There is a great unease among the American people, and perhaps even among other segments of the world’s population. It goes beyond the economic difficulties we are experiencing, the increasingly dangerous nature of the world, accelerating moral decay, political ineptitude and a host of other problems our 24/7 news cycle bombards us with on a daily basis. A word from the 70’s has come back to describe it; "malaise." I believe it is an emotional response to a very dangerous philosophical shift in the West in general, and America most recently. It is not an exaggeration to say that if this trend is not reversed, civilization as we have come to know it will end. The "Dark Ages" will return and condemn our posterity to intellectual and physical poverty.
I know that sounds alarmist but I hope that if you stick with me to the end of this piece, I will have justified my dire warning. This "malaise" is a result of the replacement of optimism with pessimism, not as general outlooks on life but as philosophical ideals. The Dark Ages ended with the Renaissance and most importantly, the Enlightenment. The accompanying philosophical change has brought us the advances in all areas we currently enjoy. Optimism, as a philosophical concept, is the principle that all evils are caused by insufficient knowledge (David Deutsch, The Beginning of Infinity). "Evils" are problems and every problem can be solved with sufficient knowledge. These problems can be moral, physical, political, economic, biological, it doesn’t matter. The philosophy of optimism includes two other important ideals. First, that there will always be problems. Even as one problem is solved, others will arise to take its place, sometimes as a direct result of the solution. Second, as I mentioned previously, problems are solvable, all problems have solutions even if they are inconceivable to us at the present. This means that this process of solving problems and the associated quest for knowledge is an infinite quest, it is a never ending process. Optimism results in the belief that societies and civilizations will advance and even though unforeseen problems will arise as a result, things will be better in the future.
Allow me to illustrate how "evil" results from lack of knowledge. Disease, for example, is often caused by lack of knowledge. In the past, knowledge of basic hygiene would have prevented many plagues. Today, knowledge of viruses and bacteria, DNA and genes, have made many of the diseases that have killed millions in the past mere footnotes in history. The diseases of today have cures that only await the expansion of our knowledge and technology to discover. What about natural disasters? In 1906 San Francisco was flattened by an earthquake. Since then, knowledge and technology has given us earthquake-resistant buildings the size of which the turn of the century San Franciscan couldn’t have even imagined. In the future, such knowledge and the accompanying technology will continue to advance and enable people to live safely under the most extreme geologic or weather conditions. These are only two examples, there are many more. The human mind has an infinite capacity for progress if it is left free to roam.
Pessimism, on the other hand, is defined by fear. It is the fear that at any moment catastrophe will overtake us. It is fear that further advancement will create problems that will make catastrophe inevitable. It is defined by the belief that this is as good as it gets, the life you have is the best there can be. Societies ruled by pessimism are autocratic, most of the people are poor and conformity is the rule. They do not advance or grow, they exist only to conserve the status quo and any new ideas conceived in such societies are directed toward more efficiently enforcing conformity and maintaining their current state. Most civilizations in history have existed under the pessimistic principle.
There is only one way to make progress in a society and that is through the process of conjecture and criticism. They must go together for conjecture without criticism is simply fanciful speculation and absolute rulers with the means to implement such ideas without the criticism necessary to prove or disprove their veracity are dangerous and often result in the deaths of many. Whether it was the Catholic Church’s speculations about heath, hygiene and the cause of the black plague resulting in the deaths of millions and the murder of thousands of Jews or the Soviet Union’s five year plans that led to widespread starvation and industrial stagnation, conjecture without criticism is often disastrous. Criticism without conjecture is simply useless bickering over inconsequential things and throughout history, such small mindedness has killed just as many through pointless wars.
The thing that conjecture and criticism have in common and makes them such potent agents for problem solving and the accompanying progress is freedom. Conjecture is freedom of thought and must be coupled with the ability to share those thoughts without fear of physical reprisal. In order to advance, individuals in society need to be able to share ideas without the fear of being burned at the stake, whisked away in the middle of the night or sent to a reeducation camp. In order to weed out the fanciful from the practical, criticism is necessary and requires the same freedom of thought and speech that conjecture does.
So far, the United States has been the best example of Enlightenment values and their results in the history of the world. By combining the freedom to think and believe, the ability to enjoy the fruits of the implementation of those ideas, a social system we call capitalism, and a minimalist government that forced individual and community responsibility, we advanced faster and farther than any society in the history of mankind. Knowledge, and its accompanying technology, has grown exponentially in the last three hundred years and in most cases, America was leading. Until today, each generation believed the next would be better off because problems would be solved and our capacity for advancement was unlimited.
The freedom we have enjoyed is based on the objective truth of natural rights, articulated most eloquently in the Declaration of Independence. (For why natural rights are objective rights, see pp. 33-56 of Leave Me Alone, A Patriot’s Plan for Restoring Pride and Prosperity in America by yours truly; www.leavemealonenow.com) "We are endowed by our Creator with certain Unalienable rights, among these are Life, Liberty and the Pursuit of Happiness." Our right to life, to our own existence, and the liberty to act to maintain our lives are the most basic rights. The pursuit of happiness is crucial to our discussion here because it is in contrast to the utopian vision of pessimism. That may seem counterintuitive, to link a utopian ideal with pessimism. Here is why. Optimism understands knowledge and progress to be infinite, we exist on a continuum that has no end. Therefore, each individual must come to terms with the world as it exists in his lifetime, striking a balance between being content with current circumstances and striving to improve them. This will mean something different for each man or woman. Happiness is an individually subjective concept.
In contrast, the utopian ideal states that all problems have been solved, there is no new knowledge to be discovered and therefore everyone will conform to whatever the utopian ideal is for that society. The society that exists is the best there is, there is no improvement and any more steps taken can only be steps backward. Everything in pessimistic societies is designed to preserve the status quo. Who decides what constitutes the best society, the end of progress, the attainment of the goal? Someone does, usually someone with unlimited political power. Leaders in utopian/pessimistic societies educate, indoctrinate or prohibit their populations from criticizing their most important ideas. What they consider foundational ideas, whether religious, philosophical or practical, are not open to speculation, those areas are not available for inquiry for they believe absolute truth in those areas has already been found. If problems result, it is not because the ideas and traditions are faulty, it is the people and their implementation. Think about the Soviet Union and how the system was beyond question regardless of how many millions starved or consider the liberal idea that it is not the failed program or the ideals behind them that are the problem, it is just that we have not done or spent enough yet. Pessimistic societies are led from the top down and whoever is on top and the system they espouse is beyond criticism, they are infallible. The problems are never with them, it is always their own people or others which is why pessimistic societies kill their citizens and go to war with their neighbors.
If you have wondered why Islamic states, dictators and the communists hate America, this is why. As their societies stagnate and their people wallow in poverty and oppression, America is progressing, growing, becoming more wealthy and powerful and its people, healthier and wealthier, our example is anathema to the belief in all these other societies that they have obtained some utopian ideal. The Communists built walls to keep their people from knowing there was something better out there and committed themselves to destroying the capitalist pigs. Muslims, wondering why even with enormous oil wealth their societies remain backward and their people "poor and oppressed" have decided that the way of the West and its associated progress is the tool of Satan and any failings in Islam are caused by lack of purity and devotion on their part. Revelation is complete with Mohammed, no further progress is possible or necessary and therefore any deviation is evil and a suitable object of derision and violence. Pessimistic societies must eliminate optimistic societies because the existence of optimistic states threatens the very foundation of their societies and their leader’s reason for maintaining power.
The embrace of "top down" solutions is one of the reasons the French Revolution was so different from the American one. Americans, because of the distance from England, were accustomed to acting independently and had a distrust of top-down solutions. The French were used to an absolute monarchy and proceeded with the belief that top down solutions with the "right" people in charge would create the best society. If anyone disagreed, if anyone failed to conform or questioned the wisdom of the "enlightened" ones, it was off with their heads. Communism operates under the same delusion, that the road to happiness can be dictated from on high and hundreds of millions of people have died as a result. Happiness is an individual phenomenon and attempts to force it on another will make no one happy and necessarily destroys their other natural rights. After all, if your non-conformity is a barrier to the collective happiness, you need to be eliminated for the good of the many, and the security of the "top" and their ideals, for they vastly outweigh the happiness of the few, or the one.
Now, let us return to the beginning. How is it we are in danger of returning to the Dark Ages, losing our optimism, condemned to exist in a pessimistic world? The pressures on the optimism embodied in the western enlightenment in general and America in particular, have accelerated exponentially in the last fifty years. Communism, European style socialist democracy and Islam are all ascending pessimistic philosophies that are attempting to squeeze the life out of Enlightenment optimism. Such pessimism in the form of top down utopianism (communism) has been infiltrating American government for one hundred years and is now nakedly obvious with the advent of the Obama administration.
There is a two pronged pessimistic approach endemic to our government that is now becoming pervasive within our society. The first is the top down utopian approach. The assumption among all the politicians and bureaucrats at all levels of government in our country is that they know how to best order society, and by extension, your individual life. Too many citizens have also accepted the idea that the government is run by experts who know what is best. This idea is antithetical to natural rights and the resulting avalanche of legislation and regulation has put fear in the minds of citizens who are often unsure as to which behaviors and actions are acceptable and which are not. When even light bulbs and toilets, medical treatment and basic financial transactions become illegal or so stringently monitored and controlled as they are today, it should be obvious our basic freedoms are long gone. This is to say nothing of the exorbitant amount of money stolen and spent in pursuit of the utopian dream of equalizing outcomes for all in the pursuit of universal happiness. The only ones happy in such a system are the politicians, bureaucrats and their friends who are looting the system.
The second attack on optimism is the "war on success." This began with the progressive income tax, a central tenant of communism, which increases the penalty for success as success increases. Add to that the class warfare standardized by Franklin Roosevelt and practiced by Democrats, and some Republicans, ever since and you have a social stigmatism and financial burden placed on success that are the complete opposite of the original American vision.
Now consider the attacks on the central tenets of optimism. Progress is a result of conjecture and criticism. In order for that process to work to advance society, there must be freedom of thought and speech, freedom from fear of reprisal. Political correctness has been limiting this for decades. We now have an administration monitoring speech and collecting information on average citizens on the internet and other places, using regulation to harass and appropriating the legal justification to hold without charge or trial individuals it deems a threat. We are well on the way to stifling dissent the way Hitler or Stalin found expedient. Add to that the fact we now have a generation or two indoctrinated through a government educational system designed to advance government acceptable modes of thought and speech, and we have an ever growing segment of society unable to think critically or outside certain clearly defined boundaries. I fact, I would say that a large segment of America’s population have lost the ability to think critically about government and their solutions. Too many of our fellow citizens blindly accept the idea that a government solution, regardless of its feasibility, cost or track record of failure, is the only solution.
While it is horrible that a minority are persecuted for conjecture and criticism beyond the bounds of politically correct discussion, every individual who has been brainwashed to the point where it does not even occur to them to go beyond those bounds is an unfathomable loss and another nail in the coffin of a free society. A fearful mind may still operate underground or find the courage to speak out regardless of consequences. But a mind drugged and/or limited in its ability to think is a mind whose unlimited potential has been destroyed. Just as abortion may kill the next great inventor or doctor who will solve our most pressing problems, so a mind put in a drug induced or politically correct straightjacket is a mind to whom some solutions will never occur that otherwise might have. That is an unrecoverable loss.
If the government is putting problem solving in the straight jacket of political correctness by moving to become the sole distributor of resources for the problems it deems worthy of attention (the carrot) and punishes those who operate outside those bounds through regulation and taxation (the stick) our progress and technological advancement will slow. If creativity is limited and ambition destroyed by eliminating rewards, we will stagnate. When the vast majority lose the ability to "think outside the box" and even conceive of critical thinking, we will become mindless slaves to the powers that remain. If fact, our situation, and the world’s, will be worse than that of the Soviet Union for there will not be an optimistic society left to steal from.
At that point, we will be taught to expect no better. In fact, this is already happening. Consider that eight to ten percent unemployment is now the "new normal" just as double digit unemployment is "normal" European socialist democracies. We are being encouraged to acquiesce to the government’s theft of twenty-five percent of our national wealth, up from the twenty percent that was the previous exorbitant norm. Too many have accepted government dependency, which is making your fellow your slave, as a way of life. We are expected to tolerate stagnant growth, a declining standard of living and a rude, violent society. This should be completely unacceptable to every one of us as inheritors of the Enlightenment and custodians of the American ideal.
A majority of Americans no longer believe succeeding generations will be better off. That demonstrates how deeply pessimism has taken hold of us. However, a majority also believe that America is going in the wrong direction, which demonstrates how deeply optimism is imbedded in our collective psyche. It is not too late for us, we can still turn things around. Optimism is not blind, will will reap what we have sown, but there are solutions to even our most pressing problems. They will not, however, come from government. The state is the biggest problem we have and cutting it down to the size envisioned by the founders so we will once again be able to exercise our freedom to create, solve problems and yes, reap the rewards of our success, is our greatest challenge today.
In 1979 amidst the malaise, double digit inflation and high interest rates, a stagnant economy and a seemingly unstoppable communist expansion, Ronald Reagan was able to convince us that our best days were ahead, that individual freedom was the solution and faith in the progress of mankind was not misplaced. More than anything else, recapturing a philosophy of optimism and putting it into practice in our own lives will save our society. If we lose our optimism it will not be long before the moochers and looters destroy our civilization and we wake up in the new Dark Ages. Optimism is our greatest asset and would surely be our greatest loss if we allow pessimism to win
Sunday, January 15, 2012
Thursday, December 1, 2011
Buying Just a Little More Time
Yesterday the markets were up on the fabulous news that the Federal Reserve and other central banks were wading into the European sovereign debt crisis. Everyone was happy, the Dow was up four hundred points, everyone exhaled and figured that the time this effort will buy will be enough. Wishful thinking.
In addition to other techniques, we are engaging in what is called a currency swap. I say "we" because you and I are on the hook for this bailout, a bailout that will make TARP look like peanuts. Yes, you and I, our present and future earnings, are being used to bail out European unions, European pension funds, European bureaucrats, European cradle to grave welfare, to ensure that European workers can receive months of vacation time, years of unemployment and that all those Muslim immigrants don’t have to bothered with work while they plan the downfall of western civilization. How do you feel about that?
In a currency swap, the Fed sends dollars over to the European Cental bank (ECB) and the ECB sends an equivalent amount of Euros to the Fed. In the future, they agree to swap the currencies back at the same rate, regardless of what they may be worth. This can be the next day or three months from now. The ECB then loans these dollars to the troubled banks in Europe to improve their balance sheets. Why is this necessary? Why can’t the ECB do what the Fed did with our banks, simply print the money and distribute it? Because no one thinks the Euro is going to be worth anything in a week or a month or a year. That is why they want dollars, the supposed safe haven asset, the reserve currency of the world. So we are going to trade something that is worth a lot for something whose value is falling rapidly.
Look at it this way. You have a friend who is a chronic drunk driver. He has smashed his car several times and it barely runs, it will probably die at any time. He comes to you and asks to borrow your brand new Mercedes and will give you his practically totaled car as collateral, assuring you he will return your expensive car and take his back in three months. Would you do it? Especially if you knew that he was going to loan that car to a bunch of his drunken friends to do with as they pleased? You’d have to be nuts.
Yet that is what we are doing. The EU banking system was set up to fail and it needs systemic reorganization to become viable again. When the Euro was set up, the new European Union wanted to encourage sovereign debt markets so they adjusted the banking rules so that sovereign debt didn’t count as a risk based asset on a bank’s balance sheets. This was also the case in regard to other triple-A rated assets like US mortgages. This means that the banks didn’t need to set aside any reserves to cover any potential losses. This resulted in two mounting problems. First, banks could load up on sovereign debt and leverage it to loan even more money. The second was that countries could find ready buyers for their debt so they could borrow considerably more than the market and common sense would have thought prudent. Since everyone thought the countries would always pay, the system worked until someone didn’t. That someone was Greece.
When Greece got into trouble and its bonds were downgraded, all those banks that were holding Greek debt found their balance sheets drop precipitously. If Greek debt was downgraded by fifty percent, the banks lost fifty percent of a supposedly safe asset and since that debt was highly leveraged, many became insolvent. If little Greece is followed by Italy or Spain, there is not enough money to bail them out. The only way all this sovereign debt by all these bankrupt countries is going to be worth anything is if they cut spending; they already have pretty well maxed out their taxes and have shrinking or stagnant economies. Doing that, they risk the wrath of their populations. At the least, they will be voted out if they stop the gravy train. At worst, the citizens burn the whole place down. Unfortunately, if they do nothing, the banks collapse, the citizens lose everything, the Euro becomes worthless and they burn it down anyway. In the last few days, Britan has warned its citizens about this very possibility.
The collapse of the European Union would be horrible for Europe and bad for the rest of the world. However, it would not be the end of the world. These countries will survive, they will revert to their own currencies again, people will go back to work, life will get back to normal eventually. It would be the fitting consequence of a failed idea. Statists cannot abide such failure, however. A failed idea is just one over which they have not exercised enough control and on which they have not spent enough money. But the EU is not Solyndra or even Social Security. It is failure on a scale unheard of in modern history. We can’t let that happen now, can we? So since 2008 the Fed has spent or lent over seven trillion dollars on insolvent banks in Europe and around the world. Now we are trading dollars for worthless Euros in the hope that our dollar will not be destroyed by European irresponsibility that has shown no signs of abating. That is our money, they will be our losses, it is our children and grandchildren who will need to work to make it all up on top of everything else we’ve done.
