An in depth analysis of WHY YOU ARE WRONG

Sunday, May 31, 2009

Thinking About Secession

Secession from any country is a drastic measure that can't be taken lightly, most especially from one with such along and successful history and doing so during what should be the happy early moments of our first black president don't make it easier. Reading through the Pre Revolutionary period makes one aware how far fetched the break which we now see as positive and inevitable seemed at the time.

Take my word for it, I don't take it lightly but I think bringing up and realistically using this threat may provide the only near term path towards fixing our nation.

Living, at this moment in Western PA, and having lived my entire life deep in one "blue state" or another, I find it almost impossible to see broad support for a return to the Constitution or fiscal sanity.

However, as the long political divide between "red" and "blue" states becomes deeper, two paths seem to be emerging. The first is the continuation as a nation loyal to it's geographical borders, but not it's political and philosophical ones, in which at best- only small relative degrees of freedom remain; a nation too crippled and bankrupt to remain whole for long. The second being a move towards two nations in which- at least one has a near term possibility of returning to the Constitution.

The trick in my opinion is to focus less on convincing the most extreme "blue states" they are on the wrong path than in more thoroughly educating and creating deep broad support for the original values in the states already trending red. Remember that as separation seems more likely--this trend will be aided by an influx of new liberty loving refugees from the socialist republics.

A consistent trend of states asserting their sovereignty and directly affirming loyalty to the original meaning of the Constitution- may help knock enough sense into people to forestall a final breakup.

All thoughts are appreciated. Please understand, that our Federal government's total liabilities far in relation to it's GDP are already far beyond what has sunk most nations. We are at a point of extreme crisis.

Friday, May 29, 2009

Truth In Accounting: A Rallying Cry For True Republicans

I wrote this comment in response to this post.

"The fundamental flaw in this strategy is that the Federal government has a capacity to borrow at a scale far beyond that of any state. It can also do two other things.

The first is - conduct accounting fraud by hiding the true costs of it's many schemes and promises. California is the poster child for this, but the Feds, being larger have even more places to hide dirt. They are also protected by the size of their own lies since seeing them clearly means realizing how much trouble we are in.

The final capacity is much more scary. The government's ability to print money, means they can try to evade their debts and this is what they are doing. Will most people recognise skyrocketing inflation was caused by the government? I doubt it.

If I had one piece of advice it would be to target the concept of corruption and lying. A move to mandate honest fiscal accounting on all levels of government would be the right thing to do. All of the corpses carefully stuffed in government closets and under rugs are being revealed and the stink should be unbearable by election day 2012.

The one thing we have seen is that when the true costs of the government we have are exposed- people want smaller government."

Of course an honest look at government numbers at all levels will will expose lots of people from both parties to all kinds of heat since the growth of the state to this scale has been a decades long bipartisan process involving all levels of government, including the courts. It will also decrease the power to hand out money and favors that seems to have attracted many to politics.While this may be very painful to many Republicans, it will prove fatal to the Democratic party.

I know that accounting seems like an obscure area to many. But that's the way people felt about Madoff's ponzi scheme as well-- untill the checks stopped rolling in.

The rallying cry for 2010 should be -- One people, united against fraud.

Please explore this website and support them if you can.

Tuesday, May 26, 2009

Some Thoughts On Sonya Sotomayor

I haven't had time to fully explore the record and views of Obama's Supreme court nominee, but the little I know so far strongly supports my view that Obama can be best described as a Fascist. Here are two previous posts that touch on how fascists and other totalitarians view the law.

Obama Admits To An Illegal, Unconstitutional Agenda

My previous posts, here, here, here and here are filled with dozens of quotes from the nation's founders, showed the pretty stark difference between their ideas and those that seem to drive most politicians today. These ideas were the basis of our Constitution, a document that is supposed to be the supreme law of the land.

In this Interview from 2001, Obama a legal scholar, admits openly that his goals to redistribute wealth are in conflict with the Constitution which was clearly designed to restrain government power. Little, we have seen since indicates things are different now.

I know that far to few Americans on either party have bothered to obey or perhaps even read our Constitution and most have seen power as a tool to do whatever they wished, always in the firm confidence that they would always be the ones wielding it. I hope we have finally woken up.

PPIC And More FDIC Lies (extended quote)

I have to be honest here. I have had strong fears for years that America is sliding rapidly towards fascism or some form of totalitarian government.

One of the biggest myths about this type of regime is that one can spot it by proliferation and strength of it's laws. In fact, totalitarian states are places in which the law is the whim of the king or dictator. Our founders feared this situation and tied leaders to the law with very few "ifs ands or buts". The president, legislators, police and government officials pledge allegiance to the law. Emergency powers are very limited and for the most part were only for use during war.

In contrast, let's look at some fascist and pro fascist political views.

Carl Schmidt

"In 1921, Schmitt became a professor at the University of Greifswald, where he published his essay "Die Diktatur" ("On Dictatorship"), in which he discussed the foundations of the newly-established Weimar Republic, emphasising the office of the Reichspräsident. In this essay, Schmitt compared and contrasted what he saw as the effective and ineffective elements of the new constitution of his country. To him, the office of the president could be characterized as a comparatively effective element within the new constitution, because of the power granted to the president to declare a state of emergency. This power, which Schmitt discussed and implicitly praised as dictatorial, was seen as more effective, more in line with the underlying mentality of political power, than the comparatively slow and ineffective processes of legislative political power reached through parliamentary discussion and compromise.

