Matt Taibbi: Teabagging Michelle Malkin

(Courtesy of Danny Mayer)

Teabagging Michelle Malkin
by Matt Taibbi
The Smirking Chimp

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Anyway this teabag thing has really gotten out of control. It’s amazing, literally amazing to me, that it wasn’t until Obama pushed through a package containing a massive public works package and significant homeowner aid that conservatives took to the streets. In other words, it wasn’t until taxes turned into construction jobs and mortgage relief that working and middle-class Americans decided to protest. I didn’t see anyone on the street when we forked over billions of dollars to help JP Morgan Chase buy Bear Stearns. And I didn’t see anyone on the street when Hank Paulson forked over $45 more billion to help Bank of America buy Merrill Lynch, a company run at the time by one of the world’s biggest assholes, John Thain. Moreover I didn’t see any street protests when the government agreed to soak up hundreds of billions in “troubled assets” from Citigroup, a company that just months later would lend out a jet furnished with pillows upholstered with Hermes scarves to former chief Sandy Weill so that he could vacation in Mexico over Christmas.

Look, I’m a taxpayer too. And I’m no less pissed off than any of these people about the taxes I have to pay. Just today I was reading hedge-fund manager David Einhorn’s book, Fooling Some of the People All of the Time, about his battles with a company called Allied Capital. Einhorn was shorting Allied because he found accounting irregularities in Allied’s books after analyzing the firm. Among other things, he found that an Allied subsidiary called BLX was irresponsibly handling tens of millions in Small Business Association loans, shoving this SBA money out to unworthy recipients and costing the taxpayer an enormous amount of money. When Einhorn went to the SBA, they basically blew him off. “We see this all the time; what’s so special about those?” was the SBA official’s response when Einhorn presented him with evidence of loan fraud. Einhorn pointed out that one of the reasons companies like BLX got away with bilking the government was because the enforcement agencies were so understaffed: he routinely found that agencies like the SEC and the OIG could not or would not investigate fraud against the taxpayer because they had no staff to pursue the investigations.

That attitude, that complete and total I-don’t-give-a-fuck attitude about taxpayer money, that’s endemic to almost every branch of the government. We saw in the last five years how contractors in Iraq nakedly robbed money from the you and me, running phantom convoys across the desert (some companies called that transporting “sailboat fuel”), systematically risking human life and gouging the taxpayer more or less right out in the open. There was over $100 billion in sole-source, non-competitive contracts in Iraq in 2006; a House Committee identified just 50 contracts totalling more than $21 billion that require “scrutiny,” but not much has been recovered so far. Why did they get away with it? Because there is basically no serious enforcement mechanism, in the military or anywhere else, for preserving taxpayer money given to contractors. In Iraq, the military auditor, SIGIR, had about seventy men in the entire military theater at the time I was there. We just bailed out AIG to the tune of more than $160 billion; its primary auditor, the Office of Thrift Supervision, had exactly one insurance expert on its staff while AIG was falling apart. There were staff cuts at the SEC several times in the last ten years; in fact there was a crucial cut of the SEC budget in an $821 billion Omnibus spending bill at the tail end of 2003 (just in time for the housing bubble) that was packed with plenty of pork and, again, inspired no protests from Joe Sixpack.

Meanwhile the federal government has systematically expanded a whole ecosystem of contractor-handout programs, most of them with names the public has never heard of. How many people out there are aware of all the millions in grants given to fortune 500 companies over the years through the Advanced Technology Program (ATP), which basically subsidizes the R&D departments of already rich firms while allowing those same companies to keep the benefits of those innovations? How about the nearly $5 billion in loan guarantees given to Boeing over the years through the Ex-Im Bank? How about the Foreign Military Financing Program, which gives millions of dollars to dozens of foreign countries every year so that they can buy American-made weapons?

Or how about the four or five billion dollars we spent annually for the last decade or so on Federal Housing Authority subsidies? Well, actually, the teabaggers probably would get riled up about those programs, which subsidize mortgage loans to low-income homeowners. The one constant in teabagger outrage is that the whatever wasteful government program they’re freaking out about has to benefit some poor slob, or else they usually don’t give a shit. What they forget, of course, is that FHA loans ultimately benefit the banks a lot more than the poor slobs — a homeowner defaulting on his FHA loan loses his house, but the bank that irresponsibly issued the loan (without fear, knowing they are backed up by the government) is still fully compensated, with you picking up the tab.

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