The Political Class has honed a dangerous skill, building the perfect undetectable fraud machine. Americans need to learn to spot these scams for their own protection and realize that the perpetrators can come from either political party and often work in cahoots with attorneys or big business.

Think about three seemingly unconnected news stories, all examples of costly or dangerously indictable fraud machines…

• The economic collapse of 2008 was caused in part by relaxed mortgage rules that allowed borrowers to get a home loan without a down payment or even proof of income in some cases.
• In the Pigford settlement, claimants were able to get $50,000 checks by asserting without proof that they had “attempted to farm.”
• In a move strongly supported by the NAACP and other liberal advocacy groups, the Obama Department of Justice just stopped South Carolina’s plan to put in place some minimal ID requirements for voting. Currently voters in a number of states don’t need to show any photo ID or other identity checks in order to cast a ballot.

All three stories are examples of systems that have been intentionally set up with such low standards that they invite fraud. But ingeniously, they have also been set up in a such a way that makes them almost critic-proof because the lack of standards makes detection of fraud nearly impossible. When the system is questioned, the defenders, creators and beneficiaries then point to the lack of “proof” of fraud as a reason to keep the status. Thus, a self-perpetuating fraud scheme is kept alive as long as possible.

Make no mistake, these scams are costly….

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From Gallup:

WASHINGTON, D.C. — Americans’ concerns about the threat of big government continue to dwarf those about big business and big labor, and by an even larger margin now than in March 2009. The 64% of Americans who say big government will be the biggest threat to the country is just one percentage point shy of the record high, while the 26% who say big business is down from the 32% recorded during the recession. Relatively few name big labor as the greatest threat.

Historically, Americans have always been more concerned about big government than big business or big labor in response to this trend question dating back to 1965. Concerns about big business surged to a high of 38% in 2002, after the large-scale accounting scandals at Enron and WorldCom. An all-time-high 65% of Americans named big government as the greatest threat in 1999 and 2000. Worries about big labor have declined significantly over the years, from a high of 29% in 1965 to the 8% to 11% range over the past decade and a half.

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In his new book Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses, Timothy P. Carney explains that Barack Obama’s “progressive” rhetoric masks good old-fashioned crony capitalism, in which the favored few and politcally well-connected get all sorts of benefits paid for with public dollars. Whether the area is Wall Street, health care reform, union organizing, or K Street lobbying, the same pattern is everywhere: using the government’s power to distribute goodies and rig markets.

A columnist at the Washington Examiner and a non-partisan reporter, Carney also lays into the Republican Party for its massive contribution to the problem when it wielded power. Carney provides a game plan to take the country back and restore truly free markets that will benefit everyone.

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Today E&E News reports (subscription required) green group faux-rage that industry reps were consulted on drafting an amendment by Sen. Lisa Murkowski to (IMO, rather unwisely) grant the Democrats a one-year reprieve from their looming political nightmare of EPA threatening to actually try and regulate greenhouse gas emissions from stationary sources by regulation under a Clean Air Act never designed for such foolishness.

Such unseemly whimpering is about as credible as the greens’ phony “hacked emails!” outrage, over what was from all appearances a whistleblower releasing “ClimateGate” email evidence of dirty green tricks. These are the same crowd whose slimy green tactics include stealing my trash on a weekly basis and working with, e.g., the Guardian to dishonestly cobble together unrelated, out-of-context (unlike ClimateGate) excerpts from emails to paint a false picture. (“Greens involved in journalism process!”; sadly, the Guardian never called me for their “story” about, well, me, so I must confess I wasn’t involved).

Specifically, E&E notes how:

“the Washington Post reported yesterday that [Bracewell & Giuliani's Jeff Holmstead] and another former EPA official, Roger Martella, ‘helped craft the original amendment Murkowski planned to offer on the floor last fall.’…

Environmentalists pounced on the reports as evidence that coal and oil interests are behind Murkowski’s efforts. ‘We now have proof that lobbyists for Big Oil, dirty coal and other special interests are directly involved in recent attempts to bail out big polluters and gut the Clean Air Act,’ said a Sierra Club press release. ‘What’s more, these big polluter lobbyists are the same former Bush administration officials who completely disregarded the Clean Air Act and even disobeyed the Supreme Court for years.’

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The late George Stigler, winner of the Nobel Prize in economics, is famous in part because of his work on “regulatory capture,” which occurs when interest groups use the coercive power of government to thwart competition and undeservedly line their own pockets.

A perfect (and distasteful) example of this can be found in today’s Washington Post, which reports that the IRS plans to impose new regulations dictating who can prepare tax returns. Not surprisingly, the new rules have the support of big tax preparation shops such as H&R Block and Jackson Hewitt, which see this as an opportunity to squeeze smaller competitors out of the market.

The IRS and the big firms claim more regulations are needed to protect consumers from shoddy work, but this is the usual rationale for licensing laws and other government-imposed barriers to entry and the Institute for Justice repeatedly has shown such rules are designed to benefit insiders rather than consumers.

Tax preparers do make many mistakes, to be sure, but that is a reflection of a nightmarish tax code, and the annual tax test conducted by Money magazine showed that even the most-skilled professionals – such as CPAs, tax lawyers, and enrolled agents – were unable to figure out how to correctly fill out a hypothetical family’s tax return. But since the IRS routinely makes major mistakes as well, perhaps the moral of the story is that we need fundamental tax reform, not IRS rules to create a cartel for the benefit of H&R Block and other big firms. Would any of this be an issue if we had a flat tax or national sales tax?

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