But especially when the government is giving away so much money, there is a big incentive for shady contractors to take advantage of the situation. The Iraq War reconstruction provides a case in point: a recent Inspector General's report uncovered the theft of some $50 billion in taxpayer funding, in what has been called "a fraud bigger than Madoff".
So how do you provide a check against unscrupulus contractors?
With stronger protections for whistleblowers. These people - whether inside the government, private citizens, or subordinates at large contractors - need to have protections from retaliation or being fired, so they can report the fraud that they may witness.
The False Claims Act gives whistleblowers protection to speak out, and has helped the Justice Department recover $21 billion since it was updated in 1986.
But with government contracting more rampant than ever, and when more and more tax dollars are given away, taxpayers need stronger protections to make sure those dollars are not being siphoned off by cheats or scofflaws.
Congressman Howard Berman (D-Calif.) and Senator Chuck Grassley (R-Iowa) have proposed strengthening whistleblower protections and updating the 1986 version of the False Claims Act. These revisions are needed to respond to recent federal court decisions that threaten to limit the scope intended by Congress.
As one editorial noted, Congress "should at least lift the gag on citizens who report fraud. Perhaps if taxpayers knew how much of their money was on the line, public pressure would prompt quicker action."
Senator Grassley has written about his amendment to the 1986 False Claims Act here:
Congress needs to increase protections for whistleblowers and the current Grassley and Berman amendments are essential to protecting whistleblowers and taxpayers.
With $500 billion in new spending at stake, we can't afford not to.
This sort of backwards-ass thinking on the part of the media industrialists really bugs me. Jerome
Recently the MPAA found its newest target in its ongoing and futile attempt to prevent legitimate and legal advances in DVD home viewing.
RealDVD is a computer program that lets views save their DVDs (movies, TV shows, and home movies) to their PCs or laptops.
But this is not just another DVD-ripping program. The DVDs that you save will play only on your computer with the License Key purchased, it does not break the encryption code on the DVD, and you cannot burn disks from the DVD upload that you make.
This is not simply another Handbrake or Jack the Ripper, two DVD ripping programs that curiously have not received the ire of the MPAA. Instead RealDVD is a program that allows users to back up their DVDs like they have been able to do with their music for many years, watch DVDs anywhere without having to lug around a cumbersome case (especially useful when traveling), and ensures that DVDs are not lost if disks get scratched or worn out.
The program does nothing to harm the film industry. RealDVD users still must purchase the DVDs to view them, and are not able to rip the movies for profit themselves.
Naturally there are concerns about the interactions between RealDVD and services like Netflix and Blockbuster online. As state previously, RealDVD is not interested in providing an avenue for people to illegal copy and share DVDs. They have spoken often about how eager they are to work with the film industry to install protections on DVDs rented from companies like Netflix and Blockbuster in order to ensure they cannot be backed up using their program.
And how does the film industry react to this program? Does it embrace it as an avenue for their continued survival to ensure they don't go the way of the recording industry?
Of course not.
Instead the major Hollywood studios banded together, sought legal action to block the distribution of RealDVD, and were ultimately successful in temporarily shutting down the distribution of the program. A Federal Judge will hear the case and the status of the preliminary injunction will be decided sometime in the next few weeks.
The MPAA is tight rope walking the same dangerous line that the RIAA did in attempting to use copyright laws to control information. In doing so the RIAA managed to kill their own industry. If the MPAA continues down this same path we will be writing the same stories about them as we are about the downfall of the RIAA.
Because the fact of the matter is RealDVD does not circumvent technology meant to prevent illegal copying of DVDs, but rather it has received rave reviews for its stringent protections against such actions.
The Hollywood film studios are selfishly preventing consumers from being able to back up their purchases. With no basis in law for such actions and absolutely no intent of wrong doing from the makers of RealDVD, the ultimate endgame of this charade by the MPAA will be blocking a huge benefit to consumers whose dollars are already being competed for left and right.
Tell me if enraging consumers and blatantly attempting to stifle innovation, as the Electronic Frontier Foundation points out as the real reason for the film industry's outrage in this October article, by blocking a completely legal product is really the best idea in these times, if ever at all?
Fortunately, between finding a way to make the biggest bailouts in US history work and watching the Wall Street woes, Congress is finally going to be considering a second stimulus package in the next couple of weeks.
I've written before about what should be in a second stimulus package, and according to Manu Raju of The Hill, Congress has gotten the message:
The package is expected to include billions of dollars for new infrastructure projects, provisions to help the auto industry and a package to renew expiring energy-tax incentives that the business community has lobbied for extensively.
Naturally, Republicans aren't quite sure if legislation that would help the average American is such a good idea:
Republicans say the economic collapse shows the need to keep taxes low, but they have been resistant to additional government measures after Congress approved a stimulus package with rebate checks in February and a housing bailout this summer.
One of the do-nothing members of Congress is Senator Orrin Hatch of Utah. According to the Salt Lake City Tribune:
Out of Utah's congressional delegation, Republican Sen. Orrin Hatch, expressed the strongest opposition to the Democratic plan.Instead of a stimulus package, he said Congress should focus its remaining time on energy legislation, free-trade agreements and extending the Bush tax cuts.
The only problem? By "energy legislation" Senator Hatch means legislation to "drill baby drill." And extending the Bush tax cuts is only a great idea if you are making millions, because those are the only people who the Bush tax cuts helped in the first place.
And people like you and me are still getting burned from the economic crisis. A second economic stimulus package won't immediately solve the economic problems across the country, but it will help. The fact of the matter remains that if the US government is finding time to bail out Fannie Mae and Freddie Mac in the middle of the night then it should be able to find time to improve infrastructure, provide aid to the states, and help the people who are really hurting. There isn't time to wait anymore. A second economic stimulus package needs to pass.
Their editorial entitled "No End in Site" lays out perfectly what the next few steps should be to help the economy whether this current storm. They begin by stating the obvious:
Lawmakers need to start crafting the next stimulus bill — without repeating the mistakes of the last one. Composed mainly of tax rebates, as the White House wanted, the first stimulus was too broad to deliver a powerful punch.
Amen. It is clear that the first round of stimulus checks didn't work. The editorial then confirms what many experts have been saying is a real potentially relief-filled measure that Congress needs to take with the second stimulus package:
The next package has to focus on actions that are known to yield big economic benefits: bolstered food stamps, which rapidly boost consumption; and aid to states and cities so they can continue to provide essential services.Lawmakers should also invest in infrastructure projects, like repairing bridges and roads. If not, projects that are already under way may have to be canceled, creating more unemployment.
Thank you. The fact that state and city governments are not asking for money to continue radical spending on pet projects, but instead to protect essential services like education and health care seems to be lost on the minds of those who are not in favor of including state aid in a second stimulus package. Every week there are stories upon storiesof states being forced to slash budgets, pay, and jobs. They are a linch pin of the economy and no one seems to notice. And investing in infrastructure will ensure that we don't add thousands of workers who make their living off of said infrastructure projects. The construction industry has been hit hard enough as is.
The editorial also touches on a response to the home foreclosure crisis:
Congress also needs to ensure that a $4 billion grant to states and cities to buy up vacant properties is quickly and efficiently distributed. The Department of Housing and Urban Development is developing the formula for allocating the money, and early indications suggest it is on top of the process. But the White House is contemptuous of the grant, calling it a gift to speculators when it is actually a lifeline for ailing communities.
If you aren't a Bush republican who just hates any sort of aid not aimed at the highest income bracket, then the main criticism of this effort is that is simply not enough to have an impact on the housing market. Whether or not this is true remains to be seen, but it is still $4 billion to help turn foreclosed properties that the states with said properties currently do not have. In that regard it is a stabilizing factor, even if it is not the stabilizing factor that ultimately turns the foreclosure crisis around. As the editorial says, it is a lifeline for ailing communities who simply do not have the money do to anything with these foreclosed homes.
The time for action is now, but because Congress is in recess the time for action will actually be September. The article suggests the difficulty with creating a second stimulus package in an election year, but brings up the most important point of them all:
Millions of Americans are already suffering. And we fear millions more will be hurt before this crisis ends. They cannot wait until after the election for help.
A very valid point. It's hard to care about battleground polls, attack ads, and town halls when you're losing your job and your home.
We understand the political logic of a second stimulus; the economic case is less convincing. Any fiscal stimulus must be targeted, timely and temporary. That is, it must put money in the hands of people who are likely to spend it quickly -- while not committing the federal government to new long-term spending.
Naturally to make their case the Ed Board selectively picks and chooses which parts of the stimulus package to highlight.
House Speaker Nancy Pelosi has called for a $50 billion package, possibly including increases in food stamps and home heating assistance as well as more Medicaid money for states and new infrastructure spending. Fleshing out Ms. Pelosi's concept, Senate Appropriations Committee Chairman Robert C. Byrd (D-W.Va.) has unveiled $24 billion in proposed energy, infrastructure and disaster relief money.
