The UK economy shrank by 0.3% in the first three months of the year, revised figures have shown last month's initial estimate from the Office for National Statistics (ONS) which showed a contraction of 0.2% were to optimistic. The downward revision was due to a bigger contraction in construction output than previously estimated. In the final three months of last year, the economy also shrank by 0.3%, meaning it is official, the UK is back in recession.
Many economist expect the UK economy to shrink again in
the second quarter of the year and that the Queen's Diamond Jubilee could reduce
output. The shadow chancellor Ed Balls
described Prime Minister David Cameron and Chancellor George Osborne as
"complacent and out of touch".It's now clear that this is a recession made in Downing Street by this government's failed policies," he said. "Despite all the problems in the euro area, France, Germany
and the Eurozone as a whole have so far avoided recession and only
exports to other countries stopped us going into recession a year ago.
The result is that Britain is now in a weaker position if things get
worse in the Eurozone in the coming months."
The British government recently increased spending by 1.6%, this was the biggest rise since the first quarter of 2008, this increase helped
offset some of the factors slowing the economy. The increase was mainly in the areas of healthcare and defense. The figures also showed unchanged growth in the service sector of 0.1%, where household spending increased by the same amount. Compared with the previous year as opposed to the previous
quarter, growth fell by 0.1%, the first annual drop since the final
three months of 2009.
When the first estimate of the GDP figures was released last
month, a number of commentators expressed surprise at the data. Almost everyone agrees that the economy is not recovering properly and with
the uncertainty over Europe hanging over the outlook many feel that the Monetary Policy Committee of the Bank of England will
sanction further quantitative easing (QE) at some point later on this
year. The Bank has already pumped £325bn into the UK economy
through its QE program to try to boost growth and has indicated it is open
to the idea of further cash injections.
Earlier this week, the head of the International Monetary
Fund, Christine Lagarde, said that if the economic recovery continues to
falter, the UK should consider more QE. She also suggested the Bank
could cut interest rates below the current record low of 0.5%. Lagarde did, however, back the government's austerity drive designed to cut the UK's budget deficit. Recently the word "austerity" is often used with negitive connotations, but it is really a substitute for "live within your means". In recent
weeks, there have been growing calls across Europe for a greater focus
on growth, as opposed to austerity. I as well as many economist think Britain is on the right track, even if the path is not easy. You cannot borrow and spend your way to prosperity.
Thursday, May 24, 2012
Tuesday, May 22, 2012
Spain In Pain, What Next?
Just a year ago when the eyes looking at Europe shifted their focus on Italy and Spain, the later was dubbed to "big to fail." Today Spain is withering in sharp pain. Since the global banking crisis of 2008, there have been four attempts by
the Spanish government - two by the current one, two by its predecessor
- to shore up a banking system seriously weakened by reckless property
and construction loans.
The ratings agency Moody's recently cut the credit ratings of 16 Spanish banks, a further blow to a country that is struggling to deal with the bad debts of its banking sector. Ten of the 17 banks were also put on negative credit watch, meaning that further downgrades are possible. It also cut the debt rating on Santander UK, a subsidiary of the Spanish banking giant. This comes after shares in struggling lender Bankia have almost halved in value this month. Fears about losses at Spanish banks have hit markets all across Europe.
In Spain the number of unemployed people reached 5,639,500 at the end of March, the unemployment rate stands at a staggering 24.4%, the national statistics agency said. These figures came just hours after rating agency S&P downgraded Spanish sovereign debt. The National Statistics Institute said the economy shrank 0.3% over the three months to the end of March, the second consecutive quarterly contraction. The only good news is that the contraction was not quite as much as economists had been expecting.
Concern over the weakness of the economy and the deficit have driven up the cost of borrowing for Spain, raising fears it will need a bailout. All this is occurring as tens of thousands of protesters hit the streets voicing opposition to planned cuts in healthcare and education. The cuts are part of the government's effort to reduce the public deficit to to 5.3% of gross domestic product in 2012, from 8.5 percent last year. But that effort is being hampered by the lack of growth. That prompted the Foreign Minister Jose Manuel Garcia-Margallo to say: "The figures are terrible for everyone and terrible for the government... Spain is in a crisis of huge proportions."
