Archive for the ‘Money Management Mishaps’ tag
I generally believe that the United States education system is a cesspool. But once in a while somebody emerges from the muck and becomes a hero to us all. Beth Elaine Allen is one such person:
According to 12 felony and gross misdemeanor counts filed Friday in Hennepin County District Court, Beth Elaine Allen, 64, is estimated to owe the state more than $50,000 in outstanding taxes, penalties and interest over a five-year period. Charges say Allen failed to pay income taxes since at least 2003, but due to the statute of limitations for tax crimes, charges are limited to years 2010 to 2015.
Five years of denying the State of Minnesota a portion of her revenue. That’s quite a streak! Of course, it could have been longer if she was more intelligent about it. If you’re going to forego paying taxes you should do everything you can to stay off of the Internal Revenue Service’s (IRS) radar. For example, if you can’t pay your mortgage don’t spend lavishly after your home is foreclosed:
Investigators also found that Allen bought a Minneapolis condo in 1992 for $245,000 and made mortgage payments of $1,400 until it was foreclosed in 2011, that she paid $94 a day to live at the Residence Inn in Plymouth and pays $700 a month to store her belongings. Credit card receipts show she spent thousands on travel, restaurants, grocery stores, liquor and wineries.
That’s the kind of thing that raises red flags with revenuers and red flags can lead to investigations. So I commend Beth on refusing to pay money to the State but I think she could have gone about it better.
Here we go again, another story of corruption at the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF)! This time the agency that likes to sell guns to Mexican drug cartels was caught using an off the books bank account for some rather luxurious expenditures:
WASHINGTON — Agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives used a secret, off-the-books bank account to rent a $21,000 suite at a Nascar race, take a trip to Las Vegas and donate money to the school of one of the agent’s children, according to records and interviews.
Agents also used the account to finance undercover operations around the country, despite laws prohibiting government officials from using private money to supplement their budgets, according to current and former government officials and others familiar with the account.
Before you make the mistake of assuming that those expenses were related to an investigation:
Other expenses, such as renting a 16-person suite at Bristol Motor Speedway in Tennessee, had no obvious connection to law enforcement operations. A.T.F. agents, along with some community members, used the suite in 2012 for the Irwin Tools Night Race, a Nascar event, according to two people who worked closely with the bureau at the time. A receipt obtained by The Times shows the suite cost $21,000.
Agents also donated money from the account, according to documents and interviews, including thousands of dollars to the high school and volleyball team of the daughter of an A.T.F. agent in Bristol. The agent, Thomas Lesnak, is now retired and did not respond to messages seeking comment. He has previously dismissed suggestions that anything was done improperly.
It’s good to be the king’s men and family of the king’s men!
Although every government agency is corrupt, the ATF seems to excel at corruption. There doesn’t seem to be a year that goes by where the agency isn’t caught in some kind of major scandal. The story notes that this latest incident shows the lack of ATF oversight but this is really a minor offense when it comes to the shenanigans of the agency. And if arming Mexican drug cartels didn’t result in more agency oversight this certainly won’t.
What this story really illustrates is how ineffective it is to give an organization a monopoly on holding itself accountable. The government maintains such a monopoly. The consequences of this have become obvious. When an agency is caught doing something corrupt no punishment, or at least no noteworthy punishment, is dispensed. Usually a hearing happens before Congress. During the hearing some members of Congress pretend that they’re shocked to find corruption within the agency in question. The hearing will be followed by a few days of government officials appearing on news channels berating the corrupt agency. Then, after the week’s news cycle is over, the entire matter vanishes from the headlines and people’s memories.
The road to Hell is paved with good intentions. Oftentimes people will discuss the intent of a law versus the letter of a law. This discussion usually happens when it comes to light that a law that was passed with good intentions ends up being abused by enforcers following the letter.
In an effort to thwart tax evaders (which qualifies as good intentions to statists although I’m not sure why), a law was passed that required individuals and businesses to report all bank deposits greater than $10,000. It’s a little known law, which means many small business have been running afoul with it. Since the intention of the law was to catch tax evaders you would think that these accidental violations would result in little more than a notice being sent to the offending businesses alerting them of the law’s existence so they wouldn’t violate it in the future. But the Internal Revenue Service (IRS), not surprisingly, has been following the letter of the law, not the intent:
While structuring is technically a crime, it’s something of a secondary one. The reporting requirements were enacted to detect serious criminal activity, such as drug dealing and terrorism. They “were not put in place just so that the Government could enforce the reporting requirements,” as the IG’s report puts it.
