You know the problem with doing one of these roundups on the European Debt Crises? I can search for “Euro” just about anytime of the day and night on Google News and come up with a dozen things I could potentially include. So just consider this a Whitman’s European Despair Sampler of possible bad news, as there’s a lot more where this came from:
Archive for the ‘Waste and Fraud’ Category
EuroDoom Roundup: Waiting for the Inevitable Greek Default
Monday, January 30th, 2012Tom Leppert Critic Jim Schutze on Problems During Leppert’s Term as Mayor
Monday, January 23rd, 2012Before I interviewed Tom Leppert, I wanted to research several controversies that came up during his term as Mayor of Dallas. Unfortunately, because of The Dallas Morning News paywall (and, as you can read below, possible DMN involvement in some of those controversies), information about them was hard to come by.
Lacking a good Dallas political connection to pump for information, I ended up reaching out to Jim Schutze, one of the writers for the Dallas Observer‘s Unfair Park section on local Dallas politics. Schutze had foolishly generously offered to dish the dirt on Leppert’s term as mayor, and when I called him up I was evidently the first person who had taken him up on the offer. I ended up talking to Schutze on the phone for over an hour.
I’ve edited the notes from that phone call into the semi-coherent form found below, and the material in block-quotes represents the gist of what I was able to transcribe from Schutze’s description (I can only type so fast, so word-by-word transcription of a one-hour phone call in real time is quite beyond me). I’ve also included some links to columns where he covers some of the issues we discussed.
I should point out that neither The Observer (which is the Dallas equivalent of The Austin Chronicle, but not as sad) nor Schutze could be considered conservative (though Schutze says that a quarter-century of observing local politics firsthand has “beaten the bleeding liberal” out of him). As such, everything said below should be taken with a grain (or several grains) of salt, and adjusted as needed for bias. However, while Schutze’s version of events should not be treated as gospel, all of the below seem to be real controversies that occurred during Leppert’s term as mayor, and I believe all should be looked at and investigated more thoroughly than they have been heretofore.
I conducted the interview with Leppert on September 19, and I really meant to have all this up considerably earlier, ideally just a week or two after that interview, but events intervened. I’ve been both busy (including a new job) and lazy, and this material needed considerable editing, which meant it got put on the back-burner while I grappled with the endless press of current events.
Trinity Toll Road Controversy
Angela Hunt (East Dallas progressive City Council member) put up a referendum on wonk infrastructure issues. Leppert mischaracterized it as an attempt to kill the toll road, but it was really a debate over where to put it: outside the flood plain or (as Leppert wanted) inside the flood plain. The 1998 election to authorize the bonds for the original project didn’t say “highway,” it said “park road” on top of the levee, not a highway. When it became a freeway, the U.S. Army Corps of Engineers said you couldn’t build one on the levees, because it was unstable and too big a risk. Plan B was to build the highway between the levees. None of the numbers for this road work, because the road is way too expensive for the amount of traffic to be carried.
Angela Hunt referendum said the road would flood, and the plan would diminish the carrying capacity of the floodway and increase flood risk. Five rightaways were under consideration, only one in the flood plain. A levee collapse would be worse than Katrina.
In 2007, Leppert was anointed by the business leadership to defeat the Hunt referendum as Job One. Leppert could sell any board of directors on anything. He was a developer in Hawaii. He was the one who moved to Dallas, Turner Construction didn’t. He wasn’t CEO for long, and I [Schutze] don’t know why he left.
Carol Reed (of a consulting company now called The Reeds) lead the campaign to defeat the referendum. Leppert said the Corps of Engineers had signed off. But the Corps said: “We haven’t signed off on anything.” The North Texas Toll Road Authority told reporter Michael Lindberger they hadn’t signed off on the money. The Dallas Morning News sat on the story; the owners are landholding families in favor of the road.
The referendum was narrowly defeated, meaning the road stayed between the levees.
The estimated $400 million turned out to be $1.4 billion (2007), $1 billion over budget, now over $2 billion. (Leppert’s dodge: “I am very comfortable with their [the Corps’] position.”)
