Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Bernie Madoff

Jury Punishes JPMorgan With $4 Billion in Damages for Mishandling $20 Million Estate

This article appeared online at TheNewAmerican.com on Wednesday, September 27, 2017:

English: Category:JPMorgan Chase

Attorneys for the widow and children of Max Hopper, the developer of the SABRE reservation software used by American Airlines, wanted to deliver a message to JPMorgan. On Tuesday they got their wish. Their attorneys announced that not only did the six-member jury award them nearly $5 million in actual damages, plus another $5 million to cover their legal fees for bringing a lawsuit against the bank, the jury doubled what the family wanted in punitive damages. They wanted to make an impression on the bank that would be heard all way from Dallas to 270 Park Avenue, New York City, the bank’s headquarters.

The jurors, apparently so outraged after listening to the bank’s fraudulent, negligent, and malicious behavior toward Hopper’s widow and two children, decided to

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Texas Congressman Proposes “Permanent” Fix for Social Security

This article appeared online at TheNewAmerican.com on Saturday, December 10, 2016:  

Congressman Sam Johnson (R-Texas), chairman of the House Ways and Means Social Security subcommittee, presented his plan, the “Social Security Reform Act,” on Thursday, which he called “a plan to permanently save Social Security.”

His proposal involves the same solutions often proposed by others trying to keep Social Security from going broke: cutting benefits, raising the retirement age, adding “means” testing, and cutting or eliminating altogether the COLA — Cost of Living Adjustment.

According to Michael Linden, an associate director at the liberal Center for American Progress, the cuts to benefits would be severe — between 11 percent and 35 percent — and they would include those already receiving Social Security benefits. Social Security actuaries who analyzed Johnson’s plan (at his request) came up with different numbers: Cuts would range from 17 percent to 43 percent but over a longer time period and with the same conclusion: everyone in Social Security (with the exception of the lowest-income participants) would take a hit under Johnson’s plan.

Nowhere in Johnson’s plan is any mention of privatizing the program, which is surprising, as it was a topic of discussion during the Republican presidential debates. Rand Paul, Mike Huckabee, Rick Perry, and Ted Cruz all expressed their support for privatizing Social Security as the best way to solve its myriad problems.

Here are some of those problems:

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Frederic Bastiat Wouldn’t Approve of Social Security

This article was published by The McAlvany Intelligence Advisor on Wednesday, October 12, 2016:  

Frédéric Bastiat

Frédéric Bastiat

Frederic Bastiat was a “classical liberal” who lived briefly in the first half of the 19th century in France. But his legacy, including his development of the fallacy of the broken window through his Parable of the Broken Window continues to resonate today. He is perhaps best known for his definition of “legal plunder”:

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

When it was enforced at the point of a pistol by a government bureaucrat, Bastiat opposed it:

I do not dispute [politicians’] right to invent social combinations, to advertise them, to advocate them, and to try them upon themselves, at their own expense and risk. But I do dispute their right to impose these plans upon us by law – by force – and to compel us to pay for them with our taxes.

There’s little doubt, then, that Bastiat would support the philosophy of The Bastiat Society, founded a dozen years ago:

Capitalism is the only economic system to produce widespread peace and prosperity. But if those in the private sector do not understand the intellectual and cultural institutions that make entrepreneurship and peaceful trade possible, what chance do they have to withstand a steady series of attacks from those who desire to bring capitalism and personal freedom to an end?

One of the battles that freedom lost was Social Security. Enacted as part of FDR’s Great Society, it remains a fixture that appears to be immovable. Today the only conversation heard is how to keep it from going bankrupt.

All manner of “fixes” are proposed. Obama’s National Commission on Fiscal Responsibility and Reform came up with ten fixes while The Motley Fool proposed 15:

  1. Cut benefits across the board right now;
  2. Change the COLA;
  3. Raise the earnings cap;
  4. Allow beneficiaries to invest in the stock market;
  5. Do nothing and cut benefits when the [trust fund] is depleted;
  6. Do nothing and enact payroll tax hikes when the [trust fund] is depleted;
  7. Offer a buyout [to the wealthy, removing them from the program];
  8. Link life expectancies to benefit levels;
  9. Means-test [to qualify] for benefits;
  10. Raise the full retirement age;
  11. Use the Estate Tax to cover Social Security [shortfalls];
  12. Freeze the purchasing power of benefits [i.e., eliminate COLA altogether];
  13. Freeze the … benefits on a sliding scale;
  14. Transfer [some] costs to [the] government [now]; and/or
  15. Increase the payroll tax on everyone right now.

