Category Archives: Corruption

Study Finds Most Haiti Aid Went to US Groups

open quote A new report on American aid to Haiti in the wake of that country’s devastating earthquake finds most of the money went to U.S.-based operations.

The Center for Economic and Policy Research analyzed the $1.15 billion pledged after the January 2010 quake. The group says a lack of transparency makes it hard to track all the money. It found the “vast majority” of the money it could follow went to U.S. companies and organizations, more than half in the Washington area alone.

Just 1 percent went to Haitian companies.close quote (Read more)

Alameda County rewards boss: $400k…for life

California will be the first state to declare bankruptcy.

open quoteAlameda County supervisors have really taken to heart the adage that government should run like a business — rewarding County Administrator Susan Muranishi with the Wall Street-like wage of $423,664 a year.

For the rest of her life.

According to county pay records, in addition to her $301,000 base salary, Muranishi receives:

– $24,000, plus change, in “equity pay’’ to guarantee that she makes at least 10 percent more than anyone else in the county.

– About $54,000 a year in “longevity” pay for having stayed with the county for more than 30 years.

– An annual performance bonus of $24,000.

– And another $9,000 a year for serving on the county’s three-member Surplus Property Authority, an ad hoc committee of the Board of Supervisors that oversees the sale of excess land.

Like other county executives, Muranishi also gets an $8,292-a-year car allowance.

Muranishi has been with the county for 38 years, and she’s 63. When retirement day comes, she’ll be getting a lot more than a gold watch.

That’s because, according to the county auditor’s office, Muranishi’s annual pension will be equal to the dollar total of her entire yearly package — $413,000. She also has a separate executive private pension plan, for which the county chips in $46,500 a year.close quote

Leaked: USDA ‘cultural sensitivity’ training is a brainwashing ritual for federal immigration ‘recalibration’

Some bombastic idiot got paid $200,000 to make USDA employees repeat mantras about diversity and multiculturalism. The videos are rapidly vanishing from the internet, but you can follow the links.

open quote– USDA sensitivity training video excerpt 1 – “If you take a look at all of you here and you think about your salaries and your benefits and what you have left undone – plus my fee – plus the expense of the team that putting the video together, this is a huge expense.”

– USDA sensitivity training video excerpt 2 – “I want you to say that American was founded by outsiders – say that – who are today’s insiders, who are very nervous about today’s outsiders. I want you to say, ‘The pilgrims were illegal aliens.’ Say, ‘The pilgrims never gave their passports to the Indians.’” Betances also asked the audience, “Give me a bam,” after these statements, to which the audience replied in unison.

– USDA sensitivity training video excerpt 3 – “By the way, I don’t like the word ‘minorities.’ How about ‘emerging majorities?’”close quote

F35 fleet grounded by engine crack

open quoteTHE Pentagon says it has grounded its entire fleet of F-35 fighter jets after discovering a cracked engine blade.

The problem was discovered during what the Pentagon called a routine inspection at Edwards Air Force Base, California, of an Air Force version of the F-35. Other versions of the F-35 are flown by the Navy and the Marine Corps.

All versions were grounded on Friday.close quote (Read more)

The F35 Is Too Heavy and Slow, So the Pentagon Made Its Performance Tests Easier

Military procurement is the most holy, and therefore the most corrupt government procurement.

open quoteThe Pentagon’s pursuit of the Lockheed Martin F-35 stealth fighter jet has been a heartbreaking one. If you’re a tax payer, the program’s estimated $1 trillion price tag probably breaks your heart a little bit. If you’re an aviation enthusiast, the constant whittling away of the do-it-all aircraft’s features, which in many cases actually amounts to adding weight and taking away maneuverability, must hurt a little bit, too.

. . . .

