Tag: Money Management Mishaps

Obama Campaign Spending Stimulus Money

The amount of corruption involved in the money given out by the state to stimulate the economy is mind boggling. Untold sums of money found their way into the pockets of the politically well connected but this story really takes the corruption to a new level:

The Labor Department paid out hundreds of thousands of dollars in federal stimulus funds to a public relations firm to run more than 100 commercials touting the Obama administration’s “green training” job efforts on two MSNBC cable shows, records show.

Obama’s campaign spent stimulus money to air ads for, well, Obama’s campaign. That’s a fairly effective way to get a little extra campaign money without having to raise it from suckers donors. What’s even funnier is that the money failed to create any jobs:

The commercials ran on MSNBC on shows hosted by Rachel Maddow and Keith Olbermann in 2009, but the contract didn’t report any jobs created, according to records reviewed recently by The Washington Times.

That has to be slightly embarrassing.

GM is Heading Towards Bankruptcy Yet Again

The state spent billions of tax victim dollars to keep General Motors (GM) from filing bankruptcy and it appears, unsurprisingly, that GM is heading for bankruptcy yet again:

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

This is why bailouts are such a joke, they reward companies that misallocate resources. When a company allocates resources towards fulfilling the desires of consumers that business is rewarded with more resource, which are voluntarily given to them by consumers. When a company misallocates resources by putting them towards producing goods and services consumers don’t want that company doesn’t receive further resources and eventually fails. When you insert government into the mix you destroy the market feedback mechanism as companies are given additional resources even though they’ve failed to provide for consumer wants. If GM gets another bailout there will be even less motivation for them to fulfill consumer desires as they would be rewarded twice for failing to do so, and the government seems more than happy to deliver GM another bailout less it be embarrassed by the dismal failure that the bailout programs have been.

Fighting Global Warming

Several people including Zerg539 and Rob sent me this solicitation from the National Oceanic and Atmospheric Administration (NOAA) for ammunition and shooting targets:

The DOC NOAA National Weather Service – Western Acquisition Division ? Boulder requires the following items, Purchase Description Determined by Line Item, to the following:
LI 001, 16,000 rounds of ammunition for semiautomatic pistols to be factory-loaded .40 S&W caliber, 180-grain jacketed hollow point (JHP). No reloads may be used with these weapons. All service furnished ammunition for issued firearms will be U.S. factory production.
?Inside Delivery? to locations below:
NED:
8,000 rounds to: Ross Lane DOC, NOAA, NMFS, OLE, NED 130 Oak Street, Suite 5, Ellsworth, ME, 04605
8,000 rounds to: Troy Audyatis, DOC, NOAA, NMFS, OLE, NED 53 North 6th Street, Room 214 New Bedford, MA, 02740., 16, Cases;
LI 002, 24,000 rounds of ammunition for semiautomatic pistols to be factory-loaded .40 S&W caliber, 180-grain jacketed hollow point (JHP). No reloads may be used with these weapons. All service furnished ammunition for issued firearms will be U.S. factory production.
?Inside Delivery? to locations below:
24,000 rounds to: Jeff Radonski, A/DSAC DOC, NOAA, NMFS, OLE, SED 263 13th Avenue South, Suite 109, St. Petersburg, FL, 33701., 24, Cases;
LI 003, 6,000 rounds of frangible, 125-grain CFRHT .40 caliber. No reloads may be used with these weapons. All service furnished ammunition for issued firearms will be U.S. factory production.
?Inside Delivery? to locations below:
6,000 rounds to: James Cassin DOC, NOAA, NMFS, OLE, NED 3350 Highway 138, Suite 218, Wall, NJ, 07719, 6, Cases;
LI 004, 500 Transtar II blue 24″ x 40″ paper targets
?Inside Delivery? to locations below:
200 paper targets to: Ross Lane DOC, NOAA, NMFS, OLE, NED 130 Oak Street, Suite 5 Ellsworth, ME, 04605
200 paper targets to: Troy Audyatis DOC, NOAA, NMFS, OLE, NED 53 North 6th Street, Room 214 New Bedford, MA, 02740.
100 paper targets to: James Cassin DOC, NOAA, NMFS, OLE, NED 3350 Highway 138, Suite 218, Wall, NJ, 07719, 500, Items;

That’s a lot of ammunition. At first I just assumed that NOAA was planning a literal war against global warming but it turns out that the weather agency has armed agents and performs raids:

They could be from the Environmental Protection Agency, the Labor or Education departments, the National Park Service, the Bureau of Land Management or the National Oceanic and Atmospheric Administration, the agency known for its weather forecasts.

