Archive for the ‘Corruption’ Category

Washington is a horribly corrupt city. The tax code is riddled with special favors for politically powerful interest groups. The budget is filled with handouts and subsidies for well-connected insiders. The regulatory apparatus is a playground for cronyism.

I’ve previously explained that shrinking the size and scope of government is the most effective way of curtailing corruption. Simply stated, people won’t try to get favors and politicians won’t have the ability to sell favors if government doesn’t have power to redistribute income and dictate behavior.

To be sure, this isn’t a recipe for zero corruption. There doubtlessly was corruption in the 1700s and 1800s when Washington was just a tiny fraction of its current size. But it’s a matter of scale. A smaller government means less opportunity for mischief.

Some folks argue that campaign finance laws would be an effective way of curtailing sleaze in Washington. And there are some compelling arguments for this approach.

After all, would we have unsavory examples of corruption like the Export-Import Bank if wealthy insiders from big companies weren’t able to generate buckets of campaign cash for politicians?

But let’s be realistic. So long as politicians have the power to provide subsidies for big business, they’ll have an incentive to offer those handouts. And companies will have an incentive to seek those handouts.

Campaign finance laws might cut back on one pathway to buy and sell favors, but the incentive to cut deals will still exist. Sort of like pressing down on one part of a balloon simply causes another part of the balloon to expand.

But, you may ask, isn’t it worth taking such steps in hopes of at least creating some roadblocks to graft in Washington.

Perhaps in theory, but let’s not forget that it’s very naïve to think that politicians will enact laws that reduce their power or weaken their chances of being reelected. That’s about as likely as burglars being in favor of armed homeowners.

As such, we actually should be concerned that new laws and rules somehow would be structured to make things worse rather than better.

That’s the message of this superb video from Prager University. Narrated by George Will, the video explains why so-called campaign finance rules are not the answer (unless, of course, the question is “how can we give more power to the entrenched political class?”).

Let me add something that wasn’t addressed in the video. Incumbent politicians like the idea of limiting campaign contributions because they start each election cycle with a giant advantage. They already are well known in their states or districts. They’ve already curried favor with voters by engaging in taxpayer-financed “constituent service.” They already get themselves in front of cameras at every opportunity when there’s a ribbon cutting for a new bridge or road project. And they’ve already built relationships with the power brokers in each community.

Challengers, for all intents and purposes, need to spend a lot of money – potentially millions of dollars depending on the electorate – simply to create a level playing field. But if there are laws that limit total spending or restrict contribution amounts, it makes it a lot harder to conduct a credible campaign.

No wonder incumbent politicians so often pontificate about “getting money out of politics.” What they’re really saying is “let’s make it impossible for anybody to threaten my reelection.”

The bottom line is that limits on campaign contributions and other restrictions on political speech make elections less fair.

And they don’t solve the bigger issue of graft, corruption, and sleaze. No wonder they’re willing to impose dozens – if not hundreds – of laws governing public malfeasance and campaign finance. They know that such rules are largely ineffective because much of what happens in Washington is legalized forms of corruption.

Which brings us back to the real issue. If you want less sleaze in Washington, reduce the size and scope of the federal government.

Everything else is window dressing.

P.S. The most pervasive form of corruption in Washington (and, sadly, in many other parts of America) is the moral corruption that exists when people think it’s perfectly acceptable to steal from their neighbors so long as 51 percent of the people approve of the theft. That’s why social capital is very important.

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Yesterday, I shared several stories that exposed the festering corruption of Washington.

Today, let’s look at one issue that symbolizes the pervasive waste of Washington.

Medicare is the federal government’s one-size-fits-all health program for the elderly. Because of its poor design, it bears considerable responsibility for two massive problems.

  1. It contributes to the systemic third-party payer problem in American health care.
  2. It exacerbates America’s long-run challenge of excessive entitlement spending.

But there’s another issue. Medicare also has a very serious problem with fraud. As is so often the case with government programs, the offer of free money encourages unethical behavior.

Well, we have some good news and bad news about Medicare fraud.