To put it bluntly, the Pentagon’s new trillion-dollar fighter jet doesn’t go a fast as it should, doesn’t turn as sharp as it should and doesn’t handle as nimbly as it should. This is bad news, explains Wired’s David Axe. For the pilots who will eventually take the F-35 into combat, the JSF’s reduced performance means they might not be able to outfly and outfight the latest Russian- and Chinese-made fighters,” writes Axe. “Even before the downgrades, some analysts questioned the F-35′s ability to defeat newer Sukhoi and Shenyang jets.” That all sounds like bad news, doesn’t it? If our expensive new jets can’t beat the Russians or the Chinese, who can we fight? I’m pretty sure al Qaeda doesn’t have an air force.close quote (Read more)

Holder Begs Court to Stop Document Release on Fast and Furious

open quoteAttorney General Eric Holder and his Department of Justice have asked a federal court to indefinitely delay a lawsuit brought by watchdog group Judicial Watch. The lawsuit seeks the enforcement of open records requests relating to Operation Fast and Furious, as required by law.

Judicial Watch had filed, on June 22, 2012, a Freedom of Information Act (FOIA) request seeking all documents relating to Operation Fast and Furious and “specifically [a]ll records subject to the claim of executive privilege invoked by President Barack Obama on or about June 20, 2012.”

The administration has refused to comply with Judicial Watch’s FOIA request, and in mid-September the group filed a lawsuit challenging Holder’s denial.close quote (Read more)

An Investation of Generals

open quoteThe reality, however, is that there are nearly 1,000 generals and admirals in the U.S. armed forces, and each has an entourage that would make a Hollywood star jealous.

According to 2010 Pentagon reports, there are 963 generals and admirals in the U.S. armed forces.close quote

open quoteFormer Defense Secretary Robert Gates appointed Arnold Punaro, a retired major general in the Marines, to head an independent review of the Pentagon’s budget. Here’s the caution he came up with: “We don’t want the Department of Defense to become a benefits agency that occasionally kills a terrorist.” [emphasis added]

So, just how good are these benefits? For the top brass, not bad at all. According to a Washington Post investigation, each top commander has his own C-40 jet, complete with beds on board. Many have chefs who deserve their own four-star restaurants. The generals’ personal staff include drivers, security guards, secretaries and people to shine their shoes and iron their uniforms. When traveling, they can be accompanied by police motorcades that stretch for blocks. When entertaining, string quartets are available at a snap of the fingers.

A New York Times analysis showed that simply the staff provided to top generals and admirals can top $1 million — per general. That’s not even including their own salaries — which are relatively modest due to congressional legislation — and the free housing, which has been described as “palatial.”close quote

open quoteU.S. ambassador to Nicaragua, wrote an Op-Ed in the Chicago Tribune explaining how the generals’ perks allow them to exist on a plain removed from ordinary people:

“Those with a star are military nobility, no doubt, and those with four are royalty. Flying in luxurious private jets, surrounded by a phalanx of fawning aides who do everything from preparing their meals to pressing their uniform trousers, they are among America’s most pampered professionals. Their orders are executed without challenge, their word is fiat. They live in a reality different from the rest of us.”

Frank Wuco, a retired U.S. Naval intelligence chief, agrees.

“With the senior guys and the flag officers, this is like the new royalty,” he said on his weekly radio show. “We treat them like kings and princes. These general officers in the military, at a certain point, become untouchable… In many cases, they get their own airplanes, their own helicopters. When they walk into a room, everybody comes to attention. In the case of some of them, people are very afraid to speak up or to disagree. Being separated from real life all the time in that way probably leaves them vulnerable (to lapses in moral judgement).”

close quote

open quoteThe Pentagon, for example, runs a staggering 234 golf courses around the world, at a cost that is undisclosed.close quote

open quoteAccording to a Washington Post investigation, the DoD also spends $500 million annually on marching bands.close quote

open quoteSince they’re so used to the luxurious lifestyle, the vast majority of pension-reaping high-ranking officers head into the private defense industry.

According to William Hartung, a defense analyst at the Center for International Policy in Washington, D.C., about 70 percent of recently retired three- and four-star generals went straight to work for industry giants like Lockheed Martin.close quote (Read more)

Super-costly F-35s, a global wrecking ball

open quoteThere is a stark lesson in the escalating cost nightmare of the F-35 fighter jets that holds more ominous implications for Washington than even for Canada’s Harper government.