Guillaume Menuet, an economist at Citigroup, said: "Spain's still very much in recession and we think that this isn't going to improve soon." Spain's performance contrasts with Germany, which on announced that retail sales had risen 0.8% in March. It's likely that Spain faces more fiscal tightening if they wish to avoid going into a bailout plan. The problem is Spain is more like that of America where massive over building occurred, this differs from Greece, where government overspending created massive debt. The only thing that is certain for Spain, more pain lies ahead.
The ratings agency Moody's recently cut the credit ratings of 16 Spanish banks, a further blow to a country that is struggling to deal with the bad debts of its banking sector. Ten of the 17 banks were also put on negative credit watch, meaning that further downgrades are possible. It also cut the debt rating on Santander UK, a subsidiary of the Spanish banking giant. This comes after shares in struggling lender Bankia have almost halved in value this month. Fears about losses at Spanish banks have hit markets all across Europe.
In Spain the number of unemployed people reached 5,639,500 at the end of March, the unemployment rate stands at a staggering 24.4%, the national statistics agency said. These figures came just hours after rating agency S&P downgraded Spanish sovereign debt. The National Statistics Institute said the economy shrank 0.3% over the three months to the end of March, the second consecutive quarterly contraction. The only good news is that the contraction was not quite as much as economists had been expecting.
Concern over the weakness of the economy and the deficit have driven up the cost of borrowing for Spain, raising fears it will need a bailout. All this is occurring as tens of thousands of protesters hit the streets voicing opposition to planned cuts in healthcare and education. The cuts are part of the government's effort to reduce the public deficit to to 5.3% of gross domestic product in 2012, from 8.5 percent last year. But that effort is being hampered by the lack of growth. That prompted the Foreign Minister Jose Manuel Garcia-Margallo to say: "The figures are terrible for everyone and terrible for the government... Spain is in a crisis of huge proportions."
Guillaume Menuet, an economist at Citigroup, said: "Spain's still very much in recession and we think that this isn't going to improve soon." Spain's performance contrasts with Germany, which on announced that retail sales had risen 0.8% in March. It's likely that Spain faces more fiscal tightening if they wish to avoid going into a bailout plan. The problem is Spain is more like that of America where massive over building occurred, this differs from Greece, where government overspending created massive debt. The only thing that is certain for Spain, more pain lies ahead.
Monday, May 14, 2012
Another Earth Needed!
A strong candidate for, "dumbest television crawler ever", is one that appeared on Bloomberg tonight, it read:
"Another Earth needed to meet human demand for natural resources."
All I can say is, good luck with that! Finding another Earth like planet near enough to supply us with resources seems somewhat unlikely. I might suggest we tone down our consumption a tad and use better the gifts that have been showered upon us.
Please take the time to read my April 12th post: Whats In A Footprint? Also my January 24th, 2012 post titled Candidates Shy Away From "C" Word. Both post suggest we move towards more sustainable lifestyles.
"Another Earth needed to meet human demand for natural resources."
All I can say is, good luck with that! Finding another Earth like planet near enough to supply us with resources seems somewhat unlikely. I might suggest we tone down our consumption a tad and use better the gifts that have been showered upon us.
Please take the time to read my April 12th post: Whats In A Footprint? Also my January 24th, 2012 post titled Candidates Shy Away From "C" Word. Both post suggest we move towards more sustainable lifestyles.
Sunday, May 13, 2012
Let Freedom Ring!
Something odd is happening out in the country that gives a glimmer of hope that freedom is not totally gone.The almost bizarre thing, is the reason why this is happening, simply put, we are broke. In a country that for years has been busy trying to legislate every possible outcome upon its people we may finally see government back off, not because they trust the people or it is the right thing to do, but because government needs the money. Sadly this trend is not the result of a sudden rejection of
paternalism by state governments. Rather, it stems from the states’ dire
fiscal straits in the aftermath of the recession.
