Sunday, June 27, 2010

Austerity is a bad idea

Be very wary of snake oil salesman dressed as politicians who are promising a return to deficit reduction and balanced budgets. This election cycle it is the Republicans crying about government deficits and national debt. If you think things are bad now just wait until the government starts to tighten its belt. Don't think the Democrats are any better - in fact they're much worse because they will claim that in order for the government to return to fiscal discipline taxes will have to go up. Of course they will claim only the filthy rich will be affected by their tax hikes. Don't believe it. The Republicans will promise to cut taxes, and they might actually deliver but they will also be glad to turn the economy over to the same businesses (the giant Wall Street banks and the Fed) that have caused so much misery.

Right now government spending is all we have. Until legitimate businesses stop being freaked out by Barack Obama (and rightly so), jobs will not be coming back. Only when average folks are back to work and feeling good about the future will lending return and new money enter our cash starved economy. The uncertainty borne of the Obama/Pelosi regime has caused business to literally sit on more than a trillion dollars rather than invest, expand and hire workers. Obviously when people are working and spending and businesses are selling and expanding then government (all governments) will experience increasing revenues. At the risk of sounding like Paul Krugman, honestly, until these things happen only government spending can tide us over.

As much as I admire the sentiment of the Tea Party movement they are wrong if they think this is a good time for the government to slam the wallet shut. The idea that the national debt is a burden on future generations is based on the false premise that the national debt must some day be paid off by the private sector. In reality, the government will pay itself to redeem its debt securities as they mature, using funds obtained by selling new securities to the public. The fact that no one – apparently the politicians included – understands how this works is not surprising. The truth makes for dull rhetoric and boring TV. For all intents and purposes this "rolling over" of the national debt can be continued indefinitely.


So are we doomed to be crushed by government debt now and for the foreseeable future? Yes and no. No for reasons stated above. Yes, if we continue to allow the banks and the Federal Reserve to have exclusive control of the money supply. We’ll end up pouring billions down the debt rat hole serving no one but the big money bankers. It is the government that grants the power to commercial banks to "create" all the money circulating in the economy by issuing loans. Why then does government borrow money from these same banks only to owe them massive amounts of interest? It really makes no sense. Think about it for a minute...

Honestly it shouldn't take but two seconds to realize that it's completely insane. Yet that's exactly what's going on. Instead of having the government (remember, we are the government) in control of the money supply we allow it to enrich a handful of multi-billionaires in D.C., New York, London and Switzerland. So we all get mad at Wall Street and we should, but they can only do what the law allows. It's the government that sets the rules and they have set them to favor the Wall Street money changers and not the citizens.

Today each time a bank makes a loan it actually creates new money out of thin air. The more the banks lend the stronger the economy, but as soon as they stop lending the economy is starved of new money and it literally grinds to a halt. Every economic bubble that bursts puts caution into the banking system, loans stop, new money stops and another possible recession looms. It makes the economy entirely unstable. It's crazy, frankly it's absurd.

Simply put, this process – the creation of "new money" by commercial banks - is the actual cause of this and every financial crisis' over the past 100 years. Each time we endure a financial crisis without a fundamental policy shift we are only assured of a worse one next time.


In simple terms we have to take back our economy from these erratic cycles, end the concept of too big to fail and force the banks to make their money fostering wealth creation instead of playing us all for suckers and serfs. Only the government has the power to do it. Neither Republicans nor Democrats have the will or the backbone to accept their responsibility. Instead we hear rumblings of austerity. That will make today's economy look like a boom town...

I've seen a few different plans describe that it might be as simple as preventing banks from having the sole power of creating the nation’s money supply by making minor changes to the rules governing bank accounts. It would restore the right to the Treasury - an agency of the government - to create the nation’s money instead of a privately-owned central bank. This would cause the newly created debt-free money to reduce our tax burden, free up private capital for economic expansion and fund the public services we already pay for but don't get because of the billions going to the giant banks in the form of interest payments.

The risk is of course that politicians being political and having control over the Treasury will pervert the process and throw the economy into a tailspin. That's different from what we have now exactly how? Politicians we can vote out of office - Wall Street bankers we can't.

