I have been an internal auditor at a major international bank. There are different auditors involved in most corporations who report to different people, but generally, Auditors provide oversight. Internal auditors generally report to the owners or board of directors of a corporation. They report on the success that management is having managing risks. Risks can include wasted money, fraud, incompetence, etc.
Inspectors General (IGs) are the governmental equivalent. That they are being purged for doing their job should enrage us all. This tells us the same people who want to blow our hard earned money paid in taxes on their own projects (lining their pockets) are getting the overseers fired who can blow the whistle on their behavior.
Read the article here.
Highlights of the fox new story:
"The mounting evidence that there might be political interference with the IGs is disturbing," said Pete Sepp, vice president for policy and communications at the National Taxpayers Union. "The IGs are being emasculated."
Congress missed an opportunity to bolster the IGs when it debated the 2008 IG Reform Act. Provisions that would have allowed only the president to remove IGs for good cause "lay on the cutting room floor" and didn't make it into the final bill passed last September, she said.
Wednesday, July 8, 2009
Tuesday, April 21, 2009
"Let big banks fail"
That's the message top economists have for the US government dealing with a bloated and ineffective financial system in breakdown. The story can be found here.
Highlights:
Columbia University professor Joseph Stiglitz and MIT professor Simon Johnson warned the Joint Economic Committee of Congress that the current government policy of propping up troubled financial giants could impede an economic recovery.
They each said spending taxpayer dollars freely on behalf of struggling big banks risks drowning U.S. productive capacity in debt -- while handing what amounts to an enormously costly subsidy to politically powerful financial sector insiders.
If the Obama administration fails to hold troubled banks accountable for their problems, the U.S. could face a lost decade of economic growth like Japan's in the 1990s, they said.
Federal Reserve Bank of Kansas City President Thomas Hoenig, said policymakers must allow troubled firms to fail rather than propping them up, a la AIG (AIG, Fortune 500). He said banks must be treated consistently, regardless of their size or connections, for the sake of restoring confidence to markets and normal function to the economy.
"Rather than letting the market system objectively discipline the firms through failure and stockholder loss," Hoenig said of the current approach to bailouts, "we tend to micromanage the institutions and punish those within reach."
Highlights:
Columbia University professor Joseph Stiglitz and MIT professor Simon Johnson warned the Joint Economic Committee of Congress that the current government policy of propping up troubled financial giants could impede an economic recovery.
They each said spending taxpayer dollars freely on behalf of struggling big banks risks drowning U.S. productive capacity in debt -- while handing what amounts to an enormously costly subsidy to politically powerful financial sector insiders.
If the Obama administration fails to hold troubled banks accountable for their problems, the U.S. could face a lost decade of economic growth like Japan's in the 1990s, they said.
Federal Reserve Bank of Kansas City President Thomas Hoenig, said policymakers must allow troubled firms to fail rather than propping them up, a la AIG (AIG, Fortune 500). He said banks must be treated consistently, regardless of their size or connections, for the sake of restoring confidence to markets and normal function to the economy.
"Rather than letting the market system objectively discipline the firms through failure and stockholder loss," Hoenig said of the current approach to bailouts, "we tend to micromanage the institutions and punish those within reach."
20 Criminal Probes and 6 Audits Underway on TARP Money Usage
Neil Barofsky, the special inspector general overseeing the Troubled Asset Relief Program, released a 250-page report detailing a long list of concerns about government efforts to prop up hundreds of banks, Wall Street firms and auto companies. There's not a lot in this story on CNN, or this article in the Wall Street Journal, nor this article on the Washington Post. The report in total was just posted to the oversight group's web site here.
Other reports from the oversight group are here: http://www.sigtarp.gov/reports.shtml
Highlights from the report:
The Troubled Asset Relief Program (“TARP”) now includes 12 separate, but often interrelated, programs involving Government and private funds of up to almost $3 trillion — roughly the equivalent of last year’s entire Federal budget.
SIGTARP has initiated, to date, almost 20 preliminary and full criminal investigations. Although the details of those investigations generally will not be discussed unless and until public action is taken, the cases vary widely in subject matter and include large corporate and securities fraud matters affecting TARP investments, tax matters, insider trading, public corruption, and mortgage-modifi cation fraud.
SIGTARP’s mission is to advance economic stability through transparency, coordinated
oversight, and robust enforcement, thereby being a voice for, and protecting
the interests of, those who fund TARP — i.e., the American taxpayers.
Other reports from the oversight group are here: http://www.sigtarp.gov/reports.shtml
Highlights from the report:
The Troubled Asset Relief Program (“TARP”) now includes 12 separate, but often interrelated, programs involving Government and private funds of up to almost $3 trillion — roughly the equivalent of last year’s entire Federal budget.
SIGTARP has initiated, to date, almost 20 preliminary and full criminal investigations. Although the details of those investigations generally will not be discussed unless and until public action is taken, the cases vary widely in subject matter and include large corporate and securities fraud matters affecting TARP investments, tax matters, insider trading, public corruption, and mortgage-modifi cation fraud.
SIGTARP’s mission is to advance economic stability through transparency, coordinated
oversight, and robust enforcement, thereby being a voice for, and protecting
the interests of, those who fund TARP — i.e., the American taxpayers.