“States are looking for a source of revenue beyond directly taxing their residents,” says Holly Wetzel of the American Gaming Association, which represents gambling interests. To put it more bluntly, states have been so desperate for revenue over the last few years that they’re looking at everything. Officials in Massachusetts, for example, have suggested that the three casinos to be built there could bring in as much as $400m a year, plus $300m in initial licensing fees.
Soon the state of Washington will be out of the liquor business altogether, freeing private businesses to sell spirits in the state for the first time since Prohibition. Last year, despite dire warnings about corporate profiteers, drunk drivers and surging policing costs, voters in the state approved the privatization in a referendum. Something similar happened in Georgia, voters lifted the ban on sales of alcohol on Sundays in an overwhelming number of the cities and counties. Last year in Texas, attempts to turn “dry” localities “wet” succeeded on 57 out of 64 occasions. In West Virginia the state legislature has just passed a bill allowing liquor stores to hold tasting sessions.
“The world is getting wetter,” says Frank Coleman of the Distilled Spirits Council of the United States (DISCUS), an industry group. It is not just drinkers who are benefiting from a loosening of puritanical regulations around America. Massachusetts last year became the 24th state to allow casinos in some form. Ohio did the same in 2009, and Maryland did in 2008. Maine has just issued its first casino license, and also lifted a ban on fireworks at the beginning of the year. Rhode Island legalized fireworks in 2010, and will soon hold a referendum about expanding gambling.
By the same token, local governments hope that lifting bans on booze or fireworks will bring in a huge amount of sales and excise tax. When Michigan approved the sale of new types of fireworks at the beginning of last year, the legislature estimated the change would bring in an extra $5.5m a year in taxes and fees. A similar argument is made for extending licensing hours, or allowing tastings, states hope that they will boost sales and bring in extra tax dollars. Dannel Malloy, the governor of Connecticut, who in January proposed lifting price controls and allowing Sunday sales among other reforms, argues that they will yield millions in new revenue by returning as much as $570 million in sales now lost to neighboring states.
But despite all these initiatives, many parts of America are still lumbered with a bizarre and complex array of restrictions on drinking, gambling and the like that seem entirely out of keeping with a country that proudly calls itself the land of the free. Even after Washington leaves the club, 17 states will still maintain a government monopoly on either the sale or distribution of spirits, or both. In Maryland it is actually certain counties that run their own liquor stores, monopolizing sales of even wine and beer.
Many states, especially in the South, remain a confusing patchwork of wet, dry and “moist” counties, the latter being those that allow sales of only certain forms of alcohol at certain types of establishment. There are over 4,000 state and federal laws concerning alcohol, says Mr Coleman of DISCUS, and another 1,900 were proposed in 2008 alone. Rules about gambling are an equally perverse mix. Only 12 states have no casinos of any sort. But several more allow them only on boats or at racetracks. Another 12 limit gambling to Indian reservations. And four states still ban fireworks of all kinds.
Not all attempts to liberalize these regimes succeed. Republican governors in Virginia and Pennsylvania have failed to push through promised privatization of state liquor stores. In Kentucky, the Republican-controlled Senate squelched the newly re-elected Democratic governor’s plans to hold a referendum on bringing casinos to the state. Andrew Cuomo, New York’s Democratic governor, vetoed a bill that would have permitted only the most innocuous forms of fireworks, such as sparklers. Each easing of the rules makes the next one more likely, by demonstrating that disaster does not occur. Despite the steady deregulation of alcohol, for example, drunk driving and underage drinking are at record lows. And even as fireworks become more widely available, they are causing fewer injuries.
Most strikingly, lobbyists and politicians seem to shy away from the notion that regulation should be trimmed simply in the name of personal freedom, rather than on practical grounds. The legislature in New Hampshire (motto: “Live free or die”) recently considered a bill that would have allowed shops that already had licenses to sell beer and wine to buy spirits in bulk from the state monopoly and resell them. The sponsor told his fellow lawmakers that by approving the proposal they would be “promoting limited government” and “enhancing freedoms”. The state House of Representatives, which is controlled by Republicans, sent the measure down to defeat, 179-123. When will government begin to realize you can not legislate decency and personal responsibility by limiting freedom.