So why are we engaging is this huge bailout? They will tell you that if Europe fails, it will negatively impact us because of trade and markets and other claptrap. While that is true to some degree, that is not the reason. European banks receive about a third of their capital from US money market funds which purchase sovereign debt, among other things. MF Global’s failure was a direct result of this investment, aside from the theft. US banks and money markets stand to lose billions and billions of dollars as Greek bonds and others are devalued. Therefore, what we have here is another bailout of Wall Street. They made bad choices-who would ever think that the bonds issued by a country that owes considerably more that its GDP, a GDP that has been falling by around 8% are a safe investment-and we, the taxpayers, are bailing them out.
The sovereign bond market around the world is only being held up by buying on behalf of central banks, the Fed being the biggest. European countries are broke and can’t afford to pay back debt at rapidly rising rates. The market knows this and even Germany has not been able to sell all its bonds. No one thinks we are going to get our fiscal house in order which is why the Fed’s been buying more than half our bonds, 70% under QE2. The only way all these western countries, including ours, are financing their exorbitant spending is through he creation of more and more money from nothing (counterfeiting) by their central banks. So where does all this lead?
What if these insolvent, irresponsible European banks lose the dollars the ECB gives them? What if all these bank execs see the writing on the wall and simply take the money and run? What if it is invested in more sovereign debt that turns out to be worthless? With what will the ECB pay back the Fed? Is the Fed simply going to write it off? Does it even matter? Does it seem to anyone but me that these central bankers in their ivory towers with no oversight or accountability are simply playing a game. Dollars, Euros, Yen, Pesos, none of it’s real. Its just paper or a number on a computer screen. Is the Fed simply sending a bunch of numbers to the ECB expecting the numbers to be returned whether there is anything real attached to them or not? When the Fed buys trillions of dollars in US treasuries, is it simply putting numbers into a computer with nothing backing them up? Of course. The Fed doesn’t have unlimited assets, but it has the ability to counterfeit at will. The only thing that keeps all this working is our perception that there is actually something real behind all the ones and zeros, that there is a trillion of something somewhere. It is hard to believe that we still accept that someone actually keeps track of all these trillions of dollars and Euros and yen and whatever. It isn’t real. Someday soon the balance will tip and everyone will see the emperor has no clothes.
In addition to other techniques, we are engaging in what is called a currency swap. I say "we" because you and I are on the hook for this bailout, a bailout that will make TARP look like peanuts. Yes, you and I, our present and future earnings, are being used to bail out European unions, European pension funds, European bureaucrats, European cradle to grave welfare, to ensure that European workers can receive months of vacation time, years of unemployment and that all those Muslim immigrants don’t have to bothered with work while they plan the downfall of western civilization. How do you feel about that?
In a currency swap, the Fed sends dollars over to the European Cental bank (ECB) and the ECB sends an equivalent amount of Euros to the Fed. In the future, they agree to swap the currencies back at the same rate, regardless of what they may be worth. This can be the next day or three months from now. The ECB then loans these dollars to the troubled banks in Europe to improve their balance sheets. Why is this necessary? Why can’t the ECB do what the Fed did with our banks, simply print the money and distribute it? Because no one thinks the Euro is going to be worth anything in a week or a month or a year. That is why they want dollars, the supposed safe haven asset, the reserve currency of the world. So we are going to trade something that is worth a lot for something whose value is falling rapidly.
Look at it this way. You have a friend who is a chronic drunk driver. He has smashed his car several times and it barely runs, it will probably die at any time. He comes to you and asks to borrow your brand new Mercedes and will give you his practically totaled car as collateral, assuring you he will return your expensive car and take his back in three months. Would you do it? Especially if you knew that he was going to loan that car to a bunch of his drunken friends to do with as they pleased? You’d have to be nuts.
Yet that is what we are doing. The EU banking system was set up to fail and it needs systemic reorganization to become viable again. When the Euro was set up, the new European Union wanted to encourage sovereign debt markets so they adjusted the banking rules so that sovereign debt didn’t count as a risk based asset on a bank’s balance sheets. This was also the case in regard to other triple-A rated assets like US mortgages. This means that the banks didn’t need to set aside any reserves to cover any potential losses. This resulted in two mounting problems. First, banks could load up on sovereign debt and leverage it to loan even more money. The second was that countries could find ready buyers for their debt so they could borrow considerably more than the market and common sense would have thought prudent. Since everyone thought the countries would always pay, the system worked until someone didn’t. That someone was Greece.
When Greece got into trouble and its bonds were downgraded, all those banks that were holding Greek debt found their balance sheets drop precipitously. If Greek debt was downgraded by fifty percent, the banks lost fifty percent of a supposedly safe asset and since that debt was highly leveraged, many became insolvent. If little Greece is followed by Italy or Spain, there is not enough money to bail them out. The only way all this sovereign debt by all these bankrupt countries is going to be worth anything is if they cut spending; they already have pretty well maxed out their taxes and have shrinking or stagnant economies. Doing that, they risk the wrath of their populations. At the least, they will be voted out if they stop the gravy train. At worst, the citizens burn the whole place down. Unfortunately, if they do nothing, the banks collapse, the citizens lose everything, the Euro becomes worthless and they burn it down anyway. In the last few days, Britan has warned its citizens about this very possibility.
The collapse of the European Union would be horrible for Europe and bad for the rest of the world. However, it would not be the end of the world. These countries will survive, they will revert to their own currencies again, people will go back to work, life will get back to normal eventually. It would be the fitting consequence of a failed idea. Statists cannot abide such failure, however. A failed idea is just one over which they have not exercised enough control and on which they have not spent enough money. But the EU is not Solyndra or even Social Security. It is failure on a scale unheard of in modern history. We can’t let that happen now, can we? So since 2008 the Fed has spent or lent over seven trillion dollars on insolvent banks in Europe and around the world. Now we are trading dollars for worthless Euros in the hope that our dollar will not be destroyed by European irresponsibility that has shown no signs of abating. That is our money, they will be our losses, it is our children and grandchildren who will need to work to make it all up on top of everything else we’ve done.
So why are we engaging is this huge bailout? They will tell you that if Europe fails, it will negatively impact us because of trade and markets and other claptrap. While that is true to some degree, that is not the reason. European banks receive about a third of their capital from US money market funds which purchase sovereign debt, among other things. MF Global’s failure was a direct result of this investment, aside from the theft. US banks and money markets stand to lose billions and billions of dollars as Greek bonds and others are devalued. Therefore, what we have here is another bailout of Wall Street. They made bad choices-who would ever think that the bonds issued by a country that owes considerably more that its GDP, a GDP that has been falling by around 8% are a safe investment-and we, the taxpayers, are bailing them out.
The sovereign bond market around the world is only being held up by buying on behalf of central banks, the Fed being the biggest. European countries are broke and can’t afford to pay back debt at rapidly rising rates. The market knows this and even Germany has not been able to sell all its bonds. No one thinks we are going to get our fiscal house in order which is why the Fed’s been buying more than half our bonds, 70% under QE2. The only way all these western countries, including ours, are financing their exorbitant spending is through he creation of more and more money from nothing (counterfeiting) by their central banks. So where does all this lead?
What if these insolvent, irresponsible European banks lose the dollars the ECB gives them? What if all these bank execs see the writing on the wall and simply take the money and run? What if it is invested in more sovereign debt that turns out to be worthless? With what will the ECB pay back the Fed? Is the Fed simply going to write it off? Does it even matter? Does it seem to anyone but me that these central bankers in their ivory towers with no oversight or accountability are simply playing a game. Dollars, Euros, Yen, Pesos, none of it’s real. Its just paper or a number on a computer screen. Is the Fed simply sending a bunch of numbers to the ECB expecting the numbers to be returned whether there is anything real attached to them or not? When the Fed buys trillions of dollars in US treasuries, is it simply putting numbers into a computer with nothing backing them up? Of course. The Fed doesn’t have unlimited assets, but it has the ability to counterfeit at will. The only thing that keeps all this working is our perception that there is actually something real behind all the ones and zeros, that there is a trillion of something somewhere. It is hard to believe that we still accept that someone actually keeps track of all these trillions of dollars and Euros and yen and whatever. It isn’t real. Someday soon the balance will tip and everyone will see the emperor has no clothes.
Wednesday, November 9, 2011
Leave It to the Professionals
The big news over the last two weeks has been the allegations of sexual harassment leveled against Republican presidential candidate Herman Cain. It has pushed all the other real news off the front page. Unemployment, the European debt crisis, scandals like Fast and Furious that actually got people killed, the unconstitutional super committee's lack of progress, president Obama’s stated intent to exercise dictatorial powers and a hundred other things that actually have facts behind them have been pushed into the background Instead, we are focusing on allegations behind which facts are vague or non-existent and the whole discussion has devolved into criticism about how the Cain campaign is handling or mishandling the scandal, whether racism is involved in the perceived witch-hunt and how it will impact the other Republican hopefuls.
Amidst all the chatter, I head a quote that really got my attention. It was from David Brooks. He stated, in defense of political "elitists" that "running for office is for professionals" as is the business of governing. Obviously this was a criticism not only of Herman Cain’s handling of the scandal but the very existence of his candidacy. In the mind of Mr. Brooks and his elitist sympathizers, Herman Cain and others like him, men and women not groomed by the right colleges and the right mentors, people who have not been immersed in the government culture, who do not speak in government approved ways and haven’t been taught how to approach problems with the government mindset have no business trying to break into the club or, God forbid, actually attempting to govern!
Unfortunately, this attitude is very pervasive, not only among the ruling class where one would expect it, but among the populace as well. Government has become so large and complicated that the general assumption is that one needs special knowledge provided by certain institutions and organizations in order to effectively manage the beast. It is this attitude that creates the chasm between the ruling class and the ruled. Government is mysterious and scary and it takes a "special" person to govern. The rest of us are to remain in awe of our wise and benevolent government and the people who make it work.
This is not how America was meant to be. While there is no doubt most of the founders had an idea about what type of person should govern, those ideas were very different from those among the ruling class today. A "leading citizen" in the early period of our history was a man who had established his reputation in his community or state through a successful career in the private sector and as a servant to his fellows. His grasp of the issues and challenges were born of experience and contact with his neighbors. Because the scope of government activity was so limited, the problems and solutions were usually clear and concise. If he was chosen by his peers for service in the state, he was not expected to make a career of it. They were expected to be short term custodians of the liberties of the people they served.
How far we have strayed. Today we are governed by career politicians and a multitude of highly paid bureaucrats. We look at the negative situation we find ourselves in and lament the waste and corruption endemic to a government that overregulates and overtaxes. We have become alarmed at the loss of our freedom and the burdens our government has placed on our lives and our posterity. We are discouraged when our elected leaders fail to make common sense changes to reverse couses of action any thinking person can see are absurd. It is as if we have suddenly awakened and wonder how we have come so far along the road to tyranny and ruin.
The real problem is that government is constantly attempting to do things government is, by definition, ill equipped to accomplish. Therefore, to justify weilding the force of government in a multitude of places where it does not belong and excuse the theft of the average citizen’s liberty and wealth, several things must happen. First, the people involved, elected and bureaucratic, need to develop a certain mindset. They must convince themselves that their ability to solve the problems of others exceeds that of the average person. Whether that results from grooming that is part of a family heritage, a certain educational path, an apprenticeship under those who have already achieved high position or simply an over-inflated sense of self, such an individual believes they are better equipped to make the decisions that affect the lives of the majority than the individuals in that majority themselves.
Second, because of the inherent inefficiency and immorality of taking free choices from individuals and appropriating them to the ruling class, government must somehow come to inspire awe. Since it cannot achieve this through effectiveness, it does it through size and complexity. A long descending spiral of laws, rules, regulations and taxes results, making government hopelessly complicated, huge and intrusive. The first attempt to solve a problem through redistribution or regulation creates two or three new problems requiring more regulation, redistribution and bureaucrats, creating more problems requiring even more regulations, redistribution and bureaucrats and on and on and on. Government is a perpetual motion machine that grows exponentially over time and requires more and more specification-i.e. experts and lawyers, to even begin to understand it. These "wise" people don’t actually know how to solve problems because a government solution is the greatest of oxymorons, they merely have an understanding of the arcane system of rules and regulation and know how to use them to benefit themselves and their friends.
Finally, government, policy and politics become incomprehensible to the average person. No longer is politics about ideas, ideals or philosophical approaches to the proper scope of government activity but specific, "technocratic" and often incomprehensible applications of government power to every area of life. Attempting to solve all the problems of the human condition by forcing individuals to conform to the vision of a few elitists, destroying their liberty and stealing the fruits of their labor, is a fool’s errand and horribly immoral. It benefits the few at the expense of the many. By convincing the majority that government is the answer to any question simply enables government to perpetually grow because they are always creating more problems requiring ever more solutions. Politicians can run on these self created problems and once the government bureaucracy that continually creates these problems and requires so much of our liberty and treasure grows large enough, the politicians can run against it even though their "solutions" will only create even more problems to "solve." This is the world Mr. Brook’s elitists have created.
Herman Cain and others like him are the stakes in the hand of lady liberty, ready to be driven into the heart of the beast that is our intrusive, oppressive, criminal government. They boldly assert that government by the experts is not what was intended in the American experiment and only leads to tyranny. They loudly claim that government is not the solution to the multitude of our problems, free individuals making individual decisions about their own lives generate much better solutions. Only by rejecting our current paradigm of government as the ultimate solution for all problems and eliminating the grip the two party elite have on power will we recapture the ideal of the citizen servant and find true freedom from the tyranny of the professionals.
Amidst all the chatter, I head a quote that really got my attention. It was from David Brooks. He stated, in defense of political "elitists" that "running for office is for professionals" as is the business of governing. Obviously this was a criticism not only of Herman Cain’s handling of the scandal but the very existence of his candidacy. In the mind of Mr. Brooks and his elitist sympathizers, Herman Cain and others like him, men and women not groomed by the right colleges and the right mentors, people who have not been immersed in the government culture, who do not speak in government approved ways and haven’t been taught how to approach problems with the government mindset have no business trying to break into the club or, God forbid, actually attempting to govern!
Unfortunately, this attitude is very pervasive, not only among the ruling class where one would expect it, but among the populace as well. Government has become so large and complicated that the general assumption is that one needs special knowledge provided by certain institutions and organizations in order to effectively manage the beast. It is this attitude that creates the chasm between the ruling class and the ruled. Government is mysterious and scary and it takes a "special" person to govern. The rest of us are to remain in awe of our wise and benevolent government and the people who make it work.
This is not how America was meant to be. While there is no doubt most of the founders had an idea about what type of person should govern, those ideas were very different from those among the ruling class today. A "leading citizen" in the early period of our history was a man who had established his reputation in his community or state through a successful career in the private sector and as a servant to his fellows. His grasp of the issues and challenges were born of experience and contact with his neighbors. Because the scope of government activity was so limited, the problems and solutions were usually clear and concise. If he was chosen by his peers for service in the state, he was not expected to make a career of it. They were expected to be short term custodians of the liberties of the people they served.
How far we have strayed. Today we are governed by career politicians and a multitude of highly paid bureaucrats. We look at the negative situation we find ourselves in and lament the waste and corruption endemic to a government that overregulates and overtaxes. We have become alarmed at the loss of our freedom and the burdens our government has placed on our lives and our posterity. We are discouraged when our elected leaders fail to make common sense changes to reverse couses of action any thinking person can see are absurd. It is as if we have suddenly awakened and wonder how we have come so far along the road to tyranny and ruin.
The real problem is that government is constantly attempting to do things government is, by definition, ill equipped to accomplish. Therefore, to justify weilding the force of government in a multitude of places where it does not belong and excuse the theft of the average citizen’s liberty and wealth, several things must happen. First, the people involved, elected and bureaucratic, need to develop a certain mindset. They must convince themselves that their ability to solve the problems of others exceeds that of the average person. Whether that results from grooming that is part of a family heritage, a certain educational path, an apprenticeship under those who have already achieved high position or simply an over-inflated sense of self, such an individual believes they are better equipped to make the decisions that affect the lives of the majority than the individuals in that majority themselves.
Second, because of the inherent inefficiency and immorality of taking free choices from individuals and appropriating them to the ruling class, government must somehow come to inspire awe. Since it cannot achieve this through effectiveness, it does it through size and complexity. A long descending spiral of laws, rules, regulations and taxes results, making government hopelessly complicated, huge and intrusive. The first attempt to solve a problem through redistribution or regulation creates two or three new problems requiring more regulation, redistribution and bureaucrats, creating more problems requiring even more regulations, redistribution and bureaucrats and on and on and on. Government is a perpetual motion machine that grows exponentially over time and requires more and more specification-i.e. experts and lawyers, to even begin to understand it. These "wise" people don’t actually know how to solve problems because a government solution is the greatest of oxymorons, they merely have an understanding of the arcane system of rules and regulation and know how to use them to benefit themselves and their friends.