The way it is now we have the entire global economy constrained by a handful of greedy pigs who win whether the economy prospers or not. We worry about radical Islam and Shariah law threatening the Western world (which I'll admit scares me too) but we are experiencing something far worse by our own hand. The potential for the betterment of all humanity is circling the drain because we have no leaders who have the will to stand up to the big time money changers. Oh, and don't fool yourself into believing that the the financial reform bill making its way through Congress is anything more than window dressing that will probably hurt the average Joe and the smaller banks even more.


All of this is not to say that the way government spends money today or that the slippery path to socialism is good or desirable. I don't favor out of control spending by anyone - especially the government. At the heart of the problem is the way the government is funded. It is currently held hostage by the way the monetary system it set up. Eventually, left unadjusted, all of our tax money will go to paying debt. This is good for whom exactly???

So when the campaigners come a knockin' this fall ask them what they plan to do to bring stability to our economy and foster job creation. If they start talking about deficit reduction and fiscal discipline look at them with a wary eye. It's just not as easy as that. Money needs to spent for wealth and prosperity to return and if you and I can't and if businesses can't then the government has to. Austerity is a bad idea, a very bad idea.


Sunday, June 20, 2010


There are times when I delve into my favorite blogs and websites - as well as the blogs and sites that feature views antithetical to my own - I soon get overwhelmed. Information overload quickly turns my brain to mush. There is just so much one mind can take. In this modern age the sheer volume of interesting and revelatory information available with the simple click of a mouse is really mind-blowing. It seems the only thing that can talk me down is to do some blogging myself. This of course only adds to the din (assuming of course that someone - anyone - even bothers to read this tripe).

All systems have a tipping point, the human mind is no different. When a system gets overwhelmed it locks up, shuts down or crashes. A computer needs to be rebooted, a climate system lashes out with violent storms before the calm returns, the mind goes catatonic, eventually falling into a deep sleep. The end result is always a "reset".

Reset is a term we've heard repeatedly from the current regime in Washington DC. The Obama Administration and their chief allies in Congress have been going around hitting the reset button on everything. Some might think it's incompetence, others think it's simply a differentiator from the previous administration's work, and still others think it "is" the plan, the only plan.

Me, well, I think it is the plan, but I don't think it started with Obama. The long term dreams of the narrative known as American socialism is more than a century old now. The Cloward–Piven strategy and Saul Alinsy's "Rules for Radicals" pre-date Barack Obama by a long shot. But Obama is the one the faithful have been waiting for to stand in the spotlight and deliver, while the behind-the-scenes guy, Mr. George Soros, puts together the funds in his role as executive producer. The production is a Nobel Peace Prize Award winning show called "Overwhelmed: The Resetting of America".

In short the plot is the deliberate overwhelming of the system to bring about collapse, where the antagonist then hits the reset button to re-program the American government into the most radical socialist form imaginable.

Author and thinker David Horowitz describes Cloward-Piven strategy as:
The strategy of forcing political change through orchestrated crisis. The "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.

The Cloward-Piven approach called for swamping the welfare rolls with new applicants - more than the system could bear. The resulting economic collapse would theoretically lead to political turmoil and ultimately socialism. It has become a blueprint for some of the Left's most destructive campaigns of the last four decades. Worse still it's likely to haunt America for years to come with George Soros' Shadow Party having now adopted the strategy, honing it into a far more efficient machine than any of its Sixties-era promoters could have ever dreamed. This method is deftly employed by leftist radicals to create and manage crisis'. This strategy explains Rahm Emanuel's ominous statement, "You never want a serious crisis to go to waste."

Obama himself adheres to the Saul Alinksy Rules for Radicals method of politics, which teaches the dark art of destroying political adversaries. He is very good at it, especially with an adoring media at his side. But it may not be enough to simply destroy a mangy dog known as the Republicans. Curiously, in a country as dynamic as ours the wheels of change still turn slowly. With elections coming around every two years an impatient electorate demands results. While Wall Street high finance and seedy mortgage lenders scream capitalist pig to the middle class like nothing else, almost nothing Obama has done has helped to lift Americans from the politically caused crisis' of the credit collapse and the housing value collapse. It's possible that the steps the administration has taken were never intended to do anything but accelerate our economic deterioration in anticipation of the saving grace of Barack Obama riding in on his high horse named Socialism to save the day.

