled far beyond capacity. It was only a couple of years ago. For many the memory is still very fresh.

But at about the same time parts of Tuscon started to be reclaimed by tumbleweeds a few hedge funds (and banks) figured that there was yield to be made from renting the homes which were now unused back to the people who could no longer afford to own them. If the homes could be pooled along with the rents, perhaps the investments could even be sold as derivatives.

Market solution right?

Wrong.

Why did the Crash of 2008 happen?

The version we hear now is that Wall Street created all these bizarre instruments for investing, got greedy, and then it all toppled on itself. That’s the version one will hear from outlets like The Washington Post or Time.

Then there’s another version which is liked by the more conservative folks which holds that the Community Reinvestment Act  signed by Clinton encouraged home ownership in places where people really had no business taking on a mortgage. Then the poor risks imploded the market.

Both narratives have a lot of truth to them. Yes Wall Street got greedy. Yes it did create overly complex instruments which went haywire. And yes the Community Reinvestment Act, an insane act of social engineering if there ever was one helped to collapse the market.

But these things are only a part, and not the main part of the story.

The Crash of 2008 occurred because Allan Greenspan panicked in the wake of the 2000 recession and the 2001 attacks on the World Trade Center and Pentagon. He cut interest rates to low and kept them there for too long.

After folks had gotten hammered in the tech bubble collapse of the late 1990s they looked around for a new way to grow money. Baby boomers were staring right at retirement. Suddenly they discovered residential property which could be financed at next to nothing thanks to the Fed keeping rates lower than they should have. Plus many people rationalized, real estate was tangible, unlike tech stocks. Baby boomers, and then their children, piled in because of all the cheap money from the Fed. Before Greenspan knew it he had ignighted a worldwide fire fueled by easy money. The crash was only a matter of time.

But when the carnage came most of the banks (especially the megabanks) emerged. Some, like Goldman Sachs, stronger than ever.  First they were bailed out by the US taxpayer directly to the tune of probably more than a $trillion (we don’t really know.) Then after the acute phase – you know the time when families across the country were waiting in in humiliation for the banks to kick them out of their homes (remember that?)- the Fed began the quantitative easing infusion of monetary junk into the arm of the financial sector.

With time the banks were recapitalized (even if they were now easy money junkies) and fat bonuses were had by many courtesy of the taxpayer.

The former homeowners were not recapitalized however, and found that they had just rejoined the rental market – if they were lucky enough to have a stream of income. 2010- 2011 were especially hard years for many Americans. They were record years for a few of the megabanks.

Now a few years on the recapitalized banks, the insiders, the friends of the Fed, have picked up the homes which were in distress to rent them back to great unwashed. How nice of them. Especially having been bailed out by the great unwashed.

But that is life in a crony capitalist economy. If one has friends in the government one gets hooked up. If one doesn’t one gets to rent one’s house from a faceless PO Box in downtown Manhattan.

And make sure the rent is on time. You wouldn’t want to have us kick you out of your home again would you?

Click here for the article.

Image credit: http://www.againstcronycapitalism.org


Nick Sorrentino
About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.

 

Will GOP lawmakers do anything about the “Too Big To Fail” bank subsidy? Probably not.

0

 

Source: http://www.againstcronycapitalism.org

By

Will GOP lawmakers do anything about the “Too Big To Fail” bank subsidy? Probably not.

 

TBTF-23

 

Dave Camp in the House and David Vitter in the Senate are looking to address the implicit subsidy granted to banks designated as too big to fail. These banks are able to borrow at lower than true market rates because they are backed by the US taxpayer. Their smaller competitors who do not have this taxpayer financed guarantee must borrow at higher rates and so are at even more of a disadvantage versus the big guys. Over time this means that capital will increasingly move from small banks to large. (This is just one of the problems with Dodd-Frank.)

This undermines the very foundation of the marketplace and our economy.

Perhaps Camp and Vitter can figure something out, but it will be tough. The big banks dump piles and piles of money into the coffers of members of Congress on both sides of the aisle.

(From The Washington Post)
 
“Eliminating the megabanks federal handouts is a simple matter of common sense,” Vitter recently said. “Megabanks have been growing at a rapid pace since the financial meltdown, largely on the backs of U.S. taxpayers.”
 
Neither Vitter nor Camp could be considered liberal sympathizers. Rather, their interests in ending big bank subsidies center on a key Republican tenet of protecting the free-market economy. Subsidies create market distortions that fly in the face of that tenet.
 