Social Security has the peculiar characteristics similar to Bernie Madoff’s Ponzi scheme: eventually it is exposed and it ends in bankruptcy. The difference is that Social Security is enforced by people with guns and badges: everyone must be covered and forced to support everyone else, or else.

No one questions the math: the program’s “trust fund” is slowly being liquidated to cover the annual shortfalls between revenues and benefits. Thanks to the Baby Boomers, the liquidation is increasing more rapidly: those Boomers have developed the nasty habit of living longer, far beyond the original mortality tables predicted back in the mid-1930s. There’s also the declining birth rate, which is reducing the number of new entrants into the system whose taxes are needed to support it.

It’s the ideology: freedom versus force. So-called conservatives want to fix it, as do liberals. Conservatives, when pressed, question the intergenerational conflict that requires young people to contribute to a plan paying benefits to seniors. They question the use of resources: tax and spend now, or save and invest for later. Conservatives even argue over who should control the money. They never question its morality.

Liberals think it’s a proper function of government, going along with the Supreme Court’s decision in Helvering v. Davis that the program is constitutional, the Tenth Amendment notwithstanding.

As economist Herb Stein noted: “If something cannot go on forever, it will stop.” With Social Security it will continue as long as it can be patched up with temporary fixes. Eventually the mathematics and the bond market will end it.

U.S. Attorney for New York is Swimming in a Sea of Opportunity

This article was published by The McAlvany Intelligence Advisor on Wednesday, December 2, 2015:  

English: New York State Assembly Speaker Sheld...

English: New York State Assembly Speaker Sheldon Silver holding a press conference (Photo credit: Wikipedia)

Preet Bharara’s resume is impressive. Born in India and raised in Eatontown, New Jersey, he graduated from Ranney School, an independent, highly-regarded college preparatory school, in 1986 as valedictorian of his class. From there he went to Harvard College, graduating magna com laude (with great honor) four years later. He received his J.D. (juris doctor) in 1993 from Columbia Law School where he served on the Columbia Law Review.

After a stint as Sen. Chuck Schumer’s chief counsel, he served as an assistant U.S. Attorney in Manhattan for five years, successfully prosecuting bosses of the Gambino and Columbo crime families.

When he was nominated for U.S. Attorney for the Southern District of New York by President Obama in 2009, he breezed through Senate confirmation with no dissents.

Since that time he has scored impressive victories, prosecuting successfully more than

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The New Third Rail: Cutting Government Spending

This article was first published by The McAlvany Intelligence Advisor on Monday, July 14, 2014:

 

Historical government spending in the United S...

Historical government spending in the United States from 1902 to 2010

Back in February the Congressional Budget Office (CBO) estimated that the deficit for the 2014 fiscal year would be $514 billion, or about 3 percent of the total economic output of the country. Since this was a nearly 27 percent drop from last year, the implication is that all is well, nothing to see here, move along please. After all, the perception has been that the White House has been spending money faster than at any time in history, running up deficits and the national debt to staggering levels. Half a trillion? Is that all? Pocket change!

Greg Valliere, the chief political strategist for the Potomac Research Group, said at the time that this guaranteed that there would be no pressure for any sort of entitlement reform this year. Jack Lew, Obama’s Treasury Secretary, said the numbers bought some time: “We have a little time to deal with the long term.”

Last week both the White House and the CBO revised downward even further the expected deficit, with Obama taking full credit for the result:

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Dinesh D’Souza Pleads Guilty, Claims Selective Prosecution

 

Cover of "The Roots of Obama's Rage"

Cover of The Roots of Obama’s Rage

When Federal District Judge Richard Berman ruled that Dinesh D’Souza, co-producer of the documentary film 2016: Obama’s America, had provided no evidence that he was selectively prosecuted for arranging campaign contributions to a friend in 2012, D’Souza had no other defense. In his plea bargain with Berman on Tuesday, D’Souza pleaded guilty to one of the two counts in the indictment, saying:

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The Implosion of the Social Security Disability Ponzi Scheme Accelerates

Fresh data just released by the trustees of the Social Security Administration show that the number of people receiving benefits from the Disability Insurance Trust Fund has exploded over the last five years, reducing the surplus in that fund from $216 billion in 2008 to just over $100 billion in 2013. There were 7.4 million recipients in January 2009, but as of October 2013, there are nearly 9 million beneficiaries, not including

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NJ’s Governor Christie Spent the Weekend Denying He’s Running for President

This article first appeared at The McAlvany Intelligence Advisor on Monday, November 11th, 2013:

Fresh from his resounding reelection victory for a second term as New Jersey’s governor, Chris Christie spent the weekend being interviewed on four different TV shows denying that he has any interest in running for president in 2016. He probably would have done another one but he ran out of time.

