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Insider Report from Newsmax.com
Headlines (Scroll down for complete stories):
1. Food Stamps Used to Buy Drugs and Guns
2. Fox News Chief Ailes Gives Blurb for Maddow Book
3. Despite Gas Prices, Hybrid Sales on the Decline
4. Americans Saved Over $1 Trillion on Generic Drugs
5. Israeli Bill Bans Too-Skinny Fashion Models
6. Foreign Firms Investing in 'Right to Work' U.S. South
1. Food Stamps Used to Buy Drugs and Guns
Food stamp recipients have traded their benefits with corrupt retailers in exchange for cash they used to buy drugs and weapons.
That's just one of the outrageous examples of abuse in the food stamp program revealed when Phyllis Fong, the Department of Agriculture's inspector general, testified before the House Oversight and Government Reform Committee on Thursday.
"In terms of fraud, we have seen many types of trafficking in SNAP (Supplemental Nutrition Assistance Program) benefits," she said in prepared remarks.
"By giving a recipient $50 in cash for $100 in benefits, an unscrupulous retailer can make a significant profit. Recipients, of course, are then able to spend the cash however they like.
"In some cases, recipients have exchanged benefits for drugs, weapons, and other contraband.
"When trafficking occurs unchecked, families do not receive the intended nutritional assistance, and unscrupulous retailers profit at the expense of the American public."
The latest estimate places the number of food stamp recipients in this fiscal year at about 46.3 million, up from 30.8 million at the beginning of fiscal year 2009.
The sale or purchase of food stamp benefits for monetary gain is punishable by disqualification from receiving future benefits, fines, and criminal prosecution, according to CNS News.
However, it came to light in Fong's testimony that the U.S. Department of Agriculture, which administers the food stamp program, does not have a policy to ban food stamp retailers from the program even when they have been convicted of defrauding the government.
Fong said: "'Suspension and debarment' is a legal tool that Federal agencies can use to protect programs from repeat abusers and ensure that the Government does business only with responsible parties.
"If FNS (the USDA's Food and Nutrition Service) took steps to debar retailers with a proven record of dishonesty, those individuals would be prevented from abusing other Federal programs.
"However, in a recent audit, we determined that FNS did not debar any of the 615 wholesalers and retailers convicted in relation to 208 cases, even though a conviction is adequate grounds for debarment."
She also testified that the USDA does not review the criminal background check on food stamp retailers and "therefore cannot comply with its own requirement to deny SNAP authorization to any retailers with a criminal history."
In addition, the food stamp program does not even check the Social Security number of some of its recipients, many of whom are using the numbers of dead people and invalid SSNs to get benefits that Fong said potentially total $1.1 million a month.
Editor's Note:
2. Fox News Chief Ailes Gives Blurb for Maddow Book
Rachel Maddow, who hosts a nightly show on left-leaning cable news network MSNBC, has a new book coming out and it has gained an endorsement from a most unlikely source — Roger Ailes, CEO of the Fox News Channel.
Maddow's book, "Drift: The Unmooring of American Military Power," is scheduled for publication on March 27.
Ailes is one of several celebrities whose favorable words appear on the book jacket, and on Amazon.com.
"'Drift' never makes the case that war might be necessary," he writes. "America would be weakened dramatically if we had underreacted to 9/11.
"However, Rachel Maddow makes valid arguments that our country has been drifting toward questionable wars, draining our resources, without sufficient input and time.
"People who like Rachel will love the book. People who don't will get angry, but aggressive debate is good for America. 'Drift' is a book worth reading."
Maddow responded through an MSNBC spokesperson: "I have professional contact with a lot of people in the media who don't share my political views. Mr. Ailes and I have politics that are basically exactly opposite, but that's all the more reason I was grateful he agreed to read 'Drift' and to write that kind blurb for the dust jacket."
Editor's Note:
3. Despite Gas Prices, Hybrid Sales on the Decline
With gasoline prices high and likely to go higher, it might be expected that Americans would increasingly be turning to fuel-efficient hybrid vehicles. But sales of gasoline-electric hybrids have actually been dropping.
The culprit: the improved mileage car buyers can get from today's gasoline-only vehicles with internal combustion engines.
Hybrid sales accounted for 2.8 percent of the U.S. auto market in 2009, but slipped to 2.4 percent in 2010 and to 2.2 percent last year, according to researcher LMC Automotive.
"Consumers don't want to pay as much as $6,000 extra for a hybrid when they can get 40 mpg on the highway in a standard car such as a Chevrolet Cruze or Hyundai Elantra," Business Week observes.
"And even more conventional cars with hybrid-caliber mileage are coming this year, thanks to advancements that enable engines to burn fuel up to 20 percent more efficiently."
Traditional engines are being fitted with technologies such as electronic controls, eight-speed transmissions, and direct fuel injection, allowing gas to burn more efficiently.