Leppert said there were fewer issues with a toll road than there actually were, and promised numerous recreational facilities would be built as well. Angela Hunt said that “Leppert’s not a liar, he’s a salesman, and he believes his pitch.”
After Katrina, the Corps of Engineers reexamined levees and said they were useless even in a hundred year flood.
Police Statistics
Urban Crime statistics have been dropping nationally. When Leppert came into office in 2007, Dallas had the highest crime overall per capita for cities of over a million people. Leppert vowed to change that. Leppert called in Police Chief David Kunkle (a tough, respected chief) and said he wanted the crime numbers down. DPD changed the way it reported crime statistics to the FBI for the Uniform Crime Statistics. Dallas Morning News did a terrific series of investigative news on the process. For burglary, an incident would no longer be counted unless something was stolen. Most other cities disagreed with the Dallas redefinition and called it a “Lawyering of the language.” As soon as they put in the new guidelines, crime rates dropped, and Dallas was no longer number one.
SAFE Teams
Another Leppert crime controversy was the creation of SAFE (Support Abatement Forfeiture and Enforcement) teams: A team of cops, code inspectors, health department inspectors, etc. would “wallpaper” cheap apartment complexes with code violations in order to seize properties. The Property Owners Association got involved, since property rights were being trampled, and in some cases apartment buildings were turned over to connected city council friends.
The City-Funded Hotel
Built by the city, owned by the city, funded by bonds, unless there’s enough revenue. Trammel Crow was against it and said the Dallas hotel market was flooded. Leppert pushed it forward anyway.
Lynn Flint Shaw and Willis Johnson
What role did Lynn Flint Shaw and Willis Johnson play in Leppert’s campaign and administration? And what role did they have in steering/approving minority business contracts with City Hall and/or DART?
Shaw was a black woman who was well liked by sophisticated white arts people, a liaison between rich white Republicans and poor blacks. That vote has been important in pushing big Business Establishment initiatives (sports stadiums, etc.). Shaw was chair of Leppert’s fundraising committee.
As soon as he was elected, she sent an email to all business contacts to go through Willis Johnson (then a radio DJ). The email said that all requests for minority contracts with the city should go through Shaw, Johnson and a small cabal of black leaders who called themselves the “Inner Circle.” Willis Johnson is at the center of an FBI investigation as a major minority contractor and lobbyist. He had a regular weekly meeting with Leppert when he was mayor.
Shaw had no official roll in City Hall, and an unpaid role at DART.
Rufus and Lynn Flint Shaw’s Murder/Suicide
Lynn Flint Shaw and her husband, columnist Rufus Shaw, were found dead of an apparent murder/suicide on March 8, 2008.
Shaw was about to be indicted on a fraud charge that had nothing to do with politics, on a debt/signature forging issue. Circumstances of her death are mysterious. She had started to run for the council, then lived on the campaign funds, and made up phony expenses. Police determined there was nothing there to investigate. She was still Leppert’s campaign chair at the time of her death.
The Inland Port
Richard Allen in California buys up 5,000 acres, says he’ll create an “inland port,” a transshipping hub in south Dallas that will create 65,000 jobs. This would compete with a Ross Perot initiative in Ft. Worth. (Perot was a big Leppert backer; Leppert had his mayoral victory party at Ross Perot, Jr.’s pad). Dallas County Commissioner John Wiley Price, longest tenured and most powerful among Dallas’ black politicians, stopped the project. He said there needed to be more planning, and Leppert backed him up. Allen had been planning for six years. Price sent cronies (the SALT group), including Willis Johnson, demanding $1 million to be paid to them, and 15% cut of profits. It was a classic shakedown. Allen refused, they blocked the project, and now Allen is in bankruptcy. (Note: The FBI raided the offices of John Wiley Price on June 27, 2011.)
Despite all the foregoing, Schutze wasn’t universally negative on Leppert. He said Leppert’s friends thought he was a good guy, more of a chamber of commerce guy than a politician, and would would probably be naturally somewhat shy and retiring if he weren’t in politics.
As soon as this goes up, I’ll send a query to the Leppert campaign to let them respond, and I’ll post their reply (if any) unedited here.