We'll move beyond the fact that many people think supplemental medicaid funding is a really good idea to the more pressing point; the Wapo Editorial Board failed to mention or mention only in passing two plans that many experts say should be the staples of any second stimulus package; aid to states and infrastructure spending. AWall Street Journal article from last month (subscription only) shows Congressional leaders getting on board with the idea so I am lost as to why it received no attention in the Op Ed:
The bill, which would likely include spending on road projects and aid to stated, isn't expected to come up in the House until September
We proved earlier this year that stimulus checks on their own are not the solution to the nation's economic woes. However not recognizing the obvious need for help that states have been screaming about over the last several months is just irresponsible. Not to mention their editorial reads just barely on the sane side of illogical.
Their suggestion that we don't know the effects of the first stimulus yet is asinine. The Post even admitted this on Thursday. On page 10 of the Washington Post Express they ran an article entitled "Stimulus Checks Run Out"
Analysts said retail sales would have been more feeble without the $92 billion in rebate payments the government sent out in May, June, and July. Those checks helped to counter plunging home prices, rising unemployment, and soaring gasoline prices. The bulk mailings are now over, though, leaving economists worried about what will happen next.
WaPo can't have it both ways. They can't report that the stimulus checks are running out but then opine that we shouldn't have a second stimulus because we don't know the effects of the first.
And sure gas prices have been falling over the last couple of weeks, but today's national average for a gallon of gasoline is still $3.77. Am I glad its down from the high of $4.11 that we saw in mid July? Yes. Am I convinced that this means I don't have to worry about gas destroying my wallet? Absolutely not.
According to the Fuel Gauge Report, gas is still $4.07 in California where their budget crisis has gotten so bad that over 200,000 state employees had their pay rolled back to minimum wage. It's $3.89 in Michigan, where unemployment is skyrocketing. Its $3.98 in New York where Governor Patterson has been forced to slash medicaid by $500 million this year and $1 billion next year. The relief at the pump will be short lived because state governments don't have the resources to ensure normal citizens won't feel the pain of floundering state economies.
The Washington Post should know better. After all, the situation is going from bad to worse in their own back yard. A Richmond Times Dispatch article has Governor Kaine says the budget shortfall could surpass $1 billion. This coming on the heals of cutting $2 billion out of the budget this year. He says he's going to apply the same formula:
Kaine said he probably would apply the same basic principles to the next round of economies that he did previously -- to not cut across the board but target more precisely areas that can be reduced. Some lawmakers and lobbyists aren't sure that's possible.
I'm not sure thats possible either. There are a limited number of areas that can be reduced before you start having to cut education, public safety, health, and other essential services. We may be months away from the endgame, but counties and cities are bracing for the worst.
"We expect, and are preparing for, very bad news," said Michael L. Edwards, a lobbyist for the Virginia Association of Counties.
What the Washington Post fails to understand is that dealing with the nations economic problems has to go beyond fixes for the individual. I would love to receive another check in the mail but it's not what's going to fix this thing. The real solutions lie in federal aid to the states and spending on infrastructure, two moves that will help states who are being forced to make dramatic cuts to essential services and potentially create jobs in states were there are far two few of them. These solutions received little to no attention in the Op Ed, which is really the biggest flaw of all in the piece.
The change in the personal saving rate corresponds closely to the size of the rebate as a percentage of disposable income. The figure shows how most of the rebate payments appear to have gone straight into saving.
Which is clearly not what President Bush had in mind when he drew up the checks in the first place.
That most of the rebate checks were saved is, though, consistent with the results we find using the University of Michigan Survey of Consumers. When consumers were asked whether their stimulus check would lead them to "mostly spend, mostly save, or mostly pay down debt," only 18% answered that it would lead them to mostly spend more.
That statement is also pretty much in line with what has been reported in the past couple of months. Still, many have been hearing reports recently that feature consumers talking about how they are spending their rebate checks, making some question whether or not it had more of an effect than originally thought. Shapiro and Slemrod don't buy this argument all the way:
Does such consumer behavior correspond to spending that would stimulate the economy? That depends on what the consumers would have done if they had not received the rebate check. If they would have not made those purchases absent the rebate, then the rebate was spent. If the rebate let them avoid running up higher credit card bills for gas and groceries they would have purchased even without the rebate, then the rebate was saved.
Thus the rosy predictions of Americans flocking to stores to spend their rebate checks may not necessarily indicate that they are having the desired effect of stimulating the economy. And what is their overall analysis of how this first stimulus package worked out?
Nonetheless, the rebates are likely to be less effective in stimulating the economy than policymakers had hoped.
