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The Grinches Who Stole Christmas

By on 12.13.11 @ 6:07AM

Essential holiday reading for anyone who’s had it up to here with thieving politicians and bureaucrats.

(Page 2 of 2)

For starters, the bill didn’t pass out of committee near the end of the 2008 session. It passed out of the Judiciary Committee in July 2008, more than enough time to get it to the floor for a vote. While it is true that Pelosi supported and got passed the Credit Cardholders’ Bill of Rights in 2009, Schweizer shrewdly notes that it focused on the interest rates that banks charge on the credit cards they issue. That doesn’t impact VISA at all since VISA makes its money by licensing its name and through interchange fees.

Nor was it a small stock purchase. Schweizer notes that the investment in VISA was at least 10 percent of Pelosi’s stock portfolio. In the end, the IPO shares Pelosi purchased soared 203 percent, making her a hefty profit.

Zornick also tries to create a diversion by saying that this doesn’t fit with Pelosi’s “legislative record.” What matters is if it fits with her financial record during her congressional career. Indeed it does. She has participated in at least 10 profitable IPOs since she has been in the House. And Zornick completely overlooks Pelosi’s efforts at securing earmarks for public transit and construction projects that boost the value of her husband’s real estate holdings. In one instance, Pelosi secured over $700 million from the federal government to build a section of light rail in San Francisco. Two stops on the line are three blocks from buildings the Pelosis own, thereby more than doubling their value.

Pelosi is hardly the only member of Congress to use earmarks to boost the value of her real estate holdings. Schweizer chronicles many others including Carolyn Maloney, Bennie Thompson, and former Speaker Dennis Hastert.

Schweizer also has chapters examining the crony capitalists who benefit from this arrangement, and none is better than the one dealing with the sanctimonious Warren Buffett. Schweizer notes that Buffett is a master of public relations often portraying himself as “above the rough and tumble of politics” and “above the folly and excess of finance.” Yet that image provides cover for the fact that he “is very much a political entrepreneur, whose best investments are often in powerful political relationships, and who in recent years has used taxpayer money as an important vehicle to greater wealth and profits.”

During the financial crisis of 2008, Buffett campaigned for the $700 billion TARP bailout. Buffet met with Speaker Nancy Pelosi and House Democrats to urge them to pass TARP. After the first vote on TARP failed, Buffett went on TV to say that he had “confidence in Congress to do the right things.”

Buffett has been so effective with his image that journalists seldom ask him what financial interests he has in his policy positions. If they did they might have discovered that in September 2008 Buffett invested $5 billion in Goldman Sachs. His company, Berkshire Hathaway, “received preferred stock with a 10% dividend yield and an attractive option to buy another $5 billion at $115 a share.” He also bought $3 billion in GE stock, and had large investments in Wells Fargo and U.S. Bancorp, all of who were struggling in the crisis. Getting TARP passed proved a windfall for Buffett and Berkshire Hathaway.

And it didn’t hurt that key political players just happened to buy Berkshire Hathaway stock in the fall of 2008, such as Senators Dick Durbin, Orrin Hatch and Claire McCaskill.

In the end, none of this was illegal. Schweizer dubs it “honest graft,” unethical business practices that don’t violate the law. But more pernicious than the fact that it is unethical is that it doesn’t create any new wealth. The political class isn’t producing anything; it is living well off of other people’s money — and in the case of some politicians and crony capitalists, they are living very, very well. This system is self-perpetuating: more and more people will join the political class as they realize it is the means to wealth. However, it can’t go on forever. The bigger the political class grows, the more resources that are sucked out of the productive sector of the economy. A society can survive only so long as its productive sector is productive.

Both Schweizer and Murray offer a number of reforms, but only Murray gets at the main solution, reducing the size of government. As the size of government shrinks, there will be less plunder for the political class. To paraphrase Ronald Reagan, it’s a simple solution, but not an easy one. As we saw in Madison, Wisconsin earlier this year, the political class will fight tooth-and-nail to keep the gravy train going.

Page:   12

About the Author

David Hogberg is a senior fellow at the National Center for Public Policy Research. Follow him on Twitter.

Letter to the Editor View all comments (26) |

Peppermint Tea| 12.13.11 @ 10:03AM

Am I living in a twilight zone world where I'm the only comment left alive? Where are you Jack in Wi? Margie? Grymlk? Canuckistani? even Purpleguy and Brooks? Ret Marine? I feel like the Omega Man.

Moe Blotz| 12.13.11 @ 10:31AM

Oy PT,for two days the rest of us peons have not had a "submit" button available to post comments. Yesterday and this morning I was able to review my comments, but could not submit them for viewing. Perhaps my two inquiries to editor@spectator.org have born fruit, but I still do not know what the problem was. Mr.Terrell may explain later.

russel| 12.13.11 @ 10:50AM

Mine's been messing up too . I wouldn't put it past the socialists' to begin hacking conservative sites fast and furious this election year .

Teaghan| 12.13.11 @ 12:32PM

I could comment but couldn't see your comments. They will get it straight soon, I'm sure. Right AS?

Melvin| 12.13.11 @ 11:30AM

Janet Reno had her secret police pick them all up last night. I suppose they will be taken to the various secret reeducation centers located around the Country.
Ret Marine wanted to go to GITMO because of the warm weather, and because the fishing is good. Apparently he got into an argument with the TSA and they put a pink snow-bunny outfit on him so that he could be easily identified and was shipped off to Maine.
Alas I fear for they're safety, they might not be the same when they return from the indoctrination centers.

SUBVET| 12.13.11 @ 11:53AM

TSA = FEMA CAMPS

Tea ......where are your friends...baned from the site right........TLP.

goldwater girl| 12.13.11 @ 10:28AM

Maybe Obama thugs have rounded them up for making negative comments about the administration

Oldefarte| 12.13.11 @ 12:19PM

And the sad fact of these type situations is that the American taxpayer is TAKING IT UP THE ANUL CAVITY with each one of these politically crony-capitalistic dealings!!!!!!!!

benedict infidel| 12.13.11 @ 12:22PM

ha ha .... i reported all of you racist, xenophobic, psuedo-intellectual, neo-con, spectator reading infidels to "attack watch" ! comment here and you may be disappeared ! allahu barackbar !

Mrs.Vito| 12.13.11 @ 2:06PM

Allah took them and left you! Now who sucks??!!

Cicero| 12.13.11 @ 2:24PM

The great Julius Ceasar plundered Gaul to buy election as the leader of Rome. Our politicos plunder us to buy election to Congress. Great country, this America.

daddio| 12.14.11 @ 7:27AM

It just proves that nothing changes really. Absolute power corrupts absolutely. Drain the swamp all you like, but it will get filled up again with new critters.

PaulyD| 12.13.11 @ 2:28PM

What Pelosi did was the same thing that sent Martha Stewart to Prison.

Oldefarte| 12.13.11 @ 10:21PM

At least in Stewert's case, they imprisoned someone with BRAINS!!!!!!

Pat| 12.13.11 @ 3:33PM

If you’re into rug biting frustration, buy these books but most of us already realize our politicians are hopelessly corrupt. They - our elected ones - don’t see it that way of course and over the past few decades they’ve worked very hard to legislate activities most of us would call “stealing” into activities they refer to as “perfectly legal”. And, even though it’s a taboo subject during Freshman orientation, our elected employees have developed some simple rules to stay out of Club Fed while still making those monthly lease payments on the Jag and the Mercedes. First rule: Don’t be too greedy every single time, there’s plenty of taxpayer money flowing through D. C., so just take a modest bite as each spending bill floats by. Emulate the Mama Grizzly, you swat a salmon out of the river, you eat it, you go back for one more. But you can’t eat every salmon swimming by during the yearly spawn, so don’t even try.

You can easily work the system so you or your relatives benefit financially, but don’t be arrogant. Your best defense is to pretend you didn’t know you were benefitting, don an expression of puzzled innocence if anyone in the media should ask about one of your backroom deals. Never say: “No Comment”, it sends the media into a feeding frenzy. The mainstream media is your friend and wants a reason to look the other way, but you have to learn your lines and practice your facial expressions.