LinkSwarm for January 9, 2012
Monday, January 9th, 2012Like a squirrel hording nuts for winter, I’ve set aside a few tasty links for you to chew on:
Liberals have a rendezvous with regret. Their largest achievement is today’s redistributionist government. But such government is inherently regressive: It tends to distribute power and money to the strong, including itself.
Government becomes big by having big ambitions for supplanting markets as society’s primary allocator of wealth and opportunity. Therefore it becomes a magnet for factions muscular enough, in money or numbers or both, to bend government to their advantage.
[snip]
Not only does redistributionist government direct wealth upward; in asserting a right to do so, it siphons power into itself. A puzzling aspect of our politically contentious era is how little contention there is about the ethics of coercive redistribution by progressive taxation and other government “corrections” of social outcomes it considers unethical or unaesthetic.This reticence, in an age in which political reticence is rare, reflects the difficulty of articulating principled defenses of these practices. They go undefended because they are generally popular with a public that misunderstands their net effects and because the practices are the political class’s vocation today. The big winners from these practices are that class and the interests adept at collaborating with it.
Government uses redistribution to correct social outcomes that offend it. But government rarely explains, or perhaps even recognizes, the reasoning by which it decides why particular outcomes of consensual market activities are incorrect. When taxes are levied not to efficiently fund government but to impose this or that notion of distributive justice, remember: Taxes are always coerced contributions to government, which is always the first, and often the principal, beneficiary of them.
Call it The Dennis Moore Effect. “He steals from the poor, and gives to the rich…”
Hat tips: Real Clear Politics, Insta, Ace.
Scenes from the EuroZone Summit
Sunday, October 23rd, 2011There have been high level Euro rescue talks going on all weekend. How are they faring? Not well.
Just when the eurozone governments thought it could not get worse for Europe’s single currency, it did.
Shell-shocked EU finance ministers meeting in Brussels on Saturday were already reeling from the worst Franco-German rift for over 20 years and a fractious failure to resolve the problems that have brought Greece, and the euro, close to the brink.
But then a new bombshell hit as a joint report by the EU and the International Monetary Fund (IMF) warned that, without a default, the Greek debt crisis alone could swallow the EuroZone’s entire €440 billion bailout fund – leaving nothing to spare to help the affected banks of Italy, Spain or France.
Of course, the problem with following this story from abroad is how the news of the summit gets distorted like some intercontinental game of telephone, especially when filtered through the dulcet-toned hearing aids of welfare state boosters. Thus this overly enthusiastic piece in left-wing newspaper The Guardian, citing that a deal was near based on unnamed “EU diplomats” becomes this blipvert in the left-wing Daily Beast stating that a deal had been reached, becomes this Fark thread in which clueless liberals crow that no one should ever have doubted the soundness of either the Euro or the glorious European welfare state. And also that ratings agencies are evil.
And yet, as of right now, this “done deal” to rescue the Euro has yet to materialize. How strange!
Somehow, how France (a country running a a $90+ billion dollar budget deficit) and Germany (a country whose ruling party has lost every local election since it started shoveling money down the Greek bailout chute), were to magically comes up with some €1.6 trillion Euros (the difference between the current bailout fund and the super-sized fund required to backstop the Euro following the inevitable Greek default) is nowhere specified. After all, it was hard enough for Chancellor Angela Merkel to get Germany’s contribution to the fund boosted from €123 billion to €211 billion in the first place.
As a result of all this happy, confident talk of how the Euro will never be allowed to falter? Moody’s downgraded Spain’s credit rating. They also threatened to do the same for France, especially if they decided to throw more taxpayer money into the Greek debt maw.
The Good Ship Europe bears its load of bailout guarantees straight for the center of the Greek Debt crisis.
And if you’re the EU, how do you prevent your debt from being downgraded? A.) Stop borrowing so much, B.) Increase your emergency reserves, or C.) Make it illegal for bond rating companies to downgrade your debt?
Yeah, that will work.