But according to the report, that’s exactly what happened at the IRS in recent years. The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents’ suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.
The IG took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business had obtained their money legally.
Structuring is the crime of breaking up bank deposits over $10,000 into multiple deposits under $10,000. That’s right, breaking up larger deposits is a crime in the United States because of the “good intentions” of a few politicians.
But the IRS doesn’t care what the intention of the law was, it only cares about the letter of the law. Instead of using the Bank Secrecy Act to pursue individuals and organizations trying to conceal illegal activities by breaking up larger bank deposits, the IRS has been pursuing individuals and organizations who have been performing perfectly legal activities. By doing this the IRS has managed to seize millions of dollars from innocent people.
Is there any reason why the IRS is despised by basically everybody? Is there any reason why libertarians flip out whenever a seemingly innocent law is passed?
I doubt the IRS will suffer any punishment for this since it was technically doing its job by enforcing the law. But this story should serve as a warning to people who often let the intention of a law cloud their judgement. When it comes to enforcement the intention of a law doesn’t matter, only the letter.
Donald Trump announced his budget. It’s what you’d expect from a neocon. Money was shuffled from neoliberal favored programs into the military:
Yesterday, the Trump administration released its first proposed budget outline. While this is just the first step in what will inevitably be extensive negotiations with Congress, it gives a clear indication of what Trump’s priorities are. First and foremost, he is focused on the military, which will see a $54 billion increase in spending, offset by cuts or wholesale elimination of programs elsewhere. Science is clearly not a priority, as it is repeatedly targeted for cuts in every agency that funds it.
But those cuts aren’t evenly distributed. NASA’s budget is almost entirely unscathed, although Earth sciences research funded by the agency will be cut to expand funding elsewhere. The National Science Foundation, a major source of grants for fundamental research, isn’t even mentioned, so there’s no sense of how it will fare. And the harshest cuts appear to be directed at biomedical research, which will see a dramatic 20 percent drop in funding for the National Institutes of Health.
As one would expect, the neocons are cheering this increase in military spending while the neoliberals are flipping out because the proposed budget cuts from their beloved science. What they fail to realize is that cutting funding for science would be a good thing for actual science.
Resource misallocation has plagued science for decades. Instead of science that focuses on the market (that would be you and me), companies have been allocating resources for the State’s pet projects in order to obtain government funding (which takes the form of tax dollars stolen from you and me). With less government funding to go around researchers would once again have to rely on the market to decide where resources were allocated. That would mean more research into making better goods and services instead of whatever idiotic pet project some random politician drummed up.
Of course, since the military budget is going up resource misallocation will continue to plagues science. Researchers will continue to focus on the State’s pet projects instead of what the market wants. Those pet projects will merely shift to making more effective methods of blowing shit up. This, of course, will anger the neoliberals because blowing shit up isn’t within their vision of what science ought to be. But the belief that science ought to be one thing or another and dictated by the State is the fundamental error being made here.
The Los Angeles Country Sheriff’s Department decided that its current silver colored metal uniform ornaments are no longer in vogue. To correct this horrible fact the department is going to spend $300,000 of taxpayer money on replacing all of its current silver colored ornaments with brass colored ornaments:
The Los Angeles County Sheriff’s Department is getting down to brass tactics.
Sheriff’s officials are spending $300,000 on items they say would make deputies look more professional in their jobs and could help make them safer.
But the taxpayer dollars won’t go toward tools such as higher-quality ballistic vests, backup guns or body cameras, all of which are optional items that deputies have to pay for on their own.
Instead, Sheriff Jim McDonnell is spending the money on a minor cosmetic makeover of deputies’ uniforms: changing the color of their belt buckles and other metal pieces of gear from silver to gold. That way, the metallic bits — all made of brass — will match the gold-hued tie clips, lapel pins and six-pointed star badges that deputies already wear, McDonnell said.
This waste of money wouldn’t be so bad if the department was a business with funds acquired through voluntary trade. But the department is funded entirely through expropriating wealth from the people is claims to protect. I doubt the color of the metal ornaments will even be noticed by 99.9 percent of the department’s
victims clientele. After all, who really gives a shit what color the metal ornaments on an officer’s uniform are when they’re either responding to your 911 call or thumping your skull because your skin color is a bit too dark for their liking? Since nobody will likely notice nor care about this change it’s an even bigger waste of taxpayer money than most expenditures.
But I’m sure the officers will feel better knowing that the metal bits on their belt finally match their tie clips.
