Crapitalism's Axis of Evil

"The Bigs – Big Wall Street, Big Government, Big Labor, and Big Business – are all protected classes in the American political system."

Wall Street gambling and corporate tax avoidance are direct results of government policy passed and signed into law by Democrats and Republicans.  You can't leave the silo door open and then blame the rats for eating the grain.

Wall Street seems synonymous with capitalism, but few there espouse market principles. Likewise, Big Business rarely eschews state intervention, instead playing willing harlots for Washington’s wiles. The further Leviathan reaches, the more special interests latch to its tentacles. Restricting the state is essential to curtailing corruption and ensuring earnings come honestly. Smaller government affords less power for those with clout to co-opt.

The Crux:

A widening rift between political ideals rends America’s social tapestry. The Right, as embodied by the Tea Party, seeks individual liberty and equality before the law where each may earn as merit warrants. The Left, as evidenced by OWS, demands that government level results regardless of merit. Personal identity yields to collectivized class or demographic consciousness. (Bill Flax – Obama Tears Down his own Wall Street)

Michael Needham and Tim Chapman bring a big, nebulous problem into sharp focus...

The Bigs – Big Wall Street, Big Government, Big Labor, and Big Business – are all protected classes in the American political system.

The tax code, regulatory regime, and campaign finance laws are all written by those powerful enough to hire an army of lobbyists to descend on Washington. Labor unions pushed their way ahead of bond holders when the Establishment bailed out Chrysler. Solyndra got venture funding from the middle class taxpayer after spending $1.9 million lobbying the Establishment.

This corrupt nexus is at the heart of the dissatisfaction across the country towards Washington. (The Washington Establishment’s Big Problem)

OWS: Operation Wasteful Slacking

Ben Stein has produced some entertaining and trenchant commentary on Occupy Wall Street...

You poor kids. You are basically asking to be supported and taken care of by Mommy and Daddy. Wake up, kids. Wall Street is you, with all of your wants and needs and wishes, only they have the balls to go out and work for it. Sometimes they are crooks and sometimes they are fools -- but you know what? So are all of us. (Ben Stein – American Spectator)

Time has named him one of the Five Most Colorful OWS Celebrity Critics. Among his observations are that yes, he hates crony capitalism too, but sleeping in tents and crapping in parks doesn’t really do anything about it. He wishes the protesters would take more productive steps like doing actual investigative work. As for the outrage at the greed, he observed that you might as well get angry at people for breathing in too much air.

7 Deadly Sins -- Why Stop at Just One?

"You know what the worst deadly sin is? Spiritual pride or thinking that you're morally better than other people," Stein says. "That's what the Occupy Wall Street people are all about; thinking they're better than other people and that's a sin, too." (Ben Stein – Yahoo)

I agree.  Have the OWS screamers looked in the mirror?  Wrath and Envy are not pretty either.  And why just focus on greed?  Let's go after all the deadly sins!  Wrath, Sloth, Pride, Lust, Envy, Gluttony, and of course, Greed are all corrosives, eating away at our society and destroying our souls.

The seven deadly sins, or cardinal sins, are so identified because they are believed to be the root sins from which all worldly iniquities branch out. As the plethora of morality systems throughout the ages testify, these sinful seven have haunted our human existence since the dawn of time. The beauty of this list is that one does not have to be a member of the big three (Christianity, Judaism, Islam) to agree that they are bad. More importantly, if we could restore self-control to its rightful pedestal, we would have the moral authority to tell Big Government to go to hell next time it scolds us over salted french fries.

Make Yourself Useful

Stein used to write 7,000 word in-depth exposes on corporate fraud. "They were a lot of work but they eventually got some people prosecuted," Stein says. "They got some money recovered for stockholders." Stein offers that if the OWS crowd wants to do something helpful they should do the research necessary to direct and inform their discontent. (Ben Stein – Yahoo)

I would be cheering them on, and maybe joining them, if instead of extolling the virtues socialism and using bank lobbies as toilets, they hired lawyers and went about investigating the crony crapitalists and the politicians who love them. Stein has posited the possibility of grand internet clearing houses of information where tens of thousands of independent investigators could submit what they've found.  Lawyers and accountants could then collate the information and connect the grimy dots, shine a light on malfeasance, and perhaps get some crooks indicted.