As reported by the Wall Street Journal, the good news is that there is a small effort to catch fraudsters who bilk taxpayers.

Recovery audit contractors, as they are known, recouped $2.4 billion in improper payments in 2014, down from $3.7 billion in 2013 before the agency scaled back other audit activities and temporarily suspended the program… Those recoveries represent just a fraction of the total amount Medicare estimates it spends on incorrect payments. The Medicare program made $58 billion in improper payments to medical providers and health plans in 2014, according to PaymentAccuracy.gov, a federal website that tracks agencies’ estimates of waste.

But the bad news is this small program is being curtailed.

The federal Medicare agency is sharply cutting back the work of auditors that review hospital claims and seek to recoup improper payments for the government… Starting in January, the auditors will be able to review only 0.5% of the claims the agency pays to each hospital or provider every 45 days, according to an Oct. 28 letter to the contractors. That is a quarter of the prior threshold: 2% of claims. The contractors say the new directive, in what is known as a “technical direction letter,” will further limit their ability to pursue undue payments.

Readers are probably wondering why this effort is being hamstrung instead of expanded.

Well, you won’t be surprised to learn that the folks who benefit from waste want to keep the gravy train rolling.

The latest step is a sign of how the $600-billion-a-year Medicare program can struggle to effectively rein in improper payments, fraud and waste, sometimes under pressure from medical providers… The Medicare agency “is getting a lot of pressure from the provider community to scale back the [audit] program,” said Kristin Walter… Hospital representatives welcomed further restrictions on the auditors.

Sort of like burglars welcoming “further restrictions” on police officers.

Unfortunately, the interest groups benefiting from waste and fraud have allies in government.

The American Thinker has a nauseating story about the fraudulent actions of a hospital in Houston

The president of Riverside, his son, and five others were arrested on October 4 as part of a nationwide Medicare fraud sweep.  Earnest Gibson III, chief executive officer of Riverside General Hospital for 30 years, has been charged with bilking $158 million out of Medicare over the last seven years. …Friday’s arrests at Riverside came nine months after the arrest of Mohammad Khan, the hospital’s acting administrator, who pled guilty to his role in the Medicare fraud scheme…the Centers for Medicare and Medicaid Services suspended payments to Riverside.

You may be wondering why this is a nauseating story when it appears that some bad guys were nailed for screwing taxpayers.

Well, now we get to the disgusting part. A politician in Washington has been fighting to enable that bad behavior.

Sheila Jackson Lee, congresswoman for Houston’s 18th district…wrote CMS Acting Director Marilyn Tavenner requesting she reconsider the agency’s decision. …Jackson Lee…asks taxpayers who have already been bilked out of hundreds of millions of dollars to pour more money into a…hospital run by alleged crooks…while administrators and politicians rake in more dough.

Sadly, the Congresswoman’s political pressure generated results.

…a month after Jackson Lee appealed to CMS…, 70% of the hospital’s Medicare payments were restored.  CMS lifted the suspension even though federal investigators were only two months away from arresting Gibson and the others.  Jackson Lee’s intervention seems to have caused even more taxpayer monies to be directed toward a hospital brimming with corruption. …This is why Washington, D.C. is broken.  Like Jackson Lee, too many politicians think that redistributing other people’s hard-earned money into the pockets of potential felons is okay as long as they get political benefit.

By the way, it’s not just Democrats. The Daily Surge reports that some Republicans are helping providers rip off taxpayers.

…efforts to rid Medicare of waste, fraud and abuse have been stymied by the power of the hospital lobby that refuses to payback excessive payments made by Medicare and are working with friends and allies in government to ensure the improper payments are never returned to the taxpayers. …at least one GOP members, Rep. Sam Graves (R-MO) has actually introduced legislation further limiting the ability of the auditors to sniff out waste. His bill would block audits of Medicare providers unless their estimated error rate exceeded 40% of total billing. More than one third of all Medicare bills would have fraudulent before an audit could be triggered. So much for good government.

Ugh, makes me want to take a shower.