Counting on the economic ignorance of a large block of Americans and a willing media to sell his "change" message Obama did not count on much push back. But a funny thing happened on the way to world-wide socialism...

1. He never saw the Tea Party coming 2. He didn't anticipate the meltdown of European socialism (so soon) 3. He underestimated the true appetite for his type of "change". He still has a strong hand to play by virtue of him not being George W. Bush and the fact that the Presidency is a powerful position. Still, unless things drastically improve between now and November his power will be diminished when his Congressional advantage is reduced and the media dogs start to turn on him in a substantive way.


Tuesday, June 15, 2010

Poor, Poor California

Congressman Tom McClintock on the "state" of California:

Here's a snippet of the key points of his July 2009 speech...

"I know that everybody likes to poke fun at California - but I can tell you right now that despite all of its problems, California remains one of the best places in the world to build a successful small business. All you have to do is start with a successful large business."

I'm sure McClintock meant it to be funny, you know, break the ice, start off with a little joke. Unfortunately as with all good humor there is a element of truth in it. The Golden State is nearly lost now. America has a preview of what will happen to the rest of the country if disasterous leftist policies are allowed to become national law. Hear this; what has happened to California can't be blamed on big business or the evil, undeserving rich.

McClintock says "it's with a sense of déjà-vu that I have every day on the House floor as I watch the same folly and blunders that wrecked California now being passed with reckless abandon in this Congress."

We all remember the Golden State in its Golden Age. He reminds us; "A generation ago, California spent about half what it does today AFTER adjusting for both inflation and population growth."

Without reservation we can agree with Congressman McClintock and say California once had the finest highway system in the world and some of the finest public schools in the country. At one time California offered a FREE university education to every resident. California had an unemployment rate consistently below the national rate and its economy was nearly recession-proof.

He goes on to point the finger at the the 800 pound gorilla. "One thing - and one thing only - has changed in those years: public policy. The political Left gradually gained dominance over California's government and has imposed a disastrous agenda of radical and retrograde policies that have destroyed the quality of life that Californians once took for granted."

The collapse of California's economy can be tied to 3 critical events:
1. the rise of environmental Ludditism
2. the abandonment of constitutional checks and balances that once constrained spending and borrowing;
3. the rise of rule by public employee unions.

Environmental Ludditism was ushered in by a radical new-age nut named Jerry Brown as governor of the state - yes, the very same Jerry Brown who is running again in 2010 (to finish the job???)

Brown's vision for California was something other than a shining example of an American success story. Basically it was European socialism and Russian centralized planning, both unmitigated disasters as we are now seeing. As governor Brown infused his warped vision into every aspect of public policy that has dominated the disastrous direction of California through both Republican and Democratic administrations.

Jerry Brown's actions led directly to California's devolution:
- cancelled the state's highway construction program
- cancelled long-planned water projects, conveyance facilities and dams.
- established the California Energy Commission that blocked approval of any significant new generating capacity.
- enacted volumes of environmental regulations that created severe impediments to home and commercial construction, empowering an incipient no-growth movement

The second problem is structural: the collapse of the checks and balances and other constitutional and traditional constraints on government spending and borrowing.

- state take-over of public education
- legislative response to Proposition 13 led to the essential state take-over of local governments
- removed the governor's ability to make mid-year budget corrections
- Proposition 111 gutted the Gann Spending Limit that had held increases in state spending to inflation and population growth
- tax increases by Pete Wilson in 1991 and Arnold Schwarzenegger in 2009

McClintock continues... "The third factor that also can be traced back to the 1970's was the radical transformation that took place in the nature and power of the state's public employee unions. Until that time, state law prohibited public employee strikes against the public and prohibited collective bargaining or closed shops."

- collective bargaining acts gave public sector unions all the rights and powers of private sector - - unions - but without any of the natural constraints on private sector unions.
- political expenditures by public employee unions exceed all other special interest groups
- radically escalating personnel costs and radically deteriorating performance

The Congressman concludes:
"That's the state's predicament in a nutshell. California's borrowing costs now exceed the budget of the entire University of California and it is increasingly likely that it will fail to find lenders when it must borrow billions to pay its bills at the end of this month. Ignoring dire warnings, Gov. Schwarzenegger and legislators from both parties earlier this year imposed the biggest state tax increase in American history.

