2/17/11…don’t just sit there

…on our collective butts…do something! If we sit there thinking that our elected representatives are going to do the right thing…in other words favoring the American people over their Wall Street friends and other special interests we don’t even deserve to live in this country! We are beyond corrupt…we are so bad that we can’t even see that there is corruption.

Sen. Grassley yesterday said that we have to do something to stop the corruption in government. That is goes unnoticed. He was referring to the GAO investigation into NOAA which controls the fisheries and has extorted, threatened, and used government moneys for their own purposes such as buying a yacht used by the employees for fishing. TB was appalled at the report especially since they wrote such obfuscated regulations that compliance was impossible and then fined the fisherman as much as $270,000 for improper reporting. So what happened? Well, they relieved the chief investigator of his position and put in a new man – a year ago so why are we just hearing about this now? – BUT the villain remains as an investigator still making more than $100,000 a year.

But Senator, you fail to discuss the corruption in the House and Senate…the House Ethics Committee investigations that take years and resulted in Charles Rangel getting a slap when if it was an ordinary citizen he would be in jail on tax fraud. The hearings on Maxine Waters and others have still not come to a head…how long must we be subjected to this? Until we vote them out…but unlike the tea baggers they need to be replaced with people who understand government not just represent an ideology and further confuse the situation.

We also need to stop the revolving door between government and the financial sector…despite the worst financial crisis in history we continue to let Wall Street dominate…Clinton vowed to stop the revolving door…a lot of good it did when you look at Robert Rubin, Larry Summers, or Rahm Emanuel….all of whom made millions almost immediately after leaving the Administration.

How could we sit and watch the events in Egypt, now spreading to Bahrain, and other countries…can the Saudi’s be far off? …yet fail to realize the perhaps 90% of Americans are not being represented by their elected officials. TB is not a union lover but how can we value capital gains on passive income over labor? We destroyed the power of the trade unions but it is the municipal unions that know wield power. But don’t blame them.

At every level of government…especially at the state and local level these unions hold power through their size and money in electing officials…much as the financial sector does at the Federal level. So regardless of what the unions want it takes the elected officials to grant it, and they have which has created a wage and benefit…especially retirements…bubble that threatens to bankrupt almost all local governments.

TB has been following with interest the case of Bell, California, where the City Manager made over $1.3 million in salary, the Councilmen over $300,000, and the Chief of Police over $400,000…more than Los Angeles or New York. They seemed to feel it was okay to be a ‘pig’ so long as you didn’t become a ‘hog’ and get slaughtered (they even had the quote wrong!).

Police, Fire, and Transit officials are grossly overpaid and worse they have perks that are added to their retirement that IF the elected officials had been doing their job instead of listening to inflated salary/benefit surveys comparing them to the private sector, would not have occurred.
According to investigative reporters for the SF Chronicle, Matier and Ross, transportation expenses have risen 57% over the past five years while ridership is up just 7%…calling in question all those calls for high speed rail. What they failed to do was tell us how much of the 57% (there’s that magic number again), was due to salaries, benefits and retirement costs.

The head of Cal Trans earns over $430,000 in salary, housing allowance, etc…how can this be? A few years ago a police chief designate in Marin County declined and accepted a position in Fremont, Ca. for more money…from a city with a much lower tax base. This is more salary survey B.S. at work…inflating everyone’s salary…and not just the boss but those under him.

One recently retired police chief in the Bay Area is receiving over $300,000 a year in benefits. Adding to his base pay was cashing in accumulated sick leave…he had 30 years of it saved up (in the private sector you cannot carry forward more than a month or so…and if you are going to be paid for it you shouldn’t get it at the maximum salary…this is a clear case of the Council not doing its job! Also, he carried over a year of vacation…again…most private companies will not allow more than two weeks as it is a liability on their books.

What must be done is the Governor call a meeting of all city and county officials and have them set a cap on positions like just described…if it is across the board they would have no choice but to accept the cuts and changes to retirement calculations…where else would they go? Certainly not out of California! Frankly, prove that any of them are doing an exceptional job.

At the Federal level enact a law that any person with multiple public sector retirements can only draw ONE retirement based on the combined years (with no allowances for unused sick leave or vacation pay), and that the cost then be apportioned to the various entities thus eliminating double and triple dipping…it is insane to pay someone more in retirement than they earned at any point in their lifetime!

TB is also upset with the financial sector for openly flaunting opposition to the new bonus rules requiring clawbacks and restricted stock. This is especially true of…Goldamn Sachs…who else?
They, and this includes ‘partners’ whatever that means in a public corporation that plays with the investors money, allow all but the top EIGHT officials to short those performance shares to the detriment of legitimate investors when many of them have department head positions and are thus privy to insider information. So let’s say three years later they screw up and the clawback takes away their shares…they have already benefited by trading them! Congress cannot keep up with them…but are they even trying? Where is the outrage?

