Free Markets, Free People

Daily Archives: February 18, 2009

Jack’s Friends

Political Wire writes that tomorrow might be an interesting day in Congress, corruption-wise.  It seems that some things have been going on around Congressman John Murtha (D-PA) which may not be entirely copacetic.

There’s a potentially big story brewing on Capitol Hill…  Apparently 104 members of Congress of both parties — 42 Republicans and 62 Democrats — secured earmarks for a lobbying firm linked to Rep. John Murtha (D-PA) in a single bill. The earmarks were inserted in a bill Murtha controlled as the defense appropriations subcommittee chairman.

It looks like business as usual, of course, until we learn that the company’s executives and clients seem to be big, big political donors to Rep. Murtha.

So, I guess it is business as usual.

Russia Freezes Iranian Missile Sale

An interesting story out of Russia via the Jerusalem Post. And while good news, albeit of a temporary nature I’m sure, I’m betting there is much more to this than meets the eye.  This is about positioning in upcoming missile defense talks with the US:

Russia has frozen the sale of the state-of-the-art S-300 anti-aircraft missiles to Iran, the Russian newspaper Kommersant reported Wednesday.

Iranian Defense Minister Mostafa Mohammad Najjar was reportedly informed of the decision by his Russian counterpart Anatoly Serdyukov on his visit to Moscow on Wednesday.

Russia said the delivery of the systems would be delayed at least until the upcoming meeting between President Dmitry Medvedev and his US counterpart, Barack Obama. Kommersant cited Russia’s wish to prevent hindering dialogue with the new US administration.

Military diplomatic sources were quoted by Kommersant as saying that the issue had been the focus of Najjar’s visit.

Of course the important point is the sale is frozen, not canceled. While that’s good news for both the US and Israel (the S-300 system is reported to be a very good air defense system against not just aircraft, but cruise missiles), it may not be any more than a temporary sop to the Americans and a reminder to the Iranians that Russia is their major backer and can pull that backing at any time. And, interestingly, there’s one other reason (or at least so Israel claims):

Israel Radio quoted Moscow sources as saying that apart form the gesture to the Americans, Russia also wanted to avoid ruining a $100 million drone purchase from Israel.

I say interesting because the S-300 sale is an $800 million sale. You jeopardize an 800 million sale for a 100 million purchase? Or do you grab the 100 mil buy because you know the 800 mil sale is in the bag? I’d say the latter, meaning the freeze is most likely for show only. Unless, of course, the Russians are just incredibly stupid businessmen.

I don’t think they are, although they’re not as clever in other areas as they sometimes think. This seems to me to be a very crude (but probably effective) set up for an “aw gee and here we made this great gesture toward working with you and this is how you act?” result of our first meeting with Russia. Absolute world opinion gold for Putin and the boys if they manage it correctly and, of course, the perfect opportunity to then unfreeze the sale.  Can anyone guess who’d end up being embarrassed by such a scenario?

~McQ

The Culture Of Corruption On Steriods

The latest to be caught up in it is Rahm Emanuel:

News broke last week that Rahm Emanuel, now White House chief of staff, lived rent- free for years in the home of Rep. Rosa De Lauro (D-Conn.) – and failed to disclose the gift, as congressional ethics rules mandate. But this is only the tip of Emanuel’s previously undislosed ethics problems.

One issue is the work Emanuel tossed the way of De Lauro’s husband. But the bigger one goes back to Emanuel’s days on the board of now-bankrupt mortgage giant Freddie Mac.

So, lived free for 5 years and didn’t pay taxes on the gift (which, frankly doesn’t particularly bother me, but since Democrats would crucify a Republican official who did the same thing, I think hoisting a Dems on the same petard is perfectly acceptable), allegedly threw business into the lap of the person who was providing the gift, and fiddled while Freddie Mac burned.

To me the most serious of the three is the last. I see it as gross dereliction of duty. FM was fined 50 million bucks while Emanuel was paid $262,000 (speaking of fat cats) for obviously doing nothing as a FM board member during the time for which the fines were assessed. It isn’t a ‘golden parachute’ or a bonus for failure, but it is darn close.

I’d say a tax audit is called for, but then since Timothy Geithner would have to call for it, so nevermind.