Rumors of Gander Mountain’s demise have been on point. This probably doesn’t come as a surprise to anybody who has walked into one of its stores. Its prices are ridiculous, especially in this age of online shopping. A lot of its used guns go for the same price as new guns elsewhere. And when it runs a sale the prices finally come down to normal prices elsewhere.
In the last week people have been claiming that Gander Mountain is in the process of filing bankruptcy. The company finally put out a statement on the matter. I think the statement will go down in history has one of the best examples of corporate speak:
As a privately held company, it is our longstanding policy not to comment on our business affairs. Unfortunately, recent speculative news articles have caused concern among some of our customers, employees, and trade partners, and require us to make a rare exception.
Gander Mountain is the nation’s largest outdoor retail network with 162 specialty stores across 26 states. We are a fully integrated Omni-Channel retailer dedicated to servicing the hunting, camping, fishing, shooting sports, and outdoor products markets. As ‘America’s Firearms Supercenter™,’ we are a market leader in the shooting sports category with an extensive offering of firearms, ammunition, and accessories.
Like most retailers, we are subject to normal economic cycles, changes in our industry and shifts in consumer demand that require us to adapt our business accordingly. It’s been that way since 1960, when we started out as a catalog company in small-town Wisconsin, and it remains the case today. It is this constant adaptation and desire to offer our customers the best selection, best value and best service that has been our hallmark for generations.
Gander Mountain and its ownership group have undertaken a best-practices approach to review our strategic options specific to positioning the company for long-term success. When we engage in such a review we often seek information and advice from external advisors to inform our decisions. To assist in this process, we have retained Houlihan Lokey as independent advisors and we are confident that the outcome of the review will identify the right go-forward strategy. In the meantime, our Gander Mountain stores and gandermountain.com remain the place to go for all of our customers’ outdoor adventure needs.
That is a lot of words put together to say nothing meaningful. If I had my corporate buzzword bing cards out I’d have probably screamed bingo at least a dozen times. I could have cut that statement down to a single sentence: Our financials are fucked and we’re brining in outside help in the hopes of fixing this shit.
I’ve periodically told gun control advocates that if they really want to land a blow against the gun industry they should vote for Republicans. The industry does best when the fear of gun control legislation is on the table, which is generally higher when Democrats get into office. Since the Republicans have pretty much taken everything we’re probably going to see a great culling of gun manufacturers and resellers as sales drop. Business like Gander Mountain, whose propensity to overcharge is well known through the shooting community, are in trouble.
The Transportation Security Administration (TSA) has a sordid record when it comes to airport security. Since airport security is the agency’s primary job and it hasn’t been doing an effective job at providing security you might expect it to, you know, try to improve its capabilities. Instead the agency has been doubling down on security theater. But the best part is that the agency realizes that its efforts are theater:
If you’ve ever suspected that the TSA’s airport behavior screening (where it looks for visual signs of lying or stress) was just another example of ineffective security theater, you now have some science to back up your hunches. Thanks to a lawsuit, the ACLU has obtained TSA files showing that the organization has pushed and even expanded its “behavior detection” program despite a lack of supporting evidence. While the TSA maintains that it can detect signs of shady activity through fidgeting, shifty eyes and other visual cues, studies in its files suggest just the opposite — you’d have just as much success by choosing at random. And those are in controlled conditions, not a busy airport where anxiety and stress are par for the course.
The TSA hasn’t thwarted a single terrorist attack since it was founded. It hasn’t even done anything noteworthy in the field of security. The only thing the agency has managed to do is bolster the profits of bottled water manufacturers by stealing air travelers’ water and forcing them to buy more inside of “secure” areas. Yet this agency continues to exist. It continues to exist because the government that established it believes stealing your money and giving it to one of its entirely ineffective agency is fiscally responsible.
The next time some statist dipshit tells you that taxes aren’t high enough remind them that a ton of tax money is being irresponsibly dumped into agencies like the TSA.
Donald Trump has promised to bring in a new wave of protectionism for American businesses. This news has been met with cheers from the small government advocates in the Republican Party. The democrats haven’t been cheering but only because Donald Trump is promising it. If Hillary Clinton had promised it they would be cheering but at least the cheering wouldn’t come immediately after claiming they’re for a small government.
Protectionism is almost always promised by people who blame foreign countries from a bad domestic economy and this case is no different. Trump and the republicans are claiming that China has been stealing American jobs. But Jack Ma, Chinese billionaire, sees things slightly differently:
Ma says blaming China for any economic issues in the U.S. is misguided. If America is looking to blame anyone, Ma said, it should blame itself.
“It’s not that other countries steal jobs from you guys,” Ma said. “It’s your strategy. Distribute the money and things in a proper way.”