“States are looking for a source of revenue beyond directly taxing their residents,” says Holly Wetzel of the American Gaming Association, which represents gambling interests. To put it more bluntly, states have been so desperate for revenue over the last few years that they’re looking at everything. Officials in Massachusetts, for example, have suggested that the three casinos to be built there could bring in as much as $400m a year, plus $300m in initial licensing fees.
Soon the state of Washington will be out of the liquor business altogether, freeing private businesses to sell spirits in the state for the first time since Prohibition. Last year, despite dire warnings about corporate profiteers, drunk drivers and surging policing costs, voters in the state approved the privatization in a referendum. Something similar happened in Georgia, voters lifted the ban on sales of alcohol on Sundays in an overwhelming number of the cities and counties. Last year in Texas, attempts to turn “dry” localities “wet” succeeded on 57 out of 64 occasions. In West Virginia the state legislature has just passed a bill allowing liquor stores to hold tasting sessions.
“The world is getting wetter,” says Frank Coleman of the Distilled Spirits Council of the United States (DISCUS), an industry group. It is not just drinkers who are benefiting from a loosening of puritanical regulations around America. Massachusetts last year became the 24th state to allow casinos in some form. Ohio did the same in 2009, and Maryland did in 2008. Maine has just issued its first casino license, and also lifted a ban on fireworks at the beginning of the year. Rhode Island legalized fireworks in 2010, and will soon hold a referendum about expanding gambling.
By the same token, local governments hope that lifting bans on booze or fireworks will bring in a huge amount of sales and excise tax. When Michigan approved the sale of new types of fireworks at the beginning of last year, the legislature estimated the change would bring in an extra $5.5m a year in taxes and fees. A similar argument is made for extending licensing hours, or allowing tastings, states hope that they will boost sales and bring in extra tax dollars. Dannel Malloy, the governor of Connecticut, who in January proposed lifting price controls and allowing Sunday sales among other reforms, argues that they will yield millions in new revenue by returning as much as $570 million in sales now lost to neighboring states.
But despite all these initiatives, many parts of America are still lumbered with a bizarre and complex array of restrictions on drinking, gambling and the like that seem entirely out of keeping with a country that proudly calls itself the land of the free. Even after Washington leaves the club, 17 states will still maintain a government monopoly on either the sale or distribution of spirits, or both. In Maryland it is actually certain counties that run their own liquor stores, monopolizing sales of even wine and beer.
Many states, especially in the South, remain a confusing patchwork of wet, dry and “moist” counties, the latter being those that allow sales of only certain forms of alcohol at certain types of establishment. There are over 4,000 state and federal laws concerning alcohol, says Mr Coleman of DISCUS, and another 1,900 were proposed in 2008 alone. Rules about gambling are an equally perverse mix. Only 12 states have no casinos of any sort. But several more allow them only on boats or at racetracks. Another 12 limit gambling to Indian reservations. And four states still ban fireworks of all kinds.
Not all attempts to liberalize these regimes succeed. Republican governors in Virginia and Pennsylvania have failed to push through promised privatization of state liquor stores. In Kentucky, the Republican-controlled Senate squelched the newly re-elected Democratic governor’s plans to hold a referendum on bringing casinos to the state. Andrew Cuomo, New York’s Democratic governor, vetoed a bill that would have permitted only the most innocuous forms of fireworks, such as sparklers. Each easing of the rules makes the next one more likely, by demonstrating that disaster does not occur. Despite the steady deregulation of alcohol, for example, drunk driving and underage drinking are at record lows. And even as fireworks become more widely available, they are causing fewer injuries.
Most strikingly, lobbyists and politicians seem to shy away from the notion that regulation should be trimmed simply in the name of personal freedom, rather than on practical grounds. The legislature in New Hampshire (motto: “Live free or die”) recently considered a bill that would have allowed shops that already had licenses to sell beer and wine to buy spirits in bulk from the state monopoly and resell them. The sponsor told his fellow lawmakers that by approving the proposal they would be “promoting limited government” and “enhancing freedoms”. The state House of Representatives, which is controlled by Republicans, sent the measure down to defeat, 179-123. When will government begin to realize you can not legislate decency and personal responsibility by limiting freedom.