How badly awry has the Eruo project gone? The problem with this Hoover Institute piece on is what not to quote from it:
The champions of the European Union once touted it as a “bold new experiment in living” and “the best hope in an insecure age.” But these days “fear is coursing through the corridors of Brussels,” as the B.B.C. reported in September. Such fear is justified, for the nations of Europe are struggling with fiscal problems that challenge the integrity of the whole E.U.-topian ideal. Greece teetering on the brink of default on its debts, E.U. nations squabbling about how to deal with the crisis, debt levels approaching 100 percent of GDP even in economic-powerhouse countries like Germany and France, and European banks exposed to depreciating government bonds are some of the signposts on the road to decline.
A monetary union comprising independent states, each with its own peculiar economic and political interests, histories, cultural norms, laws, and fiscal systems, was bound to end up in the current crisis. All that borrowed money, however, was necessary for funding the lavish social welfare entitlements and employment benefits that once impressed champions of the “European Dream.” Yet, despite the greater fiscal integration created by the E.U., sluggish, over-regulated, over-taxed economies could not generate enough money to pay for such amenities. Now, the president of the European Council, Herman Van Rompuy, admits, “We can’t finance our social model.”
This financial crisis means the government-financed dolce vita lifestyle once brandished as a reproach to work-obsessed America is facing cutbacks and austerity programs immensely unpopular among Europeans otherwise used to amenities like France’s 35-hour work week, or Greece’s two extra months of pay, or England’s generous housing subsidies that cost $34.4 billion a year. No surprise, then, that from Athens’ Syntagma Square to Madrid’s Puerta del Sol, austerity measures attempting to scale back government spending have been met with strikes, demonstrations, boycotts, and protests, some violent, on the part of citizens for whom such government entitlements have become human rights. In fact, such transfers of wealth have been formalized as rights in Articles 34 and 35 of the E.U.’s Charter of Fundamental Human Rights.
The Euro crises will likely lead to another recession in the U.S. That is, if you think we ever came out of the Obama recession in the first place, which we didn’t.
Europe’s private sector shrank for the first time in two years last month.
Again: The question of a Eurozone collapse is not “if,” it is “when.” And how much of the losses European banks can put taxpayers on the hook for.
“Greece is not salvagable”
Friday, September 30th, 2011That’s the rather bracing judgment from this Stratfor overview of Greece’s problem. Moreover, they’re saying that about its existence as a nation-state, even absent the European debt crises. Also: “Greece has to be kicked out of the Eurozone if the Eurozone is to survive.” Problem? They don’t have enough “firebreak” funds to do it. “Until the Europeans have 2 trillion Euro in funding stashed away, they can’t kick Greece out of the system.”
I’m not sure I share the pessimism about Greece in the long run. After all, nation-states can exist for an awful long time, despite crappy conditions (see, for example, Haiti). Of course, that assumes that a newly Islamic Turkey doesn’t decide to settle old scores by conquering them outright. (Assuming, of course, that Turkey is still predominately Turkish rather than Kurdish. Claire Berlinski is a little more sanguine about that prospect.)
Honestly, of the two, I think Greece will outlast the Eurozone by a good measure. The question isn’t the whether Eurocrats can prevent the Eurozone from breaking up, but rather how long they can delay the inevitable, how much sovereign debt can they put taxpayers on the hook for, and how much harder will the inevitable market correction be when it comes? It seems to be a race between how much European taxpayer money can be wasted propping up Europe’s bankrupt welfare states vs. how much of American taxpayer money can the Obama administration waste channeling payouts to well-connected Democratic cronies. The Eurocrats may be winning the race to insolvency, if only due to the lack of a European Tea Party.
In other Euro Debt Crises news:
Is there any other place desperate Eurocrats can get money to prop up their falling welfare states? Are they perhaps hoping that Obama will bail them out? After all, what’s a few more trillions in unsupported debt between friends?
More Greek Default Rumblings
Sunday, September 25th, 2011Actually, less rumblings than the roar of an approaching train. And since I temporarily seem to be ahead of the latest Ace of Spades Doom roundup, I’m going to try and give you a nice clear view of the coming crash.
“No longer a question of if, but when – that is the tone of discussions over Greece which has dominated the summit of finance ministers in Washington over the weekend.” Former Britain’s former finance minister Alistair Darling agrees, calling default “only a matter of time.”