Schmitt was at pains to remove what he saw as a squeamish taboo surrounding the concept of "dictatorship" and to show that, in his eyes, the concept is implicit whenever power is wielded through pathways outside the slow and rusty processes of parliamentary politics:

“If the constitution of a state is democratic, then every exceptional negation of democratic principles, every exercise of state power independent of the approval of the majority, can be called dictatorship.”[citation needed]

For Schmitt, every government capable of decisive action must include a dictatorial element within its constitution. Although the German concept of Ausnahmezustand is best translated as "state of emergency", it literally means state of exception which,according to Schmitt, frees the executive from any legal restraints to its power that would normally apply. The use of the term "exceptional" has to be underlined here: Schmitt defines sovereignty as the power to decide the instauration of state of exception, as Giorgio Agamben has noted. According to Agamben[1], Schmitt's conceptualization of the "state of exception" as belonging to the core-concept of sovereignty was a response to Walter Benjamin's concept of a "pure" or "revolutionary" violence, which didn't enter into any relationship whatsoever with right. Through the state of exception, Schmitt included all types of violence under right. According to Giorgio Agamben, this kind of violence, which necessarily bears a juridical value, is another example of the fusion of right to "bare life" (It. vita nuda, Grk. zoe) that transforms the juridical system into a "death machine," able to perform acts of pure violence as needed for self-legitimation, creating Homo sacer, a being that cannot be "murdered" or "sacrificed" but only killed.

Schmitt opposed what he called "chief constable dictature", or the declaration of a state of emergency in order to save the legal order (a temporary suspension of law, defined itself by moral or legal right): the state of emergency is limited (even if a posteriori, by law), to "sovereign dictature", in which law was suspended, as in the classical state of exception, not to "save the Constitution", but rather to create another Constitution. This is how he theorized Hitler's continual suspension of the legal constitutional order during the Third Reich (the Weimar Republic's Constitution was never abrogated, underlined Giorgio Agamben;[2][citation needed] rather, it was "suspended" for four years, first at February 28, 1933 Reichstag Fire Decree, with the suspension renewed every four years, implying a -- continual -- state of emergency)."

Benito Mussolini (actual quote)

"The foundation of Fascism is the conception of the State, its character, its duty, and its aim. Fascism conceives of the State as an absolute, in comparison with which all individuals or groups are relative, only to be conceived of in their relation to the State. The conception of the Liberal State is not that of a directing force, guiding the play and development, both material and spiritual, of a collective body, but merely a force limited to the function of recording results: on the other hand, the Fascist State is itself conscious and has itself a will and a personality -- thus it may be called the "ethic" State....

...The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential; the deciding power in this question cannot be the individual, but the State alone.... "

I won't go on endlessly about this, power unlimited by law is the defining aspect of all tyranny. At it's most extreme we have the Fuhrer Principle.

"The ideology of the Führerprinzip sees each organization as a hierarchy of leaders, where every leader (Führer, in German) has absolute responsibility in his own area, demands absolute obedience from those below him and answers only to his superiors. The supreme leader, Adolf Hitler, answered to no one. Giorgio Agamben has argued that Hitler saw himself as an incarnation of auctoritas, and as the living law itself. The Führerprinzip paralleled the functionality of military organizations, which continue to use a similar authority structure today. The justification for the civil use of the Führerprinzip was that unquestioning obedience to superiors supposedly produced order and prosperity in which those deemed 'worthy' would share."

Tragically, Obama's pick also displays not just a disregard for the constitution and the rule of law, but another ingredient common to most Fascists; racism.

Sunday, May 24, 2009

Another "Racist Rant"

Obviously, the thoughts expressed in this short interview are not racist, if anything they are just boring basic views held by most people. Like you may have to live within your budget.

What interviews like this show, is just how- extreme, risky and cutting edge, Obama's agenda is. The more than slightly fanatical resolve to paint all conflicting views as racist,unpatriotic or ill informed will hopefully not work and more people will fell free to share their real opinions and concerns-- even in Hollywood.

Friday, May 22, 2009

Silence = Death No More: Pension Funds Speak Up About Chrysler Bankruptcy

I was too depressed and upset to air my feelings when the few remaining Chrysler creditors were threatened into giving in to Obama's illegal Chrysler "deal".

Thankfully, several major pension and retirement plans in the state of Indiana have filed to protect their legally binding contractual rights.

Obama and his administration have tried to paint this as a dispute between "greedy" investors most of whom must be "filthy rich" and poor, helpless union workers. But in fact, these investors were acting on behalf of a wide range of retires and investors whose assets they had a fiduciary duty to protect and who made investments based on what they thought were legally binding criteria.

"Funds representing Indiana teachers and police, as well as a construction infrastructure fund, are seeking the appointment of a trustee in the Chrysler case to protect their rights as holders of first-lien loans to the bankrupt carmaker. They are arguing that the federal government is violating their rights by giving more junior creditors, like the United Auto Workers union, greater recovery on their debt, and that the government is improperly using federal bailout money earmarked for banks to prop up Chrysler.

The pension funds are also seeking to move the Chrysler case to federal district court, a higher authority than the bankruptcy court, to deal with what they argue are constitutional issues.

“As fiduciaries, we can’t allow our retired police officers and teachers to be ripped off by the federal government,” Richard Mourdock, Indiana’s treasurer, said in a statement. “The Indiana state funds suffered losses when the Obama administration overturned more than 100 years of established law by redefining ‘secured creditors’ to mean something less.”"

Of course, the courts which many think are there to protect our rights and enforce the law are looking for excuses to let the law breakers operate at will. They have long since agreed that the executive branch is above the law since it's an emergency, Obama and his pals know better and shouldn't be restrained by the law.

And so it is that one of the last nation's of law has become just another lawless state ruled by imperial whim.

