Stimulating Conversation Blog

Title: Throw Them Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send The Rest of Us to Prison Author: Peter Schweizer Rating: 4 This book is a useful attempt to show the cynical nature of Congress (the Permanent Political Class) and their constituents to enrich themselves. The major point is that Congress and their staff are exempt from many rules that apply to almost everyone else, suggesting what they do is “honest graft.” As the top of the list is insider trading based on private information. Schweizer focuses on individual members and specific legislation to demonstrate how this works. The biggest violators according to book are John Kerry and Nancy Pelosi—both rich to begin with. Kerry and others bought pharmaceutical and healthcare stock before Obama-care was passed in 2009 and similarly before Medicare Part D was passed in 2003. Kerry and many others sold stocks at the time of the Lehman bankruptcy in 2008 and bought stock before the TARP bailout. Pelosi was offered shares on initial public offerings (IPOs) or allowed to purchase shares before IPOs. The example used was Visa going public in 2008. Pelosi also promoted legislation favoring Visa and other companies she owned. Former Speaker Dennis Hastert left Congress a rich man based on earmarks for roads, etc. that benefitted real estate he owned. Pelosi did the same for her San Francisco commercial property. Note that the bulk of the examples focused on Democrats. Part One (the first 69 pages) focused on Congressional “honest grant” and the most interesting. The rest was hit and miss. Chapter 5 dealt with a thorough analysis of stimulus funding for alternative energy, including the failing Solyndra. Over 80% of the $25 billion went to Obama-connected companies, mainly through giving to his election campaign. A chapter was devoted, apparently, to the financial scandal. Given at the villains involved (Richard “Delusional Dick” Fuld; Angelo “Mad Mortgage” Mozilo with his “Friends of Angelo” program; or Llody “I’m Doing God’s Work” Blankfein) Schweizer focuses on—wait to it—Warren Buffett. He proves Buffett is a “crony capitalist,” but I didn’t see any obvious evidence he engaged in illegal or even unethical acts … except he supported Obama. Chapter 7 was interesting, focusing on hedge funds using political information (politicians can share insider information). This was a useful book. However, the biggest deficiency is the partisan nature focusing on democrats—Schweizer is a research fellow at the Hoover Institution. Presumably Republicans are equally guilty, but few are named. Major corporate lobbyists include health care, financials, energy, and defense. Almost no focus was made with either energy (except alternative energy) or defense, two major culprits in crony capitalism and other issues such as the environment. (There were also some minor errors dealing with the financial sector as well.)