So what’s the bottom line? Unfortunately, fraud is an inherent part of government. When politicians create redistribution programs, amoral and immoral people will figure out ways to maximize their share of the loot.

In the case of Medicare, it means that providers have huge incentives to over-charge, over-diagnose, over-treat, and over-test.

After all, thanks to third-party payer, the patient doesn’t care.

That’s why I’m in favor of programs to combat fraud. And the RAC program doesn’t even cost taxpayers any money since the auditors are compensated by getting a slice of the improper payments that are recovered.

Imagine that, a policy where the incentives are to save money for taxpayers!

However, the only long-run and permanent solution is to shrink the size of government.

And that’s why it’s time to restructure Medicare. We have 50 years of evidence that the current approach doesn’t work.

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I’ve explained, over and over and over again, that big government is the mother’s milk of corruption.

Simply stated, a convoluted tax code, bloated budget, and regulatory morass create endless opportunities for well-connected insiders to obtain unearned and undeserved wealth.

Is this evidence that Washington is broken?

In a column for Real Clear Politics., Mike Needham of Heritage Action suggests that the conventional wisdom is wrong. Washington actually works very well, but not for the American people.

Washington isn’t broken. It is a well-oiled machine that works for the well-connected and responds to the well-heeled. This corrupt nexus of favoritism and cronyism tends to leave hardworking Americans behind. …as we’ve seen with Obamacare, the bigger the government, the bigger the Bigs become.

Is he right? Well, let’s look at some evidence. We already know Obamacare has been a boon for hacks from the Democratic Party.

But did you know that lots of GOP insiders also are cashing in because of Obamacare?

Let’s not limit our analysis to Obamacare.

There are many other examples of how the folks in Washington live on Easy Street at our expense. For instance, they enjoy lavish junkets. Here’s what the Washington Post reported back in September.

As Congress returned Tuesday…, some 14 House members were resting up from a week-long trip to Hawaii. …It sounded like a fine journey via military jet (business class) to stay at the oceanfront Sheraton Waikiki in Honolulu. Dinners were planned at the famous Hy’s Steak House — the superb porterhouse is always worth the $88.95 — and the upscale Roy’s Hawaii with its great fusion menu. (We hope they tried the lobster pot stickers.) …The schedule thoughtfully included substantial “executive time” in the afternoons. This, as Loop Fans know, is often a thinly veiled euphemism for some fine lounging at the pool, or exploring beautiful Hawaii.

This boondoggle was especially irksome to me since I was in Hawaii at the same time. But I had to pay my own way! And my hotel was right next to Hy’s Steak House, which had a very appealing menu, but I didn’t go because taxpayers weren’t financing my meals.

Speaking of integrity in D.C., here’s a story from the Washington Post that belongs in the is-anyone-actually-surprised category.

The Honest Tea firm, which makes organic iced tea, set up a stand offering bottles of its tea at 27 cities throughout the country, including D.C., and used the honor system by asking people to leave $1 in a box when they took a tea. But in the District’s Dupont Circle neighborhood, someone stole money from the box. Executives at Honest Tea wouldn’t say exactly how much was in the box but said it ranged between $5 to $20. The theft happened in the early morning, officials believe, and they did not report it to police. It was the first time in the six years that the company has been doing its experiment that someone has actually stolen money from the collection box, officials with Honest Tea said.

By the way, Dupont Circle is a ritzy part of town, not a low-income ghetto.

I’m guessing the thief is a lobbyist or bureaucrat, someone who already has a track record of taking other people’s money.

But if you really want to see Washington at its most unseemly, the Clinton machine symbolizes the corrupt nexus of big government and cronyism. Here are some passages from a report by Politico.

A spring 2012 email to Hillary Clinton’s top State Department aide, Huma Abedin, asked for help winning a presidential appointment for a supporter of the Clinton Foundation, according to a chain obtained by POLITICO. The messages illustrate the relationship between Clinton’s most trusted confidante and the private consulting company that asked for the favor, Teneo — a global firm that later hired Abedin. Abedin signed on with the company while she still held a State Department position, a dual employment that is now being examined by congressional investigators. …Abedin also worked as an adviser to the Clinton Foundation, the nonprofit founded by former President Bill Clinton.