Agents from NOAA, in fact, along with the Fish and Wildlife Service, raided the Miami business of Morgan Mok in 2008, seeking evidence she had broken the Endangered Species Act trading in coral.

The agents had assault rifles with them, and the case documents indicated her house and business records had been under surveillance over a six-month period, says Ms. Mok. Under the 1973 law, the departments of Interior and Commerce (home to NOAA) must write regulations to define what is endangered and how it must be protected. One of those regulations specifies coral.

Why does a weather agency need armed thugs? Because they’re a state entity and the state only knows violence. Apparently they can’t even forecast the weather without the capacity to wield violence.

The Scam of Social Security

You know that scam called Social Security? It’s even more of a scam today than it once was:

People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It’s a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.

Technically this has always been the case due to inflation. The money paid into Social Security early in your career is worth less when you draw it since the dollar is in constant fall. With that said, even without inflation this was bound to happen. Why? Because Social Security is a big Ponzi scheme (in fact the only reason the state likely pursues individuals running Ponzi schemes is because they’re challenging the state’s monopoly on Ponzi schemes). Like any Ponzi scheme, Social Security can only work so long as more and more new people are signed up to pay into the system. As soon as there are more people withdrawing from Social Security than paying in the entire system collapses. Combing the increasing number of people unemployed with the fact the baby boomers are beginning to withdraw Social Security and their population is higher than new workers beginning to pay into Social Security and you have a collapsing Ponzi scheme.

What Sowing Subsidies Reaps

When the state give subsidies to a business they are sending a market signal: the businesses failure to make a profit is rewarded. Amtrak is a company that can’t operate on its own, it requires government money to stay afloat. Needless to say since they’re receiving government money they have no motivation to find ways to actually make money:

Taxpayers lost $833 million over the last decade on the food and beverages supplied by Amtrak, which managed to spend $1.70 for every dollar that received in revenue.

“Over the last ten years, these losses have amounted to a staggering $833.8 million,” said Rep.John Mica, R-Fla., in a statement previewing a House hearing today. “It costs passengers $9.50 to buy a cheeseburger on Amtrak, but the cost to taxpayers is $16.15. Riders pay $2.00 for a Pepsi, but each of these sodas costs the U.S. Treasury $3.40.”

If you can’t make a profit off of selling hamburgers at $9.50 you don’t deserve to be in business. I can go to my local butcher and get a pound of ground beef for $4.00 to $5.00 and if I buy a cow directly from a farmer and pay to have him butcher it I can get the entire animal for roughly $3.00 a pound. Since most hamburgers are usually between a quarter pound and half of a pound of ground beef Amtrak is seriously screwing up either procurement or preparation.

Why should they change though? The government keeps transferring money from individuals to Amtrak. Every tax victim is, in essence, a forced customer of Amtrak. Until the subsidies are taken away from Amtrak there is absolutely no motivation for them to offer a product people want at a price they’re willing to pay. Because of their inability to make a profit they will continue to get more government subsidies. Subsidies are a reward for failing, they tell producers that making products consumers want is unnecessary and may actually be detrimental (why risk making $1 million in profit when you’re guaranteed $100 million in subsidies).

They’re Falling Like Dominos

A third California city has declared bankruptcy:

The California city of San Bernardino has filed for bankruptcy protection amid a $46m (£30m) budget deficit and ongoing criminal investigations.

The city listed assets and debts of over $1bn, court documents show, and becomes the third in the state to go bust in just over one month.

When the previous California city declared bankruptcy I was expecting more to follow (although not quite this soon). This is the only possible result of following Keynesian economic ideas. One cannot spent themselves back to prosperity.

Savings are resources that have been set aside for future use. What’s being spent today isn’t actual savings, we’re not spending saved up resources, we’re spending nonexistent resources. One of the failures of Keynesianism is believing savings are bad for the economy. When somebody saves they are foregoing current consumption for future consumption. A city may save in order to buildup enough resources to construct a community center or a road. The key is that resources need to be available in order to do either, something debt spending doesn’t do. Eventually the shortage of resources, that is the misallocation of resources, catches up and people quickly find out that they don’t have enough resources to complete projects. Towns find themselves unable to afford finishing the new community center or road.

