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Posts Tagged ‘government thuggery’

Joe Nocera has a must-read story in the New York Times about how the legal fallout from the financial crisis. His basic theme is that the government let all the bigwigs get away with their crimes, but then has a fascinating discussion about how the government targeted an inconsequential mortgage borrower.

I’m not sure I accept the first part of his premise. There were lots of sleazy people taking advantage of the perverse system created by bad government policy, but I would like to see some clear evidence of actual crimes before hopping on that bandwagon. Selling mortgage-backed securities filled with crummy home loans to Fannie Mae and Freddie Mac may have been immoral, for instance (at least from a libertarian perspective), but I’m not aware that it is against the law to make choices that hurt the economy – particularly when government policy is designed to reward such stupidity.

That being said, I do wonder why there haven’t been any bribery prosecutions of the politicians who got sweetheart loans as part of the “Friends of Angelo” scheme. Actually, I don’t wonder why politicians such as Chris Dodd and Kent Conrad got a free ride. Politicians operate by the principle that law are only for the little people. Nonetheless, these are examples of real laws being violated.

But I’m digressing. The purpose of this post is to show how the government decided to go through great effort and expense to nail someone who, at most, was willing to go along with the government-subsidized and government-created housing scam.

Here are the sordid details.

A few weeks ago, when the Justice Department decided not to prosecuteAngelo Mozilo, the former chief executive of Countrywide, I wrote a column lamenting the fact that none of the big fish were likely to go to prison for their roles in the financial crisis.

…There was, in fact, someone behind bars for what he’d supposedly done during the subprime bubble.

…Mr. Engle’s is a tale worth telling for a number of reasons, not the least of which is its punch line. Was Mr. Engle convicted of running a crooked subprime company? Was he a mortgage broker who trafficked in predatory loans? A Wall Street huckster who sold toxic assets?

No. Charlie Engle wasn’t a seller of bad mortgages. He was a borrower. And the “mortgage fraud” for which he was prosecuted was something that literally millions of Americans did during the subprime bubble. Supposedly, he lied on two liar loans.

…It’s not just that Mr. Engle is the smallest of small fry that is bothersome about his prosecution. It is also the way the government went about building its case.

…Even the jurors seemed confused about how to think about Mr. Engle’s supposed crime. When it came time to pronounce a verdict, the jury found him not guilty of providing false information to the bank, which would seem to be the only fraud he could possibly have committed. Yet it still found him guilty of mortgage fraud. “I think the prosecution convinced the jury that I was guilty of something but they weren’t sure what,” Mr. Engle wrote in an e-mail.

…Even when he emerges from prison, though, his ordeal will not be over. As part of his sentence, Mr. Engle was ordered to pay $262,500 in restitution to the owner of his mortgages. And what institution might that be? You guessed it: Countrywide, now owned by Bank of America. Angelo Mozilo ought to get a good chuckle out of that one.

Later today, by the way, I’ll post about the IRS’s disgusting role in this story.

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You readers have been presented with a series of challenging quizzes on topics such as Sharia law, healthcareincest, and vigilante justice.

Let’s now shift to the world of taxation.

We all know governments routinely make life hard for taxpayers. The IRS, for example, is a rather brutal bureaucracy, as explained in this video. But I’m not sure the IRS can match either of these two examples of reprehensible taxation. And I’m not sure which one is worse.

Our first story comes from Switzerland, which normally gets high marks for modest taxation and respecting individual rights. But the municipality of Reconvilier is going to extraordinary lengths to pick the pockets of local dog owners. Her’s an excerpt from an AP report.

Reconvilier — population 2,245 humans, 280 dogs — plans to put Fido on notice if its owner doesn’t pay the annual $50 tax. Local official Pierre-Alain Nemitz says the move is part of an effort to reclaim hundreds of thousands of dollars in unpaid taxes. He says a law from 1904 allows the village to kill dogs if its owner does not pay the canine charge. Nemitz told the AP on Monday that authorities have received death threats since news of the plan got out.

But if you think threatening to kill Rover and Fido is brutal, brace yourself for the next story. The government in King County, Washington, is taxing a family for an infant that passed away shortly after birth. Here’s part of the report from a local TV station.

Olivia Clark lived for only one hour. Doctors didn’t even expect her to survive birth.  Now her family has a hard time understanding why the King County Medical Examiner has to review her death and charge $50. …Although her parents were from Yakima, they came to the University of Washington Medical Center for her delivery. As a result, Olivia died in King county. Her family soon learned the impact that would have when they received the funeral bill. “There was a little line on there near the bottom of the bill that said ‘King county death tax: $50.’ And we looked at that, and looked at that and looked at each other and said ‘what is that?’ Couldn’t believe that a little girl that lived for an hour has to pay a $50 tax,” said Larry. …The medical examiner instituted the $50 fee for cremations three years ago. This year, it included the fee for burials as well.

To be fair, the government didn’t impose a tax on the family because their child died. It’s a fee imposed on all funerals in the county. But it still is a bit macabre for the government to impose such a levy.