Wednesday, May 9, 2012
Consumer Credit Jumps, But.....
Where is Americas anemic growth coming from? A report released Monday by the Federal Reserve shows that U.S. consumers increased their debt in March
by a seasonally adjusted $21.3 billion. This is the seventh straight monthly gain in consumer borrowing.
The increase in March was the largest since November 2001 and was double the
roughly $10 billion gain expected by Wall Street economists. The bulk of the
increase came from non-revolving debt such as student loans, auto loans and personal
loans.
These three categories combined for a $16.2 billion jump in March. Credit card debt rose by $5.1 billion in the month after declining $2.3 billion in February. Consumer credit increased at a 7.75% annual rate in the first quarter. It is not a good sign that Americans are fueling their spending by taking on new debt while income from jobs continues to lag. The student loan category is highly government concentrated, 80% of student loans are made by the government.
These three categories combined for a $16.2 billion jump in March. Credit card debt rose by $5.1 billion in the month after declining $2.3 billion in February. Consumer credit increased at a 7.75% annual rate in the first quarter. It is not a good sign that Americans are fueling their spending by taking on new debt while income from jobs continues to lag. The student loan category is highly government concentrated, 80% of student loans are made by the government.
Monday, May 7, 2012
Student Loans, the Politics of Pandering
The repeated warnings that student loan rates will double on July 1 unless
Congress prevents it may be causing unwarranted fears for people with
college debt, the truth is the increase will only affect loans taken out on or after July 1. Student debt debt has become such a hot button election year issue that many news stories and
press releases omit or downplay the fact that the impending rate
increase will also affect only one type
of federal student loan: subsidized undergraduate Stafford loans. It won't affect other types of federal loans - such as unsubsidized
Stafford loans, Plus loans for parents and grad students, or student loans made by banks and other private-sector
lenders. Students typically take out new loans each academic year, and the
rate increase will not apply to loans that have already been made.
In 2007 Congress cut the interest on Strafford Loans in half to 3.4% on the day it expires July1, it will just return to its normal 6.8% for new loans. Exaggeration of the effect on some 7,4 million students with low to middle incomes is a description that is pathetic and misleading. Sure it will not effect those financially better off because high income students are not eligible and/or do not need the loans. Just as bad is the terminology "fixing the problem" would cost six billion dollars for one year, again this is not a problem and it is not broken, the rate is just returning to normal. All this gets sticky because politicians have framed the issue in a way that stirs the voters emotions, a petition circulating online to forgive many student loans is gaining momentum and approaching one million signatures, this raises new questions, like one of fairness.
In 1988, Congress renamed the Federal Guaranteed Student Loan program the Robert T. Stafford Student Loan program, in honor of a Vermont U.S Senator Robert Stafford for his work on higher education. When we take a deeper look into the realm of student loans we find that 80% are Strafford Loans, all of these come directly from the government subsidized or unsubsidized they are often not enough to cover all a students college cost. No payments are expected on the loan while the student is enrolled as a full or half-time student. This "in-school deferment" continues for six months after the student leaves school either by graduating, dropping below half-time enrollment, or withdrawing. This is referred to as the grace period. Unpaid interest that is deferred until after graduation is added to the loan principal.
The government already effects the cost of higher education in many different ways. State governments subsidize the budgets of public colleges and universities. And federal and state governments give money to students through programs like Pell Grants and the American Opportunity Tax Credit. A below-market interest rate for Stafford Loans is just another subsidy mechanism. Like the government programs involved in supplying people with paid healthcare making cheap government loans available for education encourages people to consume more than they otherwise would. While many would argue that this is a good thing when it comes to education the policy also causes some negative distortions in that it encourages students at the margin, to choose more expensive educational institutions than they otherwise would, and to finance more of their education with borrowing. These incentives leave students burdened with debt and also makes them less focused on price than they should be.