Good News You Won't Hear About

I think a lot of Republicans, Libertarians and other Americans, who may or not have fully supported the wisdom of Bush's invasion of Iraq and it's execution are repulsed by the simplistically brutal treatment he has received.

At the root of this attack is the rarely disputed claim that the war was a shallow, self interested grab for oil and power.

As a New Yorker, I personally knew several Iraqi refuges in the prewar period, two relatively closely (mostly we got together at a local coffee shop once a week) Iraq, wasn't a favorite subject but it was always in the back round since they all had relatives still there. The two I knew well, also had many missing relatives, who had disappeared under Saddam.

Look, let's be honest here. The United States cannot realistically protect the lives of people around the world. It can only act in ways that are consistent with it's own values interests and power. It's job is to protect it's own people.

Dropping the issue of whether it was wise to Invade Iraq, let's look at whether we had a right to do it. The clear answer is yes.

The founders and I think all rational people should see that nation's in and of themselves have no rights. They exist solely to protect the lives, liberty and property of their citizens. Attacking a peaceful country which respected it's citizen's rights would always be wrong. However, a nation or regime violating it's citizen's lives and liberty is of course open to attack-- most especially by it's own people.

Dropping the issue of whether it was wise to Invade Iraq, let's look at whether we had a right to do it. The clear answer is yes.

There are gray area's I suppose-- but even most of the extreme left concede that Saddam's murderous government was killing thousands of it's people.

Now then, the next question is whether it was our job or obligation to "take him out". Proposing it was our "obligation" means acting on the premise that our own individual rights are to be sacrificed to help others and that we really have no rights. So this leaves us with the two moral conditions for war--- the first is a regime, group or gang intent or actively violating individual rights and second, that this group poses a realistic threat to our national security or that of our allies.

On this score, Saddam fit the bill. Leaving aside, whether Saddam had weapon's of mass destruction, we have to go back to our core fear. Saddam, stood out because, unlike many other dangerous, unstable leaders, he had not only a desire for these weapons and a formally active pursuit of them but had actually used them-- on a country he attacked (OK Iran was pretty wacko too) and on his own people. The fear of country like this, in a position to hold the world's major oil supplies hostage and further use this power to attack us or other countries was pretty realistic.

This then leaves one with the third reasonable requirement for just war which is that we don't use force to replace one bad government, with another, if we can help it. On this score also, our motives and efforts in Iraq were generally moral.

I personally think a good case can be made that Bush and the "Neocon's were if anything far too motivated by an idealistic desire to create an oasis of liberal democracy in Iraq.

Anyway, all of the fruits of our efforts are not bitter. Iraq itself, may be making some progress and other changes are popping up in the region.

"And now, in 2009, another historical milestone has been reached. Last Sunday Kuwait held national elections. Kuwaiti voters elected 4 women to Parliament. According to Arab Times of Kuwait City, May 17:

Maasouma Al-Mubarak, Aseel Al-Awadhi (photo above) and Rola Dashti (photo right), besides independent Salwa Al-Jassar won seats in the new house. All are US-educated and hold doctorate degrees in political science, economics and education.

“Kuwaitis conveyed a strong and clear message of change when they elected four women to the Parliament,” MP-elect Al-Mubarak said.
But it wasn't just the election of the very first females to Parliament that represented a huge change. Kuwaiti voters firmly rejected Islamic extremism. The block of Islamist parties lost a 30% share."

Please pass along the good news. Since we know the media won't.

Thursday, May 21, 2009

Why We Must End The Fed Part Two

Mish, who has a blog I really follow and respect has a good post up about the declining values of fiat currencies around the world.

Gold is near a new high again, but it's very important to understand what's going on. Gold is really very stable in value in relation to most hard assets and manufactured goods in terms of it's purchasing power. Gold is really, just money- a real store of transferable wealth that holds it's value over time. It can't be faked or printed. You either have it or you don't. Government's today don't like it since it represents the real world they are trying to evade.

When we hear about gold rising-- what we are really talking about is that our fake money is falling in relation to gold.

Mish has a great quote from Clyde Harrison at the end.

Fiat currencies don't float. They sink at varying rates

Why We Must End The Fed

I'll start this out with a warning. This is a long post, the bulk of which I wrote late last year, in the hopes that some of it might be avoided.

Contrary, to the story told in the popular media, there were in fact a large number of trained economists and investors who predicted and warned about the situation we are now in. Of course, they were called kooks and rarely got much air time in the media or in college campuses. Ron Paul, is likely the one most of us would know.

Anyway, when the "Schiff started hitting the fan", Glenn Beck was one of the few major media figures to point bring up the Weimar Republic.

Here's my post which I titled "Weimar America"

Sorry, they pulled that one since they want you to see the full film.

I've put a lot of videos and links about America's debt and financial condition in this post. I think that only by understanding this condition fully can one see the connection between America today and that of Weimar Germany.

Most people, to the extent they know anything about the Weimar Republic know only a few things-- it was a period of interesting art, Mann, Kandinsky, Klee, Grosz; -- something about carts of money to buy loaves of bread-- and finally, that it was shortly followed by the Third Reich.

Here is an extended quote from the book, The Age Of Inflation. The roots of Germany's problems began with the promises of Bismark's welfare state and the way Germany financed the costs of WWI.

"Like all the other banks, it offered assistance to the central government in financing the war effort. Since taxes are always unpopular, the German government preferred to borrow the needed amounts of money rather than raise its taxes substantially. To this end it was readily assisted by the Reichsbank, which discounted most treasury obligations.

A growing percentage of government debt thus found its way into the vaults of the central bank and an equivalent amount of printing press money into people's cash holdings. In short, the central bank was monetizing the growing government debt.