Still, a vast majority of Republicans are unlikely to jump on the too-big-to-fail bandwagon. The securities and investment industry pumps millions of dollars into the party’s coffers, handing $3.5 million to the National Republican Congressional Committee this election cycle, according to Center for Responsive Politics.

Click here for the article.

Image credit: http://www.againstcronycapitalism.org


Nick Sorrentino
About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.

 

Okay Mr. President, you want to talk about “inequality”? Let’s talk about it.

0

 

Source: http://www.againstcronycapitalism.org

By

Okay Mr. President, you want to talk about “inequality”? Let’s talk about it.

 

SOTU-cc-565x376

 

I woke up this morning to Steve Liesman on CNBC explaining the theme of tonight’s State of the Union Address. You see, since 1980 middle class wages have only gone up only 50% in inflation adjusted terms whereas for the top 1% of earners income has gone up by 210%. Something clearly must be done. How can such a disparity be? This is unfair. Can’t the government “solve” this?

The new narrative which has likely been crafted by John Podesta super crony capitalist extraordinaire, is that Congress (specifically the Republican controlled House) isn’t letting the president address the issue of income inequality.

“It’s those old guys who don’t care about you who are holding back the manna from heaven aka Washington DC. It’s their fault not mine. I’m not incompetent and way out of my league even after 5 years in the White House. Not my fault. It’s the selfish and rich Republicans. They want you to remain poor.”

Rally the base when times are bad is the old political wisdom, and they are very bad for this president. Shore up the folks who will defend you no matter what and change the conversation from Obamacare. Anything but Obamacare.

Given that the ACA is Obama’s chief “achievement” to date this is a particularly sad state of affairs. The president’s “pivot” (the word is right up there with “optics” in my book) toward income inequality is a cynical political move. The White House is desperate to regain at least some momentum in the face of a 2013 which was one failure after another.

But since Mr. Obama seems keen on bringing it up, let’s talk about inequality.

Despite what the establishment #oldmedia always say, the increased income inequality that we see is not the result of the “rich” taking advantage of unfettered markets and then making a mint at the expense of everyone else. Capitalism, free markets, free thinking, entrepreneurship, innovation, is not the problem. Capitalism is in most respects the cure. No, the problem is that business and government have increasingly partnered with one another to make some very rich and to shut out others. It’s too little capitalism which is the problem.

Let’s take a look at the most obvious example, Wall Street.

Has Wall Street reaped the windfall it has over the past 5 years because of the free market, because of capitalism?

Absolutely not. Had the free market been allowed to work in 2008 Goldman Sachs, AIG, Citi, Bank of America, and Morgan Stanley would probably be history. These banks leveraged themselves out too far and got caught exposed. Their greed did them in. Mr Market made a margin call and many “masters of the universe” turned out to have feet of clay after all. The banks should have been allowed to collapse so that better managed banks could fill in the space.

The banks weren’t too big to fail. They could have failed and life would have gone on. ATMs would have kept working. The sun would have still risen in the east. The economy after a period of adjustment would have righted itself and emerged much healthier for having jettisoned the poorly managed firms. Lloyd Blankfein would have been out of a job, but he’d have survived somehow in the Hamptons.

But that isn’t what happened as we know. The managers of these institutions knew how to manipulate the levers of power. They were able to engineer a massive bailout, which started at $700 billion and just grew from there. In the years after the bailout bonuses were paid out at the big banks with abandon. These bonuses were for the most part paid for by the American taxpayer. No wonder people are angry.

But the bailouts weren’t capitalism. The bonuses which were paid to Jamie Dimon and friends weren’t a result of “free markets.” They weren’t the just rewards of building a better mousetrap, or even building a better derivative algorithm. They were the result of crony capitalism, a soft form of fascism, which is of course a form of socialism. The bankers made millions because the state redistributed the income of everyday Americans and gave it to Wall Street.

Or take for example the sell off of the taxpayer’s (forced) position in GM at a loss last year. In addition to losing $10 billion on the deal for the taxpayers, the deal done by Treasury unleashes the executives which so long as money was still owed to the taxpayer couldn’t go nuts with executive compensation. Now, after the $10 billion taxpayer loss they and the GM board are free to do as they wish in the pay department.

Or what about the huge percentage of so called “green” energy initiative grants and loans which went to politically connected people in 2009. Folks made millions, in wind, solar, algae, and who knows what else, all again courtesy of the US tax payer. Almost none of the ventures were economically viable. But lots of people got paid that is for sure.

