Big Government, Fraud, Enemies and Wannabe Kings

Posted by PITHOCRATES - October 27th, 2010

Joe Biden Touts the Greatness of Big Government by Citing One of its Greatest Frauds

At a fundraising stop in Manhattan, Joe Biden said this (see VPOTUS Joe Biden: Dems Will “Keep The Senate And Win The House” by Celeste Katz in The Daily Politics):

“Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive,” he said. “In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. … No private enterprise would have done that for another 35 years.”

Joe Biden ain’t the sharpest knife in the drawer.  Or he just thinks no one will know any better.  That we stopped our learning with our liberal public high school diploma.  Or our liberal university degrees.  Or he is just lying to us.

The Great Northern and the Milwaukee built their transcontinental railroads with private capital.  And without all of the corruption of the government funded line Biden talked about.  For a brief recounting of the great Crédit Mobilier Scandal, see LESSONS LEARNED #35: “Not only is ignorance bliss, but it’s a godsend to Big Government.” -Old Pithy on this same website.  The pertinent part of that post follows here:

Go West, Young Man

The transcontinental railroad was making poor progress during the Civil War.  Because it was starved for capital.  No one would invest.  Few doubted that they could build it.  Even if they could, few doubted it would ever make money.  The West was mostly raw, unsettled land.  There was nothing to transport.  Nothing to earn revenue.  It was a huge investment with a huge risk.  Investors are smart when it comes to money.  And they saw the transcontinental railroad as a one-way road that their money would go down and never return.  They needed something.  Big Government.

When it comes to throwing money away on a losing investment there is but one place to go.  Uncle Sam.  With the power to tax, the federal government has huge piles of money to play with.  So here’s what happened to build that railroad.  Union Pacific (UP) created a shell company called Crédit Mobilier (CM) to finance and build the railroad.  These companies were one and the same.  Without getting too complicated, UP sold their ‘worthless’ stock to CM at par.  Now, CM being a finance and construction company, a train never had to run over the road they were building to make a profit.  Union Pacific, on the other hand, needed trains running on that new track.  They were a transportation company.  They earned a profit from transporting goods on their trains.  This meant it could take years before UP could even hope to earn a profit on the new transcontinental railroad.  CM, on the other hand, could start earning a profit with the first invoice they submitted for construction.  And they did.

CM had strong revenues.  They submitted grossly inflated construction invoices to UP.  UP added a small construction management fee and submitted them to the government.  The government paid UP.  UP paid CM.  With revenues far exceeding their costs, CM made obscene profits.  CM stock took off into the stratosphere.  Some of which was sold to Congressmen at a deep discount who in turn realized obscene capital gains if they sold their stock.  Or collected obscene dividends if they held onto their stock.  In return for this sweetheart deal, they approved all cost overruns.  Killed any legislation unfavorable to UP/CM.  Provided lucrative incentives to build track on the worst ground in the most indirect path (to maximize the railroad’s mineral rights).  Provided little to no oversight on the construction of the road (some track was built on ice, with cheap steel and flimsy wooden trestles wherever possible).  When east met west the different railroads kept on building, parallel to each other to keep billing Uncle Sam.  All paid by the public treasury.  By the taxpayer.  The little guy.  Being raped and pillaged by their own representatives.

In an effort to praise Big Government, Biden picks one of the greatest frauds ever perpetrated by Big Government.  Like I said, he isn’t the sharpest knife in the drawer. 

Big Government and Property Rights – Mutually Exclusive in Venezuela

Meanwhile, in Venezuela, Big Government is on the move.  Hugo Chavez, Obama supporter and friend of Communist Fidel Castro, is showing what Big Government does best.  Abolish property rights.  They just stole an American company (see AP’s Chavez Orders Expropriation of Owens-Illinois).  Why?

The leftist leader criticized the company’s practices in the country, saying it had been “taking away the money of Venezuelans” and exploiting local people. Chavez did not detail his complaints about the company.

Exploited the local people?  They were probably the best jobs available in the local economy.  And if it wasn’t for Owens, there wouldn’t have been a plant to provide jobs for the local people in the first place.  The lesson here?  The state can’t create (despite what Chavez or Biden says), they can only take.  And when the state is above the law, you can keep on taking.  As Chavez said.

He said in his speech that more expropriations are planned.

Like Nixon Like Obama – They Check Their Enemies List and they Check it Twice Like Kings are Wont to Do

President Obama was speaking to a group of Latinos recently on Univision Radio.  He said:

I am president.  I’m not king.  I can’t do these things just by myself.  If Latinos sit out the election instead of saying we’re gonna punish our enemies and we’re gonna reward our friends who stand with us on issues that are important to us, if they don’t see that kind of upsurge in voting in this election, then I think it’s going to be harder, and that’s why I think it’s so important that people focus on voting on November 2nd.

Punish our enemies?  (Does Obama have an enemies list like Richard Nixon?)  Reward our friends?  Oh, he wishes he was king.  So he could do what Hugo Chavez can do.  Dispense with these inconvenient elections.  To have absolute power.  But, so far, America is still free.  So the best he can do is to grow Big Government.  To reward his friends.  And punish his enemies.  Like Congress did during the Crédit Mobilier scandal.  The kind of corruption that can put a tingle up Joe Biden’s leg.

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