By the end of the war the amount of money in circulation had risen fourfold and prices some 140 percent. Yet the German mark had suffered no more than the British pound, was somewhat weaker than the American dollar but stronger than the French franc. Five years later, in December 1923, the Reichsbank had issued 496.5 quintillion marks, each of which had fallen to one-trillionth of its 1914 gold value.[1]

How stupendous! Practically every economic good and service was costing trillions of marks. The American dollar was quoted at 4.2 trillion marks, the American penny at 42 billion marks. How could a European nation that prided itself on its high levels of education and scholarly knowledge suffer such a thorough destruction of its money? Who would inflict on a great nation such evil which had ominous economic, social, and political ramifications not only for Germany but for the whole world? Was it the victors of World War I who, in diabolical revenge, devastated the vanquished country through ruinous financial manipulation and plunder? Every mark was printed by Germans and issued by a central bank that was governed by Germans under a government that was purely German. It was German political parties, such as the Socialists, the Catholic Centre Party, and the Democrats, forming various coalition governments, that were solely responsible for the policies they conducted. Of course, admission of responsibility for any calamity cannot be expected from any political party."

This was just the start of the problem. Germany was already deep in debt but it didn't feel like it could handle the sharp recession all the industrial countries had as they demobilized. To put off this pain and potential instability, they began to spend more and more. Many, many people, soldiers, farmers, workers and businesses needed help.

"Immediately after the war the German government, under the leadership of the Socialist Party, embarked upon heavy expenditures for health, education, and welfare. The demands on the treasury were extremely heavy anyway because of demobilization expenses, the demands of the Armistice, the disorders of the revolution, and the staggering deficits of the nationalized industries, especially the railroads, postal services, telephone, and telegraph. Public administration by the new men raised to power by the revolution, nevertheless, was extravagant, as the resources made available by the creation of new money were apparently unlimited. A number of measures for the nationalization of certain industries (e.g., the coal, electrical, and potash industries) were introduced, but failed to become law. The eight-hour day was enacted, and labor unions were given many legal immunities and privileges. In fact, a system of labor councils was set up which authorized the workers in each enterprise to elect representatives who shared in the management of the company! While government expenditures rose by leaps and bounds, the revenue suffered a gradual decline until, in October 1923, only 0.8 percent of government expenses were covered by tax revenues. For the period from 1914 to 1923 scarcely fifteen percent of the expenses were covered by means of taxes. In the final phase of the inflation the German government experienced a complete atrophy of the fiscal system."

The immediate effects of their actions weren't clear to most and the monetary authorities went to great lengths to tell people that the inflation people saw in their daily lives wasn't really there.

The other thing that reminds one of this time was not just that Germany was up to it's eyeballs in debt but that this debt was largely owed to foreigners who had once considered it a good credit. They continued to lend and only slowly realized their mistake. When they did, the Mark dropped like a stone and the real pain began.

The situation since only a reinforced and confirmed my worst fears. The receding tide exposed the pyramid of lies and false promises behind not just the Federal, but almost every local and state budget. It's a very grim situation, I talked about here. We have been living far beyond our means and have to make serious cuts on a personal and national level. A new confrontation with reality is slowly taking shape, which we saw at the Tea Parties, and was carried forward by the votors in California.

But, But, But, This is the rub. We all know that the government run by people like Barak Obama, Joe Biden, Nancy Pelosi, or for that matter Arlen Specter, Colin Powell or Arnold Schwarzenegger will never allow itself to shrink and can in fact never live within it's means.And, as long as they a have the Fed, they don't have to. We know almost every state can count on a bail out.

Even more scary than all of this is the bold honesty of the looters who now run the Fed and their fellow travelers. through most of it's history, the Fed made the pretense of "protecting" the value of the dollar-- even as it destroyed it. In fact, this is supposed to be it's primary job. How's it doin?

This exposes the real and only reason governments need fiat paper money -- to use inflation to paper over bills they cannot or do not want to pay. Be very afraid, because they can no longer hiding this.

Here's advice from a prominent economist and Bush advisorBut Bernanke has made many similar statements.

"In advocating that the Fed commit itself to generating some inflation, Mankiw, 51, likens such a step to the U.S. decision to abandon the gold standard in 1933, which freed policy makers to fight the Depression.(the FED caused the depression)

Faster inflation might be preferable to increased unemployment, or to further budget stimulus packages that push up the national debt, says Mankiw, who was chairman of the Council of Economic Advisors under President George W. Bush.

The White House has forecast that the budget deficit will hit $1.84 trillion this fiscal year, or 12.9 percent of gross domestic product. Rogoff doubts that politicians will be willing to reduce that shortfall by raising taxes as much as needed. Instead, he sees them pressing the Fed to accept faster inflation as a way of easing the burden of reducing the deficit.

Easier Debt Repayment

Inflationary increases in wages -- and the higher income taxes they generate -- would make it easier to pay off debt at all levels."

This is the kind of sick morality that's at work here. Here is a major economist who doesn't see any difference between paying off debts normally through savings, work and hard choices like normal people do-- and just printing fake money. We have to understand that the FED is no longer an impartial actor here. It's backing up major banks, companies and most especially itself by conducting a massive theft from any responsible person.

Also, please, please remember the cold cruely of these actions which put the lie to the sham of government concern for the poor. Inflation is a sharply regressive tax on all the basic necessities of life.

Tuesday, May 19, 2009

Mark Sanford Defends Libertarians

Here's Mark Sanford's response to Lindsey Graham. America's basic values and founding ideals are now considered fringe to most.

But make no mistake about it, if the country is to survive, these are the ideas we must return to. The previous big tent in which we all get together to spend down our kids and grandkids money is breaking down. Mostly it was built on illusuions, and the remaining glow built up by America's once sterling reputation as a highly responsible country. Something we haven't been for many years.

Yes, when the swamp is drained, many, many, many so called Republicans will be caught in the muck. But our core position should be fine-- providing we return to our values. Remember, that the uniting principal of the Democratic party is statism, and it can't survive long without spoils to pillage. The Republican party can only benefit from this trend, if it returns to it's original roots as the defender of liberty, the rule of law and individual rights.

Thursday, May 14, 2009

Democrats Still Stopping Ethics Probes

Democrats were able once again to stop an inquiry into campaign finance abuses and possible corruption by several Democratic lawmakers, including John Murtha.

Murtha, who posed as an ethical watchdog when accusing US troops as being "baby killers" in Iraq now seems rather shy about his personal record which has loaded his district in Western, PA with epic monuments to waste, fraud and taxpayer abuse.

In 2007 and 2008, Murtha, Rep. Jim Moran, D-Va. and Rep. Peter Visclosky. D-Ind., directed $137 million to defense contractors who were paying PMA to get them government business.

At the same time, the three lawmakers received huge amounts of political donations from PMA lobbyists and their clients. Murtha has collected $2.37 million from PMA's lobbyists and the companies it has represented since 1989, according to the Center for Responsive Politics, which tracks political money. Visclosky has collected $1.36 million; Moran, $997,348.

New Public Slums for Detroit

A little sick green shoot humor here at the Onion.More than a few people in the general public know where most "hopeful" government projects lead and this joke plays on that.

Slum opens with glass breaking ceremony with the Detroit mayor throwing the first brick.

"Designed as an urban community where parents will be too afraid to let children out of their sight, and where residents can come together, get involved in dangerous gangs, and eventually hold up a liquor store, Baneberry Heights is Detroit's largest housing initiative in nearly a decade.

Many have hailed the new slum as a boon for the struggling city, saying it will provide appallingly unsafe housing for 4,000 residents and, by summer's end, cold and bleak street corners for more than 2,000 homeless citizens.
"This is why I became a politician—to help out the people of Detroit," said urban development secretary Robert Sturges, who also christened the new slum by urinating on its entranceway. "Being able to say that I had a hand in getting this squalid hellscape of concrete and steel off the ground...well, it's all the thanks I need."

Sadly, some residents think they are not doing enough to destroy their city-- while others think they can do it themselves.

"As far as giant 'f -yous' from the city go, I'm a little underwhelmed," said Danica Michaels, a single mother of four young children. "This is nothing compared to the giant interstate they built through my neighborhood last year."

Latest Peter Schiff Video

Here's the latest Peter Schiff commentary. He posts about once a week.He touches on a number of subjects including the most recent projections about the insolvent Social Security scam.

He also remarks about the new Obama propsal to create a "Blue Ribbon" panel to examine the causes of the financial crisis. The conclusions of this panel are not in doubt-- will they blame the Federal Reserve or Fannie and Freddie or a whole host of other government policies? It's not likely. Mostly, the real purpose is to embed the myth that most "experts" agree with Obama's policies and his conclusion that the "market has failed".

Schiff points out that this is total bull. There were in fact a large number of people who saw something like this coming, such as Peter Schiff, Ron Paul and most of the economists knowledgable about Austrian Business cycle theory. Not all of them predicted the exact timing of the collapse but a few did. Anyway, there is almost no chance many of these folks will be asked to be on the panel-- although one may, just for show.

Tuesday, May 12, 2009

Are Asian Investors Being Racist?

OK, this is sort of tongue in cheek, but a lot of the major media and administration spin has implied that most administration critics are racists, dumb or "super rich" and have few rational reasons for opposing Obama. An extreme version of this spin can be seen here.

This then makes one wonder about the overtly critical and fearful statements coming from major figures in Asia about our economic policies. First we had major Chinese Officials saying they no longer believed we could fully pay our debts or maintain a solid currency.

And now, the major Japanese opposition party has said that if elected they would no longer buy dollar denominated U.S. Government debt. Of course there have been many other foreign critics of our policies, but some of them are white, so their views are suspect.

Remember, China invented the abacus.

Rule Of Law Vs. Rule Of Thugs

No time to do a more complete comment on this, but David Frum, nailed a real good post about Obama's recent assault on (what's left of) the rule of law.

As a strong Libertarian Republican, I've been very angry about both parties disregard for the rule of law. But, the recent moves by Obama have taken this to a new level. The hide in the cave crowd, which looked so loony to most can now make a strong case that a fully totalitarian state is now weeks or months away.

The thing to understand is that given what we know about what Obama has done already, we can only assume it's the tip of the Iceberg. One thing is clear, this administration -- always thinks the ends justify the means which is the central maxim of the dictator.

Frum focuses on the recent Chrysler "deal" and his threat to withhold Simulus money if California cuts the pay of union workers but sadly one can come up with many, many, many more examples.

Chrysler "deal"

"The trouble was: those assets belonged to somebody else. They belonged to the company's bondholders, who had a legal first claim. Under the administration's plan, those senior-secured creditors would have received just 29¢ on the dollar.

For a failing company to shuffle assets so as to favor some creditors over others with a stronger claim is a very serious wrong, potentially even a crime. There's a sound economic reason for this rule of law: Bondholders accept lower returns in good times in exchange for greater security in bad times. Protecting bondholders in bad times ensures that future borrowers will be able to borrow in good times."

