Tag: Picking Winners

Its irritating to the core. So, after hearing that sixty two former employees of Pinnacle Foods (in Imlay Township) have been convicted and sentenced for unemployment fraud, I immediately wondered what might foster such an environment of this kind of cheating.  It was discovered that the former employees had been wrongfully collecting unemployment benefits while continuing to work. And in the end, all of the individuals convicted, were ordered to pay restitution totaling $960,012 to the State of Michigan.

Shaun Thomas, acting director of the UIA said

"Through great work of the Lapeer County Prosecutor's office, working together with our UIA investigators, we were able to bring these cases to justice and take another step toward rooting out UI fraud in Michigan. The UIA is serious about detecting and preventing fraud and will continue to work with partners such as the Lapeer County Prosecutor's Office to stop fraudulent schemes such as this one."

Those big dollars never came back did they?

Nope.

This Pinnacle UI fraud effort represents the largest single prosecution of unemployment fraud from one employer in Michigan history. But not the largest fraud that involves a company that has received money from bread winners and other business owners struggling to survive in an era of unprecedented regulatory nightmares and work place rules.

But wait .. there is more!

As written by Daniel Horowitz from the Madison Project, "The most important amendment that has been proposed so far is Mike Pompeo's amendment #37 to abolish the Economic Development Administration (EDA). The EDA is a failed Great Society program that serves as a stimulus/pork slush fund for special interest communities under the guise of assistance to economically distressed areas of the country. It's nothing more than a fund for corporate welfare and a way of picking winners and losers in the market. It has been as successful in creating jobs as Obama's stimulus." This amendment would have saved $3 billion in wasteful "stimulus" spending over ten years.

Unfortunately, the amendment failed.

All Democrats and 104 Republicans voted against the amendment. Included in that number was Congressman Fred Upton, who has lately been telling his constituents back home that he is opposed to stimulus spending and bloated budgets. "Voting against this amendment is hypocrisy on his part. I can only assume he thought nobody would find out," stated Hoogendyk.

"The Pompeo amendment is just one example of how Congress and Fred Upton can make meaningful cuts, one at a time, to reduce the size of the federal budget which is in serious need of reduction," he continued. Upton voted wrong on several other amendments that would have saved a total of over $8 billion in the coming year.

"It's in the amendment process that government can be reduced," said Hoogendyk. "Now is the time for courage and action."

A Republican, Rick Snyder, is the father of the MEDC.  It was his baby, and lest anyone forget, it was created under the Republican Engler administration.  The MEDC, which has yet to produce a model that definitively demonstrates taking taxpayer funds, then giving those funds to hand picked "winners" produces net economic growth in our state.  The MEDC which essentially could be called a taxpayer funded venture capital scam.

The MEDC's MEGA, The state of Michigan through Tax Breaks, and the DOE,  which gave us that "success story" A123 systems.:

"When A123 Systems announced it was opening its lithium-ion battery manufacturing plant in Livonia in September 2010, then Gov. Jennifer Granholm wrote about it on the Huffington Post calling it "a Recovery Act success story."

But there have been troubles for A123 Systems in the 17 months since then despite a lot of state and federal aid to prop it up.

The state of Michigan gave it a $100 million MEGA tax credit that is contingent on the company creating 300 jobs by the end of 2016. A123 Systems also received another $41 million in tax breaks and subsidies from the state. The Department of Energy awarded A123 Systems a $249.1 million grant.

But the company has not been able to meet its own projections. For instance, on March 28, 2011 in an SEC filing, the company projected total revenue between $210 million to $225 million for 2011. Its latest report shows they had just $118 million of total revenue through the first three quarters of 2011 and reported a net loss of $172 million."

Yeah, that's a winner.

In fact doing so well, taxpayers should be happy to know that the top brass in the company thanks them for providing a generous raise.