In reality Shapiro and Slemrod only add another reliable source to the masses who have highlighted the failure of the first stimulus package to boost the economy. They also join another group that has been picking up steam lately; those who think investing in the states should be a central tenant of any new stimulus package:
If a second round of stimulus is necessary, other options that should be on the table. These include payments to states that will need to cut spending because of balanced budget provisions as their tax revenue falls. Additionally, policymakers should consider increased infrastructure investment on items such as roads and bridges.
Both of these are great ideas. Though they ask the question, is a second round of stimulus necessary? All I can say is look around.
In California the state budget impasse is rounding the track on its 6th week (they were supposed to have something figured out by July 1st.) Governor Schwarzenegger has been favoring scare tactics over real negotiation with state Democrats. Ask the 200,000 state employees who had their salaries reduced to minimum wage if they think a second round of stimulus is necessary. Ask the 10,000 plus seasonal and student workers who lost their jobs if they think a second round of stimulus is necessary.
In New York, Governor Patterson is calling the state legislator back into session to address a projected $6 billion budget gap next year and a gap that could ballon to $26 billion in three years. They say everything is on the table for cuts. I'm sure they could use a little help.
These are just two of countless examples of states in need of some aid. Here's to hoping that when Congress comes back into session next month they do so with the recommendations of Mr. Shapiro and Mr. Slemrod in mind.
With tropical storm Edouard running up the coast of Texas, coastal residents should check up on their insurance policies.
After Katrina, thousands of Gulf Coast residents found that their insurance companies were nothing at all “like a good neighbor.” State Farm, for instance, refused to honor claims for water damage and fought to classify the damage as “flood” instead of “wind” so they could abandon their customers. Worse, State Farm ordered some of their contract engineers to alter their damage reports, so they could avoid paying claims. They would have to pay $30 million more and “re-evaluate” more than 3,000 Hurricane Katrina clams as a result of a settlement with policyholders in April 2007.
State Farm’s actions during Katrina helped it earn the ranking of #4 on the “Worst Insurance companies in America.”
You can read more about State Farm’s anti-customer behavior in a new report on the ten worst insurance companies in the nation.
Based upon exhaustive research, court documents, state insurance records and news accounts, the legal organization, the American Association of Justice compiled the report.
You can read a synopsis of the report here: http://www.justice.org/pressroom/PressRe leases/2008/july09.aspx
Or view a pdf of the full report here: http://www.justice.org/docs/TenWorstInsu ranceCompanies.pdf
The Biloxi (MS) Sun-Herald writes up the "Worst Insurance Companies" report here: http://www.sunherald.com/business/v-prin t/story/675669.html>
The general consensus, among people including former Clinton administration officials Lawrence Summers and Alan S. Blinder, was that checks for individuals and additional government spending would help boost the economy, stem job loss and alleviate the pain of higher prices that people are paying for food and gas.
Thankfully Congress seems to finally be coming to terms with what we all have known for a long time now; that the health of the national economy is reliant on the health of the state economies. Speaker Pelosi brings home this point in getting into the finer points of what the bill will entail:
Along with rebates and spending on infrastructure projects, Ms. Pelosi said other possible proposals under consideration are help for states with their share of costs in the Medicaid health program for the poor. Some form of state aid is likely to be included, as Democrats said they are concerned that states, to balance their budgets, will cut programs or increase taxes in ways that would further slow the economy.
Newsflash, this has been happening for the last 5 months as states attempted to balance their budgets. The legislation isn't expected in the House until September, but I am thankful that Senator Reid and the Democratic leadership took the time to make sure the stimulus package would address the right needs. The question now is whether we should be saying "better late than never" or "too little too late."
· Blanche Lincoln's website supports public option (desmoinesdem)
· Big Coal's PR Spending Spree (desmoinesdem)
· IA-03: Former college wrestling coach to challenge Boswell (desmoinesdem)
· Tea Baggers Target Gore... (Cliff Schecter)
· Stimulus Watch (Jerome Armstrong)
· CREW seeks ethics inquiry of Bachmann (desmoinesdem)
· Did IRC help? (MN Campaign Report)
· 5 Worst cities for urban youth (desmoinesdem)
· "The Bishops' Huge Financial Stake in Stupak-Pitts" (desmoinesdem)
· Conservative group wants FEC to override state laws on robocalls (desmoinesdem)
· URGENT: Call these House Ds Saturday to oppose Stupak amendment (desmoinesdem)
· WI-08: Wingnut plans to run as "conservative independent" (desmoinesdem)