TB is working on ways to suggest cuts to the federal government that make sense…for sure the GOP isn’t going to do it as they still haven’t identified the cuts they want to make! If you have any ideas let him know.

Again, House Speaker Boehner, said that if government jobs are lost that is just tough as we are broke…which is an outright lie! While serving the needs of HIS party’s constituents he said not to worry that social security benefits will not be cut for anyone 55 or older…so that is where TB is going to begin. But be very thankful that Wall Street didn’t convince Congress to adapt Dubya’s lame proposal that people be able to invest the money as they choose…even in a home! No Republican has mentioned this interesting and shameful idea.

First, social security was created at a time that there were no pensions from employers. It had an added component of a lesser ‘old age pension’ for those who had not worked…remember prior to WWII very few women worked. It was not sold as a social program, thus there were no means tests. Subsequently, companies developed retirement programs then successfully dumped them for IRA’s . Obviously given the condition of the economy at the time social security was created as a ‘pay as you go’ plan with all monies invested in U.S. Treasury Bills…which now earn less than they did when enacted…has Boehner suggested investing the money differently? Out of Congress’ greedy little paws? If you were contributing to your retirement now at 12.4% (combined with employer contributions) that would be no small amount of change…heck, Congress only pays 2.6% for it’s own health care! So here are some of TB’s thoughts:
1. For those who continue to work but wish to collect social security, and for all other purposes it should be measured not against EARNED INCOME but adjusted gross income with a floating maximum before the $1 for $2 earned at least as high as the federal poverty level.

2. Those earning above a set level…perhaps $200,000, of AGI, whatever seems appropriate, no benefits would be paid, but future benefits would be increased commensurately perhaps even allowing them to be passed on to heirs…just a thought.

Medicare:

1. BAN any advertising of prescription drugs…frankly they are sickening anyway (no pun intended), and let the docs due their jobs instead of having to deal with neurotics.

2. Change the prescription drug law to require Medicare to purchase any drugs that are to  be covered…unlike the GOP plan which prohibited them from doing just that.

No further mention of healthcare…it is too complex…but as Obama said it should be discussed sensibly not dragged out for political gain – by either party!

Government salaries:

1. Boost the President’s salary from the current ridiculously low $300,000 to $500,000 then insure that no employee earn more than 80% of that, and anyone under them make no more than 80% of their salary.

2. Give bonuses, similar to whistleblowers, to investigators in successful prosecutions of criminals so they receive a portion of the settlement. Also, any government employee who abuses his position for personal gain should be banned for life and receive no retirement benefits.

Government contractors:

Reduce the number of contractors who operate without control and who are hired at will by the military (think Lockheed Martin and Halliburton), at absurd cost to the taxpayers and make the costs associated to them readily available to the public for scrutiny.

Taxes:

1. Increase the marginal rate by 2% on incomes above $250,000 and have all earned income (including hedge fund managers taxed at the full rate). You cannot cut the deficit by cost cutting alone…revenue has to be increased.

2. Capital gains should be just that. Tax dividends and other passive income as ordinary income BUT allow corporations to take this as a deductible expense. This would increase revenues, incent TRUE investing, and encourage companies to pay more in dividends rather than speculatively doing stock buybacks which have an abysmal record of success (this idea was Nobel laureate Franco Modigliani’s idea and it is a good one…defeated by Wall Street),

. . . – – – . . .

In the debate on FHLMC and FNMA gone unnoticed is the ongoing litigation against former FNMA CEO Franklin Raines who earned $1.3 million in salary alone and two other directors including Vice Chairman Jamie Gorlach. So far the government has been forced to pay legal fees for THEIR defense of $160 million ($24 million for Raines alone, who between 1998-20003 earned a collective $150 million). In addition, the government has had to put up $130 billion to keep the two quasi-agencies afloat. Remember that Raines was forced out due to an accounting scandal which hugely boosted his bonuses.

As for Gorlick, if you recall she was assistant attorney general under Janet Reno. She petitioned the Supreme Court for an opinion on whether the FBI and CIA should share information. The court saw no problem if handled properly. Despite this cover she banned them from sharing information which was a major contributing cause to 9/11.

Go on…get sick…it’s ok…we are screwed so unless you wake up and stand up for OUR rights nothing is going to change…until like we are seeing in Africa, the majority takes control…and that can be accomplished without rioting…they merely have to go to the polls!

Ciao,

TB

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2 Comments »

  1. Yarnman said

    TB–When you have he chance, read “How Goldman Killed A.I.G.” by William D. Cohan in yesterdays New York Times. Be sure to sit down, and have a basin nearby for your vomit!–Yarnman PS I find it interesting how the new Tea Party members of Congress are getting bribed, seduced and co-opted?

    • traderbill said

      Thanks, Arny! Would have missed it!
      TB

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