And I can assure you that the Laffer curve is alive and well. In the first two months after the tax increase took effect, state revenues have plunged 33 percent.

Sadly, California has reached the terminal stage of a bureaucratic state, where government has become so large and so tangled that it can no longer perform even basic functions.

Congress is now enacting the same policies at the national level that have caused the collapse of California. So whistle past this cemetery if you must, but remember the medieval epitaph: "Remember man as you walk by, as you are now so once was I; as I am now so you will be." The good news is there is still time for the nation to avoid California's fate. If anything, the collapse of California can at least serve as a morality play for the rest of the nation - unfortunately in the form of a Greek tragedy."


Tuesday, June 08, 2010

Is This Man Satan?

Occasionally you'll come across a quote or an article by this man and find your suspicions confirmed that Satan is alive and well and walking among us. Peter Singer is well known for his views on the value of humans in general. He doesn't see any value in human life at all. Singer is Professor of Bioethics at Princeton University and Laureate Professor at the University of Melbourne. His most recent book is “The Life You Can Save.” He often makes waves with his proclamations that infanticide and euthanasia ought to be practiced safely and legally. But this NYT article cries out for condemnation, shame on the NYT for even giving this crap a forum.

Essentially Singer tries to make the case for this being the last generation of humans, that we should submit to mass sterilization and then party like there's no tomorrow. FTA "So why don’t we make ourselves the last generation on earth? If we would all agree to have ourselves sterilized then no sacrifices would be required — we could party our way into extinction!"end quote. I mean why would we care about the environment or the economy for future generations if there isn't going to be any? Wouldn't the world be better off if humans just went extinct? Better off for whom? Cute little bunnies and dragonflies? Rationally this makes little sense looking at it from a purely scientific angle. Homo Sapiens is a product of nature. To intentionally kill off any species is anti-natural.

But beyond the rational there is something unfathomably horrifying about his ideas. They are the very essence of evil. God, or Zeus if you wish, created man so that "our love" would deliver sustenance for God and man. Satan (or Hades) brings hate and death for the express purpose of thwarting God - and therefore love itself. Singer, who is clearly Satan's servant if nothing else, puts forth here and in other proclamations that life is cruel, miserable and worthless and certainly not worth living. Surely those infected, as Singer is, with negativity and joylessness would find life a pointless drudge. He must have never heard a baby belly laughing. He obviously has never marveled at the technical ingenuity of mankind or listened in awe to a powerful musical passage. He has never been inspired by a priest during a homily or a public orator giving a great speech, or watched a movie that made him cry. There are a million things that make life worth living.

The idea that because everyone suffers at some point in their lives that the whole thing is useless and beyond that, cruel. Singer does capitulate at the end of his piece and declares that human life should be allowed to go on for a few more generations...

FTA I am enough of an optimist to believe that, should humans survive for another century or two, we will learn from our past mistakes and bring about a world in which there is far less suffering than there is now. But justifying that choice forces us to reconsider the deep issues with which I began. Is life worth living? Are the interests of a future child a reason for bringing that child into existence? And is the continuance of our species justifiable in the face of our knowledge that it will certainly bring suffering to innocent future human beings?end quote

Sadly this man has been allowed inflict his warped ideas on several generations of our young people and most certainly prompted some to forgo ever having children. Alas they will never hear the belly laugh of a joyous baby of their own.


Friday, June 04, 2010

Earth to Paul McCartney: "You're a Buffoon!"

In a classless act Sir Paul McCartney lased out at President Bush saying “After the last eight years, it’s great to have a president who knows what a library is.”

Gee Paul that was a pithy line. Did you come up with that one all by yourself? You're either a sick puppy or you're a buffoon. It is fairly well known that President Bush was a voracious reader and especially fond of the writings of Winston Churchill. We know you and all your buddies depised Bush for taking out Saddam Hussein, Saddam was such a nice guy, for the Christ's sake, but you could've at least used a line that 1.) made sense 2.) had a basis in fact.

After all his lovely wife, Laura, was librarian - I'm fairly certain she told George what a library was.