There are probably thousands of other examples over the last 10 years or so (and many more going back way before the past decade,) ranging from war profiteering of all sorts, to cronyism in the new healthcare law, to draconian copyright laws which are a subsidy to Hollywood, to, well, there are many other examples which we have chronicled at Against Crony Capitalism.

So we shouldn’t be surprised that there is so much income inequality. Business and government in this country have partnered up. Sometimes the government has the upper hand. Sometimes business does. But both parties engage in the crony capitalism waltz to enrich themselves, to the exclusion of a large part of the American population.

And at the heart of it all, is the Federal Reserve.

Nothing creates illegitimate inequality (there is legitimate income inequality which exists in a free price system) like the Federal Reserve.

0% interest rates are for the most part pretty good for rich people. Money which is super cheap can be used to speculate and invest at almost no cost. In theory such low rates are also good for home buyers. Low rates keep monthly payments lower. More people buying homes (with lower payments) spurs the economy and then the economy roars back to life as we all buy Sub Zero freezers and SUVs. This was the logic behind the housing boom in the mid 2000s and it is the same logic the Fed is using now (with less success.)

But 0% rates also means that savers are hung out to dry. The prudent middle class is hammered. Those who have a nice nest egg built up over a lifetime of hard work and thrift find that unless they take on significant risk there is no return for their money. $500,000 in a CD not so long ago yielded an yearly payout of $25,000. Now because of the Fed keeping money cheap artificially that same $500,000 might yield $5,000 on an annualized basis if one is lucky.

Over time granny finds that $5000 per year isn’t enough to get by on even though her house is paid off. She finds she must dip into her nest egg a little more each year, which also in turn lowers her already modest yield. Soon the nest egg is gone.

Of course she can always seek increased yield in other places like the stock market, (which though they won’t say it is exactly where the Fed wants granny to put her money) but widows and orphans really have no business there. It’s bad enough for granny to lose her pool of wealth over years. Losing much of it in an afternoon is tougher to take. But that is what our current monetary policy encourages.

Not so long ago granny could keep up. She could beat inflation and pay her living expenses. When she died her wealth was passed on to the next generation.

But now, thanks to the Fed and it’s policies which benefit the hedge fund guys instead of the average saver it is unlikely that much of granny’s wealth will be passed on. Wealth has been pulled from the middle class.

“Inequality” has been exacerbated by a government which is too large. The only way to get the economy on track is to lessen the footprint of government. Free prices. Free markets. Let people create. Make it easier to start businesses

But tonight Obama is unlikely to talk about how after years and years of failure government must now get out of the way. (Boy how great would that be?) Or how government sponsored public/private partnerships steal money from the average American. Or how the government enabled the biggest bonus binge Wall Street has ever seen. Or how granny is getting clobbered because of loose monetary policy.

No, my bet is that he will talk about how the economy has worked for the “rich” while others have fallen behind. But he won’t call for freer markets and an end to price fixing at the Federal Reserve. He will instead insist that government “do something.” What that something is I’m not sure but the term “shovel ready” will likely make an appearance tonight along with its old buddy “infrastructure improvement.”

The president will probably wag his finger at the House GOP a bit and threaten to use executive actions to go around them. He’ll try to look like he means business.

Obama will also talk about the need to raise the minimum wage, which is basically economic suicide but makes for good sound bites. He will give hope to people who are hurting but who unfortunately may not understand that if the minimum wage is raised they may soon be out of a job.

In short Obama will be long on proposals, long on rhetoric, but woefully short on understanding. Pretty much the to story of his presidency.

Image credit: http://www.againstcronycapitalism.org


Nick Sorrentino
About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.

 

 

Government Motors cuts the price of a new Volt

1

Source: http://www.againstcronycapitalism.org
By Nick Sorrentino

Government Motors cuts the price of a new Volt

 

20130807-150339.jpg


According to the Mackinac Center at one point in 2011 every Volt one saw on the road had over $200,000 taxpayer dollars in it. Now that they’ve made a few more we are confident that the number is lower, thank goodness. However it does still have plenty of subsidy in it that one can be sure of.

The hope is that cutting the price of the Volt by $5,000 will bring more buyers to the showroom. With the $7500 tax credit that’s a good bit of dough.

I am a fan of “alternative energies.” There are places where wind, solar, geothermal, and even algae power make sense from a market perspective. But the Volt was almost Soviet style social planning in one respect and just good old crony capitalism in another respect. For all the good the car can do in reducing emissions, etc., it is far outweighed by the bad–that is to say the mountains of taxpayer money–that went into the vehicle.