This is amazing. Working for an influence-peddling company while on the government payroll as well?!?

And speaking of influence peddling, check out these excerpts from another Politico story.

Campaigns are required to file reports detailing registered lobbyists who round up donations, but that number is only a small slice of the fundraisers who work in some capacity in Washington’s vast influence industry… A quarter of the “Hillblazers” who bundled $100,000 or more for Clinton work at lobbying firms or public affairs agencies lobby at the state level or otherwise make their living from influencing the government on behalf of special interests… Clinton received at least $5.4 million from professional influencers, compared with $3.2 million from registered lobbyists disclosed to the FEC. For Bush, the equivalent figures are $1.02 million and just under $408,000.

The Hill also has a story about D.C. insiders flocking to Hillary Clinton.

K Street is banking on Hillary Clinton, with more than twice as many Washington lobbyists donating to the former secretary of State’s presidential campaign than any other candidate.  Clinton — the frontrunner for the Democratic nomination — received at least $625,703 from 316 registered lobbyists and corporate PACs during the first half of the year, according to disclosure forms. …Former Florida Gov. Jeb Bush ranks as a distant second in the influence industry, collecting $444,500 from 140 lobbyists.

And why are lobbyists coughing up cash?

For the simple reason that they want access. And with access to politicians, that means they get access to other people’s money.

…support from K Street can not only help boost a candidate, but also put lobbyists in good standing with the candidate in the event he or she takes the White House. …lobbyists have hedged their bets by supporting several candidates, sometimes at the request of clients, they told The Hill, asking for anonymity.

Though keep in mind that Ms. Clinton and her cronies are just the tip of the iceberg.

She’s more guilty than most for the simple reason that she actively wants to expand government, which would create even more opportunities for mischief.

Let’s also be fair in acknowledging that this problem exists in other countries. Indeed, it’s probably worse elsewhere.

Vote buying in India, for instance, can be especially challenging. Check out these passages from a Reuters report.

Village bachelors in northern India are demanding brides for votes in state polls next month because of a shortage of women after decades of illegal abortions of female fetuses, the Mail Today reported on Thursday.

Though it appears that some Indian politicians actually are willing to say no to voters.

Politicians have dismissed the demand, the report said.

Of course, it’s quite possible that the politicians are saying no in public and then somehow trying arrange brides behind the scenes.

Time to conclude with some excerpts from a story about our ruling class in Washington.

Thousands of clients using the affair-oriented Ashley Madison website listed email addresses registered to the White House, top federal agencies and military branches, a data dump by hackers revealed. The detailed data, released Tuesday, will likely put Washington, D.C., on edge. The nation’s capital reportedly has the highest rate of membership for the site of any city. Indeed, more than 15,000 of the email addresses used to register accounts were hosted on government and military servers.

The key words above are “highest rate of membership.” Yup, these are the people who think they should tell us how to live our lives. These are the clowns who think they can spend our money better than we can. These are the buffoons who want to direct and control the private economy.

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Back in March, I asked why Republican presidential candidates were willing to openly violate federal anti-bribery law by supporting agriculture subsidies in exchange for campaign loot.

My question was merely rhetorical, of course, since politician supposedly aren’t violating the law because the money goes to their campaigns rather than their personal bank accounts.

But that doesn’t change the fact that there’s a sleazy quid pro quo.

If you think I’m exaggerating, you’ll change your mind after reading these excerpts from a column by the superb muckraking journalist Tim Carney.

The target of his piece in the Washington Examiner is Congressman Stephen Fincher of Tennessee.

Congressman Stephen Fincher…, once an opponent of the Export-Import Bank —a federal agency that subsidizes foreign buyers of U.S.-made goods — now is trying to undermine his party’s leadership by teaming up with Nancy Pelosi and her party in order to reauthorize Ex-Im Bank as President Obama and his big donors in the business lobby have demanded. …Fincher has pulled up his Tennessee roots and is now firmly planted in D.C. Instead of serving Western Tennessee, Fincher..now represents Wall Street and K Street.