Wednesday, April 15, 2009
Sunday, February 8, 2009
Ron Paul on how we got here
Found here on Youtube Ron Paul speaks on how we got into this mess and what we are doing wrong trying to get out of it.
Some sense, 11% or less, in a weekend of stimulus eliminations
Congretional Democrats, believe it or not, with a few Republicans (rumored to be Sens. Susan Collins and Olympia Snowe, both of Maine, and Sen. Arlen Specter of Pennsylvania) this weekend have managed to trim a bit of fat from the "stimulus" bill which is approaching $1 Trillion ($1,000,000,000,000). The detailed list is in this article on CNN. The numbers don't look as large without all the 0s so I've taken the liberty of modifying the list and providing a total which doesn't show up in the article:
Grand Total cut is $88.36 billion, or 11% of the supposed $800 billion bill
| $1 billion | $1,000,000,000 | for Energy Loan Guarantees |
| $1 billion | $1,000,000,000 | for Head Start/Early Start |
| $1.2 billion | $1,200,000,000 | for retrofitting Project 8 housing |
| $1.25 billion | $1,250,000,000 | for project based rental |
| $16 billion | $16,000,000,000 | for school construction |
| $2 billion | $2,000,000,000 | for broadband |
| $2 billion | $2,000,000,000 | for Health Information Technology Grants |
| $2.25 billion | $2,250,000,000 | for Neighborhood Stabilization |
| $3.5 billion | $3,500,000,000 | for energy-efficient federal buildings (original bill $7 billion) |
| $3.5 billion | $3,500,000,000 | for higher education construction |
| $4.5 billion | $4,500,000,000 | for General Services Administration |
| $40 billion | $40,000,000,000 | for state fiscal stabilization (includes $7.50 billion of state incentive grants) |
| $5.8 billion | $5,800,000,000 | for Health Prevention Activity |
| $10 million | $10,000,000 | state and local law enforcement |
| $100 million | $100,000,000 | for distance learning |
| $100 million | $100,000,000 | for Farm Service Agency modernization |
| $100 million | $100,000,000 | for National Institute of Standards and Technology |
| $100 million | $100,000,000 | for science |
| $100 million | $100,000,000 | from FBI construction (original bill $400 million) |
| $100 million | $100,000,000 | from law enforcement wireless (original bill $200 million) |
| $100 million | $100,000,000 | from National Oceanic and Atmospheric Administration (original bill $427 million) |
| $122 million | $122,000,000 | for Coast Guard Cutters, modifies use |
| $122 million | $122,000,000 | for Coast Guard polar icebreaker/cutters |
| $140 million | $140,000,000 | for BYRNE Competitive grant program |
| $165 million | $165,000,000 | for Forest Service capital improvement |
| $20 million | $20,000,000 | for working capital fund |
| $200 million | $200,000,000 | for National Science Foundation |
| $200 million | $200,000,000 | from Environmental Protection Agency Superfund (original bill $800 million) |
| $200 million | $200,000,000 | Transportation Security Administration |
| $25 million | $25,000,000 | for Fish and Wildlife |
| $25 million | $25,000,000 | for Marshalls Construction |
| $300 million | $300,000,000 | for BYRNE Formula grant program |
| $300 million | $300,000,000 | for federal prisons |
| $300 million | $300,000,000 | from federal fleet of hybrid vehicles (original bill $600 million) |
| $50 million | $50,000,000 | for aeronautics |
| $50 million | $50,000,000 | for aquaculture |
| $50 million | $50,000,000 | for Cooperative State Research, Education and Extension Service |
| $50 million | $50,000,000 | for Cross Agency Support |
| $50 million | $50,000,000 | for detention trustee |
| $50 million | $50,000,000 | for exploration |
| $50 million | $50,000,000 | for NASA |
| $50 million | $50,000,000 | from Department of Homeland Security |
| $55 million | $55,000,000 | for historic preservation |
| $55 million | $55,000,000 | for historic preservation |
| $600 million | $600,000,000 | for Title I (No Child Left Behind) |
| $65 million | $65,000,000 | for watershed rehabilitation |
| $75 million | $75,000,000 | from Smithsonian (original bill $150 million) |
| $89 million | $89,000,000 | General Services Administration operations |
| $90 million | $90,000,000 | for State and Private Wildlife Fire Management |
| $98 million | $98,000,000 | for school nutrition |
Grand Total cut is $88.36 billion, or 11% of the supposed $800 billion bill
Thursday, February 5, 2009
Libertarian Stimulus
Not sure how the carbon tax ideas got into Libertarian ideology, but they have a good perspective on economic stimulus that is detailed in this comentary.
Jeffrey A. Miron is senior lecturer in economics at Harvard University
Jeffrey A. Miron is senior lecturer in economics at Harvard University
When libertarians question the merit of President Obama's stimulus package, a frequent rejoinder is, "Well, we have to do something." This is hardly a persuasive response. If the cure is worse than the disease, it is better to live with the disease.
In any case, libertarians do not argue for doing nothing; rather, they advocate eliminating or adjusting policies that are bad for the economy independent of the recession.It is tempting to believe that every problem has a solution, but the reality is not so nice. It is possible, even likely, that the best we can do is fix things we know how to fix, and then get out of the way. This may not ameliorate the current situation, but it avoids making things worse. In economics as in medicine -- first, do no harm.
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