On ABC’s “This Week,” Christie said:

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NJ Governor Christie Denies Running for President

Newly reelected New Jersey Governor Chris Christie was busy over the weekend explaining that his focus is back on running New Jersey and not worrying about running for president in 2016. For instance, in an interview on ABC’s “This Week” Christie said:

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Jesse Jackson, Jr. to be sentenced on Wednesday

This article was first published at The McAlvany Intelligence Advisor on Wednesday, August 14th, 2013:

 

At 8:30AM Wednesday morning, a federal judge will sentence former Illinois congressman Jesse Jackson, Jr. and his wife Sandra, former Chicago alderman, for using $750,000 of campaign funds for personal purposes and underreporting $600,000 of income to the IRS. He could get up to four years behind bars, while she is facing a maximum of 18 months.

But they do things differently in Chicago. They might just get

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The Unwinding of the Social Security Ponzi Scheme

This article was originally published in the McAlvany Intelligence Advisor on Monday, July 1st, 2013:

 

Every Ponzi scheme fails, some sooner than others. The Wall Street Journal just outlined the predictable unraveling of Social Security along with suggestions on how to keep it solvent. None of them will work.

In 2010 Social Security payouts exceeded payroll taxes for the first time since 1983 and it is now dipping into its reserves to stay afloat. The trustees’ report says those reserves will be gone by

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Thomas Sowell’s Musings

A FRAUD THROUGH AND THROUGH

(Photo credit: SS&SS)

When someone as bright, articulate and profound as Thomas Sowell offers his musings “on the passing scene,” I sit up and take notice. There’s bound to be something in there worth reading.

And so there is:

How are children supposed to learn to act like adults, when so much of what they see on television shows adults acting like children?

Example? Joe Biden:

The know-it-all smirks and condescending laughs of Vice President Joe Biden, when Congressman Paul Ryan was speaking during their debate, were a little much from an administration presiding over economic woes at home and disasters overseas — and being caught in lies about both. Like Barack Obama, Joe Biden has all the clever tricks of a politician and none of the wisdom of a statesman.

And this:

Whenever you hear people talking about “a living Constitution,” almost invariably they are people who are in the process of slowly killing it by “interpreting” its restrictions on government out of existence.

And this:

The question to be asked of people in the media, and that they should ask themselves, should be: “Is your first loyalty to your audience or to your ideology?” The same question should be asked of educators, especially those who see themselves as “agents of social change,” even though that is not the job description under which they have been hired and paid.

He saves the best for last:

If there is ever a Hall of Fame for confidence men, Charles Ponzi and Bernie Madoff will have to take a back seat to Barack Obama. Obama is the gold standard — or, perhaps more appropriately, the brass standard.

I was taught years ago a marketing principle that is finally causing Obama to crater: overexposure. The more you advertise a bad product, the faster it disappears from the shelf. Happily that’s not something Obama can fix. He has been exposed for what he is. I like to think I’ve helped a little in that exposure.

Is Social Security a Ponzi Scheme?

Mug shot of Charles Ponzi (March 3, 1882 – Jan...

More than $16 billion of investors’ money evaporated in Ponzi schemes in 2009, according to the Associated Press. Although the names Bernie Madoff and Allen Stanford were in the headlines in 2009, many other Ponzi schemes were uncovered as the economy declined, making continued payouts to investors impossible.

As Warren Buffet said, “Only when the tide goes out do you discover who’s been swimming naked.”

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Sarbanes-Oxley and the Separation of Powers

Michael Oxley , U.S. Senator from Maryland.

On Monday, December 7, the Supreme Court began hearing arguments concerning Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB).

While perhaps not as memorable as the “date which shall live in infamy,” this case has been called the most important “separation of powers” case in 20 years by Judge Brett Kavanaugh, the dissenter in the 2-1 decision by the D.C. Circuit Court of Appeals that ruled for the PCAOB, prior to the case going to the Supreme Court for review).

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann