Tag Archives: government

Federal Waste, Climate Change, and Federal Outsourcing

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Fox News ran an article late last week concerning the State Department’s own Office of the Inspector General’s report concerning State’s handling of taxpayer funding of activities in support of the climate change meme—in other countries, yet.  The OIG audit itself can be read here, and the auditors’ list of State programs sampled can be seen here.

What the OIG found in State’s Bureau of Oceans and International Environmental and Scientific Affairs and its Office of Global Change (OES/EGC), “the nerve center of the Obama administration’s international climate change policy,” was…interesting.  The findings, which included aggregate overspending of some $214 million over the period 2006-2010 that was the subject of the OIG audit, included these:

  • 7 of 19 program totaling $34 million in grants had no particular plans for results monitoring.  Thus, as OIG wrote, “…[State] may not always have reasonable assurance that federal funds were spent in accordance with the grant award; that the grant recipient performed program activities as dictated in the grant award; and that the program’s indicators, goals and objectives were achieved.”
  • [G]rant oversight officers failed to provide written reviews of compliance with State Department reporting standards….
  • [V]isits to climate change sites were rare, and then little effort went into actual examination.  [R]eports “typically summarized meetings held with grantee officials where only the statuses of the programs were discussed.”
  • Requirements that grant recipients submit quarterly financial statements seemed routinely to be ignored.  [A] recipient in Hyderabad, India, who got two separate grants totaling $1.1 million continued to receive funding, even though reporting requirements were not followed.
  • Indeed, reporting requirements for detailed results were not included in any of the seven grants examined by OIG.

Regardless of what anyone might think of the idiocy of spending taxpayer money on the chimera of man-caused global warming, here is a potful of that money being shipped overseas for…well, just because, apparently, given the interest in oversight shown here.  At least, had that money been spent at home, there might have been one or two domestic jobs created or saved, instead of those jobs being outsourced.

A Modest Proposal for Financial Law

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Standard Chartered PLC agreed to pay a $340 million “fine” for improper financial transactions amounting to $250 billion, a fine of just a tad over 1% of that total.  Judge Jed Rakoff, of the United States Federal District, refused to sanction a proposed settlement between the SEC and Citigroup Global Markets of a $160 million “fine” for an improperly handled billion dollar CDO fund, arguing in part that there was no basis for a punitive settlement when there was no allegation or admission of a wrongdoing.

It is, in fact, routine for supposedly misbehaving financial entities and their Federal regulators to negotiate such chump change fines, whether or not actual wrongdoing is conceded or alleged.  This disconnect between the sanction and the (phantom) misbehavior generally is not the result of cronyism; all the players are, say I, fundamentally honest.  No, such settlements are driven by the complexity of our financial laws, of which Dodd-Frank is only the latest addition.  The defendant financial institution usually finds it cheaper to pay the government’s vig than to defend itself, even when innocent, and the government usually finds it cheaper to charge only a taste and make no demand for admission of wrongdoing than to prosecute a case.

As a result of this unnecessary complexity, the government simply continues to hector the financial institutions and the financials simply continue to misbehave (my remark about honesty not withstanding) with the settlements just part of the cost of doing business.

Accordingly, a modest proposal.  Get rid of the financial laws and the regulations.  Replace them with a few simple laws (which, in their simplicity will need no implementing regulations) to the effect of honoring freely signed contracts, the products sold having to be openly and clearly described, all parties to the contracts, and their roles, having to be clearly and openly described.  There might be one or two others, but you get the idea.

Then get serious about cases.  If these laws are violated, hale the miscreants into court and go for serious penalties.  No more “negotiating” pocket money payments.  That’s like negotiating with Willie Sutton over his “community service.”  $250 billion in illegal trades ought to get that much as the floor of a fine.  If that puts the misbehaving company out of business, I suggest that a criminal organization won’t be missed.

Paul Ryan and the European Press

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Spiegel Online International occasionally summarizes the views of other European (mostly German) newspapers on the subjects of the time.  Monday’s edition brought these remarks about the Republican Vice Presidential Candidate, Congressman Paul Ryan (R, WI).