Is this hyperbole?

Well, check out what Tim found out about his fundraising.

Fincher has raised a quarter-million for his re-election, according to his most recent campaign finance filing. Exactly two of his approximately 150 donations have come from Tennessee residents. Tennessee residents have given Fincher a combined $750, which rounds to 0 percent of his money raised.

And why are out-of-state donors lining up to give Fincher money?

Draw your own conclusions.

Fincher introduced his bill to reauthorize Ex-Im on Jan. 28. Two days later his campaign deposited a $2,000 check from General Electric, Ex-Im’s second-largest beneficiary and most ruthless defender. …Boeing (which benefits from 40 percent of Ex-Im subsidies) and United Technologies chipped in about a week and a half later. All of Ex-Im’s top beneficiaries, exporters and lenders (notably Ex-Im’s leading lender JPMorgan), have given to Fincher’s re-election.

The corrupt Ex-Im Bank is just one example of the for-sale sign in Fincher’s office.

Odious agriculture subsidies also can be purchased, even though none of the loot winds up in the pockets of Tennesseans.

Fincher has voted to protect the federal sugar program, whereby our government keeps out foreign sugar and issues taxpayer-backed loans to guarantee high prices for U.S. sugar growers. This hurts families, U.S.-based foodmakers and the economy, while benefitting a handful of privileged sugar companies. Tennessee produces no sugarcane or sugar beets… But Fincher’s donors do. Sugar Cane Growers of Florida PAC, American Crystal Sugar PAC, American Sugar Cane League PAC, Florida Sugar Cane League PAC, Southern Minnesota Beet Sugar Co-Op PAC and the U.S. Beet Sugar PAC are all Fincher donors and all beneficiaries of the corporate welfare Fincher supports.

By the way, I should hasten to add that this doesn’t mean that Fincher is especially corrupt by congressional standards.

Or that he’s completely bad. I’ve made the point before that most politicians are a combination of good and bad characteristics.

It’s like they have a devil on one shoulder whispering bad advice and an angel on the other shoulder trying to get them to do the right thing.

And when the devil has a lot of PAC checks and the angel is a wonky think tank economist like yours truly, the bad guys oftentimes triumph.

But not always. Fincher, for instance, has voted for budgets based on genuine entitlement reform. And in the grand scheme of things, reining in those programs is much more important to the nation’s long-run fiscal health than curtailing sleazy corporate welfare.

That’s still no excuse, though, for Fincher’s behavior. He’s using the coercive power of government to steal from one group of people in order to provide unearned and undeserved goodies for another group.

Democrats do the same thing, of course, and they’re quite promiscuous. They seemingly favor all forms of redistribution, ranging from traditional welfare to corporate welfare.

But you can make a strong argument that Republicans are being even more immoral since they generally redistribute from the poor and middle class to the rich.

P.S. Since I’m not feeling particularly charitable to the political class, let’s close with some biting humor against the crowd in Washington.

Regular readers know I’m not a big fan of Pope Francis, and I’ve shared some criticism based on the insights of Walter Williams and Thomas Sowell.

But I definitely think this clever image is worth sharing.

Reminds me of this Star Wars-themed joke about Washington.

P.P.S. If you like mocking the political class, I have lots of other material for you to enjoy. You can read about how the men and women in DC spend their time screwing us and wasting our money. We also have some examples of what people in Montana, Louisiana, Nevada, and Wyoming think about big-spending politicians.

This little girl has a succinct message for our political masters, here are a couple of good images capturing the relationship between politicians and taxpayers, and here is a somewhat off-color Little Johnny joke. Speaking of risqué humor, here’s a portrayal of a politician and lobbyist interacting.

Returning to G-rated material, you can read about the blind rabbit who finds a politician. And everyone enjoys political satire, as can be found in these excerpts from the always popular Dave Barry.

