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Government's Small Business Administration Exposed As Corporate Welfare For Big Business
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Many people have noted that the more insidious or corrupt a law or agency, the more positive sounding its name. The most egregious example during my lifetime, was naming legislation that stripped Americans of most of their civil liberties the “Patriot” Act.
In a similar vein, which red-blooded American could ever be opposed to something called the Small Business Administration (SBA). We all love small businesses and the entrepreneurial spirit, and even those who abhor big government have a hard time siding against an agency that supports the little guy. As such, the SBA is the perfect vehicle for cronyism, corruption and corporate welfare, which indeed appears to be its primary reason for existence.
My friends at Open the Books have published a key study on the SBA, and the results are ugly. The full report can be found here, but what follows is some analysis of the report by Stephen Moore at Investors Business Daily:
The Small Business Administration is under fire for lending billions of taxpayer dollars a year to exclusive country clubs, golf resorts, yacht clubs, pet resorts, upscale plastic surgeons, wineries and other businesses catering to the lifestyles of the very wealthy.
A new report by the federal spending watchdog OpentheBooks.com has uncovered these and other questionable loan activities by the SBA and its roughly $106 billion loan portfolio.
It’s the latest in a long history of hard-to-justify lending activities by a federal agency that proclaims its purpose is to “help Americans start, build and grow businesses.”
The SBA has come under attack for gross misallocation of funds and even potential fraud. A 2008 inspector general report found 1-in-4 SBA loans involved improper payments.
In 2011 the Cato Institute investigated the program and concluded: “Although lawmakers portray the SBA’s programs as a boost for small businesses, the programs are actually a form of corporate welfare for some of America’s largest banks. The banks reap profits from the program, but taxpayers are liable for the losses.”
The profits flow to some of the biggest banks that snatch up the loan guarantees — which are like licenses to make money on risky loans.
In 2009, the top 10 lending institutions swallowed up roughly one-quarter of all the SBA loan guarantees. Wells Fargo & Co., JPMorgan Chase, U.S. Bancorp and PNC Financial Services Group were the big beneficiaries, with taxpayers guaranteeing repayment of the loans and the banks collecting the profits.
The businesses that benefit from the low-cost lending often aren’t small at all.
According to a 2010 audit by the Government Accountability Office, 61 of the top 100 small business contractors were in reality large businesses. This same study found that the government awarded more than half of the $8 billion of the government’s $14 billion in “small” business contracts to large businesses.
Open the Books found that from 2007-13, $92 million went to beauty spas in upscale towns such as Lake Tahoe and Napa Valley.
More than $160 million was lent to at least 40 exclusive “members only” country clubs. An additional $1.5 million was lent to the Pequonnock Yacht Club in Connecticut. Several Rolex jewelers cashed in on $20 million in loans. A $3.5 million loan went to Lamborghini dealerships in Chicago and Orange County, Calif.
Another scandal at SBA is how private equity firms game the system to cash in on loan guarantees. In total, $9 billion of SBA funds flowed through “venture capital, capital partner firms, mezzanine finance firms and private investment funds,” the report discovered.
“It’s an amazing scam,” says Andrzejewski. “These billion dollar equity firms are making investments backed by taxpayers. It’s a federally insured license to make money.”
But not for taxpayers. “Charge offs” on loans and guarantees have totaled $11 billion since 2010 and $27 billion since 2005.
In Cronyism We Trust.
USA! USA! USA!
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Private equity still firing on all cylinders http://hedgeaccordingly.com/2014/12/xiaomi-invests-in-misfit-wearables-4...
Sounds kinda like the import/export bank. These guys sure do have a lot of different welfare offices.
I founded (or co-founded) three US-based businesses, all three failed.
The fourth business was the charm.