Finally, government, policy and politics become incomprehensible to the average person. No longer is politics about ideas, ideals or philosophical approaches to the proper scope of government activity but specific, "technocratic" and often incomprehensible applications of government power to every area of life. Attempting to solve all the problems of the human condition by forcing individuals to conform to the vision of a few elitists, destroying their liberty and stealing the fruits of their labor, is a fool’s errand and horribly immoral. It benefits the few at the expense of the many. By convincing the majority that government is the answer to any question simply enables government to perpetually grow because they are always creating more problems requiring ever more solutions. Politicians can run on these self created problems and once the government bureaucracy that continually creates these problems and requires so much of our liberty and treasure grows large enough, the politicians can run against it even though their "solutions" will only create even more problems to "solve." This is the world Mr. Brook’s elitists have created.
Herman Cain and others like him are the stakes in the hand of lady liberty, ready to be driven into the heart of the beast that is our intrusive, oppressive, criminal government. They boldly assert that government by the experts is not what was intended in the American experiment and only leads to tyranny. They loudly claim that government is not the solution to the multitude of our problems, free individuals making individual decisions about their own lives generate much better solutions. Only by rejecting our current paradigm of government as the ultimate solution for all problems and eliminating the grip the two party elite have on power will we recapture the ideal of the citizen servant and find true freedom from the tyranny of the professionals.
Wednesday, November 2, 2011
Berie and Big Government
Bernie Madoff has been back in the news lately. According to his wife, when their fortunes turned for the worse, they attempted to kill themselves. In case the most infamous Wall Street name in recent history doesn’t ring an immediate bell, he is the man who developed a billion dollar ponzi scheme that defrauded clients from little old ladies who put their life saving in his care to non-profits who tried to expand their balance sheets to do more good work. He was a con-man, a cheat, and he took advantage of people’s trusting and sometimes greedy nature to make a lot of money at their expense. He is in jail for life and the “investors” have gotten back pennies on the dollar.
What did Bernie really do that has made his name so infamous, that made him a worthy target of the ire of America? He convinced people to voluntarily part with their own money on false pretenses with false promises, promises that were impossible to fulfill, so he could take that money and use it to enrich himself and his friends. It was theft, pure and simple. Instead of a gun, Bernie used lies and half-truths. Instead of a knife, deceit and greed. In his wake, he left people destitute, destroyed their faith in their fellows, bankrupted worthy organizations, and besmirched the reputation of a whole sector of the American economy. In case you haven’t noticed, there are a bunch of ignorant, smelly and sometimes violent protestors camped out on Wall Street and in cities around the country that think the whole world of investing and capitalism is crooked and every wealthy individual got that way by swindling the rest of us.
While Madoff's swindle got a lot of media attention, it only involved a few thousand people and a few billion dollars. I don’t know anyone directly affected by his crime and you probably don’t either. It didn’t bring us to the supposed edge of economic collapse like Lehman Brothers. It didn’t start a tsunami of foreclosures that affected hundreds of thousands of people like the sub-prime mortgage debacle. It didn’t put millions of people out of work. It was simply one more swindle in a long history of swindles.
There is a swindle going on right now, however, that does affect you, does put people out of work, is putting the economy at great risk, is stealing your money and enriching the few at the expense of the many based on lies and deceit. This is the great con of the Federal Government. It is based on the lie that government is a wise and benevolent entity that exists to equitably distribute the nation’s resources and direct the lives of the people for their benefit. What makes this fraud so egregious is not simply its scope, which encompasses a fifteen trillion dollar economy and three hundred million people, but the fact that your participation is not voluntary. In fact, this wise and benevolent government has developed an effective system of brainwashing known as the public schools that have convinced most people that government is the answer to all problems. But not all the people. If the appeals to “fairness” and “social justice” don’t work, and we can’t be scared into feeling good about our “contribution” through doomsday warnings about global warming, mass unemployment or homelessness, the gun of the government will be put to our heads to force us to relinquish our hard earned money to support the scam with the threat of confiscation, financial ruin and imprisonment.
Is it fair to compare what our Federal Government does to Bernie Madoff’s fraud? Not really, what the Federal Government does is so much worse. Ponzi schemes? The government perpetrates the largest ponzi scheme in the history of the world. We call it Social Security. While the early participants received generous benefits for small investments, as the number of contributors have declined, instead of simply losing their money, which may yet happen, they are forced to contribute ever higher amounts to support those who currently benefit. It is a ponzi scheme whose collapse is forestalled by ever larger involuntary contributions by the latecomers.
Of course, the voracious appetite of the government cannot be satiated simply through forced contributions. To cover the growing gap between spending and income, they borrow. And borrow. And borrow. And borrow. Bernie may be broke and have nothing to pass down to his children except an infamous name but his children and grandchildren are not on the hook for repaying his fraud. Not so the Federal Government. Today’s free spenders from both parties will be gone when the bill comes due for future generations. Future generations of Americans have been condemned to involuntary servitude, forced to pay back trillions of dollars to the Chinese and Saudis by the greedy politicians and bureaucrats of today. Nothing is more immoral.
When the numbers of people contributing to Bernie’s racket fell below the level needed to sustain it, it collapsed and those who came in late lost their money. No so the Federal Government. In addition to confiscating more money from the rest of us and borrowing from future generations, it has another method of maintaining its malevolent work. It can simply print money. Ah, if Bernie had just used a printing press he could have kept it up indefinitely. Oh yeah, that’s illegal; its called counterfeiting and it is so because it destroys the value of, and confidence in, the currency. Is it any different when the Federal Government does it through the Federal Reserve bank? No, we are destroying the value of our currency and our standard of living. The fact that our buying power and real wages continue to go down is a direct result of this hidden theft. The very real possibility of hyperinflation and the total collapse of the currency and economy are also directly tied to this fraud.
If Bernie was a mobster and a thug in addition to a cheat, he could have forced people to “contribute” to his growing power and punish those who didn’t pay the required protection money. The Federal Government, operated as a thugocracy under this current administration, does have that power. As Gibson Guitar found out, not contributing to the right party will result in armed goons breaking into your business, endless lawsuits designed to harass and intimidate, limitless regulations selectively applied for the sole purpose of putting one out of business to serve as a warning to others. This works for individuals as well as businesses.
Bernie used his ill gotten gains to live the life of the rich and famous. The benefits of working with and for the Federal Government are similar. The average annual salary and benefits for a federal worker is over $123,000, a salary and benefits we pay through our tax dollars, and those salaries are rapidly increasing. While the politicians and bureaucrats live the high life on our dime, partying at seminars and training sessions in Las Vegas, going on fact finding missions to Tahiti and dolling out billions of dollars to friends and relatives, how are the serfs who pay for this living? Seventy five percent of us make less than $50,000, forty seven percent of us, less than $25,000; salaries that are going down in real terms. Almost half of us are making less than a fifth of our “public servants.” And when we fail at our jobs or do something illegal, our income goes to zero or we go to jail. Bureaucrats who lose millions like those at Fannie Mae are paid millions when they leave. Gun runners at the ATF are promoted. Tax cheats are given cabinet positions. The standard of justice for the rulers and the ruled has never been so different in America.
The politicians and bureaucrats are not the only beneficiaries of the fraud. Just as Bernie spread the wealth around to his friends, so does the Federal Government. The rewards of the “protection money” paid to campaigns can amount to millions and even billions of dollars. Business like Solyndra and General Electric enrich themselves at our expense. Grants are dolled out to those who support the party line. Homes, health care and cash are the rewards of the poor voters who consistently put these con men and women in office even if what they receive is a pittance compared to the “in” crowd. Its all about the money, your money and my money, and using it in ways we would never even consider. Would you choose to invest in a company with a faulty business model, pay the living expenses of a man who lives in a crib and wears a diaper or train Chinese prostitutes to drink responsibly? No? Ah...but you and I do and we are not given a choice.
Bernie is in jail for the rest of his life. We name roads and buildings for the thieves in Washington DC. We expect so little we don’t even care when another robber is caught and released, or even promoted. The Federal Government, our Federal Government, is looting our country, stealing the wealth of its citizens and their progeny and destroying the best economic and governmental system ever conceived by man. It is doing so by perpetuating the lie that if government just had enough money and power life would be better for all of us. It is a lie. It is a failure. It is immoral. It is evil. Bernie may get the bad press but compared to the Federal Government of the United States of America, he looks almost angelic.
What did Bernie really do that has made his name so infamous, that made him a worthy target of the ire of America? He convinced people to voluntarily part with their own money on false pretenses with false promises, promises that were impossible to fulfill, so he could take that money and use it to enrich himself and his friends. It was theft, pure and simple. Instead of a gun, Bernie used lies and half-truths. Instead of a knife, deceit and greed. In his wake, he left people destitute, destroyed their faith in their fellows, bankrupted worthy organizations, and besmirched the reputation of a whole sector of the American economy. In case you haven’t noticed, there are a bunch of ignorant, smelly and sometimes violent protestors camped out on Wall Street and in cities around the country that think the whole world of investing and capitalism is crooked and every wealthy individual got that way by swindling the rest of us.
While Madoff's swindle got a lot of media attention, it only involved a few thousand people and a few billion dollars. I don’t know anyone directly affected by his crime and you probably don’t either. It didn’t bring us to the supposed edge of economic collapse like Lehman Brothers. It didn’t start a tsunami of foreclosures that affected hundreds of thousands of people like the sub-prime mortgage debacle. It didn’t put millions of people out of work. It was simply one more swindle in a long history of swindles.
There is a swindle going on right now, however, that does affect you, does put people out of work, is putting the economy at great risk, is stealing your money and enriching the few at the expense of the many based on lies and deceit. This is the great con of the Federal Government. It is based on the lie that government is a wise and benevolent entity that exists to equitably distribute the nation’s resources and direct the lives of the people for their benefit. What makes this fraud so egregious is not simply its scope, which encompasses a fifteen trillion dollar economy and three hundred million people, but the fact that your participation is not voluntary. In fact, this wise and benevolent government has developed an effective system of brainwashing known as the public schools that have convinced most people that government is the answer to all problems. But not all the people. If the appeals to “fairness” and “social justice” don’t work, and we can’t be scared into feeling good about our “contribution” through doomsday warnings about global warming, mass unemployment or homelessness, the gun of the government will be put to our heads to force us to relinquish our hard earned money to support the scam with the threat of confiscation, financial ruin and imprisonment.
Is it fair to compare what our Federal Government does to Bernie Madoff’s fraud? Not really, what the Federal Government does is so much worse. Ponzi schemes? The government perpetrates the largest ponzi scheme in the history of the world. We call it Social Security. While the early participants received generous benefits for small investments, as the number of contributors have declined, instead of simply losing their money, which may yet happen, they are forced to contribute ever higher amounts to support those who currently benefit. It is a ponzi scheme whose collapse is forestalled by ever larger involuntary contributions by the latecomers.
Of course, the voracious appetite of the government cannot be satiated simply through forced contributions. To cover the growing gap between spending and income, they borrow. And borrow. And borrow. And borrow. Bernie may be broke and have nothing to pass down to his children except an infamous name but his children and grandchildren are not on the hook for repaying his fraud. Not so the Federal Government. Today’s free spenders from both parties will be gone when the bill comes due for future generations. Future generations of Americans have been condemned to involuntary servitude, forced to pay back trillions of dollars to the Chinese and Saudis by the greedy politicians and bureaucrats of today. Nothing is more immoral.
When the numbers of people contributing to Bernie’s racket fell below the level needed to sustain it, it collapsed and those who came in late lost their money. No so the Federal Government. In addition to confiscating more money from the rest of us and borrowing from future generations, it has another method of maintaining its malevolent work. It can simply print money. Ah, if Bernie had just used a printing press he could have kept it up indefinitely. Oh yeah, that’s illegal; its called counterfeiting and it is so because it destroys the value of, and confidence in, the currency. Is it any different when the Federal Government does it through the Federal Reserve bank? No, we are destroying the value of our currency and our standard of living. The fact that our buying power and real wages continue to go down is a direct result of this hidden theft. The very real possibility of hyperinflation and the total collapse of the currency and economy are also directly tied to this fraud.
If Bernie was a mobster and a thug in addition to a cheat, he could have forced people to “contribute” to his growing power and punish those who didn’t pay the required protection money. The Federal Government, operated as a thugocracy under this current administration, does have that power. As Gibson Guitar found out, not contributing to the right party will result in armed goons breaking into your business, endless lawsuits designed to harass and intimidate, limitless regulations selectively applied for the sole purpose of putting one out of business to serve as a warning to others. This works for individuals as well as businesses.
Bernie used his ill gotten gains to live the life of the rich and famous. The benefits of working with and for the Federal Government are similar. The average annual salary and benefits for a federal worker is over $123,000, a salary and benefits we pay through our tax dollars, and those salaries are rapidly increasing. While the politicians and bureaucrats live the high life on our dime, partying at seminars and training sessions in Las Vegas, going on fact finding missions to Tahiti and dolling out billions of dollars to friends and relatives, how are the serfs who pay for this living? Seventy five percent of us make less than $50,000, forty seven percent of us, less than $25,000; salaries that are going down in real terms. Almost half of us are making less than a fifth of our “public servants.” And when we fail at our jobs or do something illegal, our income goes to zero or we go to jail. Bureaucrats who lose millions like those at Fannie Mae are paid millions when they leave. Gun runners at the ATF are promoted. Tax cheats are given cabinet positions. The standard of justice for the rulers and the ruled has never been so different in America.
The politicians and bureaucrats are not the only beneficiaries of the fraud. Just as Bernie spread the wealth around to his friends, so does the Federal Government. The rewards of the “protection money” paid to campaigns can amount to millions and even billions of dollars. Business like Solyndra and General Electric enrich themselves at our expense. Grants are dolled out to those who support the party line. Homes, health care and cash are the rewards of the poor voters who consistently put these con men and women in office even if what they receive is a pittance compared to the “in” crowd. Its all about the money, your money and my money, and using it in ways we would never even consider. Would you choose to invest in a company with a faulty business model, pay the living expenses of a man who lives in a crib and wears a diaper or train Chinese prostitutes to drink responsibly? No? Ah...but you and I do and we are not given a choice.
Bernie is in jail for the rest of his life. We name roads and buildings for the thieves in Washington DC. We expect so little we don’t even care when another robber is caught and released, or even promoted. The Federal Government, our Federal Government, is looting our country, stealing the wealth of its citizens and their progeny and destroying the best economic and governmental system ever conceived by man. It is doing so by perpetuating the lie that if government just had enough money and power life would be better for all of us. It is a lie. It is a failure. It is immoral. It is evil. Bernie may get the bad press but compared to the Federal Government of the United States of America, he looks almost angelic.
Wednesday, September 21, 2011
Monopoly Money
In case you haven’t heard, the hundreds of billions of dollars we have printed and borrowed to bail out our own banks and businesses that are “too big to fail” has now reached a whole new level of insanity. Our freshly printed dollars are now leaving our own shores to bail out the banks of Europe and their investments in the failed welfare states of Europe. Yes, “Helicopter Ben” Bernanke is now working with European central banks to infuse liquidity and prop up European banks that are heavily invested in bonds from Portugal, Ireland, Italy, Greece and Spain, affectionately known in the investment community as the “PIIGS.” No doubt pig slop is worth more than bonds from these bankrupt countries.
So without any input from you or I or our elected representatives, the gods at the Fed are going to send hundred of billions or trillions of our dollars to Europe in an attempt to forestall the inevitable collapse of their failed socialism, an experiment made possible by our military welfare. Our dollars are going to ensure the generous pension checks, free health care and the salaries of all those bureaucrats necessary to keep their nanny states running and the eternal adolescents from rioting. And we can’t forget the generous welfare benefits given to a those Muslim immigrants so that instead of working they can sit around and plan jihad against the self-loathing and deteriorating European states and culture. With all our own economic problems and mountains of debt, is this really where our money should be going?
Of course, the Obama administration doesn’t engage in any activity for altruistic reasons. It does so either for ideological reasons or to help or pay back supporters. In this case, one of the companies which will experience devastating losses if European banks and countries start defaulting is Obama’s favorite American company, General Electric. GE’s balance sheet looks much like America’s, way too much debt and not enough cash. It has a lot of exposure to credit cards and mortgages in Europe and losses of tens of billions in those markets will put it on the verge of bankruptcy. Of course it won’t fail, we the people have generously guaranteed its debt through 2012 and another bailout would not be hard to get. The only reason Jeff and Co. can run GE like this is because they know they have friends in high places and they are only interested in getting the highest compensation they can while they can as their business model dooms an American icon. Its the Solyndra model writ large.
It is important to understand that there is no real wealth available to bail these banks out. Europe is broke. Now that we have joined the European economic club of anemic growth, we don’t have trillions of dollars in wealth lying around either. That means only one thing. The money for these bailouts is brand new off the printing presses. To understand why this is not only horrible economically but just plain immoral, I have reprinted the following excerpt from the Fed section of “Leave Me Alone; A Patriot’s Plan for Restoring Pride and Prosperity in America” available at www.leavemealonenow.webs.com
"There is a very simple reason why we intuitively know we are being screwed by this system, a system that benefits those at the top, or the insiders, and leaves the rest of us holding a bag of excrement. To understand why this wholesale printing of money benefits the government and their friends in the banking industry and hurts the rest of us, we need to look at it honestly for what it is-legalized counterfeiting. Counterfeiting is illegal for you and I and for good reason. It erodes confidence in, and the value of, the currency. Remember one of the primary premises of this work, what is wrong/bad/immoral for the individual is wrong/bad/immoral for the government. When the government, through the Fed, prints money, the effects are the same. The currency loses value and eventually, people lose confidence in it.
The question is, who benefits from counterfeiting? Obviously, the counterfeiter does because he goes out and exchanges his fake money for goods and services at their current value, based on the amount of money in circulation. Think of it in a closed neighborhood. In that neighborhood there was one million dollars in circulation and all goods and services were based on that amount of money. The counterfeiter prints another million. He goes out and spends it all, buying a new house, a car and whatever else he wants. He buys everything at current prices based on the one million dollars in circulation. However, he has now doubled the money supply which means money becomes cheaper and goods become twice as expensive. Each time that fake money changes hands, it loses buying power and the average people in the neighborhood suffer from inflation. The crook got his stuff when the currency had twice as much value but everyone else had their purchasing power cut in half.
Now elevate it to the national level. The Fed prints two trillion dollars and trades it for treasuries so the Federal Government now has an extra two trillion dollars to spend. Who gets that money first? Obviously, anyone who works in government receives that money before anyone else. After that, it goes out to all those who have lobbied for and received government contracts and benefits. It goes to bailouts to those whose friendship with Washington has “merited” them such treatment. The banks receive that money as deposits that they use to lend to their friends and clients. They all get to spend that “new” money at current values. However, as that money makes its way through the system, as those union workers and contractors spend it and banks loan it, money becomes cheaper because there is more of it. The rest of us who receive it last find our dollars buy less than they did last year, last month or even last week. It is redistribution of income from the middle class and the poor to the rich and connected.
Of course, the way all that happens in practice is not so simple. Tim Geithner doesn’t walk over to the Fed and hand Ben Bernanke a suitcase full of treasuries and leave with a suitcase fill of freshly printed hundred dollar bills. The Federal Reserve buys and sells treasures on the open market through a broker, or a series of brokers like Goldman Sachs, not from the treasury directly. These brokers compete with one another under the New York Fed through an auction process, keeping the whole process neatly confined among the Wall Street elite.
The fact is this, wherever power is concentrated, corruption is rampant. The bigger the government, the more corruption. With the amount of money flying around and out of Washington, a process only made possible by the Fed, corruption is precipitated on an unheard of scale where billions of dollars are paid out to those with the best paid lobbyists and more intimate connections. It is a system that is based on an immoral premise, counterfeiting, and therefore it breeds immorality. The only way we are going to even begin to change Washington is to eliminate the very foundation for this perverse and wicked edifice."
“Lenin is said to have declared that the best way to destroy the capitalist system to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis for society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” John Maynard Keynes
So without any input from you or I or our elected representatives, the gods at the Fed are going to send hundred of billions or trillions of our dollars to Europe in an attempt to forestall the inevitable collapse of their failed socialism, an experiment made possible by our military welfare. Our dollars are going to ensure the generous pension checks, free health care and the salaries of all those bureaucrats necessary to keep their nanny states running and the eternal adolescents from rioting. And we can’t forget the generous welfare benefits given to a those Muslim immigrants so that instead of working they can sit around and plan jihad against the self-loathing and deteriorating European states and culture. With all our own economic problems and mountains of debt, is this really where our money should be going?
Of course, the Obama administration doesn’t engage in any activity for altruistic reasons. It does so either for ideological reasons or to help or pay back supporters. In this case, one of the companies which will experience devastating losses if European banks and countries start defaulting is Obama’s favorite American company, General Electric. GE’s balance sheet looks much like America’s, way too much debt and not enough cash. It has a lot of exposure to credit cards and mortgages in Europe and losses of tens of billions in those markets will put it on the verge of bankruptcy. Of course it won’t fail, we the people have generously guaranteed its debt through 2012 and another bailout would not be hard to get. The only reason Jeff and Co. can run GE like this is because they know they have friends in high places and they are only interested in getting the highest compensation they can while they can as their business model dooms an American icon. Its the Solyndra model writ large.
It is important to understand that there is no real wealth available to bail these banks out. Europe is broke. Now that we have joined the European economic club of anemic growth, we don’t have trillions of dollars in wealth lying around either. That means only one thing. The money for these bailouts is brand new off the printing presses. To understand why this is not only horrible economically but just plain immoral, I have reprinted the following excerpt from the Fed section of “Leave Me Alone; A Patriot’s Plan for Restoring Pride and Prosperity in America” available at www.leavemealonenow.webs.com
"There is a very simple reason why we intuitively know we are being screwed by this system, a system that benefits those at the top, or the insiders, and leaves the rest of us holding a bag of excrement. To understand why this wholesale printing of money benefits the government and their friends in the banking industry and hurts the rest of us, we need to look at it honestly for what it is-legalized counterfeiting. Counterfeiting is illegal for you and I and for good reason. It erodes confidence in, and the value of, the currency. Remember one of the primary premises of this work, what is wrong/bad/immoral for the individual is wrong/bad/immoral for the government. When the government, through the Fed, prints money, the effects are the same. The currency loses value and eventually, people lose confidence in it.
The question is, who benefits from counterfeiting? Obviously, the counterfeiter does because he goes out and exchanges his fake money for goods and services at their current value, based on the amount of money in circulation. Think of it in a closed neighborhood. In that neighborhood there was one million dollars in circulation and all goods and services were based on that amount of money. The counterfeiter prints another million. He goes out and spends it all, buying a new house, a car and whatever else he wants. He buys everything at current prices based on the one million dollars in circulation. However, he has now doubled the money supply which means money becomes cheaper and goods become twice as expensive. Each time that fake money changes hands, it loses buying power and the average people in the neighborhood suffer from inflation. The crook got his stuff when the currency had twice as much value but everyone else had their purchasing power cut in half.
Now elevate it to the national level. The Fed prints two trillion dollars and trades it for treasuries so the Federal Government now has an extra two trillion dollars to spend. Who gets that money first? Obviously, anyone who works in government receives that money before anyone else. After that, it goes out to all those who have lobbied for and received government contracts and benefits. It goes to bailouts to those whose friendship with Washington has “merited” them such treatment. The banks receive that money as deposits that they use to lend to their friends and clients. They all get to spend that “new” money at current values. However, as that money makes its way through the system, as those union workers and contractors spend it and banks loan it, money becomes cheaper because there is more of it. The rest of us who receive it last find our dollars buy less than they did last year, last month or even last week. It is redistribution of income from the middle class and the poor to the rich and connected.
Of course, the way all that happens in practice is not so simple. Tim Geithner doesn’t walk over to the Fed and hand Ben Bernanke a suitcase full of treasuries and leave with a suitcase fill of freshly printed hundred dollar bills. The Federal Reserve buys and sells treasures on the open market through a broker, or a series of brokers like Goldman Sachs, not from the treasury directly. These brokers compete with one another under the New York Fed through an auction process, keeping the whole process neatly confined among the Wall Street elite.
The fact is this, wherever power is concentrated, corruption is rampant. The bigger the government, the more corruption. With the amount of money flying around and out of Washington, a process only made possible by the Fed, corruption is precipitated on an unheard of scale where billions of dollars are paid out to those with the best paid lobbyists and more intimate connections. It is a system that is based on an immoral premise, counterfeiting, and therefore it breeds immorality. The only way we are going to even begin to change Washington is to eliminate the very foundation for this perverse and wicked edifice."
“Lenin is said to have declared that the best way to destroy the capitalist system to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis for society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” John Maynard Keynes
Monday, September 12, 2011
President Obama's America
All you really needed to know about President Obama’s understanding of America was found in one of the introductory lines of his "jobs" speech. Obama’s America is one in which "everyone gets a fair shake and does their fair share." This is nothing more than slang for the core principle of communism as explained by Karl Marx; "From each according to his ability, to each according to his need." Obama’s vision is Marx’s vision and everything in this speech is explained by this statement.
To bring about the communist ideal where private property is abolished and everyone is made "equal", an all powerful government needs to be established to equitably redistribute the property the greedy capitalists have stolen from the poor working man. Obama repeated his call for a war on the successful, vowing to take even more from those who actually create wealth and prosperity. He brought up his favorite billionaire, Warren Buffet, again. He said even Warren agrees that he doesn’t pay enough taxes and that Warren said that government should take more of his money. Warren should shut up. If he wants to "contribute" more, no one’s stopping him. He should put his money where his mouth is instead of shielding as much of his income and wealth as he can from taxes and fighting the IRS to keep from paying the taxes he already owes. But Warren is a prime example for Obama’s belief that all rich people are really stingy, cruel, immoral people who are incapable of compassion and therefore must have it forcibly extracted from them. If poor Warren, who has so much more than he needs, won’t give even when he says he should, then it is obvious that the only way the rich are going to help those "less fortunate" is if the government shows up with a gun and takes it.