But hey, they are on sale. So maybe now is the time to buy. Why purchase a masterfully designed, and very fuel efficient BMW 3 Series when you can buy a Chevy from Government Motors?

(From The Detroit News)

General Motors Co. is slashing the price of its plug-in hybrid Chevrolet Volt by $5,000, making it the latest automaker to lower prices of electric vehicles in the face of lagging consumer demand.

The Detroit-based automaker said it will cut the base price 12.5 percent, from $39,995 to $34,995. The price cut comes just weeks after the automaker announced a $5,000 give-back on the 2012 Volt and $4,000 on the 2013 model.

The first Volt, a 2010 model, cost $41,000.

Click here for the article.

Image credit: http://www.againstcronycapitalism.org

Detroit Red Wings Get New $400 Million Taxpayer-Financed Stadium While the City Goes Bankrupt

0

Source: http://libertycalling.net

Posted by Judy Morris

Detroit Red Wings Get New $400 Million Taxpayer-Financed Stadium While the City Goes Bankrupt

 

20130725-142745.jpg

 

….. we just got some breaking news that the Michigan strategic fund has decided to issue $450 million in bonds for a new stadium for the Detroit Red Wings, 44 percent of which will be financed publicly…..

Well, you know, I mean, I think that Detroit built a new baseball stadium, it built a new football stadium, and lo and behold, here we are a few years later and Detroit is still going into bankruptcy.

Read the rest at Therealnews.com, here.

IRS Execs “Commute” via plane, Charge taxpayers for flights (3 over $100K last year)

0

Source: http://www.againstcronycapitalism.org

By

IRS Execs “Commute” via plane, Charge taxpayers for flights (3 over $100K last year)

 

 

One would think that to be an executive at the IRS one would at the very least have to reside generally in the Washington DC region. But not so. Some top IRS brass live in places such as Dallas, Atlanta, and Minneapolis. These guys must be pretty indispensable because it’s costing taxpayers hundreds of thousands of dollars to have them fly in.

Remember though, that travel is taxable.

 

(From AJC.com)
 
In other words, they would fly weekly to and from Washington, D.C. by plane, and then bill the taxpayer for that travel and their extended stay in D.C. – and it is not a temporary situation, but has been going on for years.
 
One IRS official, labeled “Executive B” in the report, traveled to Washington, D.C. a total of 282 days in Fiscal Year 2012, claiming almost $127,000 in travel costs. (That’s $450/day if you do the math.)
 
In FY 2011, “Executive B” traveled to Washington 238 days, with total travel costs of almost $116,000.

Click here for the article.

Image credit: http://www.againstcronycapitalism.org


Nick Sorrentino
About Nick Sorrentino

Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.

Lawmakers and aides leaving Capitol Hill because they will be forced into Obamacare

1

Source: http://www.againstcronycapitalism.org

By

Lawmakers and aides leaving Capitol Hill because they will be forced into Obamacare

 

Capitol_Hill_-_blue_sky_with_clouds1

 

Currently congresspeople and their staffs have 75% of their premiums paid for by the taxpayer. The plans they enjoy are also top notch. Top top notch.

But because of the way Obamacare was written, the law we needed to pass before we knew what was in it, lawmakers and their aides are about to be thrown into the vortex of the Obamacare healthcare “exchanges.” And guess what? They don’t wan’t to go down the hole.

Now, it’s perfectly OK for the average American to deal with this nightmare.

 

House Democratic leadership says the issue must be resolved.

“The leadership has assured members that fixing this issue is a top priority,” said one Democratic leadership aide. “This issue must be fixed by administrative action in order that the flawed Grassley Amendment’s spirit is honored and all staff and members are treated the same.”

It could be politically difficult to change this provision. The provision was put in the bill in the first place on the theory that if Congress was going to make the country live under the provisions of Obamacare, the members and staff should have to as well.

Its the law cc

But for the members of the House and Senate who voted for the colossal mistake which is Obamacare, or as I like to call it “Obama’s Iraq,” the “Affordable Care Act” is a burden they’d just assume not deal with. They are federal employees after all. A special imperial class.

Rep. John Larson, a Connecticut Democrat in leadership when the law passed, said he thinks the problem will be resolved.

“If not, I think we should begin an immediate amicus brief to say, ‘Listen this is simply not fair to these employees,’” Larson told POLITICO. “They are federal employees.”

Good enough for you. Not good enough for them.

Click here for the article.

Go to Top