Quite simply, it is that allied Western nations are finding the once-vaunted high-tech American weaponry no longer politically affordable. Not in large numbers.

Canada’s grief over its share of the F-35 price tag — now estimated to be almost $46 billion over 42 years — has been shared by a half-dozen countries, including Britain, Australia, Italy and the Netherlands, which have been forced to either cut back on their orders or contemplate outright cancellation.

This political fallout is upending the whole global arms bazaar. Around the world, America’s big-ticket defence items are being increasingly challenged by cheaper products from Europe and now Asia as well.

More developing countries are shunning extravagant U.S. weaponry for the cheaper but quite-good-enough products of Russia, China, India, and South Korea.

India itself recently rejected a large F-35 purchase in favour of buying more Russian and, possibly, French fighters for its fleet.

. . . .

t is a problem that goes well beyond the F-35s.

American insistence on super-smart combat designs has pushed the price tag of one destroyer to $1.2 billion and a new submarine to twice that. Even Congress has started to gag at such numbers.

Ironically, it was Washington’s concern over rising foreign competition that led to the F-35 woes.

The Pentagon recklessly raced the Lockheed Martin F-35 into early production in 2007, even before it was flight tested, in an attempt to corner the market for the company’s new stealth technology.

As aviation analyst Richard Aboulafia told the New York Times, “there was this big desire to kill the competition.”
‘Acquisition malpractice’

Bypassing flight tests before production was extraordinarily risky and some officials inside the Pentagon warned it would end badly. But apparently higher-ups insisted that any kinks would be worked out in computer simulation.

The F-35 was originally to have been a relatively affordable mix of three different plane types. But it turned out to be a far more complex hybrid than imagined.

Start-up costs have already consumed $65 billion, and the whole mess was denounced as “acquisition malpractice” by the Pentagon’s new procurement chief, Frank Kendall, earlier this year.

The F-35s are now the most expensive weapons program in history, so over the top, in fact, that the Pentagon’s original hope to produce some 2,400 of these fighters, spread across nine nations, is fading fast.

The estimated unit price per plane has doubled from $69 million to $167 million today and some industry experts warn that only half that projected production run may be achievable. . . .close quote (Read more)

The Hostess Liquidation: A Curious Cast Of Characters As The Twinkie Tumbles

open quoteWhat is curious is that its emergence had all the drama of a anti-Mitt Romney PAC funded thriller, with a PE firm, in this case Ripplewood holdings, injecting $130 million in order to obtain equity control of Hostess as it was emerging last time. There were also more hedge funds, investment banks, strategic buyers, politicians involved in this particular story than one can shake a deep fried numismatic value Twinkie at. More importantly, however, as America has been habituated following the last season of the reality TV show known as the presidential election, if Private Equity then “bad.” Only this time there is a twist: because it wasn’t really PE that was the pure evil in the Obama long-term campaign, it was associating PE with Republicans, and thus: with jobs outsourcing. And here comes the Hostess twist: because Tim Collins of Ripplewood, was a prominent Democrat, a position which allowed him to get involved in the first bankruptcy process in the first place, due to his proximity with the Teamsters’ long-term heartthrob Dick Gephardt (whose consulting group just happens to also be an equity owner of Hostess). In other words, the traditional republican-cum-PE scapegoating strategy here will be a tough one to pull off since the narrative collapses when considering that it was a Democrat who rescued the firm, only to see it implode in a trainwreck that has resulted in the liquidation of a legendary brand, and 18,500 layoffs.

But it only gets better. Because the full cast of characters involved here is quite stunningclose quote (Read more)

Storm Economics in One Lesson

open quoteIn a natural disaster like Hurricane Sandy, the only thing people should fear more than the storm is the government’s response.

Let us count the ways.