California "deal"

"The state of California faces a desperate fiscal situation. California now has the worst credit rating of any American state. Governor Arnold Schwarzenegger and the Democratic majority legislature have struggled to balance the books, as they are constitutionally obliged to do. They have raised taxes dramatically, but they have also cut some programs. Among the cuts: a $2-an-hour cut in the wages of home health-care workers.

Those workers were unionized, and their union -- the Service Employees International Union - carries clout in Obama's Washington. On Thursday, California state officials told the Los Angeles Times that they had received a warning: The federal government would deny California $6.8-billion in stimulus funds unless the wage cut was rescinded. Since the wage cut will save only about $74-million, the state will have little choice but to surrender."

What's happening is a clear pattern of intimidation using all the force of the state sending the message-- do what we say- or else!

Saturday, May 09, 2009

Independent Media In A Fascist State

I want to do a more detailed post on this subject, but here are a few thoughts.

Our founders had a very clear opinion that all rights and liberties were interconnected and that attacks one right one would cause the collapse of all others. For example, they didn't think a person, company or group could keep their independence from the state without an absolute right to their private property and contract rights. How could a newspaper, or any person be fully free from government coercion in a place where, the state controlled media licenses which they could pull at will, or provided subsidies and hand outs.

Th Fascist state goes to great extremes to make sure that nothing and nobody can be fully independent but it doesn't always do this by directly seizing all private property. Instead it uses a process of subsidies, licenses and other state powers to threaten and control the flow of ideas, much like the king did only on a bigger scale.

Please keep this in mind when looking at current media reporting. The three major networks are always under the threat of having their licenses revoked if they don't act in whatever the current leader or gang considers "the public interest".

Of course, we know on top of this, there is now "public TV" and "public radio" which get a large chunk of their money directly from the government which should, for any sane person exclude them as a possibly objective source of news about the state.

However, the ever increasing bailouts have added a new ingredient to the mix.

Can GE, which owns NBC and MSNBC and other media assets, really be considered an independent company anymore? Remember, that GE has taken billions of dollars in TARP money to shore up it's troubled and huge GE Capital unit. It's also almost surely on the "too big to fail list" of companies that administration has said will never be allowed to go down. How many of their toxic assets have been bought by the FED is a secret as are those of many huge banks that owe it money in some way.

Add to this the fact that GE is also a huge defense contractor and has a host of units hoping to cash in on "stimulus spending" and you have to question if it can have any independence at all.

FYI, Could Be A Lie

People giddy over the reported loss of "only 530,000 lost jobs" might want to know about the recent revisions in reported figures.

This is very true now.

August 2008: Initially 84,000, revised to 175,000

September 2008: Initially 159,000, revised to 321,000

October 2008: Initially 240,000, revised to 380,000

November 2008: Initially 533,000, revised to 597,000

December 2008: Initially 524,000, revised to 681,000

January 2009: Initially 598,000, revised to 655,000

February 2009: Initially 651,000, revised up 30,000

Added to this are a few more issues as pointed out by Zero Hedge

Kool Aid sales still strong

"First, the "seasonal adjustment", which is a black box that can tweek me into looking like Dumbo the flying elephant. They're knocking off ±65,000 workers for no clearly discernible reason.

Second, notice that the Census Bureau hired 60,000 people last month. Those workers (by definition) are temporary, and are a net cost to the economy, as they will not be adding marginal utility to any economic sector, the census being merely a social expenditure."

No doubt unemployment has declined in Washigton DC--- hiring some security for the next TEA Party and perhaps a few jail cells for us all.

But, But, But--- The stock market is up right???

Or is it that the value of the dollar is down? One thing Washington has done well.

Friday, May 08, 2009

March Consumer Credit Plunges

The chances this recession/depression is over are close to zero. Reuters is reporting a massive plunge in consumer borrowing showing that both borrowers and lenders are starting to realise how broke they are. As they say-- when in a hole-Stop Digging!

"March consumer credit fell at an annual rate of 5.2% to a total of $2.55 trillion. This was the biggest percentage drop since December 1990.

February's decrease was revised to $8.1 billion from an originally reported $7.5 billion drop.

Analysts polled by Reuters were expecting a $3.5 billion drop in consumer borrowing for March."

Mish as usual has a good take on this along with this chart.

Notice that until the 1980's and throughout American history, consumer credit played a small role in our economy, with most houshold purchases funded by savings and income and most credit used for business investment. This worked fine, but the Fed and it's statist pals thought we could do better and our "consumer economy was born."

We are starting to see the results. Unlike, the bulk of business investment in a free economy-- most consumer purchases do not lead to higher levels of earnings or productivity to pay off the loans. They can, for a time result in higher asset prices, providing there is more and more credit available to push up prices. But at some point, the last dollars of true savings are spent and the last solvent creditors have borrowed and the cycle goes into reverse.

Well, at least the Feds can borrow and spend for us right??? Well, I serously doubt it. Sadly, American consumers now will not only have to pay for their own mistakes but for the insane policies of our government as well.

Thursday, May 07, 2009

Pension Tsunami

John McCain came up with a great phrase when he used the term Generational Theft to describe what our government has done.

The above figures only give a clue as to federal liabilities, but cities, states, county governments have trillions in surprise obligations. Officials had a fiduciary duty to estimate the costs of future benefit promises and account for them honestly but in state after state this was not done.

"Actuaries should be able to tell what a promised pension benefit would cost. But if they come up with too big of a number those benefits might not be provided which is bad for the government workers who won't get those benefits and bad for the government officials who will need to come up with some remuneration scheme that they won't be able to defer onto future taxpayers.

In New Jersey benefits were increased across the board for all retirees and active participants by 9% in 2001 which led, along with the Whitman-instituted contribution holidays, to the current decrepit funded status of the plan.

