WASHINGTON, February 22, 2012 – On a fairly regular basis, the media loves to denounce the (Republican) Grant and Harding Administrations as the “most corrupt in American history.” The idea, of course, is to make “Republican” synonymous with “scandal” as a key part of the Democrat’s preferred historical narrative.
But the ghosts of Grant and Harding may not have much to worry about, particularly if our current Administration is somehow granted a second term. By riding roughshod over the Constitution, Congressional prerogatives, the taxpayers, and logic itself, the Obama Administration is creating a list of scandals and blunders that no presidency, past or future, may be able to surpass. Give these folks another four years and they’re sure to surpass their current record.
The problem is, the press doesn’t bother to report much of this stuff. As a result, Americans remain in the dark about most of these scandals and blunders. Nothing to see here, folks, just move along.
Well, we don’t want to play along, so we’ve created our list of the Obama Administration’s Top Ten Scandals and Blunders. Most have received passing mention at some point, but no journalist or Journolista will ever get a Pulitzer for digging into these stories. Too dangerous to budding or established careers. We don’t have such false scruples here, however, so we’re going to let things rip. There are certainly additional candidates for this list, but we’re focusing on the ten that have either already caused a great deal of damage or—in the case of one or two—are cruising toward a potential catastrophe.
10. Rape of the GM Bondholders
Back in his days as an active broker, this reporter was constantly reminded that in a corporate bankruptcy, it was the bondholders who were regarded as the senior creditors. In other words, bondholders of a bankrupt entity essentially have first dibs among investors on whatever assets remain. If a company is able to reorganize under bankruptcy proceedings and emerge again as a going concern, it’s still the bondholders who can make or break the final deal, because, under the law, they’re senior creditors.
The Obama Administration—as it has done so often since taking office—ran roughshod over the bondholders during GM’s “prepackaged bankruptcy” proceedings. While the bondholders and the American taxpayers got stiffed, the United Auto Workers’ Union made out like bandits in the final settlement. This in spite of the fact that union contracts can and often are legally declared null and void under bankruptcy proceedings.
This absurdly lopsided and possibly illegal settlement was clearly one piece of the Obama Administration’s ongoing quid pro quo with America’s Labor Unions, which supported him to the nth degree during Campaign 2008. An ad hoc committee representing GM’s then-existing bondholders quickly recognized the absurdity and the futility of the situation:
“The current offer is neither reasonable nor adequate. Both the union and the bondholders hold unsecured claims against GM. However, the union’s VEBA [pension fund] would receive a 50 percent recovery in cash and a 39 percent stake in a new GM for its $20 billion in obligations; while bondholders, who own more than $27 billion in GM bonds and have the same legal rights as the unions, would only receive a mere 10 percent of the restructured company and essentially no cash.”
The current deal “can be seen as one that serves up bondholders on the altar of political self-interest,” CreditSights Inc. analyst Glenn Reynolds wrote in a report last week titled, in part, “Waterboarding Bondholders.”
The consequences to the American taxpayer of this disaster persist today. GM’s “re-IPO” was initially well-received, providing American taxpayers—who, collectively, had loaned GM the money for the bailout—with some payback on their “investment” (which lawmakers, no doubt, immediately managed to spend.) But with GM stock now substantially below IPO’s initial offering price, it’s probable that the taxpayers will actually lose money when the balance of the remaining shares are sold by the Feds. No wonder you’re not hearing much about this lately.
Oh, and argue all you want about the “good American (read union) jobs that were saved” by the Administration’s strongarm tactics. The real lesson here is that American taxpayer money was used to fund the dubious resurrection of a badly run enterprise. And that taxpayer money most likely will never realize a profit for Mr. and Mrs. America, many of whom still can’t afford a new car in this economy anyway.
For at least one notable followup to this fiscal disaster, see the next entry.
9. The Chevy Volt
Adding insult to the injury of the GM bankruptcy arrangement, the Administration used its remaining control of GM, at least in part, to leverage and promote the manufacture and sale of the still unready-for-prime-time Chevy Volt, a poorly-performing electric car that’s definitely not a car for the rest of us. Not only do taxpayers lose money each and every time one of these unpopular white elephants is sold. The selling price of this expensive “eco-friendly” boondoggle is further subsidized to the tune of between $7,500 and $10,000. By the American taxpayer of course.