Let’s not forgot to include this joke by doctors about the crowd in Washington. And last but not least, here’s the motivational motto of the average politician.

P.P.P.S. One serious point. If we want to clean up corruption in Washington, more campaign finance laws won’t work. The only way to reduce corruption is to shrink the size of government.

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In the past, I’ve identified the world’s most misleading headlines and I’ve also identified the world’s least surprising headline.

Today, I’m going to share the world’s most disappointing headline.

When I first saw this story in USA Today, I thought it was time to celebrate.

Wow, I thought, what a great outcome. I’ve always wanted a restoration of federalism, but I never thought this is how it would occur.

So I decided to read the story to find out what’s causing DC’s well-deserved disappearance.

Alas, none of those reasons apply for the simple reason that the headline is an absurd exaggeration.

I hate to burst anyone’s bubble, but Washington isn’t really going away. Here’s what’s actually in the story.

…new research from the U.S. Geological Surveyand the University of Vermont shows that the land in the district — where the Lincoln Memorial was built on silt dredged from the Potomac River — is expected to fall 6 inches or more during the next 100 years.

Sigh, how disappointing.

In other words, we’re going to have to rely on old-fashioned methods if we really want to cut Washington down to size. Since it’s not going to disappear on its own, we’ll need tax reform, deregulation, and program terminations if we want to solve the problem.

And one fringe benefit of this approach, as pointed out by the Wall Street Journal, is that a smaller government means fewer lobbyists and special interest groups.

Businesses have no choice but to lobby a government that can cripple them with a single new regulation. …The real problem is the opportunities for corruption and special dealing that a too-large government provides. Every new regulation or twist of the tax code is an opening for some powerful Member to assist the powerful. But the solution is to reduce the size and scope of the regulatory state and to reform the tax code.

Amen. I’ve been arguing for years that big government means big corruption. I even narrated a video making that point.

But I think I said it best in this CNBC interview when I equated big government to a dumpster in an alley.

So we may not be able to sink Washington, but we can make it less of an unseemly nuisance by reducing the size and scope of the federal government.

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Remember Sleepless in Seattle, the 1993 romantic comedy starring Tom Hanks and Meg Ryan?

Well, there should be a remake of that film entitled Clueless in Washington. But it wouldn’t be romantic and it wouldn’t be a comedy.

Though there would be a laughable aspect to this film, because it would be about an editorial writer at the Washington Post trying to convince people to feel sorry for the IRS. Here’s some of what Stephen Stromberg wrote on Wednesday.

Congress has done some dumb things. One of the dumbest is the GOP’s penny-wise-pound-foolish campaign to defund the Internal Revenue Service. …its mindless tantrum against the IRS has produced for taxpayers: a tax season that was “by far the worst in memory,” according to the Taxpayer Advocate Service, an agency watchdog.

Before I share any more of the article, I should point out that the “Taxpayer Advocate Service” isn’t a watchdog. It should be renamed the “Government Advocate Service” since its main goal is to increase the IRS’s budget.

But I’m digressing. Let’s continue with Mr. Stromberg’s love letter to tax collectors.

The underlying problem is that Congress has asked the IRS to do a lot more, such as administering a critical piece of Obamacare, but the GOP Congress won’t give the agency the funding it needs to do its work. …But good luck convincing Republicans to fix the IRS’s entirely predictable and avoidable problems. Not when that would mean restraining the impulse to act on anti-tax orthodoxy, blind populist anger and scandal-mongering about the IRS mistreating conservatives. In fact, Republicans want to double down on their nonsense budgeting, proposing deep cuts to the IRS last month.

Oops, time for another correction.

Stromberg is cherry picking data to imply that the IRS budget has been savaged.

If you look at the long-run data, however, you’ll see that the IRS now has almost twice as much money to run its operations as it did a few decades ago.

And that’s based on inflation-adjusted dollars, so we have a very fair apples-to-apples comparison.

Stromberg also wants us to sympathize with the bureaucrats because the tax code has been made more complex.