When it comes to healthcare the result is higher cost, in education many see the government loans as a driving force behind tuition inflation. Instead of extending the policy of holding Stafford Loan interest rates very low, it might be better to let rates go back up and redirect the cost of the subsidy into an expansion of Pell Grants and refundable tuition tax credits. This policy would keep the positive distortion associated with Stafford Loans (people get more education) without the negative ones such as people are less price sensitive and borrow more money. The clear instinct of many politicians is to defend cheap Stafford Loans in an effort to be on the side of education. But subsidizing education need not mean subsidizing borrowing. We’d be better off letting student loan interest rates rise and searching for other ways to drive the cost of higher education down with innovations like integration of more online classes.
Please check out my April 14th post titled "Students Borrowing against the Future." It focuses on the dark-side of these loans.
In 2007 Congress cut the interest on Strafford Loans in half to 3.4% on the day it expires July1, it will just return to its normal 6.8% for new loans. Exaggeration of the effect on some 7,4 million students with low to middle incomes is a description that is pathetic and misleading. Sure it will not effect those financially better off because high income students are not eligible and/or do not need the loans. Just as bad is the terminology "fixing the problem" would cost six billion dollars for one year, again this is not a problem and it is not broken, the rate is just returning to normal. All this gets sticky because politicians have framed the issue in a way that stirs the voters emotions, a petition circulating online to forgive many student loans is gaining momentum and approaching one million signatures, this raises new questions, like one of fairness.
In 1988, Congress renamed the Federal Guaranteed Student Loan program the Robert T. Stafford Student Loan program, in honor of a Vermont U.S Senator Robert Stafford for his work on higher education. When we take a deeper look into the realm of student loans we find that 80% are Strafford Loans, all of these come directly from the government subsidized or unsubsidized they are often not enough to cover all a students college cost. No payments are expected on the loan while the student is enrolled as a full or half-time student. This "in-school deferment" continues for six months after the student leaves school either by graduating, dropping below half-time enrollment, or withdrawing. This is referred to as the grace period. Unpaid interest that is deferred until after graduation is added to the loan principal.
The government already effects the cost of higher education in many different ways. State governments subsidize the budgets of public colleges and universities. And federal and state governments give money to students through programs like Pell Grants and the American Opportunity Tax Credit. A below-market interest rate for Stafford Loans is just another subsidy mechanism. Like the government programs involved in supplying people with paid healthcare making cheap government loans available for education encourages people to consume more than they otherwise would. While many would argue that this is a good thing when it comes to education the policy also causes some negative distortions in that it encourages students at the margin, to choose more expensive educational institutions than they otherwise would, and to finance more of their education with borrowing. These incentives leave students burdened with debt and also makes them less focused on price than they should be.
When it comes to healthcare the result is higher cost, in education many see the government loans as a driving force behind tuition inflation. Instead of extending the policy of holding Stafford Loan interest rates very low, it might be better to let rates go back up and redirect the cost of the subsidy into an expansion of Pell Grants and refundable tuition tax credits. This policy would keep the positive distortion associated with Stafford Loans (people get more education) without the negative ones such as people are less price sensitive and borrow more money. The clear instinct of many politicians is to defend cheap Stafford Loans in an effort to be on the side of education. But subsidizing education need not mean subsidizing borrowing. We’d be better off letting student loan interest rates rise and searching for other ways to drive the cost of higher education down with innovations like integration of more online classes.
Please check out my April 14th post titled "Students Borrowing against the Future." It focuses on the dark-side of these loans.
Saturday, May 5, 2012
Secret Service Sex Scandal
Last weekend the talk shows were a buzz about the Secret Service sex scandal. I was surprised to hear both men and women commentators blowing off much of the scandal as "boys will be boys", yes we had the occasional, "it was utterly disgraceful" but genuine shock that America's best would do this while on the job, and during an important mission was somewhat absent. One fella even went so far as to comparing it to when a ship returns to port and the sailors jump ashore to have a good time and let off steam. The idea that these agents were working rather then on "shore leave," and that the American taxpayer provided them with an expense account seemed irrelevant.
Also disturbing is the timing of this scandal, it surfaces on the back of recent incidents that racked the GSA forcing resignations and firings of key employees. What is going on inside Washington? At a time Americans continue to suffer government employees are partying on. The prostitution scandal engulfing the US Secret Service seems to deepen further with new revelations about the roles of senior supervisors overseeing security arrangements for President Barack Obama’s visit to Colombia. Two of the agents who have been fired or forced to resign from involvement in the Cartagena scandal were veteran Secret Service officers there to supervise the work of dozens of less experienced agents.