In Obama’s understanding of America, we became a great nation because of government and only government intervention and expansion can make us great again. It was when we abandoned the "rigid idea of what government could and could not do" , i.e. the Constitution, and passed the great "entitlement" programs that America became a nation worthy of greatness. It is obvious that our form of government as described in the Constitution is an impediment to Obama’s communist vision. For Obama, government should be able to confiscate, redistribute, regulate and control without restraint. To that end he must work to bring down the structure of government that exists within the constraints of the Constitution and replace it with an autocratic form much more conducive to implementing his vision. He has already shown himself to be more dictatorial than any other president. He rules by fiat whenever he can get away with it. He ignores the rules or makes them up as he goes along. If congress can’t or won’t act, it is his prerogative to do so.
But to really achieve his goal, he must collapse the current system. This explains his push for a larger and larger payroll tax reduction. No statist ever wants to reduce taxes but this has been a theme in the Obama administration for a while. Why? Because all the spending and borrowing is meant to collapse the system. We all know Social Security is a Ponzi scheme we have been forced to contribute to and is, therefore, by definition, unsustainable. The dates for its demise under the current structure vary but there is no question that if Social Security and Medicare/Medicaid continue as they are, they will break the bank, a bank that is already broke. Obamacare is accelerating that day for the heath care side of the equation. If we suddenly cut in half the amount of money we are contributing to the Social Security "trust fund", will it not break sooner? The crisis these bankrupt entitlements create will be just the excuse a statist will need to step in and take even more wealth and control; and the majority of Americans will ask for it. We want our "free" health care and our pensions and if we are convinced after many years of liberal indoctrination that Obama is right, the Constitution is an impediment to our happiness, we will allow the autocrats to ignore or scrap it and accept whatever keeps the goodies flowing.
In Obama’s America we are not allowed to be on our own, or write our own rules. No, we must take care of each other and government exists to make sure we do. Without this bill children will not be educated, roads will not be repaired, veterans will not get jobs, teen-agers will spend their summers playing video games and America will never out build or out innovate the rest of the world. If government doesn’t spend a half trillion dollars, America is finished. Of course he never said where that money was coming from, only that it was "paid for." By whom? The rich? If you confiscated all the wealth of the rich, it would fund the government for a period of weeks, at most. Savings elsewhere? Laughable. This president and even the Republicans in congress haven't shown any ability to cut anything substantial from a federal budget for which "bloated" seems an inadequate description anymore and suddenly they are going to come up with a half trillion dollars of savings this year? No, we will all pay, we and our children and grandchildren and great grandchildren through debt and inflation. All to ensure jobs for government employees and union members.
President Obama, your vision of America is most un-American. America is not a place where everyone gets a fair shake and does their fair share. Life is not fair. The circumstances of everyone’s birth are different and very unequal. Some are born poor, others rich. Some are born on the mean streets of the inner city, others on expansive farms. Some have parents that spoil them, other have parents that neglect them. In most places in the world and throughout history, birth determines opportunity. Once a serf, slave or peasant, always a serf, slave or peasant. That is "unfair" and unjust. America was the first to reject this idea. Every man is equal in his capacity for success and in America, no matter what a man’s previous circumstances were, he had the opportunity to try to make what he could of himself. He owned what he acquired through his hard work, no one else could claim it. Some accumulated more than others because they were smarter or harder working or even "luckier" but the whole world benefited from the innovations and wealth produced by truly free men.
President Obama, government did not make America successful. America was successful because its government took little and did little. America did not become compassionate because of government. America was, and is, the most compassionate nation on earth because of our religious heritage. If, as you said in your conclusion, you really want to see America great once again, cure her ills, and restore hope and prosperity to all her people, you need not spend another dime. Just give us opportunity. Opportunity to succeed and keep the fruits of our success. Let us work without a government bureaucrat looking over our shoulder with his hand in our pocket. Freedom, not coercion, is the key to peace and prosperity. Until we have people in government who actually believe that and have the courage to act on it, we are condemned to continue our decline with this president leading the way.
Thursday, July 14, 2011
Are We This Pathetic?
President Obama has now tried to jump start negotiations over the debt ceiling by stating that he could not guarantee government checks for Social Security, veterans benefits, and military pay, to name a few, will go out on time in August if the debt ceiling is not raised. Obviously, this is a scare tactic to get all those government dependents across the land, a majority of us unfortunately, to pressure their congressmen to agree to something. Raising current taxes or reducing future benefits, it doesn’t matter to most people, as long as that government money is in the account on the first of the month. Whether the threat is real or not, the fact is there are a lot of people across the land for whom even the threat of not receiving their government benefits on time raises the specter of real privation.
How sad. How absolutely pathetic. How did the wealthiest nation in the history of mankind fall to the point where the majority of its citizens depend on a pitiful allowance consisting of money stolen from others or borrowed from future generations? How did we come to the point where the ineptitude of our national leaders can impact whether or not we can buy groceries next week? How did we allow ourselves to become so dependent on our masters in Washington that when they so mismanage their financial affairs as to bring us to bankruptcy, the serfs on the land will be reduced to absolute poverty?
Liberty, that antiquated idea that this country was founded upon, is the idea that each man will make choices about his life and he will either benefit from the results or suffer for them. He and he alone. His prosperity or poverty is based only on his decisions and hard work. Your prosperity or poverty should be based only on your decisions and hard work. It should not be based on what happens in Washington, things you have no control over. Our destiny, our ability to meet our basic needs, and our ability to secure our future, should reside within ourselves, our hearts and minds.
Oh, how far the mighty have fallen. Strong, independent American men and women who once viewed obstacles as challenges and whose hard work and persistence built a nation out of the wilderness have been reduced to sniveling beggars who grovel before their masters in Washington, begging them to continue their idiocy just a little longer so they can have their bowls filled with poisonous gruel.
Where are you standing? If the checks stop coming in August will you quickly slide into homelessness and hunger? Does your entire life depend on receiving stolen and borrowed money from the government? It doesn’t matter if the president was lying about the ability to pay benefits or not. The question is whether or not your survival depends on the goodwill of Washington and its ability to continue its financial insanity. We will all suffer when that insanity comes to its logical conclusion whether in August or the next month or year. However, the more independent and better prepared you are, the better position you will be not only to weather the storm but provide a beacon of liberty to show your neighbors the way forward.
"They are obscure, unorganized, inarticulate, each one rubbing along as best they can. They need to be encouraged and braced up, because when everything has gone completely to the dogs, they are the ones who will come back and build a new society, and meanwhile your preaching will reassure them and keep them hanging on. Your job is to take care of the Remnant." Albert Jay Nock
How sad. How absolutely pathetic. How did the wealthiest nation in the history of mankind fall to the point where the majority of its citizens depend on a pitiful allowance consisting of money stolen from others or borrowed from future generations? How did we come to the point where the ineptitude of our national leaders can impact whether or not we can buy groceries next week? How did we allow ourselves to become so dependent on our masters in Washington that when they so mismanage their financial affairs as to bring us to bankruptcy, the serfs on the land will be reduced to absolute poverty?
Liberty, that antiquated idea that this country was founded upon, is the idea that each man will make choices about his life and he will either benefit from the results or suffer for them. He and he alone. His prosperity or poverty is based only on his decisions and hard work. Your prosperity or poverty should be based only on your decisions and hard work. It should not be based on what happens in Washington, things you have no control over. Our destiny, our ability to meet our basic needs, and our ability to secure our future, should reside within ourselves, our hearts and minds.
Oh, how far the mighty have fallen. Strong, independent American men and women who once viewed obstacles as challenges and whose hard work and persistence built a nation out of the wilderness have been reduced to sniveling beggars who grovel before their masters in Washington, begging them to continue their idiocy just a little longer so they can have their bowls filled with poisonous gruel.
Where are you standing? If the checks stop coming in August will you quickly slide into homelessness and hunger? Does your entire life depend on receiving stolen and borrowed money from the government? It doesn’t matter if the president was lying about the ability to pay benefits or not. The question is whether or not your survival depends on the goodwill of Washington and its ability to continue its financial insanity. We will all suffer when that insanity comes to its logical conclusion whether in August or the next month or year. However, the more independent and better prepared you are, the better position you will be not only to weather the storm but provide a beacon of liberty to show your neighbors the way forward.
"They are obscure, unorganized, inarticulate, each one rubbing along as best they can. They need to be encouraged and braced up, because when everything has gone completely to the dogs, they are the ones who will come back and build a new society, and meanwhile your preaching will reassure them and keep them hanging on. Your job is to take care of the Remnant." Albert Jay Nock
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