The underlying irrationality is the same: The IRS doesn’t write the tax code or health-care law, but the agency must apply these policies and engage with people affected by them, so it is an easy scapegoat.

Part of this passage is correct, and I’ve specifically pointed out that the tax code is mind-numbingly complex and that politicians deserve an overwhelming share of the blame for this sorry state of affairs.

That being said, the IRS goes beyond the law to make the system worse, as we saw when it imposed a regulation that put foreign tax law above American tax law. And when it arbitrarily rewrote the Obamacare legislation to enable additional subsidies.

In other words, it deserves to be scapegoated.

But there’s a bigger issue, one that Stromberg never even addresses. Why should we give more money to a bureaucracy that manages to find plenty of resources to do bad things?

Never forget, after all, that this is the bureaucracy that – in an odious display of bias – interfered with the electoral process by targeting the President’s opponents.

And then awarded bonuses to itself for this corrupt behavior!

Even more outrageous, the Washington Examiner reports today that the IRS still hasn’t cleaned up its act.

A series of new revelations Wednesday and Thursday put the Internal Revenue Service back under fire for its alleged efforts to curtail…conservative nonprofits. …the Government Accountability Office uncovered evidence that holes in the tax agency’s procedure for selecting nonprofit groups to be audited could allow bias to seep into the process. …lawmakers exposed the lack of safeguards that could prevent IRS officials from going after groups with which they disagreed. Meanwhile, the conservative watchdog Judicial Watch released documents Wednesday that suggested the IRS targeted the donors of certain tax-exempt organizations.

Does this sound like a bureaucracy that deserves more of our money?

If you’re still not sure how to answer, consider the fact that the IRS also somehow has enough money in its budget to engage in the disgusting “asset forfeiture” racket.

The Wall Street Journal recently opined on this scandal.

…a pair of new horror stories show why Americans dread any interaction with the vindictive tax man. Khalid Quran owns a small business in Greenville, North Carolina. He emigrated to the U.S. in 1997, opened a convenience store near a local airport, and worked long hours to give his four children more opportunity. After nearly two decades, Mr. Quran had saved $150,000 for retirement. Then in 2014 the IRS seized his bank account because he had made withdrawals that raised red flags under “structuring” laws that require banks to report transactions of more than $10,000. Mr. Quran had made transactions below that limit.

So even though Mr. Quran did nothing illegal and even though it’s legal to make deposits of less than $10,000, the IRS stole his money.

Just like money was stolen from the Dehko family.

Here’s the other example from the WSJ.

Maryland dairy farmer Randy Sowers…had $62,936.04 seized from his bank account because of the pattern of his deposits, though the money was all legally earned. …Mr. Sowers told his story to a local newspaper…a lawyer for Mr. Sowers asked…“why he is being treated differently.” Mr. Cassella replied that the other forfeiture target “did not give an interview to the press.” So much for equal treatment under the law.

Yes, you read correctly. If you have the temerity to expose the IRS’s reprehensible actions, the government will try to punish you more severely.

Even though the only wrongdoing that ever happened was the IRS’s confiscation of money in the first place!

So let’s celebrate the fact that the IRS is being subjected to some modest but long-overdue belt-tightening.

Notwithstanding Mr. Stromberg’s column, the IRS is not a praiseworthy organization. And many of the bureaucrats at the agency deserve our disdain.

The bottom line is that IRS budget cuts show that Republicans sometimes do the right thing.

And maybe if there are continued cuts and the current tax system actually does become unenforceable at some point, maybe politicians could be convinced to replace the corrupt internal revenue code with a simple and fair flat tax.

P.S. Clueless in Washington won’t be the only remake out of DC if President Obama decides to go Hollywood after 2016. Indeed, I suspect his acting career would be more successful than mine.

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A few days ago, I had some fun by writing a tongue-in-cheek column about the world’s most misleading headlines.

Today, I want to share a strong contestant for the world’s most depressing headline.

It’s from The Hill, and it’s the lead to a story about giddy times for Washington’s lobbying community.