The dip in hybrid sales comes even as the auto industry plans to introduce an array of electrified vehicles to meet more stringent federal fuel economy regulations.
With those plans, the number of hybrids, plug-in hybrids and electric models on the American market would rise from 40 last year to 153 by 2020, Business Week reports.
But carmakers may rethink those plans in response to slow hybrid sales. Ford Motor, for example, is dropping its hybrid version of the Escape SUV after seven years of disappointing sales.
Editor's Note:
4. Americans Saved Over $1 Trillion on Generic Drugs
A bill passed by Congress in 1984 has revolutionized the drug industry, enabling Americans to enjoy huge cost savings by buying generic drugs instead of their brand-name equivalents — and the savings will increase in the future.
The Hatch-Waxman Act, sponsored by Orrin Hatch, R-Utah, and Henry Waxman, D-Calif., facilitated the sale of generic drugs while protecting the patent rights of brand-name drug manufacturers to encourage continued investment in research and development.
Generic drugs can be marketed after a brand-name medication's patent expires, and they generally cost about 75 percent less than their branded equivalents.
When the Hatch-Waxman Act was passed in 1984, generics accounted for only about 19 percent of all drugs dispersed. Today they account for about 78 percent of drugs dispensed in retail settings, according to the Government Accountability Office (GAO). That percentage is expected to increase in the next few years as top-selling drugs lose their patent.
A series of studies cited by the GAO estimated the total savings that have accrued to the U.S. healthcare system from substituting generic drugs for their brand-name counterparts amounted to more than $1 trillion from 1999 through 2010.
One study assessed the potential for additional savings within the Medicare Part D program, which provides outpatient prescription drug coverage for Medicare, and found that if generic drugs had always been substituted for the brand-name drugs studied, about $900 million would have been saved in 2007 alone.
"Until the early 2000s, drug spending was one of the fastest growing components of healthcare spending," the GAO notes.
"However, since that time the rate of increase has generally declined each year, attributable in part to the greater use of generic drugs."
Editor's Note:
5. Israeli Bill Bans Too-Skinny Fashion Models
Two legislators in the Israeli Knesset have introduced a bill that would bar underweight fashion models from appearing in advertisements.
Models with a body mass index below 18.5 would not be allowed to appear in ads, and any ad that employs computer editing to make a model appear thinner would have to clearly state that editing was used, according to the Jerusalem Post.
"Extremely thin models have become the ideal in the advertising world, which surrounds us all day long and tells us what to buy and what to do," said one of the legislators, Rachel Adatto.
"They can no longer serve as role models for innocent youth that adopt and copy the illusion of thinness."
The second legislator, Danny Danon, said the fashion industry is responsible for encouraging teens to become anorexic, terming overly thin models a "social and strategic threat."
Models and agents attended a meeting to discuss the bill. One agent, Roberto Ben Shushan, told Adatto that he thought she may be underweight, the Post reported.
"How would you feel if you were told you'd have to fatten up before every meeting in the Knesset?" he asked.
Ben Shushan was removed from the meeting.
Editor's Note:
6. Foreign Firms Investing in 'Right to Work' U.S. South
Foreign companies are increasing their industrial investment in the United States and concentrating their growth in the Southern states due to their "most hospitable business climates," according to a new report.
Industrial investment by overseas firms in America rose $30 billion between 2009 and 2010 alone, much of it concentrated in the chemical and automotive industries.
"It is heavily focused on the southeastern states and Texas," according to Joel Kotkin, executive editor of NewGeography.com and a contributing editor to the City Journal in New York. He cites a study showing that the five states with the best business climates and 10 of the top 12 are from the old Confederacy.
He also notes that foreign companies generally invest in those "right to work" states to avoid troubles with unionized workers.
The largest Mercedes plant in the United States is in Tuscaloosa, Ala., and last year the German company invested $350 million in the plant.
German automaker Volkswagen announced it will build a new assembly plant in Chattanooga, Tenn. Nissan, Toyota, and Kia have also announced major new plant openings or expansions in the South.
The average cost of building these facilities is over $1 billion, and they bring not only higher-paying jobs at the auto plants, but also employment at parts suppliers and other related industries. For instance, Germany's Thyssen Krupp has invested $4.6 billion in the steel industry in Alabama, reports Kotkin, whose article originally appeared in Forbes.com.
He writes that managers in foreign firms believe Southern workers "have not picked up the bad habits and work rules common among their unionized Midwestern brethren."
Only 7,100 auto workers in Alabama are unionized, and less than five percent of workers in Texas, Georgia, South Carolina, North Carolina, and Virginia belong to a union.
And according to the U.S. Department of Commerce, foreign industrial firms are far less likely to impose layoffs on their workforce than their domestic competitors.
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