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POLITICS VERSUS PRUDENCE: SYSTEMIC MISMANAGEMENT OF OUR NATION

There is little or no doubt in my mind that corrupt politics is behind the greatest financial, military and social catastrophe to befall America in modern times.

Let us examine the issue further:

1. Legal Bribery – one need only consider the corrupt political feedback loop that drives our present government at all levels: local, state and federal. Politicians pander to the special interests in return for campaign funds and voter support. As if “we the people” are only there to be manipulated at election time.

Consider the tax-exempt “special interest” foundations in California which purport to relieve the tax payer of the burdensome travel, lodging and wining-and-dining expenses of top state elected officials. Funded almost entirely by lobbyists doing business before the state. Lobbyists hopping to bring lucrative contracts and legislation back to their sponsors. Making these foundations yet another channel for legalized bribery. Relatively anonymous bribery because they are not compelled by law to reveal their donors.
2. Million-Dollar Miscounting – one need only consider that while very large financial and corporate entities can account for  and manage large sums of money, no one in government seems to be able to account for even the simplest program. Tens of millions have been spent on complex accounting systems that fail to accurately account for the taxpayer’s funds. Almost every GAO (Government Accountability Office) report notes systemic failures of systems, procedures and controls. And this in spite of the large accounting systems provided by top-notch companies including major accounting firms, auditors, consultants and others.
3. Deception by Design – one need only read a few legislative bills to see that they are virtually unintelligible to the ordinary man and to most of the legislators who are voting on the issues. They are often written by lobbyist-lawyers to obfuscate the real intent and effect of the legislation. And what irks me the most is the deliberate torturing of the legislation’s title to provide a media-friendly but misleading acronym.

It seems, at least to me, that allowing lawyers to obfuscate and torture legislation to the point of requiring their fellow practitioners to interpret its meaning is a fundamental conflict of interest as well as being un-American.

To hold American citizens and entities responsible for obeying millions of conflicting, confusing or illegal laws they cannot read, understand or obey is to artificially criminalize the population to allow for selective prosecution for political purposes. Creating a class of purposeful political prisoners in this land of the free, home of the brave.
4. Revolving Door – it should come as no surprise that those who are responsible creating and administering legislation and the rules and regulations promulgated by regulatory agencies come from the various special interests that are promoting their own agendas; and most troubling, return to highly-paid positions once the desired deed is done.
5. Non-Regulatory Agencies – Where was the Securities and Exchange Commission, the FDIC, and the myriad of other regulatory agencies prior to the mortgage meltdown and financial collapse?

In spite of specific, credible,and written information, the SEC failed to detect, deter and prosecute the Madoff fraud; not to mention the billions of dollars in other systemic financial frauds perpetrated by our nation’s leading financial institutions.

In fact, there is evidence suggesting that one of the largest regulatory agencies – not even an official part of the government – aided and abetted insolvent financial institutions to cover-up their insolvency and cover their losses with money taken out of the taxpayer’s pocket.
6. Profitable Non-Profits – how many organizations purporting to be non-profits provide their senior management with salaries and perks befitting top corporate chief executives as they pursue their self-serving agendas?

Whether hiding behind faux religious credentials, foundations and other such devices, we see that the taxpayer is being played for a sucker to benefit the entity’s top management and/or their special interest donors.
7.

Redefining the Rules – America purports to be a nation of laws, but few really consider the unofficial rulemakers who deeply affect our daily lives.

First, we find the various bar associations whose function is to insure that their members are honest and ethical; but whose proceedings are opaque to the citizens who rely on their ability to police their own membership. 

Second, and in my opinion more egregious, we find the accounting rulemaking bodies who have enabled most of the Enron-style accounting fraud to be hidden from the public, auditors, counterparties and the regulatory agencies.

Rules that allow you to hide tremendous losses in “off-balance sheet” accounts that do not easily allow the company’s personnel, counterparties, auditors and regulators to see the growing systemic risk being assumed by the organization.

Rules that allow you to book short-term loans as sales which fundamentally distort the public’s view of the organization’s finances by hiding significant risky business or actual losses.

How many people knew that accounting rules allowed a financial institution to take a loan from another financial entity (at a hefty fee) and put up 105% of the collateral so that the loan could be booked as a sale of assets? All the while knowing that this was a short-term loan that needed to be repaid after the accounting period was closed.

“Repo 105 is an accounting maneuver where a short-term loan is classified as a sale. The cash obtained through this ‘sale’ is then used to pay down debt, allowing the company to appear to reduce its leverage by temporarily paying down liabilities—just long enough to reflect on the company's published balance sheet. After the company's financial reports are published, the company borrows cash and repurchases its original assets. <Source> Nothing like condoning “official” fraud.

And one must not forget the “accounting rules” that allow citizens and domestic corporations to evade billions in taxes with exotically-named schemes such as “Double Irish With a Dutch Sandwich.”

While it is “American” to be able to arrange business affairs to provide the lowest tax bite, it is something quite different to engage in rule-enabled tax evasion rather than tax avoidance.

8. Political Piggybanks – Notably the Government Sponsor Entities, Fannie Mae and Freddie Mac, along with their self-run foundations serve as the preferred employers for family, friends and out-of-work legislators. 

Not only did the senior management of these organizations, consisting mostly of politically-connected democrats, reap multi-million dollar salaries and perks; their theft of unearned millions of dollars in salaries and benefits as a result of “cooking the books” went virtually unpunished.

We saw these quasi-government institutions “privatizing” the profits in the mortgage industry while “socializing” any losses that may occur.

We saw special funding initiatives being shoveled into certain legislative districts in return for potential legislative favors.  