A piece in The Daily Caller pinched in on this a little further, noting potential effect of the latest subsidy increase:
“The White House intends to boost government subsidies for wealthy buyers of the Chevy Volt and other new-technology vehicles — to $10,000 per buyer.
“That mammoth subsidy would cost taxpayers $100 million each year if it is approved by Congress, presuming only 10,000 new-technology autos are sold each year.
“But the administration wants to get 1 million new-tech autos on the road by 2015. The subsidy cost of that goal could reach $10 billion.
“The planned giveaway will likely prompt populist protests from GOP legislators, but it will likely also will be welcomed by auto-industry workers in the critical swing state of Michigan.
“That welcome is critical for President Barack Obama, who is touting his support for blue-collar manufacturing programs to help offset his low public approval ratings.
“The new subsidy level represents a 33 percent jump from the current $7,500 government payout for each Volt buyer, even though the Volt’s buyers are already among the wealthiest Americans.”
Stated in another way, the Obama Administration is subsidizing America’s 1% in pursuit of its own bizarre “green” utopian fantasy. Our current score in this two-part GM scandal: UAW = 1. Eco-fanatics = 1. American taxpayers = double Zero.
Hope and change. Or is that change vs. hope? How’s it workin’ out for ya?
Ex-solar company Solyndra is the poster child for this Administration’s foolish vision of an America that uses no fossil fuels at all. (Which is apparently what passes for their current “energy policy.”) You can toss numerous unsuccessful, Federally subsidized disasters like the Fisker electric car (a massively expensive toy for the rich that still doesn’t exist) to A123, a Federally subsidized battery maker that can’t yet compete with Chinese offerings and probably never will, and heaven knows what else into this stew.
The Washington Examiner elaborated further:
“What is clear from emails made public … by the House Energy and Commerce Subcommittee on Oversight and Investigations, headed by Rep. Cliff Stearns, R-Fla., is that key Solyndra loan decisions were guided primarily by political considerations. Obama was not in the White House when the proposal to back the company initially appeared in Washington, but two weeks before President George W. Bush left office an Energy Department review panel unanimously recommended against making the loan. Even after Obama opted to champion the proposal, career employees at the Office of Management and Budget cautioned against doing so before a final decision was made. One even predicted Solyndra would run out of money and head for bankruptcy court by September 2011. And a Government Accountability Office report said the Energy Department had circumvented its own rules in order to make loan guarantees to at least five firms, including Solyndra.”
But hey, what’s a few more taxpayer dollars, particularly when they go to subsidize the useless boondoggles of key Obama financial donors like the supporters of Solyndra?
Note that the Bush Administration recommended against making this loan, something that’s cleverly evaded by Obama Administration spinmeisters and apologists. Journolista-in-Chief Ezra Klein, chief Administration propagandist in the Washington Post, twists the facts to come up with the fantastic (and false) conclusion that the Bushies actually supported the Solyndra loan.
Democrats have pointed out that Solyndra’s loan process was initiated by the Bush administration and that many key investors were Republicans. Still, there could have been other reasons the deal was hastened. As a former Clinton energy aide stressed to me, it was arguably a mistake to sell the loan guarantees as job-creating stimulus (the program was expanded as part of the 2009 stimulus bill).
Klein, as always, plays fast and loose with the facts. Solyndra’s “loan process” was “initiated” by the Bushies in that the loan application was accepted for review under a current government program. Klein conveniently fails to point out the previous Administration’s recommendation to reject the Solyndra proposal.
But for Ezra Klein, it’s always Bush’s fault.
7. Fast and Furious
No, not the film, the scandal. This is perhaps the most underreported major government law enforcement screw-up in modern memory. It would be downright funny if it hadn’t turned into a long string of murders both here and across the Mexican border.
To make a long story short, the Feds, in an elaborate “sting” operation, put a huge cache of deadly weaponry directly into the hands of Mexican drug lords and their minions. This weapons bonanza has resulted (and is continuing to result) in the wholesale slaughter not only of Americans, but hundreds of Mexican citizens as well.