Mandatory evacuations presume that politicians know the risks better than property owners themselves. That can’t possibly be true. In an information age, we all have access to the same data. Especially these days. We should be able to make our own risk assessments, coming and going from our property as we choose.

Where is the evidence that property owners systematically underrate risk whereas political elites are clear headed and know precisely what to do? The incentives for the government is to clear everyone out because doing so exempts city workers from liability for failing to do the job they exist to do, namely to protect and serve people in times of crisis.

There is also something extremely perverse about arresting people for failing to take government-mandated steps to protect themselves. When it is all over, government is in then in a position to control access to one’s own home and property. In every natural disaster with evacuations, people find themselves struggling against their own government to get back to their own property and assess the damage .

In this case, all across the Northeast region, even where storms only brought some wind and rain, it was the government workers who fled first. It makes sense because they tend to regard themselves as more valuable than the rest of us. A friend posted the following even before the storm hit:

So I call 911 for the downed power line in the alley way. I get fairfax county 911. They transfer me to alexandria city 911. They refer me to the storm damage emergency line. I get the voicemail for the city communications office.

So I call 911 again. They transfer me again. They refer me again. I tell them, but nobody is answering. They say that’s where I’m supposed to call. So I call again. The guy there does not know for sure whether he is supposed to take calls for downed power lines. (pause) He looks it up. (pause) He decides he is supposed to take my information and enter it into the computer.

I call my landlord. He comes right over.

Then there’s the anti-gouging mania that hits every government executive. They warn with great bravado that no private seller can raise prices more than 10% in the event of an emergency. This defies reality. Storms and impending storms send existing supply and demand matrices into total upheaval.

Prices change, and that’s a good thing. It should go without saying that when things and services are in shorter supply, the price of them goes up. This serves two purposes. It provides a signaling device and incentive for new sellers to jump into the market. It also signals the need for more and alerting consumers to conserve until more arrives. This is good for everyone. Would you rather pay $5 a gallon for water or have no water available for sale at all? That’s the choice.

When government threatens people not to profiteer, it discourages producers from entering the market. And yet this is what they do. One North Carolina paper even editorialized for people to rat out any gougers by turning them in. “It’s a good law, and is made better when the public reports profiteering incidents to authorities.”

Amazing: demonize the people who are providing solutions in time of crisis!

Short-circuiting the pricing process discourages gas stations, water sellers, restaurants, and everyone else in the commercial marketplace not even to bother showing up. Why take the risk when there is no reward? As for the goods and services that are available, they will be depleted more rapidly than they should be.

Lives are at stake here. Yet all the politicians seem to care about is their reputation and power, regardless of the consequences. Long experience tells us that it is not government that serves people well in emergencies, but places like Wal-Mart, Waffle House, and Lowe’s. Of course, these commercial establishments are the ones that the political class tries to shut down. It’s perverse even by government standards.

Given the torrent of criticism over the last disaster, FEMA did its best to spin opinion in its direction this time. They have the National Response Coordination Center, which, as the New York Times says, decides “where officials gather to decide where rescuers should go, where drinking water should be shipped, and how to assist hospitals that have to evacuate.”

In other words, they tell people what to do. But who is actually doing the thing itself? The Wall Street Journal reports that WalMart “staffed up an emergency operations center at its headquarters last Thursday and began routing shipments of goods to 10 disaster distribution centers along the storm’s projected path. As the storm clears, Wal-Mart will dispatch trucks from the disaster warehouses to stores in the areas hit by the storm.”

Sandy was a less deadly storm than it might have been because of such preparations. Can we get a round of applause for Home Depot, Wal-Mart, Lowes, and the thousands of other retailers who made a difference this time around?

As well, how about a respectful nod to new commercial technologies. Even when the power failed, the cell towers still functioned. 3G connections were going full blast while the lights were out. Youtube’s live streaming technology allowed anyone to watch live reports on their smart phones. Instagram permitted live documentation of the entire storm, with 10 images per second being posted. Reporters filed reports from their ipads even with massive power outages. This was the most documented storm in the history of the world, all thanks to the market economy.