We will see more and more stories like this as more and more municipalities collide head on with the reality that there aren’t enough available resources to continue existing projects.

Renovating Gitmo

Remember when Obama said he was going to close Gitmo:

I wonder how the $40 million renovation of Gitmo fits into his plan to shut it down:

The U.S. Navy base at Guantanamo Bay, Cuba, will be getting an estimated $40 million communications upgrade, signaling it will continue its mission of holding top suspected terrorists and as a major humanitarian aid base in the region.

The base, also known as Gitmo, will upgrade its limited satellite communications system to an underwater fiber optic line that will stretch from the base to the coast of Florida, according to Pentagon spokesman Army Lt. Col. Todd Breasseale.

I guess one does have to be a pathological liar in order to become president so this shouldn’t surprise anybody.

The Cost of Political Conventions

Previously on Politics: The Reality Television Show for Suckers supporters of Ron Paul’s campaign sued the Republican National Convention (RNC) for helping Romney in his quest to get the presidential nomination. Paul’s supporters claim that the RNC’s rules requiring delegates to sign pledges to support certain candidates violates federal election rules. Paul’s opponents claim that the RNC is able to run elections however the please because the RNC is a private organization. Clearly both sides cannot be right.

In today’s episode of Politics questions about the RNC’s status as a private organization are raised as they receive money from the state for their nomination process:

Congress has given Tampa — and Charlotte, the location of the Democratic National Convention — $50 million each in taxpayer money to try to ensure everyone is safe for the political gatherings that crown each party’s presidential candidate every four years.

Tax victims are wondering how an organization can claim to be private and still receive state funds. They are also left wondering why the presidential nomination process costs so much money. Will the RNC respond to the tax victim’s concerns? Will the state’s courts side with the Paul supporters or the RNC? Join us next episode to find out!

EDIT: 2012-07-23: 13:23: Apparently I can’t use words as Bruce pointed out in the comments. I mean to say “violates federal election rules.” not “violents federal election rules.” I’ve correct this mistake and my compliments go to Bruce for pointing it out.

Failing to Learn Lessons

I know when we fail to learn from history we doom ourselves to repeat it but you would think we’d still remember the housing bubble since it only burst and caused massive economic damage a few short years ago. Apparently not:

Amid global economic woes and a struggling jobs market lies a silver lining: Mortgage rates have fallen to the lowest level in at least 40 years, giving the housing market a much-needed boost in Minnesota and across the country.

The rate for a 30-year mortgage is 3.62 percent, less than half of the historical average.

For crying out loud the only thing we need is for some shill at Freddie Mac to come out and tell people how great of an opportunity this is… damn it:

“It’s just an incredible opportunity,” said Frank Nothaft, chief economist for Freddie Mac, which tracks national mortgage rates.

So we’re going to do it? We’re going to repeat the same bad economic polices that lead us into the current economic crisis before we’ve even managed to get ourselves out of said crisis? No lessons were learned? The idea that giving cheap money to people in the hopes they’ll buy a home is still considered solid? I guess if something doesn’t work we must try it again, only harder!

By Thor in Valhalla, we’re screwed. If the idiots in charge of economic policies can’t even learn lessons from things that happened a few short years ago there’s no hope.

Obviously a Good Use of Taxes

Of all the things to spend tax money on I’m sure this is the most crucial:

The University of California – Berkeley Police Department (UCPD) has acquired a $200,000 grant from the Department of Homeland Security to purchase an “Armored Response Counter Attack Truck,” a police department spokesman told Campus Reform on Friday.

The eight-ton vehicle, commonly referred to as a “Bearcat,” is used by U.S. troops on the battlefield and is often equipped with a rotating roof hatch, powered turrets, gun ports, a battering ram, and a weapon system used to remotely engage a target with lethal force.

It makes sense that the Department of Homeland Security (DHS) is now giving armored personell carriers to campus police forces. DHS has already fully militarized state and city police departments so now they have to move on to arming campus police departments. I wonder when Berkeley will get rockets launchers?