He said the U.S. has wasted over $14 trillion in fighting wars over the past 30 years rather than investing in infrastructure at home.
While I disagree with his claim that the money was merely misappropriated, he’s entirely correct in saying that the $14 trillion spent in fighting wars was wasted.
Any economist who isn’t a complete moron, of which there are very few, knows that wars don’t produce wealth. Sure, it often looks like wars are good for the economy because jobs are created to feed the war machine but none of those jobs are productive. They exist to destroy wealth. Every piece of military machinery is build to be destroyed. Ammunition is expended. Tanks are either destroyed in combat or destroyed after they’ve been made obsolete by a new tank. Aircraft carriers that aren’t sunk by the enemy are sunk by the owners when they’re decommissioned to make way for the new fleet. Every building, road, and telephone pole destroyed in a war must be rebuilt afterwards. No actual wealth is created by war. Wealth is merely dumped into building expendable equipment or redoing work that was previously done. This is also why fourth generation warfare is so effective. One side spends pennies while the other spends trillions.
Instead of waging an endless war, the people of the United States could have been doing productive things. But the government chose warfare, the people rolled over and accepted warfare, and a huge amount of wealth has been diverted to unproductive endeavors, which has done nothing good for the economy. China isn’t taking American jobs, the United States government is destroying those jobs.
What happens when a business makes more monetary promises than it can fulfill? Its assets are liquidated so that the proceeds can go towards paying off some of those promises. What happens when a government makes more monetary promises than it can fulfill? That seems like an important question to ask right now:
You can look at the financial health of Social Security in many ways.
Despite the huge numbers, there’s even a less generous way of looking at the fiscal shortfall.
A projection, known as the “infinite horizon,” takes into account all the program’s future liabilities, even those beyond the 75-year period that Social Security actuaries typically use in their calculations.
Under the infinite horizon, Social Security will have $32.1 trillion in unfunded liabilities by 2090, $6.3 trillion more than last year’s projection. (See the chart below.)
Social Security was sold as a safety net that would guarantee that retirees would have money even after they were no longer working. But like all government schemes, Social Security was just another mechanism to expropriate wealth from the people for the benefit of the State. The scheme was originally quite simple. Today’s valued dollars would be taken by the State so it could use them as it pleased and then returned at a future date after inflation had devalued those dollars significantly. But the scheme quickly became more complicated.
Since 1982 Social Security has been paying out more than it has been bringing in. This deficit, often referred to by cute names such as unfunded obligations or unfunded liabilities, is slated to ballon to $32.1 trillion by 2090. To put that in perspective, the current national debt is hovering near $20 trillion.
If Social Security (or the United States government for that matter) was a business it would be forced to file bankruptcy as there is no realistic way that it will ever be able to repay its debts.
In Finland the jobless can get their money for nothing and they don’t have to install microwave ovens:
Finland will soon hand out cash to 2,000 jobless people, free of bureaucracy or limits on side earnings. The idea, universal basic income, is gaining traction worldwide.
The computer graphics in that video are almost as bad as this idea!
Before any advocates of universal basic income start creaming their pants over this let me point out that this is a solution to a problem that was, not surprisingly, created by the government in the first place:
While entrepreneurs are eager to put these people to work, the rules of Finland’s generous social safety net effectively discourage this. Jobless people generally cannot earn additional income while collecting unemployment benefits or they risk losing that assistance. For laid-off workers from Nokia, simply collecting a guaranteed unemployment check often presents a better financial proposition than taking a leap with a start-up in Finland, where a shaky technology industry is trying to find its footing again.
The problem isn’t that there aren’t jobs available. The problem is that the Finnish government has created a system that discouraged unemployed individuals from seeking another job. Instead of fixing that problem the Finnish government has decided to exacerbate the problem by giving unemployed individuals money for being unemployed. How will that encourage them to seek a new job? It won’t.
I’m sure a bunch of advocates of universal basic income are ready to accuse me of hating workers because I’m not onboard with their little scheme. But I don’t hate workers. In fact, I am a worker. But universal basic income is an unsustainable idea because it relies on taxes and taxes only exist if there is wealth to steal. Ask yourself this, without employees motivated to work how can employers create the goods and services that create the wealth that supports universal basic income? Without employers wealth isn’t created. Without employees the employers can’t create wealth. This means that eventually the supposedly guaranteed income is no longer guaranteed because there is no money to pay it with.
TANSTAAFL, there ain’t no such thing as a free lunch, is the rule that the universe runs by. A few words written by some bureaucrats in a marble building can’t make that rule go away.