Forbes guest writer Frank Miniter lays out the case:
“Fast and Furious was an operation so cloak-and-dagger Mexican authorities weren’t even notified that thousands of semi-automatic firearms were being sold to people in Arizona thought to have links to Mexican drug cartels. According to ATF whistleblowers, in 2009 the U.S. government began instructing gun storeowners to break the law by selling firearms to suspected criminals. ATF agents then, again according to testimony by ATF agents turned whistleblowers, were ordered not to intercept the smugglers but rather to let the guns ‘walk’ across the U.S.-Mexican border and into the hands of Mexican drug-trafficking organizations.
“Given all the politics and the cover up that even the former ATF director says has occurred, could operation Fast and Furious have been about anything other than pushing for new gun-control laws? And given all of this obfuscation from the Obama administration, isn’t this scandal comparable to the cover up that surrounded Watergate?”
6. Overt and covert support for Wisconsin’s union brownshirts
This is an ongoing story that just won’t quit. In 2010, disgusted with the disastrous fiscal path their state was taking, Wisconsin put control of the governorship and both houses of the legislature in the hands of the Republicans. In so doing, they repudiated the Democrats who were driving the state toward almost certain bankruptcy.
In 2011, no sooner had the Republicans been sworn in than their attempt to straighten out this fiscal mess was attacked by Democrats, the organized left, and notably by the state employee union thug-ocracy. No less than “The One” himself chimed in on this serious state matter, encouraging the anti-Republican attacks, and even helping fund them via the Administration’s usual backdoor channels.
The Washington Post—no particular friend of Republicans—reported that:
“Obama accused Scott Walker, the state’s new Republican governor, of unleashing an ‘assault’ on unions in pushing emergency legislation that would change future collective-bargaining agreements that affect most public employees, including teachers.
“The president’s political machine worked in close coordination Thursday with state and national union officials to get thousands of protesters to gather in Madison and to plan similar demonstrations in other state capitals.
“Their efforts began to spread, as thousands of labor supporters turned out for a hearing in Columbus, Ohio, to protest a measure from Gov. John Kasich (R) that would cut collective-bargaining rights.
“By the end of the day, Democratic Party officials were organizing additional demonstrations in Ohio and Indiana, where an effort is underway to trim benefits for public workers. Some union activists predicted similar protests in Missouri, New Jersey and Pennsylvania.”
Well, that’s what you get, one might guess, when you uncritically elect as President a man who’s spent his entire life as a “community organizer”—an Alinskyism for “local Socialist Party Chair.”
Democrats in the Wisconsin Senate decamped from Madison, fleeing to the even more corrupt precincts of Illinois to thwart quorum and prevent a vote on reining in the state’s employee unions whose gold-plated benefits, captive insurance plan, and union dues withholding, were killing state, county, and city budgets. New York magazine laid things out short and sweet, with the expected biased swipe at the Republicans:
President Obama voiced his support for Wisconsin’s Democratic state senators, many of whom are holed up in a Best Western in Illinois to block a vote on an anti-union bill.
Ultimately, in spite of huge, wasteful expenditures by the public employee unions, the Democrats lost this round. Not ones to recognize any kind of Republican legitimacy, the next retaliated by mounting an expensive recall campaign against Republican senators who’d been directly elected less than a year previously. The recall ultimately failed, so today these same thugs are going after Governor Walker himself.
The lesson here: only Democrats may govern. If Republicans win an election, it’s due to an error by the voters, and the Republicans will not be allowed to govern. Of course, what’s really at stake here was—and is—an existential threat to the Democrats. Without the automatic (and often grudging) direct collection of union dues—a good chunk of which go directly to Democrat coffers—the Democrats’ systematic thwarting of democratic rule could very well be in jeopardy.
Postscript: Again largely unreported, Wisconsin counties that took advantage of Walker’s new legislation by trimming outlandish public employee union power didn’t lay off a single teacher last fall and often ended up with budget surpluses that enabled them to make additional hires. Jurisdictions that played patty-cake with the unions and signed contracts prior to the law’s going into effect remain budget-challenged and have been forced to lay off teachers and other union members to maintain the budget-busting old-style rules.
