Friday, March 11, 2011

Just Another Scumbag Politician Lining Her Own Pockets at the Expense of the Taxpayer

A Missouri Democrat, Senator Claire McCaskill, for the last five years has chartered 89 flights for herself through a company she owns (or has 'an ownership stake in', if you'd rather downplay the issue like the Washington Post does). Now there are no defined rules about this being allowed or disallowed, but clearly it begs the questions of how many of those flights were necessary (one flight every 20 days), and were the costs fairly valued (they say they were)? It is a dangerous financial situation for one party to be both the beneficiary and the administrator, for the spending of other people's money, of a transaction. Would we want our President passing a bill to buy 1 million of his books to donate to libraries? No, because that would be a conflict of interest.

So, it is interesting to note the liberal Washington Post mention of the "no profit" that was earned. Well I tell ya, that must be one crappy airline they are running over there! But all joking aside, this is a actually a spin to put the situation in the most positive light. Your average American doesn't think of profit the way an accountant does. Your average American will take profit to mean that it is the money above the cost actually incurred to make, package, and sell the product, or in this case, sell the flight. They would see any money beyond the cost to fill the plane up with gas, pay the pilot, and the fee to rent to airplane as profit incurred. But an accountant will also factor in a non-cash event called depreciation, which reduces profit. It is a mechanism to shield profits from taxation (or in this case, 'perceived benefit') while still passing through cash-flow. So while it may be true that at the bottom of the accounting ledger, net income (profit) was recorded as zero, it does not mean that positive cash flow didn't accrue to the owners. And of course by saying that they earned zero profit, this implies to your average American that the senator derived no benefit from these chartered flights, which is clearly misleading.

And think about it, if they got at least 89 flights out of it, and who knows how many other flights from public customers and they only made $200 in 'profit' would you think they would be partial owners to this company? Why would a firm like that even be in existence?

How often do you think this kind of thing happens? It does make you wonder why nearly every member of congress is a multi-millionaire, doesn't it?

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