And we shouldn’t forget that the IRS has a 35 percent death tax for people who make the mistake of saving and investing too much money before they die, so grave-robbing by governments is not an unknown phenomenon.

So which example is worse? Normally, taxing a dead baby would trump everything, but the tax – while horrible – doesn’t actually target infants. The bureaucrats in Reconvilier, by contrast, are dusting off a 1904 law and threatening to kill people’s pets.

How do you vote?

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I hate writing about the TSA and airport security, especially since I fly frequently and despise the pointless “security theater” of the whole process. I keep doing posts about the issue, though, because it seems a day doesn’t go by without some new revelation about foolish government action.

Here’s a video (courtesy of Pejman Yousefzadeh and Megan McArdle) indicating that TSA bureaucrats violated federal law and deliberately hassled a woman for not surrendering to their petty demands.



A couple of quick thoughts…

1. If the statements in this video about the treatment of breast milk are true, the manager and screeners involved should be fired. And if they’re not fired, that tells us things will get even worse.

2. The passenger being harassed may be an activist who deliberately wanted to provoke this reaction, but even if she was the world’s biggest b*tch, that does not justify the TSA’s behavior.

3. What did the TSA accomplish by making the woman pour the breast milk into smaller containers? Let’s assume the liquid actually was some sort of compound that becomes dangerous in amounts greater than 3 ounces. Couldn’t the woman just pour the little bottles back into the big bottle once she got on the plane?

4. Having said all this, we do have real security concerns. I have no doubt that there are people in the world (and even in America, as shown by the recent Portland bombing plot) who gladly would like to blow up a plane using fake breast milk. Heck, some of these nut-jobs would probably be willing to smuggle explosives onto a plane in the diaper of one of their own children (though I’m not sure what an infant will do with 72 virgins if such a bomb plot succeeded).

5. When all is said and done, I’m amazed that these fanatic morons haven’t blown up a plane since 9-11. In part, this may be because they actually are morons. But I suspect a lot of the credit goes to our intelligence services, so kudos to the FBI, CIA, et al, but continued jeers for the TSA’s empty security theater.

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Reason TV has a new video in their great Nanny-of-the-Month series. The winner is a San Francisco politician who pushed through legislation to ban restaurants like McDonald’s from including toys in happy meals.

Here’s a great idea: How about banning politicians from trying to tell us how to live our lives? Our Founding Fathers surely would agree, but I guess that’s asking too much in the modern era. But is it too much to ask that maybe politicians focus on real issues, such as undoing the mistakes they’ve already made?

If Supervisor Mar really cares about his city, he should be pushing legislation to reduce excessive pay, benefits, and pensions for bureaucrats. These are the policies that are pushing San Francisco closer to fiscal collapse with each passing day. When the city declares bankruptcy, I don’t think the average person will be overly concerned about whether McDonald’s is offering happy meals.

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AARP’s support was instrumental in getting Obamacare passed. Now they’re raising the price of insurance for their employees because of the massive tax on so-called “Cadillac” plans that it included.

In an e-mail to employees, AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.

And AARP adds that it’s changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax.

…AARP officials said medical inflation is the main reason employee costs will be going up. The health care law is “a small part,” said David Certner, legislative affairs director.

Will Sebelius respond with more threats designed to intimidate providers into keeping quiet about the reasons for rate hikes? As opposed to insurance companies, AARP is a key Obama constituency, so we can bet not.

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I’m finally back in Washington after a week in Australia for the Mont Pelerin Society general meeting. Aussies are great people, but their government is just as misguided as the one we’re burdened with here in America. A friend took this pic of me on a visit to Manly Beach. You may notice a similarity to this other photo (though the Australian sign has not been changed to reflect truth-in-advertising).

Moreover, it also appears that the Australian Tax Office is just as odious as our internal revenue service. One of the Aussies at the Mont Pelerin meeting told me that his nation’s tax police were going to investigate a bunch of people because…drum roll, please…they purchased hail-damaged cars at an auction.

Yes, you read right. Being a frugal shopper and looking for bargains apparently is seen as behavior that cries out for harassment by the tax man. I expressed some skepticism when told this story, but the Aussie sent me a link to a story that ran in the West Australian. Here’s an excerpt.

Tens of thousands of Perth residents who bought a new car after the March hailstorm face a new danger – a close examination of their tax details. The Australian Taxation Office revealed yesterday it was expanding its data matching program to take in cars worth more than $10,000 that were sold, transferred or newly registered between July 1 last year and June 30 this year. Tax commissioner Michael D’Ascenzo said…”In the past our motor vehicle data matches focused on luxury cars, but the net is now being cast much wider,” he said. “We’re looking to identify businesses that sell vehicles and fail to report or under-report those sales. “We’re also looking at whether a person’s income was not sufficient to support the purchase of the vehicle. …Car sales in Perth went through the roof after the March 22 storm when many hail-damaged vehicles were written off by insurance companies. WA car sales hit an all time high of almost 12,000 in April, a jump of 29 per cent on March, as drivers rushed to buy a replacement vehicle. Almost every one of those purchases will fall under the ATO’s watch.

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I’m not a big fan of multi-guest panels, but I think this interview went well.

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