Alarming questions about the reliability and discretion of the elite bodyguard unit tasked with protecting the lives of America’s top leaders are being asked. It has now emerged that one of them, who is married, posted photographs on his public Facebook page of himself partying with scantily-clad women and guarding Sarah Palin. He joked that he was “really checking out” the former vice-presidential candidate in a comment beneath the picture. Now the agency has acknowledged it is "really checking out" whether its employees hired strippers and prostitutes in advance of another Presidential trip to El Salvador last year.
A spokesman for the Secret Service said ongoing investigations include allegations raised in news reports that Secret Service employees received sexual favors from strippers at a club in San Salvador and took prostitutes to their hotel rooms ahead of President Barack Obama's visit to the city. This embarrassing disclosure came shortly after the Homeland Security secretary assured skeptical senators that the recent prostitution scandal in Colombia appeared to be an isolated incident.
Separately, The Washington Post this week cited unnamed "confidants" of the Secret Service officers implicated in Colombia as saying senior managers had tolerated similar behavior during previous official trips. The Post described a visit to Buenos Aires in 2009 by former President Bill Clinton, whose protective detail also included agents and uniformed officers. With each new allegation it appears increasingly clear that consorting with whores was not a one time event.
I found myself forced to wonder, what the reaction would of been if it had been the CEO and upper echelon of a large American company caught engaged in such unprofessional behavior. I was surprised as to why no mention of the marital status of the agents was cast out by the judgmental American public. Do not be surprised if more shoes are about to drop concerning disturbing and unflattering actions at other government agencies. In the end it seems this is just another symptom a large government that has grown out of control, a line comes to mind to explain this phenomena, "power corrupts and absolute power corrupts absolutely."
Also disturbing is the timing of this scandal, it surfaces on the back of recent incidents that racked the GSA forcing resignations and firings of key employees. What is going on inside Washington? At a time Americans continue to suffer government employees are partying on. The prostitution scandal engulfing the US Secret Service seems to deepen further with new revelations about the roles of senior supervisors overseeing security arrangements for President Barack Obama’s visit to Colombia. Two of the agents who have been fired or forced to resign from involvement in the Cartagena scandal were veteran Secret Service officers there to supervise the work of dozens of less experienced agents.
Alarming questions about the reliability and discretion of the elite bodyguard unit tasked with protecting the lives of America’s top leaders are being asked. It has now emerged that one of them, who is married, posted photographs on his public Facebook page of himself partying with scantily-clad women and guarding Sarah Palin. He joked that he was “really checking out” the former vice-presidential candidate in a comment beneath the picture. Now the agency has acknowledged it is "really checking out" whether its employees hired strippers and prostitutes in advance of another Presidential trip to El Salvador last year.
A spokesman for the Secret Service said ongoing investigations include allegations raised in news reports that Secret Service employees received sexual favors from strippers at a club in San Salvador and took prostitutes to their hotel rooms ahead of President Barack Obama's visit to the city. This embarrassing disclosure came shortly after the Homeland Security secretary assured skeptical senators that the recent prostitution scandal in Colombia appeared to be an isolated incident.
Separately, The Washington Post this week cited unnamed "confidants" of the Secret Service officers implicated in Colombia as saying senior managers had tolerated similar behavior during previous official trips. The Post described a visit to Buenos Aires in 2009 by former President Bill Clinton, whose protective detail also included agents and uniformed officers. With each new allegation it appears increasingly clear that consorting with whores was not a one time event.
I found myself forced to wonder, what the reaction would of been if it had been the CEO and upper echelon of a large American company caught engaged in such unprofessional behavior. I was surprised as to why no mention of the marital status of the agents was cast out by the judgmental American public. Do not be surprised if more shoes are about to drop concerning disturbing and unflattering actions at other government agencies. In the end it seems this is just another symptom a large government that has grown out of control, a line comes to mind to explain this phenomena, "power corrupts and absolute power corrupts absolutely."
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