Lastly, spread the wealth around, those who can help you deserve their kickbacks, the big money contributors get the most “help”, but your second tier supporters deserve at least an invite to a victory celebration and 5 minutes rubbing elbows with the High and the Mighty - they enjoy feeling important and it shouldn’t cost you a single penny out of your cut. Follow these simple rules and you can have a long and lucrative career as a humble public servant – what a glorious country we live in.

russel| 12.13.11 @ 6:55PM

Pat , thanks for spending the time writing . I could not have said it better and I agree 100%. A sorry state of affairs when we have to strategeorize on how we can get rid of some corruptocrat . Our Founders almost had it dialed - they just didn't figure in just how low a Sapien - Politico could go .

Pat| 12.13.11 @ 7:46PM

russel: Sapien-politico and corruptocrat, had to laugh and you certainly know how to coin a phrase.

daddio| 12.14.11 @ 7:29AM

Al Capone would be right at home in our current situation.

Naturalborn Texicanette| 12.13.11 @ 7:29PM

So very good to see/read ALL of you again!!!
I missed each and every one of you!!!!!!!

RSS Ronald Reagan | 12.13.11 @ 9:24PM

"TSA Administrator John Pistole has said that he doesn't think there's any advantage to private security firms."

Really? The 60-70 % fail rate at simulated bomb detection (as opposed to the 20% rate among private screeners) doesn't indicate any advantage to private firms?

daddio| 12.14.11 @ 7:30AM

either ratio is too high for me. It's one reason I do not fly.

POST American| 12.13.11 @ 10:40PM

----And even now, the MASS is, again,
X-ing itself while the REAL spirit of the hoiday goes begging.

Observe, nowhere in our long infiltrated,
utterly compliant 'Christian' establishment,
is there a peep about standing down on
the wampum-ization of ths holiday.
Refusing to do the Pavolian slave good
rewards number.

NONE.

We might suggest you spare the X-pence
of slave goods from RED China, bought in
bin op franchises under CCTV surveillance
and HD mind control screens.

INSTEAD---USE the money for a banquet for friends and family.

ALSO, charity should be administered
NOT through the usual bloated, utterly
corrupt EUGENICS foundations and
fronts ---but personally, by you, wherever --on the scene.

IF you want to give to faraway horror
scenes, use the net to get in touch with
REAL people on the scene. ASK them
what they need. Get the money and
assistance DIRECTLY to them.

-------------------THIS WE CAN DO--------------------

markenoff| 12.14.11 @ 12:35AM

The reason liberals believe the "1%" have gotten their wealth illegitimately is because that is the way liberals get their wealth. Simple projection.

daddio| 12.14.11 @ 7:30AM

+1

TrueBlue| 12.14.11 @ 1:36PM

Standard liberal tactic, blame the other side for what you're doing so nobody will believe it when they point back and say, "You're the one doing that!" The first person to point blame nearly always ends up blameless in the public eye, no matter how much evidence to the contrary.

Buffalo| 12.16.11 @ 6:48PM

I worked for DoD (NAVY) for 42 years. Here's some info I've sent other civil service bashers.

It is with extreme dismay that I have heard of plans to freeze federal salaries for X# years and/or cut their pay. Yet federal contractors will get raises even though their pay already exceeds federal pay for equivalent jobs in the same area. Freezing pay for X# yrs even though property & state taxes, food, gas, and all other expenses are increasing at an ever faster rate is an abominable way to treat employees. Eliminate Departments and Agencies to save the money but then treat your remaining employees decently!!! Congress needs to do an “Undercover Boss” episode. I am a retired (conservative, Tea Party member) federal employee whose 42 yr career was in test and evaluation of Navy aircraft and weapons systems. Believe me, DoD Feds are NOT OVERPAID!!!!

Comparing average federal salaries to the average US salary is comparing apples to oranges. The Navy organization I worked for has virtually no government public works personnel (gardeners, janitors, building maintenance, etc.) except for contract administrators. Most government technicians are gone. Government supply department personnel (warehouse workers, etc.) are mostly gone. There are no government fast food or cafeteria workers. They have eliminated virtually all government secretarial and administrative support positions - like the aforementioned jobs, almost all have been contracted out. I also believe that studies have proved contracting out to be a false savings as after the initial low-bid contact that beat out civil service costs the new contracts rise faster than civil service costs would have. We also have no salesmen or sales clerks like the rest of the US. We've necked down to almost all highly specialized, technically degreed personnel and a high percentage of those personnel have advanced degrees. This greatly exceeds the “average US” education, experience, and ease of replacement. I have a feeling those agencies whose salaries fall outside the "standard" civil service pay schedule (such as Fannie May, Freddy Mac, the SEC, and the Federal Reserve) are a major contributor to the perceived pay imbalance. Their similar jobs in the "average US" pay as much or more only as they're a much smaller percentage of the "average US" they don't impact the "average US" as much. The Heritage numbers are extremely biased, they're presenting the data so as to draw a false conclusion in a manner similar to the way Al Gore treats "global warming" data (and I have an email response from Heritage admitting such).

I am a retired federal employee whose career was in test and evaluation of Navy aircraft and weapons systems. A large number of my co-workers left over the years for industry at a 20-30% pay raise (for less responsibility) or more. One left for a 25% raise, I got his job (lead engineer for an aircraft T&E program) at his old salary, and he became a contractor on the program with a fraction of the responsibilities (data analyst). In 2009 I (as a program manager) had to pay $10,000/week/person (their approved rates which I couldn't change) for support from a prime contractor to fix the mistakes they made in their product (which incensed me). The contract was written before I got the job (and their contracts people always seem to outsmart ours). Our people developed as many fixes as they did. The company got/gets paid that $520K per manyear fixing something that never should have been delivered in the first place! And by the way, we found (find) lots of major mistakes in the aircraft and weapons systems the contractors sell us which supposedly are ready for the fleet yet their pay and benefits greatly exceeds ours.

Federal Civil Service employees and retirees pay 25% of their health insurance costs and most plans carry considerable copays for visits, hospital care, and medicine, unlike most state and local government or union employees. Due to Obamacare, I’m paying 10% more per month for my HMO insurance and 20%+ for copays in 2011. I also paid 7% of my salary towards my pension (old plan (CSRS)). I am not eligible for Social Security (I only had 8 quarters) nor do I get spousal Social Security (which I could get had I not worked for the US but spent my time in a bar drinking beer and watching TV). I paid for my life insurance (although it was a group policy which helped costs) while major companies gave it to their employees for free. I’m not complaining about Federal benefits (which I believe are reasonable for an employee of a major organization), but most non-federal union employees contribute much less for the same or better benefits – except for leave. And my retirement plan is in excellent fiscal shape as opposed to those other plans.

I will admit some of the reasons I stayed included job security (which no longer exists), the pension (I worked till over age 63 with just short of 42 years in although I could have retired at 55) (and which has been changed for new employees), but most of all the job(s) that I had over the years (the test pilots and the future astronauts I worked with, the technology (unbelievable!), etc.). So I stayed and willingly and knowingly accepted LESS pay than the contractors got. I felt that what I was doing was vital to the security of the US, was constitutionally valid, and was personally rewarding on many levels (not including pay). There are many, many things wrong with federal service, but the pay for technically degreed DoD personnel is not one of them.

So why do so many people want to cut or freeze DoD salaries (among others)? Conservatives that are fixated on federal salaries need to stop the class warfare and demagoguery – we complain when the Democrats do it. Please think - don't just blindly accept numbers from people who know the results they want (on both sides) without researching the facts and methodology.

You want to save federal costs? Eliminate the EPA and DoE (really the Department of Non-Energy). That'd give both a major savings in federal costs and a major boost to the economy. Eliminate the Education, Labor, and Housing and Urban Development Departments. Go to a flat tax or, preferably, the Fairtax and eliminate 90% of the IRS. Cain’s 9-9-9 plan has good ideas (although the FairTax is the best).

Any proposed across the board federal pay cut or freeze is poorly conceived and wrong.

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http://spectator.org/archives/2011/12/13/the-grinches-who-stole-christm

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