But it is in Peru. Hmm.
hello stranger. Hope you’re doing well. Keep working on the forth business. Might be near you next month, nothing has been secured. West Palm beach in a 20 mile radius. Still shopping for a month rental near beach. Email me any ideas you have in Miami. As you know, we are flexible to location. Thought the Ft Myers tenant was going to leave this month, she renewed her contract. I miss that house. 4 bedroom, 3 stall garage and heated swimming pool within a lanai enclosure. Crying now until I receive the next rent check. Anyhow, let me know if you have ocean front property from friends for the month of January.
We swindled some folks
1600 Pennsylvania Ave NW,
Washington, DC 20006
Off Market
Zestimate®: $381,662,382
Rent Zestimate®: $1,778,997/mo
Est. Refi Payment
$1,421,838/mo
http://www.zillow.com/homedetails/1600-Pennsylvania-Ave-NW-Washington-DC-20006/84074482_zpid/
Ask your local appraiser to validate this. Do you remember the earlier thread? Bombshells are left for early morning.
/LOL
No bama
https://www.youtube.com/watch?v=hNCkHsOTJT4
I'm guessing the SBA (scumbags/ bastards/ and assholes) is now just some Harvard secret society job pool.
Damn this shit just keeps pissing me off!!
I'm gonna go grab some bottle rockets and head out to the woods cuz I just feel like blowing shit up right now.
small and medium businesses are an endangered species whenever and wherever Big Biz has a too big handle on politics. it's really that simple
Yes...and then there is the BBB (the Better Business Bureau) who seem to think that not answering its questions (launched by an ex-employee or dissatisfied customer) is tantamount to some admission of guilt.
Its not and the business owner has every right to not give into their strong-arm/extortion tactics.
The BBB is a "buy a reputation" agency. Are you dishonest, a crook, flim flam man. No problem, write us a check and we will give you a triple A rating.
David Einhorn penned a book about this years ago, I think it was Allied Capital he was trying to short. They were a DC connected company to THe SBA and it was Einhorn that was hauled into the SEC basement for trying to expose them.
"In a similar vein, which red-blooded American could ever be opposed to something called the Small Business Administration (SBA)."
A thinking man is opposed to ALL things from this Govt!
Probably the same one that didn't oppose "affordable" care.
any real surprise here?
Nope, surprise factor is zero.
If you've been in the business world anytime in the last 20 years you already know this. This what government does. This is who government is.
Not sure what part of "empire in decline" isn't understood, but when everyone finally realizes this game is OVER (and the crash of 2008 should have made it abundantly clear, if not for the crash but the response to the crash) you'll realize we're already well past the point where things can be pulled back, where rationality can reassert itself.
This is about getting what you can while you can. And big businesses have the leverage. When reality eventually reasserts itself, they will be long gone.
Reality happens when the West gets revalued down to 20% of what they thought they were worth. That's when they blame every strawman imaginable and start WWIII.
Its not over, we're just letting the mega-corporations and bankers win. Once we institute common sense regulations, prosecute lawbreakers and throw them in jail, and make them pay their fair share of taxes then the middle class and producers will stopped getting raped.
It isnt that hard
Execpt you have the law of #'s working against you, that takes more time to resolve, until you then finally run out of time to complete the resolve, which leads to a more tollerable beginning.
+100
its affectionately called, Scorched Earth policy.
but still.. the idiots here and all over the net.. blame obummer, or shaniqua and 6 ebt kids. LOL this has been going on since 1913!
P < P + I
One good reason that people's animosity toward poor welfare, EBT, recipients always makes me laugh.
Not only should one's animosity be directed at those funding welfare with wealth stolen from us, but Shaniqua and her 6 kids are only the smallest part of the tip of the iceberg.
Rural welfare and direct and indirect farm subsidies dwarf the amounts that we associate with Shaniqua and her 6 kids. And then there is the mostly hidden corporate welfare.
Or put another way, what does one suppose the monopoly on "printing" the DC US' money, "printing" the money the DC US borrows each year, AND being exempt from theft and fraud charges is worth, in welfare terms, to the banksters and Wall St.?
No, EBT Shaniqua and her 6 kids don't bother me, hell, she doesn't even know better. However, what Corzine did, and he knows better, that shit bothers me.