Then there’s the ongoing probe into supporters of John Murtha which has now widened to include him.  Allegations have surfaced that he may have broken campaign-finance laws during a fundraiser held by the same people now under FBI investigation.  I’m just shocked, shocked I tell you!  Then there’s Charlie Rangel.

And Roland Burris? Heh … “Oh, yeah, um by the way, I did offer to raise money for the ex-gov.  Somehow that just slipped my mind during the hearings.”

Tell me again how it is now so much more ethical and honest in Washington DC since the Democrats took over?  Oh, and transparant.  That too.

“Just words …”

~McQ

Automakers – Gathering At The Trough Again

To be blunt about it, this just pisses me off:

GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM’s chairman and chief executive, said the bankruptcy scenarios are “risky” and “costly” and would only be pursued as a last resort.

Really? Well guess what – it’s even more “risky” and “costly” for the taxpayer to give GM another 100 billion bucks (and further on in the article it is acknowledged that a pre-packaged bankruptcy would cost about 30 billion).

GM claims its going to pare down its working force and model line. But what isn’t clear is how it plans on eliminating the legacy costs which still make it uncompetitive. Anyone know what would require them to confront that issue? That’s right – bankruptcy.

As for Chrysler:

Chrysler’s plan said the company would likely have to file for Chapter 11 protection if it doesn’t get additional loans from the government and concessions from unions, creditors and dealers. It said it would need $24 billion in financing if the company were to file for bankruptcy. But company officials said in a conference call that they believe a Chapter 11 filing is “not necessary” for Chrysler’s survival.

Uh no. Want more money? See Cereberus, the company you belong too and which is sitting on about 150 billion in assests. Let them pick up the tab. If not, see you in bankruptcy court.

This is ridiculous.

In particular, new opposition to further aid for Chrysler seemed to be building on Capitol Hill. In an interview Tuesday, Sen. Judd Gregg (R., N.H.) said no more taxpayer money should be given to Chrysler until its majority owner, private-equity firm Cerberus Capital Management LP, agrees to inject more funds into it.

Good. It’s about time this demand was made. What in the world is government doing throwing money at Chrysler when it has an owner with plenty of money? And Cerberus’ answer?

Cerberus said in a statement that it can’t put additional investments into Chrysler because agreements with its investors limit how much it can commit to any single investment. It added Cerberus has agreed to forgo any Chrysler profits before the government loans are repaid.

Tough beans. In that case, Cerberus had better find a way to sell off some of its investments to raise the necessary cash or be prepared to watch Chrysler hit bankruptcy court. Whichever choice it makes, it is not the job of the taxpayer to keep a marginal company afloat. And that’s even more true when that company has private assets upon which it can draw.

But when politicians are in the pain avoidance business, the Constitution is just a piece of paper and whatever they think they need to do to protect their positions of power will be done, regardless of law, principle or morality.

Just watch.

~McQ

This Could Be Interesting

If they can get this passed, it might shake things up in the states rights arena:

This week the Oklahoma House of Representatives Rules Committee voted unanimously to support House Joint Resolution 1003 authored by state Rep. Charles Key. Key’s proposal should now be headed to the floor of the House where I look forward to supporting it.

HJR 1003 seeks to reassert Oklahoma’s sovereignty under the 10th Amendment to the U.S. Constitution, and according to the resolution’s language, serves as “Notice and Demand to the federal government, to cease and desist, effective immediately, mandates that are beyond the scope of these constitutionally delegated powers.

The 10th Amendment states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.”

Of course it will end up in court if passed, but I would love to see it upheld and it lead to more 10th amendment exceptions leading toward a reestablishment of more states rights.

Read the rest of the article – Rep. Jason Murphey makes a good case concerning levels of influence and representation. His point about those with money driving national politics is well taken.

~McQ

Irony – Advice From Putin … But Will We Heed It?

Amazing that it is Russia giving the advice and the US deciding it isn’t valid:

Russian Prime Minister Vladamir Putin has said the US should take a lesson from the pages of Russian history and not exercise “excessive intervention in economic activity and blind faith in the state’s omnipotence”.

“In the 20th century, the Soviet Union made the state’s role absolute,” Putin said during a speech at the opening ceremony of the World Economic Forum in Davos, Switzerland. “In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.”

Unfortunately I think this lesson is mostly lost on us and it will, just as it did Russia, cost us dearly.

~McQ