Were I the actuary for the New Jersey plan, I wouldn't be releasing pro forma reports based on assumptions dictated to me by politicians. To avoid getting sued my executive summary would look something like this:

Without significant cash infusions the benefits promised under this plan are unsupportable and the forced liquidation of assets will mean that within five years little more than the employees' own contributions will remain in the plan to fund all benefits. This pension plan will then morph into a true ponzi scheme. Assuming no significant benefit changes the Annual Required Contribution should be at least at $10 billion for 2009 (from the current $4 billion) and increase with inflation.
Maybe this year's annual report* will have some variation of this wording included (on advice of Milliman's and Buck's counsel) but I doubt it. Telling New Jersey officials what they've been avoiding might not get you sued, but it could get you fired. That's why they keep quiet about it."

The site, Pension Tsunami gives one some idea of the scale of generational theft that has gone on. Underfunding, on this scale is the result of far more than a few mistakes or a few bad years in the markets.

More Evidence Of Bernanke's Role In Bubble

This shouldn't really be a surprise to anyone, but just released comments from fed meetings show the degree to which Ben Bernake recklessly cheer led for rate cuts which pumped up the housing bubble. Of course this earned him a promotion.


"I would like to caution against the situation where we are continually waiting for uncertainty to be resolved before taking action," Bernanke said in a March meeting, just before the Iraq war started. "If the economy is still struggling and if there is no significant improvement or evidence of increasing strength by our next meeting, I hope we will at least consider the case for easing policy at that time."

Skipping ahead.

Part of the low-interest rate policy during that period included a statement from the Fed that it would leave rates low "for a considerable period." There was a spirited debate over whether to use that language in the August 2003 meeting, and Bernanke made a vigorous argument to do so.

Bernake was already mentioning the idea of a zero or sub zero fed funds rate which would make it profitable to make almost any bad investment. (and that's what happened)

His alleged calls for clarity and transparency now ring as hollow as Obama's

The Real Stress Test Starts

"May 7 (Bloomberg) -- U.S. stocks slid from a four-month high as declines in financial, telephone and technology shares snuffed out an early rally. Treasury 30-year bonds fell the most since February as investors demanded higher-than-forecast yields at an auction of $14 billion of the securities."

No doubt it's racism that's made foreign investors nervous about our national debt.

Wednesday, May 06, 2009

Zombie Banks

Don't expect the Zombie Media to tell you if you have your money in a Zombie Bank.

Only your blood sweat and tears can keep these Zombies going. Half living, half dead, no soul,dependent,helpless and willing to do Obama's bidding for a Tarp transfusion.

Tuesday, May 05, 2009

Fascism Update: NY FED Chief Makes Two Million Dollar Score On Goldman Sachs

People who look at Fascist and other economies of that type have a hard time telling whether corporate interests and insiders have taken over the state or the other way around. Anyway, the recent revolving door between Goldman Sachs and government and quasi governmental agencies is a perfect example.

Here we have the NY Fed chief not only keeping his Goldman Sachs position after Goldman became a bank but using likely inside knowledge to double down on his investment.

"The New York Fed asked for a waiver, which, after about 2½ months, the Fed granted. While it was weighing the request, Mr. Friedman bought 37,300 more Goldman shares in December. They've since risen $1.7 million in value.

Mr. Friedman also was overseeing the search for a new president of the New York Fed, an officer who has a critical role in setting monetary policy at the Federal Reserve. The choice was a former Goldman executive."

Remember, the exact actions of the FED such as what bad assets it may have bought or guaranteed from Goldman or any of it's counterparties are kept secret.

Goldman was one of nine big banks the Treasury aided with capital injections in early October. The prior month, the government decided, partly at the urging of New York Fed officials, to bail out insurer American International Group Inc. The initial $85 billion provided to AIG enabled it to pay a portion of $8.1 billion it owed to Goldman, stemming from past trading agreements. By the end of the year, Goldman had gotten all of the $8.1 billion as AIG received more government aid.

Freedom From Reality

I have to admit that this post stating what should be self evident facts and logical principles may be boring to many but it seems like this needs to be written.

The founders of the country pretty clearly intended it to do one simple thing- free people to use their own judgement to run their own lives by freeing them from coercion. Never, ever, ever did any of the founders think it was logical or possible on any level to do more than this and they warned against it.

Their reasoning was simple and really not refutable.They knew that reality had never provided any person with automatic food, or shelter or medical care or perpetual security. If people as individuals had no automatic guaranteed security in nature, then they couldn't expect to have it just because they lived in a large group.

In the private sector--- promising "guaranteed returns" , bulletproof benefits and the like are usually considered the hallmark of fraud. At best, only by setting aside large amounts of money each year and using the most conservative and prudent accounting and actuarial standards can give one a high level of security.

At what point, exactly do using rosy projections cross the line into fraud or criminal negligence? I think this line was long ago crossed by many if not most public pensions.It's pretty clear promises were made that could not reasonably have been expected to be paid out by returns from invested funds with a careless, if not criminal disregard for the taxpayer that would pick up the tab.

"While poor financial market conditions are the immediate cause of the problem, Timothy Potts of Democracy Rising, a nonpartisan citizens group, lays blame with lawmakers.

"The Legislature always prefers to have someone else raise taxes, which school boards will now be forced to do," said Potts, who is a member of the Carlisle Area school board in Cumberland County.

Pittsburgh Public Schools, the largest district in the county, has 2,700 teachers and full-time professionals. Chris Berdnik, chief financial officer and chief operations officer, estimates that contributions to the pension fund will rise from $10.08 million this year to $33.18 million in the 2012 school year."

