This chart represents a product portfolio that I worked with for 11 years while wholesaling to financial services Reps and independent insurance agents.
Let’s look at distribution:
Insurance reps and financial planners were needed to sell our product. They submitted their business through an insurance agency that offers both back office and sales assistance and periodically uses a specialist for special products such as long term care.
This is also the distribution model for the WEDC.
This more that $450MM operation when you take us all the ancillary programs, goes much deeper, but at this point I want to ask a question; I thought the red team was for less government interference into our markets? The state of Wisconsin should not have a bank set up and funded by the tax payers of Wisconsin, but that is exactly what we have.
With Governor Walker the Chair of WEDC, and bankers and other private business owners from around the state serving on the board, it creates a moral hazard of collusion of the greatest magnitude. Has the Governor even done this before and does he know he is head of a bank?
Here is the real moral hazard. What this says is that our money was loaned out, hopefully at a profit, to a small business that filled out an application and met the plethora of hurdles place before them by the state, and then took that funding and used it as a down-payment (leverage) on a much larger loan from a private institution.
What the Red Team has done is created a sub prime bank (the state admits these programs are for businesses that don’t qualify or have trouble qualifying for a conventional loan) entity to administer loans and distribute incentives from tax payer dollars.
It’s a Bank.
But, what percentage of the leveraged lending went to non-member banks? If our money was used to leverage $119MM in loans I want to know, did it help to belong to the club?
The collusion of business and government is fascism. This is a terrible idea. Shame on you Red Team and Blue Team.
How does the public not see the inherent risk of cronyism and exclusion. Government should have gotten out of the way of the market, not put in place a bank to better manage the system. I will go back to a question I have asked before; “what makes Chairman Walker think his bank knows better how to create jobs than the free market. You can hardly argue the point that there just wasn’t enough money in the system. We’re drowning in liquidity.
Noodle this while I’m gone this week-
How did Act 255 and it’s participating companies add jobs during the collapse in 2008-2009? The Fed says it’s likely a cooked number.
But like the report says, numbers are skewed due to companies that no longer report growth because they don’t use the programs any longer. Of course, that means you didn’t the losses either.
Rigged with your money people.