An American, not US subject.
That is a BINGO!
Corzine - Government Bank fines - Subsidies make funding social programs minor. But of course who makes the money on the EBT? Did I hear Chase?
Yep - more of the same.
JP Morgan is EBT Contractor/Corporate Subsidy Entity.
How true. It is amazing how everyday Americans loathe 'individuals' that game the system yet have no idea the biggest welfare in the country is given to corporations and organizations posing as 'contractors' to the USG. If you do biz with Uncle Sam you are a Fascist and Welfare Queen in my book. Small government means having no ties to business. Otherwise you have Fascism.....
No one is going to read this, but I must write it anyways:
It is about knowing one's enemy, and above all, who one's enemy really is.
Shaniqua may not have our best interests at heart, and one day she may come to rob us, but she is not THE enemy. Those that are plundering us, spying on us, and caging us, are THE enemy.
An American, not US subject.
.gov serving the corporatocracy and the kleptoligarchy?
I'm shocked I tell you, shocked! Next they'll be bailing out the banks and insurance companies!
Oh wait...
A beauty spa is a small business. Even a nice one. And yacht clubs come in all shapes and sizes. Don't need my intelligence insulted Mike. Drudgitis is contageous. How big of a business does this appear to be?
http://www.tahoeserenityspa.com/index.php
Tell us Mike? Do you think your readers are so stupid that you need to exagerate everything? Really enough retards in the world without you going retard too. The case is strong enough without the retard stuff.
Yes, small biz compared to DOW companies... They have their own welfare streams of $$.
Everything I wanted to say got covered.
teethvillage88s; I approve this message.
Pelosi: Food Stamps & Unemployment Give Us The "Biggest Bang For The Buck"
ACA Jonathan GruberGate
No form of ethical and moral corruption escapes the Obama administration.....and has created them all...
I trust Americans now understand that to Obama and TPTB, you are all pointless worthless rubbish.
Same as it ever was.., as it will continue to be. Next admin will not get it right either.... Just a different color.
And I don't see the Rhino's doing anything about it. Red Team Blue Team BOTH answer to the same Master. Get INSIGHT!
You think too highly of the majority of Americans. Just looking at the recent protests only shows many don't or don't care.
Yes, Putin oligarch regime is stealing wealth from ordinary people and giving to elite.
Like stealing from pension funds.
"Earlier this month, the Russian government seized its citizens’ pension contributions. Normally, 6 percent of Russians’ salaries is invested in financial markets, earmarked for their retirement. This year that $8 billion in contributions will finance Russian spending instead."
Gosh!
Meanwhile, the EU and UK have introduced a new idea of "bank bail-ins" which amount to stealing the savings of ordinary people who dare to save for a major purchase or for their retirement. And what's left of the savings are receiving "negative interest rates" and therefore losing purchasing power each year.
And if you happen to live in the US, you may be stopped by a police officer and have any cash you have with you "confiscated".
These oligarchs are just aweful.
I see you've got your complete propaganda team busy serving up red downers today.
Yikes. You'll be throwing potatoes next.
Potato make rich in Latvian S.S.R., so is last thing would throwing.
"Many people have noted that the more insidious or corrupt a law or agency, the more positive sounding its name."
A fascinating discovery, and so true.
It brings to mind the supposed ultimate method of investigatng misconduct or malfeasance inside government in Britain:
"An Independent Public Inquiry".
These are not independent since the Inquiry Chair is carefully selected and appointed by a government minister and is given a very carefully and narrowly articulated brief. The public have little or no access to the inquiry and never allowed to be involved. And they do not really inquire into anything meaningful except the narrow brief given to them by the govt minister.
The result is very famously British:
"A Whitewash".
At best the countless pages of the Inquiry cost £millions and up to 24 months to produce (even longer in many cases) and get used as a door stop.
The nation moves on.
My small business suffers from over-regulation, health insurance costs, taxes, and many accounting hoops to jump through, again thanks to government.