From Süddeutsche Zeitung:

…Ryan fits in almost absurdly well with the caricature of Romney the Democrats have been painting for weeks now — namely that he is a cold, money-grubbing multimillionaire and would have to transfer nary a cent to Washington in taxes if his pupil Ryan actually got the opportunity to implement his radical fiscal concepts.

From Frankfurter Allgemeine Zeitung:

[Ryan’s] ability to attract swing voters is likely to be limited. Although they may be dissatisfied with the current situation, it is unlikely that a radical restructuring of the social system will warm their hearts….

From Handelsblatt:

The choice of Paul Ryan as Mitt Romney’s vice presidential candidate is…an act of desperation.

And so on.

As I wrote a while ago about Republican Presidential Candidate Mitt Romney, if the liberal European press doesn’t like Ryan, he must be pretty good.

Subsidy and Food

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Here are some minor facts concerning a particular subsidy, courtesy of an The Wall Street Journal op-ed.

USDA lowered its 2012 corn forecast by 13% from last year’s, to 10.8 billion bushels, the shortest harvest since 2006, even though the planted acreage is the highest since 1937 and 4% more than last year.

only 24% of the corn crop is in good or excellent condition in the 18 major corn belt states, down from 72% just since June.

USDA’s world agricultural outlook board estimated that global corn consumption will be reduced by 38.9 million tons, with US problems responsible for ¾ of the shortage.

As a result,

Corn futures are up nearly 50% over the last six weeks.  The US accounts for 60% of global exports, and corn feeds cows, pigs, chickens, and humans through its role as a key ingredient in a broad range of foods.

Those corn futures will be realized as actual, sharp price increases that consumers will pay.  The price increase wouldn’t be so bad, but for a certain Federal subsidy.

The food-to-fuel mandate, Renewable Fuels Standard, requires 13.2 billion gallons of ethanol to be blended into the gasoline supply this year, rising to 36 billion gallons by 2022.  Fully 40% of 2011’s corn production went to ethanol, and courtesy of our EPA (though the subsidy originated in an earlier administration), and now more corn is devoted to fuel than to livestock or other foods.

But not to worry.  Despite the drought, the resulting corn crop failures, and the succeeding price increases driven by the crop failure, despite all of these hardships and negative impacts on the food supply, the ethanol makers got theirs.  The Renewable Fuels Association put out a statement, without a trace of irony, that there’s no danger of an ethanol shortage:

obligated parties under the RFS will have every opportunity to demonstrate compliance this year.

Helps to have your priorities straight.

“Ryan Budget” in a Nutshell

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Here’s a summary of the budget that the Progressives have begun demagoguing the moment Congressman Paul Ryan (R, WI) was asked to run for Vice President.

  • The latest full-scale version of the plan, unveiled in March, vows to cut spending by $5 trillion over the next decade, compared against President Obama’s plan.
  • The plan would, a decade from now, give seniors the option of taking a government payment to purchase health insurance. That payment could be used to buy a private insurance plan, or go toward the traditional Medicare plan. The plan calls for extra assistance to help low-income beneficiaries and those with “greater health risks.”
  • The plan would overhaul Medicaid by turning it into a block grant system for states.
  • The plan would cut the corporate tax rate from 35 percent to 25 percent. It would implement two individual income tax brackets — 10 percent and 25 percent.
  • The plan would head off the scheduled automatic defense cuts, first by diverting the planned $55 million defense cut in 2013 by implementing those cuts elsewhere.
  • The plan vows to bring the size of government to 20 percent of GDP by 2015.

Of what are the Progressives so terrified in this budget?  Ryan put his finger on it two years ago in the summary paragraph of his Wall Street Journal op-ed, reprinted by the WSJ over the weekend:

The contrast with our budget couldn’t be clearer: We put our trust in citizens, not government.  Our budget returns power to individuals, families and communities.  It draws inspiration from the Founders’ belief that all people are born with an unalienable right to the pursuit of happiness. Protecting this right means trusting citizens, not nameless government officials, to decide what is in their best interests and make the right choice about our nation’s future.

With the people in charge, Progressives won’t have anything to do.