Hopefully, most Cheeseheads will understand this should the Walker recall take place. But no Republican should ever be confident of vindication.
5. Buffett Rule
Wikipedia has a pretty good, though Administration-friendly summary of the ongoing “tax the rich” farce set in motion by the Sage of Omaha, Warren Buffett, at the behest of his good buddy, Barack Obama. However, we’ve omitted the phenomenally biased “Occupy Wall Street” propaganda, which Wikipedia’s editors out to consider eliminating:
“The Buffett Rule is a tax plan proposed by President Barack Obama in 2011 to alleviate income inequality in the United States…. The tax plan would apply to individuals earning more than $1 million per year; this comprised the top 450,000 of Americans by income when the rule was proposed.
“The plan is named after American investor Warren Buffett, who publicly stated in early 2011 that he disagreed with the rich paying less in federal taxes, as a portion of income, than the middle class, and has voiced support for increased taxes on the wealthy. It would implement a higher minimum tax rate for taxpayers in the highest income bracket, to ensure that they do not pay a lower percentage of income in taxes than less-affluent Americans.”
This is all nonsense, of course, as anyone who’s ever done an IRS 1040 long form will readily attest.
Warren Buffett—and most of his crony capitalist pals, who are, BTW primarily Democrats—pays himself less in salary each year than most Major League Baseball bench-sitters get in their paychecks. This keeps him comfortably in a lower tax bracket than might otherwise be the case.
Meanwhile, like any shrewd investor, Buffett lets his massive capital gains run, courtesy of his giant conglomerate, Berkshire Hathaway. Tax law permits you to let your long-term capital gains accrue indefinitely and generally leaves them non-taxable until you sell the investment and actually book the profit.
Buffett has accumulated massive, untaxed capital gains over the decades, but that’s just the point. They’re not “salary” so they’re not taxed until he actually “realizes” the gains by selling a given asset. Which he rarely does.
So the Buffett Rule’s “tax the rich” message is almost entirely bogus. Most wealthy individuals have traditionally accumulated their wealth in this manner, i.e., via long term capital gains. And since these unrealized profits are not “wages”—i.e., “unearned income” in the always amusing IRS parlance—they are, as we’ve stated, effectively not taxable.
You can raise Uncle Warren’s tax rate to 100% and it will scarcely cause him a hiccup. He’ll just rejigger his “salary” to adjust to the new rates and won’t pay more than a few bucks than he’s paying now. But small businessmen, who can’t afford such massive (and yes, legal) tax dodges, will take it in the ear.
Unfortunately, since most individuals never personally hold unrealized long-term capital gains (save indirectly in their 401[k] plans or their homes if they’re not currently under water), they will never grasp this simple truth and the demagogues will win. Warren will still keep most of his money, along with ur-socialist George Soros, and everyone else in the faux-Socialist camp. But that won’t stop them from proclaiming their virtue, which is the whole point of this nonsense anyway.
Or, as some Republican commentators liked to call it, “Porkulus.”
The 2009 Obama “Stimulus” package was, like the GM settlement, the Chevy Volt, Solyndra, and much, much more, simply another payoff for union support. The bulk of taxpayer funds for this program went to bail out overpaid union teachers, particularly in expensive big government states like New York and California. Whatever was left after these payoff were earmarked for “shovel ready” projects that would employ, of course, union labor.
Making things worse, a chunk of this so-called stimulus was intended as a down payment to select, politically important states, for building unnecessary high-speed rail systems. What we were never told, of course, was this: once those railroads were built (by union labor), the individual state taxpayer would have to subsidize said railroads forever—and pay the posh salaries and gold-plated benefits of the new union hires who’d be operating the railroads! Who would then fork over even more taxpayer-supported union dues to keep pliant Democrats in power.
Sadly, a stimulus bill of this magnitude aimed at reviving the private sector may have actually helped blunt the nation’s growing unemployment rate. Opined writer Greg Halvorson in The American Thinker:
“I guess it doesn’t matter that two-thirds of the stimulus originally earmarked for infrastructure (“shovel ready” projects supported by all!) lies dormant in federal coffers, “infrastructure” is a poll-tested sound-bite from Government Heaven. ‘Roads, rails, runways’ is a catchy motto which sooths the electorate with images of Men at Work.”
