The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Corporatism in action: Feinstein routes government money to firm doing business with husband – UPDATED!

Posted by iusbvision on April 21, 2009

Once again, what is the difference between political market capitalism (aka corporatism) and real capitalism?

It is like we showed you with the Phillip Morris example HERE:

For those of you who don’t know, corporatism is political market economics on steroids. Political market economics is not like regular market economics which is a meritocracy (where you make the best product at the best price for consumers), in political market economics the goal is to manipulate and lobby regulators and politicians to tilt the rules in your favor, which in turn enriches politicians by donations.

For a more academic explanation as we showed you HERE:

Political markets — less enabled by government than made by it — operate according to fundamentally different, and less trustworthy, principles. Propped-up by subsidy, structured by central diktat and created ex nihilo by edict, political markets may arise from noble aspirations but in the end are instruments always of the privileged and powerful.

In political markets, the battle for competitive advantage is in part a battle over the rules of the game. That, in turn, is a battle for the hearts of minds of regulators, who generally know less, and are far less motivated, than the industry insiders they regulate. It is no surprise when regulators come to confuse the interests of the powerful (for whom they might someday wish to work, after all) with the interests of the public. As we have recently witnessed, the heavily regulated nature of our financial markets did not keep them from going haywire and taking the entire economy down with them.

Now we have Democrat Diane Feinstein  routing taxpayer dollars to a firm doing business with her husband. Washington Times:

On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband’s real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

Mrs. Feinstein’s intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn’t a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments – not direct federal dollars.

Documents reviewed by The Washington Times show Mrs. Feinstein first offered Oct. 30 to help the FDIC secure money for its effort to stem the rise of home foreclosures. Her letter was sent just days before the agency determined that CB Richard Ellis Group (CBRE) – the commercial real estate firm that her husband Richard Blum heads as board chairman – had won the competitive bidding for a contract to sell foreclosed properties that FDIC had inherited from failed banks.

About the same time of the contract award, Mr. Blum’s private investment firm reported to the Securities and Exchange Commission that it and related affiliates had purchased more than 10 million new shares in CBRE. The shares were purchased for the going price of $3.77; CBRE’s stock closed Monday at $5.14.

Ed Morrissey at Hotair.com translates:

In other words, Richard Blum bought 10 million shares at the same time his wife arranged for an unusual and extremely large chunk of taxpayer money to go to FDIC.  Blum must have been an investment genius to guess that his wife’s intervention would coincidentally precede the FDIC’s award, making CBRE stock more valuable.  Blum’s investment made a $14 million profit for Blum and Feinstein and their partners.

But of course, that’s all just a coincidence.

How long are the people going to take this kind of corruption?

UPDATE –  Here we go more of the same..

Taxpayers are increasingly exposed to losses and the government is more vulnerable to fraud under Obama administration initiatives that have created a federal bank bailout program of “unprecedented scope,” a government report finds. – LINK

AND….

CBS News has learned that this month, Murtha is steering new earmarks toward 10 companies that recently donated to his campaign.

Murtha wants $8 million for Argon ST, a defense contractor whose CEO gave Murtha the maximum allowed by law – $2,400 by an individual. He’s directing a $5 million earmark toward Advanced Acoustic Concepts, which also gave the max – $5,000 for a political action committee – to his campaign. In all, 10 recent Murtha donors are slated to receive $31 million in Murtha earmarks for 2010. – LINK

And more….

Rep. Jane Harman , the California Democrat with a longtime involvement in intelligence issues, was overheard on an NSA wiretap telling a suspected Israeli agent that she would lobby the Justice Department reduce espionage-related charges against two officials of the American Israeli Public Affairs Committee, the most powerful pro-Israel organization in Washington.

Harman was recorded saying she would “waddle into” the AIPAC case “if you think it’ll make a difference,” according to two former senior national security officials familiar with the NSA transcript.

In exchange for Harman’s help, the sources said, the suspected Israeli agent pledged to help lobby Nancy Pelosi , D-Calif., then-House minority leader, to appoint Harman chair of the Intelligence Committee after the 2006 elections, which the Democrats were heavily favored to win.

Seemingly wary of what she had just agreed to, according to an official who read the NSA transcript, Harman hung up after saying, “This conversation doesn’t exist.” – LINK

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