The talk now is of how to put in a “firewall” to prevent the contagion of an inevitable Greek default from spreading throughout the European banking system.
The Euroskeptics have been completely vindicated:
Very rarely in political history has any faction or movement enjoyed such a complete and crushing victory as the Conservative Eurosceptics. The field is theirs. They were not merely right about the single currency, the greatest economic issue of our age — they were right for the right reasons. They foresaw with lucid, prophetic accuracy exactly how and why the euro would bring with it financial devastation and social collapse.
I think at this point UK residents should be feeling vrey glad indeed that they didn’t abandon the Pound for the Euro.
Bret Stephens talks about the long line of deceit and fraud that lead Europe to the current crises. “What is now happening in Europe isn’t so much a crisis as it is an exposure: a Madoff-type event rather than a Lehman one.”
Mark Steyn, using the ever popular music and political metaphor gambit, compares the breakup of the Eurozone with the breakup of R.E.M. while bringing the usual Steyn goodness: “Attempting to postpone the Club Med welfare junkies’ rendezvous with self-extinction will destabilize internal German politics (which always adds to the gaiety of nations).” And this:
As its own contribution to the end of the world as we know it, the Obama administration has just released a document called “Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction.” If you’re curious about the first part of the title — “Living Within Our Means” — Veronique de Rugy pointed out at National Review that under this plan debt held by the public will grow from just over $10 trillion to $17.7 trillion by 2021. In other words, the president’s definition of “Living Within Our Means” is to burn through the equivalent of the entire German, French, and British economies in new debt between now and the end of the decade. You can try this yourself next time your bank manager politely suggests you should try “living within your means”: Tell him you’ve got an ingenious plan to get your spending under control by near doubling your present debt in the course of a mere decade. He’s sure to be impressed.
Germany is near the limit of their willingness to bail out Greece.
There may even be a taxpayer revolt brewing in the Aegean.
And if the other PIIGS are doing better than Greece, it is only a matter of degrees: “Italy is the new Lebanon, Portugal the new Venezuela, Spain the new Vietnam, Ireland the new Argentina and nothing is more risky than Greece, according to today’s credit default swap market.”
But it’s not just Greece and Europe that are hitting the wall. China’s housing bubble may finally be bursting. Worse still: “growth in China may be zero [and] China has ‘European kind of numbers’ when it comes to debt.”
And the Chinese housing bubble isn’t just affecting China. It’s also affecting Canada.
And at least one observer has drawn parallels to a certain hopemonger currently residing in the White House:
Obama has no intention of really solving the debt crisis. And that brings us back to Greece. That government has been doing the same thing for a decade and the chickens have now come home to roost. Greece’s debt is 150 percent of its Gross Domestic Product. Our debt has just reached 100 percent of GDP and the debt is accumulating faster than it ever has. If we were looking out the windshield down the road, we could see the crash that’s just up around the bend.
But rather than put on the brakes, the president has chosen to pick a fight with the other passengers in the car he is driving. Talk about distracted driving! He is gambling that this fight will convince the passengers to let him stay behind the wheel for another four years. But we certainly can’t wait that long. He’s turned up the radio in hopes we won’t hear the ambulance sirens.
It looks like its going to be another rough week for world markets…
LinkSwarm for Friday, September 9, 2011
Friday, September 9th, 2011After an unusually active week, here’s a LinkSwarm for a lazy Friday, including a few things I meant to link to earlier and didn’t have the time.
LinkSwarm for Wednesday, March 9, 2011
Wednesday, March 9th, 2011It’s a busy week for me, so here are a few links to tide you over:
Texas Democrat (and House Financial Services Committee Member) Ruben Hinojosa Declares Bakruptcy
Saturday, February 5th, 2011“Texas Democratic Congressman Ruben Hinojosa – a member of the House Financial Services Committee – filed for personal bankruptcy late last year.”
The eight-term congressman was forced to file for bankruptcy after Wells Fargo Bank won an arbitration hearing that found Hinojosa owed the bank $2.6 million. That left him with $2.9 million in liabilities against less than $1.5 million in assets.
If I put this in a novel, an editor would reject it for heavy-handed symbolism…
(Hat tip: Instapundit)