So why are lobbyists rolling in cash? What accounts for all the dollars flowing to the influence-peddling community?

The answer, as noted in the article, is that there’s been an end to gridlock.

Nearly all of Washington’s top lobby shops saw gains in revenue in the first half of 2015 as an uptick in activity within both Congress and the Obama administration translated to a boon for K Street. Following a period of relative stagnation in the two-year span preceding the 2014 elections, the Beltway’s biggest lobbying firms have broken through the malaise… “Corporations are a lot more optimistic about whether to invest in Washington,” said Marc Lampkin, a former aide to Speaker John Boehner (R-Ohio)… K Street’s top firm — Akin Gump Strauss Hauer & Feld — continued to bolster its advocacy revenue, earning $10.23 million in the second quarter. …“I think our success during the first half of 2015 reflects the…high degree of activity in Congress,” said Don Pongrace, head of the firm’s public law and policy practice.

In other words, an “uptick in activity” in what gives special interests an incentive to “invest in Washington.”

So the obvious lesson is that if you want to reduce lobbying in Washington, the best option is for Washington to do nothing. My personal preference is to make Congress a part-time legislature. That’s worked out quite well for Texas, so why not try it in the nation’s capital?

But if that option isn’t available, then I’m a big fan of gridlock. Simply stated, if my choices are for politicians to do nothing or to have politicians make government bigger, the answer is obvious.

Which is why I was initially very worried when I saw this headline from another story published by The Hill.

This sounds like my worst nightmare. The last thing we should want is productive politicians!

That’s sort of like having productive pickpockets.

But if you read the story, Governor Bush says he wants a lot of activity as part of an effort to shrink “the federal footprint.”

…the GOP presidential candidate said he’d announce tax and regulatory reform proposals over the “coming months,” as well as changes to entitlement programs and a replacement for ObamaCare. …”The overspending, the overreaching, the arrogance and the sheer incompetence in that city — these problems have been with us so long that they are sometimes accepted as facts of life…” Bush criticized Washington for operating on autopilot, ticking off a slew of pitches meant to push back against what he characterized as a needless expansion of the federal footprint.

And it’s true. Fixing all these problem will require lots of legislation.

So while I’m generally very uneasy with the notion of a “productive” Congress, I also realize that lots of reforms will be needed to restore economic vitality.

Now let’s consider one final headline. This one is from a report in the New York Times, and it also revolves around Jeb Bush and his campaign.

And here’s some of what’s in the article.

Jeb Bush…outlined a wide-ranging plan on Monday to rein in the size of the federal government and curb the influence of lobbyists who live off it. …His proposals, modeled on his record as a budget-cutting governor, amounted to…an assault on the culture of Congress

By and large, this sounds good.

But here’s the catch. You don’t need specific anti-lobbying reforms (such as Bush’s proposed six-year ban on lobbying when Senators and Representatives leave office) if you actually are serious about reducing the size and scope of the federal government.

Reducing the power of Washington is the best way of starving DC’s special-interest community.

Indeed, it’s the only genuinely effective way. I explain in this video that laws to control corruption in Washington don’t work because they don’t address the real problem of politicians having far too much influence over the economy.

I hope you noticed the balloon analogy at the end of the video. If you don’t like Washington’s parasite class, the only way to curtail their privileged existence is with smaller government.

By the way, I don’t want to imply that all lobbying is bad. It all depends on whether lobbyists are engaged in self-defense or extortion. Here’s some of what I wrote last year.

…lobbying is not necessarily bad. If a handful of business owners want to join forces to fight against higher taxes or more regulation, I’m all in favor of that kind of lobbying. They’re fighting to be left alone. But a big chunk of the lobbying in Washington is not about being left alone. It’s about seeking undeserved benefits by using the coercive power of government.

Moreover, I also pointed out two years ago that we need to respect what the Founding Fathers envisioned.

…the First Amendment protects our rights to petition the government and to engage in political speech.

So at the risk of repeating myself, I urge people to fix the real problem of big government and not get overly distracted by the symptom of favor-swapping and corruption in Washington.

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