The human bowel movement in the Guy Fawkes mask is losing steam anyway…

When Public Policy Polling took the temperature of Occupy Wall Street in October, “voters were split, with 35% supporting the movement’s goals and 36% opposing them.” As of today, the “split is 33-45, 11 points worse.” And it’s worse among everybody. The percentage of Democrats opposed to the movement “has risen from 16% to 24%. Meanwhile, both Republicans (from 13-59 to 11-71) and independents (from 39-34 to 34-42) have moved 13 or 14 points against O.W.S.” (Reason)

For every thousand lice-infested protestors beating the leaves, there is one dogged investigator hacking at the root 

Maybe OWS could grow up and make itself useful like Steve Croft at 60 Minutes. He's now braving a firestorm of criticism from Big Government's praetorian guard in the press over his expose on Congressional insider trading.  See Big Journalism’s takedown of Politico,  tongue bath giver to big government.  That Democratic Party web site lashed out at Croft with an especial wrath, exposing it as the  shameful purveyor of putrescent progressive porn that it is.

The first step to getting to the bottom of something is to face facts.  The left has not yet done that. 

Links to responsible journalists exposing crony corruption and congressional get rich quick schemes:
WaPo – Crony Capitalism Exposed
The Wonk Who Slays Washington
The Get Rich Congress

In an OWS World...

If you agree with OWS that more government control over the economy is the answer, then you must be willing to accept more Solyndras, more Fannie and Freddie failures, and more bailouts of businesses, banks and unions, as they gamble with your money.  


The result will be less entrepreneurship resulting in more expensive goods and services, lower wages, higher taxes and a lower standard of living.

Mark Steyn explains...

My colleague Rich Lowry correctly notes that many of the beleaguered families on the "We are the 99%" websites have real problems.

However, the "occupy" movement has no real solutions, except more government, more spending, more regulation, more bureaucracy, more unsustainable, lethargic pseudo university with no return on investment, more more more of what got us into this hole. (Mark Steyn)

Indeed. Unrepentant capitalist Charles Gasparino reminds us that capitalism's predations on the proletariat are mere trifles when compared to the serial Marxist miseries that have stained humanity and snuffed liberty and the light of reason while slaughtering hundreds of millions:

Don’t try to explain to any of these protesters how those who sought to create a Marxist utopian dream of revolution also gave us the Stalinist purges, Mao’s bloody Cultural Revolution and many other efforts to collectivize thought in the name of economic “justice.” (Gasparino)

Even the benign Western European democratic socialist model is collapsing. Germany is cutting back, and what's left of the safety net comes at a high price: Wage cuts, benefit cuts, compliant unions voluntarily  trading away worker bennies in exchange for no layoffs. Their tax system is grossly un-progressive, with consumption taxes hitting the rich and the poor equally.  A gallon of gasoline costs over six dollars, and everything else, including food and heating oil, is taxed at 19%, and that's on top of the income tax. 

"Call it Crapitalism"

Gasparino visited the socialist squatter's encampment on Wall Street, and came away with this observation...

Also absent was any notice of how the much-hated banks benefited not from free-market capitalism, which would have let them fail in 2008, but from crony capitalism that bailed them out.

The similar cronyism practiced by Trumka and the Obama administration -- massive spending on useless but politically connected businesses like Solyndra, paired with class-warfare rhetoric -- likewise has very little to do with free markets.  (Gasparino)

As John Stossel Says, Occupy Wall Street is Half Right...

If by "capitalism" they mean crony capitalism (let's call it crapitalism), a system in which favored business interests are supported by government, I'm against that, too.

But if they mean the free market, then they are fools. When allowed to work, the market has lifted more people out of the mud and misery of poverty than any government, ever.

I have at least found some common ground with some Wall Street protest supporters. Joe Sibilia, who runs the website CSRWire (Corporate Social Responsibility), told me, "You can't have an environment where people are betting on financial instruments with the expectation that the government is going to bail them out."

So we agree that Wall Street bailouts are intolerable. Now we just have to teach our progressive friends that truly free markets work for the benefit of all.

Government Money is Stupid Money

Barack Obama has ushered in a brave new era of unabashed Crony Crapitalism, gleefully rewarding friends and punishing enemies 

As if President Obama didn’t have enough bad news last week, Solyndra, which manufactures solar panels, filed for bankruptcy and laid off almost its entire work force of 1,100. Going down the tubes with it, of course, is a $535 million loan that was guaranteed by the federal government as part of the stimulus program.

And it seems the White House put pressure on the Department of Energy to OK the loan.

This is looking more and more like ‘Chicago Way’ political patronage; the president rewarding his friends. Even if it wasn’t, it is still criminally stupid

While Energy Department officials steadfastly vouched for Solyndra — even after an earlier round of layoffs raised eyebrows — other federal agencies and industry analysts for months questioned the viability of the company. Peter Lynch, a longtime solar industry analyst, told ABC News the company’s fate should have been obvious from the start.

“Here’s the bottom line,” Lynch said. “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.” (Obama’s Patronage Pigs Can’t Fly)

As stated in the article, no investment officer would have granted such a loan, and if she did, she would be fired for gross incompetency.  In fact, said loan officer would end up on the business end of a federal lawsuit for such bald-faced malfeasance.  Government bureaucrats who produce nothing and who pay no price for wasting billions of taxpayer dollars are woefully ill-equipped to pick winners and losers.

This was just one company. Imagine the money-wasting debacle an Obama “Jobs” program would be. Corruption, fraud and waste on a grand national scale.  This and other government-sponsored financial fiascos argues against giving one more dime to the Obama Administration for a "jobs" program.

Accountability at the Local Level

The way you build infrastructure is at the local and state level, in discrete pieces as its done now. Those projects are funded by taxes and people hold governors and mayors responsible for the efficient completion of such projects. Accountability at the local level. The state has a budget and the government has a vested interest in getting the project done ahead of time and on-budget. It’s a model that has worked well. When it doesn’t, people get voted out of office, or worse, put on trial and sent to jail.

How do the states fund these projects? Revenues from working people and the businesses that hire them. No economic activity, no revenue. Create a favorable climate for the jobs providers and the rest will take care of itself.

Obama’s Patronage Pigs Can’t Fly

Reason - Obama's Crony Capitalism

Dr. Frankenstein Turns Against His Monster

I'm not going to talk about the president's speech.  He is intellectually bereft, and perhaps the most economically ignorant president in the nation's history.  I will give him credit for pulling off a singularly unprecedented act :  Last night was the first time a sitting president kicked off his reelection with a campaign speech delivered to both houses of congress.  Kudos to President Obama!  Even FDR never dared to be so brazen, and the utter shamelessness of it was impressive.

On to some real news...

The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble.  (NY Times)

This reminds me of when the elder George Bush took down Panamanian caudillo Manuel Noriega. The left snidely (if not inaccurately) pointed out that Noriega was a monster of US design, so ex-CIA Chief Bush was just cleaning up his own mess.

Don’t get me wrong. I want to see these criminals marched off to jail, along with the ratings agencies and the AIG crooks who insured them and then got billions in federal funds when the scheme collapsed. But the feds need to go a step further and put Fannie and Freddie in the docket as well. And while we’re at it, let’s put the FHA itself on trial. How much taxpayer money have they wasted? What exactly was their role in aiding and abetting all of this financial malfeasance?

A Dirty Cop Bring Down the Perp

Do you see what's wrong with the FHA filing suit?  They were in on this criminal enterprise! This is how dictatorships operate. Look to Russia or Venezuela for examples. The crony crapitalist government gets in bed with the private sector and they throw wild multi-billion dollar orgies at taxpayer expense. It’s all good during the fat times, but when the inevitable collapse occurs, the regime puts it's official uniform back on, including the tin badge, and arrests its fellow partiers.

So by all means, go after these crooks, but don’t stop at the private sector.  Take down the government crooks as well.  They were the criminal kingpins who hosted the parties.

Democrats and GE: They Bring Good Jobs to China

Unemployment Explained

Obama's Jobs Czar, GE CEO Jeffrey HeMelts has thrown thousands of Americans out of work even as he pockets rich tax exemptions from his buddy Barack Obama.

When the president named him Jobs Czar, he failed to mention that he was making him China's jobs czar.

Welcome to the Third World, America

We're focused on rotten statist regimes in the Middle East, while ignoring the one that is growing right here in the land of the free and the home of the brave

I have lived in the third world (I know, it’s a politically incorrect term, so sue me), and this land that I love is starting to resemble it. It started before Obama, but he is hastening the downward swirl.

Our central bank, The Federal Reserve, handed out almost $100 Billion to Foreign Banks

We are too reliant on foreign bankers, as evidenced by the Fed handing out hundreds of billions of our tax dollars to them in the name of bailouts, economic stability, unclogging the system or whatever the latest alibi is.

Meanwhile, US owned mainstreet banks who weren’t big enough to earn a place at the DC-NY hog trough were left to die. Thank George Bush and Dirty Hank Paulson for that one. International fractional reserve banking is a shell game, and when the jig is up, the taxpayer bails out the cartels, who turn around and give the politicians their cut.

Government Grows, Private Sector Shrinks

Third world regimes are famous for a one-party state.  If you don't belong to the state-approved political party you get no job, no goodies, no nothing.  The more sophisticated regimes form a couple of parties to maintain the facade of choice, but the aim is the same:  Expand the power of the state by handing out government jobs and government assistance.

“Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things.” ( WSJ – We’ve Become a Nation of Takers, Not Makers)

This is a favorite game of rotten statist regimes:   Put 'em on the dole and put 'em on the public payroll!  Tax credits, legal exemptions, food stamps, welfare.  This builds a reliable voting block eager to pull the lever for more and bigger government.  It's a reliable scheme until the axles on the gravy train snap.

Crony Crapitalism is Another Hallmark of Third-World Statist Regimes

The GM bailout actually cost the taxpayer over $80 billion... 

"a March 16 Congressional Oversight report [...] estimates taxpayers will be out of $25 billion. Additionally, the report points out that “full repayment will not be possible unless the government is able to sell its remaining shares at a far higher price.”

That's only the beginning. Both the White House and the Congressional Oversight report omit the fact that during its bankruptcy, GM got a $45 billion tax break, courtesy of the American people.

Over one year after the promises President Obama and his administration made about the auto bailout, a February piece on AutoBlog also confirms that GM will also get a $14 billion dollar domestic tax break.  (Washington Times – Losing $84 Billion is Big Success)

With over $80 billion of taxpayer money sucked into GM’s corrupt, mismanaged maw, the state-sponsored Chevy Volt has become our version of the Communist East German Trabant.  Heavy government subsidies + anemic sales = Third-World Government Failure.  And the much ballyhooed GM bailout payback was a scam.

Government rewards failure with million dollar bonuses
Government pet projects Fannie and Freddie gave their executives tens of millions of dollars in bonuses while we were bailing them out to the tune of hundreds of billions...

The top six executives at the companies received $35.4 million over the two years. Since Fannie Mae and Freddie Mac were taken over in September 2008, the companies’ mounting mortgage losses have required a $153 billion infusion from taxpayers. Total losses may reach $363 billion through 2013, according to government estimates. (MSNBC-Fannie and Freddie Bonuses)

At what point does venal and incompetent cross the line and become criminal?

I Paid More Taxes Than GE

April Fools Day!

The New York Times reports that GE made $14.2 billion last year, $5.1 billion here in the US.

Its American tax bill?  Zero.  $00000.00.

In fact, G.E. claimed a tax benefit of $3.2 billion.  And Obama's cool with it, poking his head out of GE boss HeMelt's blazer pocket to tell us so.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. (NY Times)

Are Corporate tax Rates Too High?

Such strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Yet many companies say the current level is so high it hobbles them in competing with foreign rivals. (NY Times)

How do you reconcile this apparent discrepancy?

Easy. Tax avoidance ain’t cheap. This is how high tax rates can rob the treasury by resulting in less taxes. Businesses hide their money in unproductive pursuits and spend more on financial trickery. All money that could have gone to capital expansion that brings more jobs.

This is why many democrats and republicans are talking up tax reform that cuts out the swiss cheese exemptions and loopholes in exchange for a lower rate. It also explains why the move would be revenue neutral. At a certain point, it’s easier and cheaper to just pay the tax rather than pay skyscrapers full of accounting wizards and tax lawyers.

Crony Crapitalism

Unfortunately, too many people think "free market" means pro-business. It doesn't. Free market means laissez faire -- prohibit force and fraud, but otherwise leave the marketplace alone. No subsidies, no privileges, no arbitrary regulations. Competition is the most effective regulator. (John Stossel)

Government statists have a vested interest in the kind of crony capitalism that allows GE to pay no taxes.  You can't have your campaign sponsors wasting money on frivolities when you need that cash to finance your next election.

Streets of Fire

"The financial crisis in 2008 didn't stop the practice of economic management by printing money. Burning streets will.”

Andy Xie of Rosetta Stone Advisors, has written a particularly pessimistic piece of what the near economic future holds. He starts by making the case that North Africa unrest that has spilled over into the Middle East was touched off by economic issues like unemployment and rising prices. He ends by saying it could spread to Europe and the US.

In 2009, 14.3 percent Americans lived in poverty, according to the U.S. Census. Including ones that have given up on looking for a job, one sixth of American workers are underemployed or unemployed.

A huge chunk of American people have no cushion against massive increases in the cost of food and energy. In addition, the prices of imported consumer goods that low income Americans depend on are rising and are likely to rise much more, later in the year. Fifty million Americans are not so different from Egyptians in their economic plight. Riots could come to American cities.  (Hot Money, Fast Riots)

Here's a good explanation of the effects of inflation...

Inflation is redistributive, usually unfairly. First, low income people tend not to have debt, because they are usually not qualified to borrow from banks. When inflation surges, as it is happening now, their bank deposits erode in real value. Where do their losses go? The people who have debt and real assets like property speculators gain the same amount. Inflation essentially robs the poor and gives to the rich.