"In 2001, lawmakers increased their pension benefits by 50 percent and, at the same time, boosted teachers' and state workers pensions by 25 percent.

But the Legislature didn't require a corresponding increase in contributions from school districts, says Wythe Keever, a spokesman for the Pennsylvania State Education Association, the state's largest teachers' union.

"The districts, in the latter part of '90s and in the early part of this decade basically took a pension holiday. They did not pay enough to sustain the system during the down years," Keever said."

The proper way to deal with this is the remedy normally used in the private sector to deal with liabilities that exceed assets-- bankruptcy. Not fake, fraudulent, Obama type bankruptcy but the real thing. The kind individuals and small businesses face in the real world. As to what should happen to the politicians and union officials that created these problems- many should be in jail for fraud or criminal negligence. At issue is whether one group of people can declare itself immune from reality by enslaving others.

Monday, May 04, 2009

Glenn Beck Town Hall

No time to do a real post, partly because recent events and trends have me honestly too angry and wound up. I thought I'd post this recent video of what seems to be a live town hall event of "Tea Party" types. The discussion seems very reasonable as a whole and gives a a good picture of the frustrations of a crowd who that seems well informed.

Friday, May 01, 2009

Lessons From France

In order to fully understand why the founders so valued human liberty one needs to see that they saw it as not just a moral right but also a practical necessity.

"Laissez faire, telle devrait être la devise de toute puissance publique, depuis que le monde est civilisé.... Détestable principe que celui de ne vouloir grandir que par l'abaissement de nos voisins! Il n'y a que la méchanceté et la malignité du coeur de satisfaites dans ce principe, et l’intérêt y est opposé. Laissez faire, morbleu! Laissez faire!!

(Leave them be, such should be the motto of every public authority, according to which the world is civilized..... A detestable principle that which would not wish us to grow except by lowering our neighbors! There is nothing but mischief and malignity of heart in those satisfied with that principle, and interest is opposed to it. Leave them be, damn it! Leave them be!)"Having thus introduced a measure of order and economy into the workings of the government,"

Legend has it that these words were spoken to the all powerfull French Minister Of Finance under Louis XIV who sought to "help his economy" in ways similar to Obama today.

"Colbert now called for the enrichment of the country by commerce. The state, through Colbert's dirigiste policies, fostered manufacturing enterprises in a wide variety of fields. The authorities established new industries, protected inventors, invited in workmen from foreign countries, and prohibited French workmen from emigrating. To maintain the character of French goods in foreign markets, as well as to afford a guarantee to the home consumer, Colbert had the quality and measure of each article fixed by law, punishing breaches of the regulations by public exposure of the delinquent and by destruction of the goods concerned, and, on the third offense, by the pillory. But whatever advantage resulted from this rule, the disadvantages it entailed more than outweighed them. Colbert prohibited the production of qualities which would have suited many purposes of consumption, and the odious supervision which became necessary involved great waste of time and a stereotyped regularity which resisted all improvements. Other parts of Colbert's schemes have met with less equivocal condemnation.

By his firm maintenance of the corporation system, each industry remained in the hands of certain privileged bourgeois; in this way, too, the system greatly discouraged improvement; while the lower classes found opportunities of advancement closed. With regard to international commerce Colbert suffered equally from lack of foresight: the tariffs he devised protected commerce to an extreme, and under his tutelage enforcement of trade and quality restrictions was draconian, to the point that his technocrats put to death 16,000 small entrepreneurs whose only crime was importing or manufacturing cotton cloth in violation of French law.
[1] He did, however, wisely consult the interests of internal commerce. Unable to abolish the duties on the passage of goods from province to province, he did what he could to induce the provinces to equalise them. Currency exchange rates still remained between these provinces despite a policy focusing on the unification of French trade. His régime improved roads and canals. Pierre Paul Riquet (1604–1680) planned and constructed the Canal du Midi under Colbert's patronage. To encourage overseas trade with the Levant, Senegal, Guinea and other places, Colbert granted privileges to companies, but, like the noted French East India Company, all proved unsuccessful. The narrowness and rigidity of the government regulations significantly contributed to this collapse, as well as the failure of the colonies, upon which Colbert had bestowed a great deal of energy and political capital."

Of course, at the end of this period with the help of Louis extravagant spending and wars, France was bankrupt and at the edge of total collapse.

”According to historical folklore, the phrase stems from a meeting c. 1680 between the powerful French finance minister Jean-Baptiste Colbert and a group of French businessmen led by a certain M. Le Gendre. When the eager mercantilist minister asked how the French state could be of service to the merchants, Le Gendre replied simply "Laissez-nous faire" ('Leave us be,' lit. 'Let us do').[3]

The laissez faire slogan was popularised by Vincent de Gournay, a French intendant of commerce in the 1750s. Gournay was an ardent proponent of the removal of restrictions on trade and the deregulation of industry and economic prosperity in France. Gournay was delighted by the LeGendre anecdote, and forged it into a larger maxim all his own: "Laissez faire et laissez passer" ('Let do and let pass'). His motto has also been identified as the longer "Laissez faire et laissez passer, le monde va de lui même!" ('Let do and let pass, the world goes on by itself!'). Although Gournay left no written tracts on his economic policy ideas, he had immense personal influence on the thinking of his contemporaries, notably the Physiocrats, who credit both the 'laissez-faire' slogan and doctrine to Gournay.[4]"

Adam Smith and a number of other British and American writers came to wonder why England, with it's relative lack of resources so far outperformed nations like France and Spain and concluded that the higher level of economic freedom was the reason. Sadly we are returning to the childishly ignorant world of Colbert all over again.