Earlier in the year, Ed Lasky wrote a column ("Obama, the Chicago Boys, and Their 30 Billion Dollar Slush Fund") regarding extraordinary efforts by the administration to shield a new 30 billion dollar small-business lending program from government oversight. The Obama team wanted to ensure that no inspector generals (the government's watchdogs) would be able to monitor how these funds were spent. In other words, a giant honey pot would be created to distribute our tax money to favored groups, areas, businesses, and people.

The potential for this being a source of fraud and waste is clear; the likelihood that this would be used for partisan political purposes was also high. These type of "lending programs" have very high rates to default.

The Washington Times points out another problem. The Small Business Administration has run programs similar to the new one that Obama has proposed. The result has been a disaster. The agency has become a "bloated, billion-dollar affirmative action agency that discriminates against worthy companies, using your tax dollars".

In 2008, the federal government doled out a whopping $93.3 billion in contracts to "small businesses," with the SBA playing a leading role in determining what groups were worthy of this support. Under what is known as the 8(a) program, "socially and economically disadvantaged individuals" receive preferential treatment and even sole-source access to lucrative federal contracts. Agency bureaucrats effectively can bar participation by small, struggling but capable firms merely on the basis of the color of the owner's skin.

The carelessness costs taxpayers billions. GAO identified 14 firms that received $325 million in fraudulent 8(a) assistance on top of a stunning $1.2 billion in other federal subsidies - including $17 million from the president's so-called stimulus package. The owner of a Fairfax information-technology firm, for example, claimed she was "disadvantaged" while concealing her ownership of $4.2 million worth of real estate. Even after GAO pointed out the deception, SBA allowed the company to accept a $1.7 million federal contract.

Barack Obama ran as a post-racial candidate-a leader who would run the government in a color-blind way.

But, as George Picard writes in "Racial Spoils in Obama's America" the administration is anything but color-blind when it comes to its policies, practices, and personnel choices. Just recently, the administration has announced support for affirmative action in college admissions. We can rest assured that all its federal judges will be selected with consideration of their "progressive views" (see this speech from Justice Sonia Sotomayor  for example;  or Attorney General Eric Holder's we are "a nation of cowards on matter of race" speech).

Now government programs, including the giant slush funds controlled by Barack Obama will be steered towards favored groups with very little or no government oversight.

Why?

The administration is race-obsessed, according to Victor Davis Hanson:

The tell-tale symptoms of the campaign have now grown into a clear pathology. In a moment, white police can become stereotypers who act "stupidly." America suddenly is "cowardly" on matters of race. Black congressmen or state governors who are unhappy with their political fortunes take their cue from the Obama administration and cite "racism" for their troubles

If protesters at town halls are not proportionally representative in racial terms, they are of course "racists." In the world of Obama favorite Van Jones, whites steer pollution into black communities, and white suburban kids are more likely than black urban kids to commit mass murders. Valerie Jarrett, arguably one of the most powerful women in the world by virtue of her access to the president of the United States, in her war against Fox News resorts to the coded civil-rights trope of "speaking truth to power." Apparently, in this cosmic struggle, by virtue of her race and her anointed vision she has perpetual truth on her side, while others, less saintly, have perpetual power, which is to be assailed.

Racism, cited during the last weeks of the campaign as the only reason why an otherwise shoo-in Obama might lose, now often explains Obama's falling popularity. Indeed, to the degree that Barack Obama gets what he wishes, the country is deemed to be on racial probation; to the degree he does not, it is considered recidivist and back to Jim Crow days.

Laws will be sued to tip the scales of the un-blindfolded Lady Justice; and taxpayer dollars used to redistribute savings to favored groups.

Should the SBA not prove sufficient, and the new small business lending program also not be sufficient, then there are other sources of taxpayer dollars that can be tapped to reward favored groups. Among them are community block grants-that have long been a multi-billion dollar folly with funds often flowing to state and city governments that funnel them to urban groups for patronage purposes. The new City Journal magazine has a superb article (not yet available on line) that charts the wasteful history of this program, one that is tailor-made for the type of Alderman payoffs and politics long practiced by Chicago pols.