In fact, we saw the boyfriend of Barney Frank, former Chairman of the House Financial Services Committee and ardent supporter of Fannie and Freddie, being given a top-level position which included lobbying legislators on behalf of the GSEs. <Source
9. Pandering to the Illegals – while I can appreciate anybody leaving a failed and dangerous country to seek their fortune elsewhere, it is imprudent to allow hoards of illiterate, unskilled, sick people -- or those with continuing foreign allegiance -- to severely impact our infrastructure to the point where American citizens are not getting the support and services that they continue to pay for.

To allow this gross invasion of  illegal aliens  who are demanding the rights of citizens while forcing changes in our culture is wrong. We have entire areas where English is a second language, police are afraid to patrol, ethnic food is the standard and foreign holidays are celebrated as American ones are tolerated,  
10. Inequality under the law – it is abhorrent that Americans are allowing their longstanding system of laws to be perverted by politicians who are pandering to special classes.

Why should calling someone a racial or sexual slur during the commission of a crime demand a penalty enhancement or allow the federal government to ignore “double jeopardy” issues by trying the same crime in federal court after a state acquittal?

If we are assaulted – for any reason – the crime must be handled in a uniform manner under the law. Swiftly and harshly as the circumstances demand. We deserve the same type of prosecutory diligence as any other class of person.

Why should be allow the definition of marriage to be perverted when all marriages are essentially civil unions sanctioned and controlled by state laws? If gays want equality under the law; change the requirements for civil unions and don’t attempt to redefine the institution or definition of marriage.
11. Military Billions – where are the billions of dollars we are pouring into foreign governments as military aid. In fact, has anyone noted that there has been a substantial shift from services provided by our military and those provided by well-compensated “private” para-military and infrastructure contractors. Money which may be kept offshore for the benefit of those who do not support the American tax system?  And allowing politicians to claim a lower troop count for political purposes?

Why are we supporting foreign bases which are unnecessary and whose governments loathe us?
12. Enforced Energy Dependence – has anyone else noted the political dissonance as each and every politician supports energy independence and simultaneously panders to our enemies by road-blocking that very goal?

And this list is hardly comprehensive given the constraints of the blog format.

But my biggest complaint is the continuing political manipulation of America’s financial system …

Consider the present Administration pandering to their entitlement culture base of supporters. Ostensibly for the purpose of allowing women, minorities, illegals and the poor to participate in the American dream, this is forced wealth-redistribution on a grand scale. Plucking the taxpayer’s pockets to confer special advantage to the corrupt politicians and their special interest supporters.

Who do you think picks up the tab when the regulatory agencies force financial institutions to make imprudent loans on which the borrower defaults?  Liar loans also known as NINJA loans because they do not demand the verification of income, jobs or assets. 

Most often, loans guaranteed by the government – also known collectively as the taxpayers – and granted under the type of relaxed underwriting standards that was the proximate cause of the mortgage meltdown.

Continuing financial chaos …

Now we see the federal government providing refinance loans known colloquially in the mortgage industry as 125’s – that is, they enable someone to borrow 25% more than the equity in their home.

How stupid is that?

How many years before the equity in these homes will rise twenty-five percent or that the borrower will pay down the loan’s principal balance by 25% given the stated interest rate.

This is an encapsulated example of why America is being screwed by the corrupt politicians and our recession is on-going. The political fix is in and the taxpayer is on the hook.

Bottom line …

Our corrupt political parties and their participants are killing America.

One can blame President Obama, who I believe is a hard-core Marxist,  if not Communist, for what has transpired on his watch.

But, equal consideration should be given to the Republicans with their crony capitalism, continued politicization of regulatory agencies, nomination of inept political operatives and placement of large donors into positions of high responsibility. Something raised to a high art during the Clinton Administration.

It is time for bold leadership … and I am afraid the 2012 election is simply a stop-gap until 2016.

There is no doubt in my mind that we must throw Obama and his fellow travelers out of office. And capture a majority in the House and Senate. But that is only the first-step on the road to recovery.

The second step is putting forth a prudent financial plan.

But this, I fear, might be delayed with the selection of Marco Rubio as the Vice-Presidential nominee to pander to Hispanics rather than the fiscally-conservative Paul Ryan who is the “Man with the Plan.”

In modern times, we have been given impossible choices by the corrupt political parties. Forced to choose between the lesser of two evils. Perhaps, it is time to choose good over evil and be done with the corrupt system.

Unlikely, as my best friend Al continues to point out, but something that must be done. And we can do it! At the local, state and federal level, we must throw out those who pander to the special interests – especially the public employees’ unions who force us from the bargaining table while the unions bargain with their politically-selected elected official.

Start by voting Obama out of office. Replacing all politicians with fiscal and social conservatives Start by clearing your school board of Marxists who are dumbing down our children. Start by purging your state legislature of the hippie do-gooders (and mostly Marxists) who have spent us into near-bankruptcy.

And most of all, protect yourself and your loved ones from those who would deny you the right to self-defense and protection from the criminals that spawned by an increasingly corrupt political system to justify stricter government regulations and larger government.

--steve


“Nullius in verba.”-- take nobody's word for it!

“Beware of false knowledge; it is more dangerous than ignorance.”-- George Bernard Shaw

“Progressive, liberal, Socialist, Marxist, Democratic Socialist -- they are all COMMUNISTS.”

“The key to fighting the craziness of the progressives is to hold them responsible for their actions, not their intentions.” – OCS

"The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane." -- Marcus Aurelius

“A people that elect corrupt politicians, imposters, thieves, and traitors are not victims... but accomplices” -- George Orwell


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