Second, low income people tend to have insecure jobs and cannot bargain wages up along with inflation, especially when inflation surges like now. The reduced purchasing power for their wages pushes them into an unsustainable situation. They simply cannot make ends meet. (Hot Money, Fast Riots)

Paul B. Farrell, pessimistic liberal investor, wonders when the revolution will start...

Only a revolution will stop Wall Street’s self-destructive capitalism. And watching the people revolt against dictators like Mubarak and Gadhafi reminds us of the spirit that sparked America’s revolution in 1776.

Economist Peter Morici: “Capitalism is broken, America’s government is two bankrupt political parties bankrupting the country.”

BusinessWeek recently asked analyst Mary Meeker to run the numbers. How bad is it? America really is bankrupt, with a “net worth of a negative $44 trillion.” Bankrupt. (Paul B. Farrell)

Farrell laments that it is too late to frog march the Wall Street banksters off to the slammer.  Our corrupt political class lacks the will (and credibility) to do it anyway; they were co-conspirators. But he lists four factors that could cause a revolutionary explosion right here in the US of A:

Wealth gap, Wall Street immorality, Wars, World Population Explosion

The NY-DC Axis of Evil is raping and robbing us.  When will we have enough?

Will the GOP Cover Freddie's Fannie?

Today the GOP Takes control of the House of Representatives, and Harry returns a shriveled man with a shrunken majority.  

Some conservatives have already begun attacking the GOP before they even get started.  Blogger buddy Andrew 33 over at Allied Liberty News, is preparing a boiling cauldron of tar and collecting burlap bags of feathers. 

I'm keeping my powder dry and I encourage others to give them some room.  Still, there are some disturbing rumblings...

Republicans are already backing off of earlier threats to dismantle Fannie and Freddie. These pie-in-the-sky programs that encourage irresponsible financial dealings have cost us $134 billion in the last two years alone.

Republicans cheered on Jeb Hensarling, Representative from Texas, as he crafted legislation last year to kill the ghastly twins:

"Of all the dumb regulation that caused our economic crisis, none was dumber than that which created the (Fannie and Freddie) monopolies," Mr. Hensarling said in March. (WSJ - GOP Shifts on Fannie, Freddie)

Alas, government largesse dies hard, and for some GOP statists, parting is such sweet sorrow…

A hasty end to the government's support of Fannie and Freddie would mean fewer Americans could get home loans, causing home sales and prices to drop even further and pushing taxpayers' cost for rescuing the mortgage giants even higher, said Rep. Randy Neugebauer (R., Texas), a former banker and housing developer who serves on the House Financial Services Committee.

"You'd cause Freddie and Fannie to have even larger losses than they'd already have," Mr. Neugebauer said.  (WSJ - GOP Shifts on Fannie, Freddie)

A Banker and a housing developer, eh? 
Don’t suppose that would have anything to do with how Rep. Neugebauer comes down on this, do you? He concedes that home prices are still too high, but he supports keeping them artificially propped up.  Spoken like a true crony crapitalist that is afraid of the free market.

He also reveals the truth that “fewer Americans would get home loans” as a result of ending this homebuyer-corporate welfare program. How is that bad? Too many people getting home loans is what got us into this mess. Stop Digging! Representative Neugebauer, Republican from Texas, is now officially part of the problem.

Next come the homebuilders, realtors, and mortgage lenders, hat in hand, begging a bankrupt government for special treatment...

"We don't believe that the private market — right now — is willing or able to provide the liquidity that's necessary to get us out of this," said Joe Stanton, chief lobbyist for the National Association of Home Builders. "To erode that support right now would be a disaster," said Vince Malta, a real estate agent in San Francisco and a vice president of the National Association of Realtors. (WSJ - GOP Shifts on Fannie, Freddie)

... So let’s keep the bubble inflated.

They are all wrong. 
If houses were being traded at market prices right now, and if only those who could establish financial credibility could buy them, the market would be on solid footing. It would be smaller and less active, but it would be financially sound. And that’s the problem for these crony crapitalists. The bankers, builders and realtors want turnover. Who cares if people can afford it or not? These industries that suckle at mama government’s ample teats won’t get stuck when irresponsible people get forclosed. Uncle Sam will pick up the tab! And they continue making their millions in transaction fees. This crap needs to stop now.

Like anything, Fannie and Freddie can be sold in the marketplace, maybe for a loss. At this point I don’t care. We stepped in dog doo and it’s time to scrape it off our shoe. Nothing will inject sanity back into the housing market like removing taxpayer-funded subsidies.