Then there’s the aftermath in which government suddenly discovers millions and billions of dollars available to shovel onto the cleanup and rebuilding efforts. Decades of experience show that average people see little of this money. Instead, it goes to government contractors and real estate developers and other preferred groups who are closely connected to politics. The money is taken away from the private sector when it is needed most and transferred to people who waste it on projects that the market may or may not value.

The process to get approved for post-disaster largess causes city and state governments to even delay private cleanup efforts. The political class discovers that it has every reason to make the mess look as bad as possible as long as possible, all in the hope of getting ever more money sent from the capital city to the affected area.

Another tendency is for government to enforce licenses on all service professionals. Want someone to cut down the tree or fix your plumbing or rewire your home? You had better choose someone with a license to do business or you will be in big trouble. Of course, this only discourages an influx of new service providers just when they are needed most.

In general, government sees every emergency has a power-grab opportunity. I get shivers down my spine just reading about FEMA’s wonderful plans to nationalize just about everything should the need present itself. If anyone believes that martial law is out of the question under these conditions, he hasn’t been paying attention to the police-state trends over the past decade. Weapons confiscations? It’s going to happen if conditions get bad enough, as happened in New Orleans during the Katrina disaster.

Then there’s the role of economists. It is inevitable that some find an upside to the destruction in a natural disaster, same as they find an upside to stimulus and inflation and war. “While natural disasters take a large initial toll on the economy,” Moody’s Ryan Sweet said on, “they usually generate some extra activity afterward.”

Yahoo Finance ran the most notorious example this time around, asserting that every act of destruction contains a multiplier that causes even more creation later.

For the umpteeth time, there is no upside to wealth destruction. But try telling that to the folks who calculate GDP. It is very likely the Sandy will be given credit for any fourth quarter fake economic growth. After all, that’s how government affects the GDP. The more it spends, the higher economic growth appears to be.

You need only look at the third quarter 2012 GDP statistic that dominated the headlines last week. The government announced the thrilling news that the economy grew 2 percent. But Veronique de Rugy and Keith Hall of the Mercatus Center looked more carefully at the data to find that “all of the increase in GDP growth came from the biggest increase in federal government spending in over two years.”

It turns out that government spending rose 9.6% at an annual rate in the third quarter. Hence the seeming boost to productivity. Never mind that the government has nothing that it doesn’t take from somewhere else. Private sector growth rates actually fell in the third quarter compared with the second.

This is not economic growth. No matter how many economists tell us that the storm will inspire all kinds of new and wonderful things, the first impression will remain true. This storm has been a disaster and a serious blow to the economy when we least needed it.

At the same time, the storm should remind everyone who romanticizes about the wonders of nature that there is a more fundamental truth: the whole history of humanity has mostly consisted in finding ever more effective ways to diminish the nature’s threat. First came shelter, then came clothes, then came tools to kill animals for our own use, then came transportation to overcome the limits of nature so that we could travel fast on land and water.

It’s true with every advance: indoor heating, air conditioning, indoor plumbing, the washing machine, chemicals to kill pests, medical advances to keep killer bacteria at bay. To a very great extent, it is the struggle away from nature that defines the idea of progress. It is only once the elements have been mastered that we can afford to think of the environment around us as a friend.

These are things we can learn during times of natural disaster. They are the same things we should know before the natural disaster. Only people know what’s best for themselves. Only markets can deliver goods and services. Only property owners know how to assess risk. As for politicians and bureaucrats, they care only about themselves.

Governments do vast damage in normal times, and vastly more precisely when it is commonly believed that they really need to act. In all times and places, people who are determined to build and sustain a life for themselves are inhibited only by the actions of powerful governments.

The people who are suffering through the aftermath of this storm are all being reminded that the political elites are not very useful in times of crisis, and, in fact, are frequently worse than useless. Storm preparation and storm survival is our job, not theirs.

Jeffery Tuckerclose quote (Read more)