Halvorson’s observations then yield the floor to Michelle Malkin who writes:
“Not all workers are equal in Obama’s eyes. And most of them will remain ‘idled’ by the Democrats’ own design. The key is E.O. 13502, a union-friendly Executive Order signed by Obama in his first weeks in office, which forces contractors who bid on large-scale public construction projects in excess of $25 million to submit to union representation for its employees.
“The blunt instrument used to give unions a leg up is the ‘project labor agreement (PLA),’ which in theory sets reasonable pre-work terms and conditions — but in practice, requires contractors to hand over EXCLUSIVE BARGAINING CONTROL, to pay inflated, above-market wages and benefits; and to fork over dues money and pension-funding to corrupt, cash-starved labor organizations. These anti-competitive agreements undermine a fair bidding process on projects that locked-out, non-union laborers are funding with their own tax dollars. And these PLAs benefit the privileged few at the expense of the vast majority. In the construction industry, 85 percent of the workforce is non-union by choice.
“This was predictable…. Mr. Obama exists in two worlds: one made up of real Americans whom he mocks, and one made up of utopian schemers. One feeds on fact, one feeds on foolishness. And it’s apparent to all which he prefers.”
3. Keystone Pipeline
If offered a chance of caving to the environmentalists or caving to the unions, the Obama Administration invariably will throw in with the former. Don’t take our word on this. Read a recent statement by the inaptly named “Friends of the Earth,” crowing about the President’s stifling of the Keystone Pipeline from Canada: ironically a real, honest UNION jobs program if there ever was one:
“After more than two years of active campaigning by Friends of the Earth and its members and activists, President Obama rejected the permit for the Keystone XL pipeline on January 18, dealing a blow to Big Oil. The president’s action would not have happened without the sustained grassroots pressure exerted by activists across the country.
“You can read our statement here.”
“While we are energized by this David v. Goliath victory, we know that Big Oil and its cronies in Congress will not relent — and we continue to fight against tar sands oil and any pipeline meant to carry it.”
With a jaundiced eye, Gary Starr, in American First Principles, approaches this unbelievable, job-busting scandal from the other side:
“Does our Fraudinator-in-Chief care about jobs? You bet he does. So long as they exist only on paper. Or they are non-existent solar panel green jobs. Or they are public sector jobs….you know, teachers, government paper shufflers, SEIU, etc.
“But private sector shovel-ready jobs? Hmmmm, not so much. We need some more environmental impact studies.
“The Canadian Keystone XL oil pipeline is ready to go. Massive oil reserves are ready to be pumped from the ground and delivered to the U.S. That would mean 20,000 jobs here in this country, less dependence on the Arabs, and possibly, lower gas prices. A win-win, right?
“Nyet, comrade. No gas for you. Obama can’t enrage his socialist no-growth flat-earth environmental buddies. That’s his base for 2012.
“So he kicked the oil can down the road to post-election 2013 as far as a decision on Keystone is concerned (c’mon, we know what his decision will be if he’s re-elected). He did what he does best….he voted present.
“OK says Canada — we will ship the oil to Asia. China is a ready and willing customer….”
On a roll, Starr continues:
“But there is another reason to delay the pipeline. In the wake of the 2009 Gulf Oil spill Obama’s kneejerk reaction was to suspend all deep-water drilling and permitting to U.S. companies, and announce a lengthy period of environmental impact studies to ward off any legal complications. At the same time Obama-buddy George Soros made a substantial investment in Brazil’s Petrobras which does deep-water drilling in the Gulf. Obama traveled to Brazil and announced that the United States would be Brazil’s ‘best oil customer’ thus benefitting Obama-buddy George Soros.
“In North Dakota there is an oil boom going on at the Bakken Oil Fields. Who benefits from the Keystone delay? Obama-buddy number 2 — Warren Buffett.”
Another fabulously wealthy socialist, except for his own money, Soros was a predictable beneficiary of the Administration’s arrogant stonewalling of this key American jobs producer. But there’s another surprise, according to Starr, who mined this info from Investors Business Daily:View Entire Story
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