There is no freedom left in this country. Try driving without a seatbelt on and see how free you are. Or firing up a tobacco cigarrette in a park in Asheville, NC, or anywhere in Savannah GA and see just how free you really are.
This article comes as no surprise.
The wierder and more unbelievable a story the more believable it is, especially when that story deals with government corruption and cronyism.
John Corzine fo the MFW.
Who corrupted every spec of the country?
The hard liners, and they are easy to spot too.
Actually the stripping of people's rights started with the snivel rights movement. Ensuring equal treatment under the law wasn't wrong. But they instead gve the govt. the power to award extra rights to blacks, then women, other minorities and the queers. That destroyed the concept of equal rights and put the govt. in the position of playing kingmaker in deciding who would be granted extra favors. Since the people given extra rights are all burdened by either being stupid, mediocre or dysfunctional, it rewarded the least productive citizens and put the most productive at a disadvantage. People have learned to live with this without protest because to do otherwise is to be labeled a racist, bigot, discriminatory, anti-semite, homophobe, misogynist, etc. The idea is to drive society down to the lowest common denominator with the govt. enforcing this spoils system on behalf of the PTB. This is really a form of social fascism, ensuring the PTB keep a monopoly in their position.
instead of bitchin... i'm off to the sba..... thanks taxpayer donkey....
and what is the big surprise here? government workers are simply expensive welfare recipients who think they are doing something.... but are only shuffling paper/data and creating NOTHING...except grief..... we have a crony monarchy/oligharcy kickback combo... i'd like to see the pics that obama keeps bohner in line with... beastiality perhaps... or nancy ramming a 14" dildo up his ass perhaps... more tears john, squeal like a pig... when obama talks about new car smell.... it applise to the entire government structure top to bottom... right now it reeks like down wind from a pig farm...
Agreed that too much of SBA goes to big biz, but you can't also say a spa isn't a small biz just because it is in a nice area. Do you only want banks to lend in high risk areas? With tax payer funds? There are lots wrong with SBA but this is a little to hypocritical.
By all means.
Personally, I enjoy guaranteeing loans to multi-millionaires who have the means to obtain loans on projects from the private sector.
Take Solyndra for an example...Maybe not SBA, but another helpful crony Alternative Energy agency.
Those Mom & Pop businesses are way too risky to loan to. They actually need the money.
Back in the late 90's I dealt with a private 'contractor' for the SBA when I bought a defaulted commercial property.
So, I asked, what hoops did I have to jump through to grab a low interest investment loan on the property I was about to buy?
He laughed and said that if I wanted to buy the whole industrial park instead of the one building, we could write up a proposal.
Uncle Sam and Main St. have two distinctly different definitions of small business.
Here in Minnesota, we've had to tolerate the moralistic hectoring of State Sen. Sean Nienow (R-Cambridge) for a while. It turns out Nienow and his wife bought a company called "The National Camp Association, Inc." from some outfit in New York. Supposedly the Camp Association was a resource for parents to select a camp for their kids to attend. The Nienows were then sued for never making full payment to buy the company.
The Nienows also took out an SBA loan in January of 2009 for $613,000. They paid back a little of it, but then stopped paying after the first year. They have been sued in Federal Court for repayment of $558,076.53 and administrative costs of $189,861.09 for a total of $747,937.62.
I don't know how this turned out, but what do you need that kind of dough to run a summer-camp consultancy? A website, I would imagine. And then you'd charge summer camps to be listed? What do you do with the other $500,000?
I'm guessing you spend it on yourself, and then preach at everybody else about "fiscal prudence" and all the other bullshit thieves like this like to spew. Of course, at some point (probably about when the last of the SBA money had been spent), the Nienows dissolved their company.
Oh, yeah, the voters in his district re-elected him. He's big pals with (soon-to-be-former) Rep. Michelle Bachmann. A real peach. One of the "Little Guys," who can apparently get their hands on $613,000 of federal money, don't feel compelled to pay it back or even explain themselves, and lecture everyone else on integrity.