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Archive for September, 2011

Is the Solyndra Affair an Impeachable Offense?

Unless you have been under a rock or possibly out of the country (a benefit of the doubt I am willing to extend to my overseas teacher colleagues) you know by now that there is great outrage in Washington, D.C. over the Obama Administration’s $535 million loan to green company and now bankrupt entity Solyndra.  Investigations have been launched by both the Justice Department and Congress investigating whether Solyndra executives misled them during the loan application process.

Of course, the hubbub about Solyndra executives deceiving the Administration to get the loan is simply a smokescreen.  Politically, the Solyndra debacle makes Obama look bad just as he begins to launch his reelection campaign.  It not only calls into question the judgment of his administration but its ethics.  To complicate matters, besides endeavoring to support a renewable energy company, the Administration’s loan to Solyndra was also intended to minimize the risk of venture capital firms invested in the company.  One investor in Solyndra was Oklahoma billionaire and Obama campaign fundraiser George Kaiser.  Could it be that the Solyndra loan was fast-tracked and a rash decision made because a big time Obama supporter had interests in the company?  If it is proven would that represent an impeachable offense?

In reality, even if those allegations prove false Obama’s actions are still impeachable.  Nowhere in the Constitution, that the president swore an oath to, is the federal government granted the power to loan to, subsidize, or guarantee the loans of businesses.  This is corporatism similar to what existed in Mussolini’s Italy in the 1920s and 30s.

What the Constitution does say is that the President “shall be removed from office on impeachment for and conviction of treason, bribery, or other high crimes and misdemeanors”.  The key phrase is “high crimes and misdemeanors”.  What are they?  They were the grounds used by the English parliament to impeach officials of the crown dating all the way back to 1386.  Among the offenses included in high crimes and misdemeanors was misappropriation of government funds.  If using tax dollars, including those of other energy companies, to benefit certain players in the marketplace isn’t a misappropriation of government funds then I don’t know what is.

Certainly, Obama is not the first president to practice corporatism.  Jimmy Carter bailed out Chrysler in the 1970s and TARP was signed into law by George W. Bush to name just two.  Impeachment is a very political endeavor anyway and for most politicians in Washington the Constitution is irrelevant.  But the next time you hear some politician vilify Solyndra’s executives remember it’s just a smokescreen.  Washington shouldn’t have made the loan in the first place.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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A Return to the Gold Standard is a Must

Money printer extraordinaire and Federal Reserve Chairman Ben Bernanke is at it again.  He and several of his central banking buddies in Europe and Asia are going to lend dollars to non-U.S. banks that lack adequate liquidity to operate.  Many of the recipient banks are feeling the pinch because of their exposure to the Greek debt crisis.

Of course this isn’t the first time the Fed has lent our money to foreign banks to stave off their insolvency.  In July of 2009, Bernanke testified in front of Congress that the Fed had loaned over $550 billion to foreign banks during the height of the financial crisis in 2008.  And thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act a one-time General Accounting Office audit uncovered a remarkable $16.1 trillion in Fed loans to various banks including non-U.S. ones during the same time frame.

Now, it’s bad enough the Fed has and will again use our money to bailout foreign banks that were irresponsible.  But, the latest round of foreign bailouts comes at a time when it is being reported that tent cities filled with homeless folks are becoming commonplace across America and some Americans are resorting to dumpster diving to feed their families.  Is this what America is coming to?  Our central bank helps Greek citizens retire at fifty while our citizens live in nylon igloos while wallowing in trash dumpsters for their next meal?  Worse yet, besides Ron Paul, no member of Congress or the Obama Administration has expressed any outrage over the foreign bailouts.

The whole sordid affair is yet another reason why we need to return to a gold standard to protect the integrity of the dollar.  As Congressman Paul has stated many times, we must return to the constitutional mandate requiring gold and silver be used as money.  Article 1, Section 10, Clause 1 of the Constitution states in part, “No State shall…emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts…”

Many anti-constitutionalists will argue that the clause only applies to the states and the federal government can use what it wants for money.  Thus the current fiat dollar system is legal.

But upon closer examination of history the anti-constitutionalists are proven wrong once again.  During the colonial period of our country’s history, the Spanish milled (silver) dollar was the predominant medium of exchange in the original Thirteen Colonies.  .  In July of 1785, Congress voted unanimously to make the dollar the monetary unit of the United States to emulate the Spanish milled (silver) dollar.  On August 8, 1787, Congress resolved that the new American dollar would contain three hundred and seventy-five grains and sixty-four hundredths of a grain of fine silver.  This measure of silver made the new American dollar equal in value to the Spanish dollar.

At the same time in Philadelphia, the Constitution was being written by many of the same people who adopted the silver dollar standard for the country in the Continental Congress.  Thus, these men as well as their Constitutional Convention colleagues were well aware that the silver dollar had become and was the official monetary unit of the United States. As a matter of fact, the term “dollar” is referred to twice in the Constitution – Article 1, Section 9, Clause 1 and in the Seventh Amendment.

Where it is not mentioned is under Congress’ powers in Article 1 Section 8.  Additionally, gold and silver are not mentioned there either.  The only requirements for money in that section are that Congress has the power “…to coin money and regulate the value thereof…”  And a month before the Constitutional Convention adjourned Congress did just that by making the silver dollar with three hundred and seventy-five grains and sixty-four hundredths of a grain of fine silver the monetary unit of the country.

Thus Ron Paul is correct when he says the Constitution calls for the federal government to use gold and silver money.  It was implied in Article 1 Section 8 Clause 5 because that is what existed at the time of the writing of the Constitution.  Article 1, Section 10, Clause 1 was a reaffirmation of that fact and a prohibition for states to use anything but gold and silver in payment of debts.  After all, what’s good for the goose is good for the gander.  Why would the states be prohibited from using non-gold and non-silver coins when the federal government isn’t?  That would make no sense.

So now that we have ascertained that the current fiat currency system in the U.S. is unconstitutional, so what?  The question is, how would a gold and/or silver backed dollar protect our currency from the Fed’s reckless lending overseas?  With a gold standard the Fed would be prevented from doing this because every Tom, Dick, and Harry who holds dollars could redeem them for gold.  If enough money printing took place, U.S. gold reserves would run dry and the dollar would be backed by nothing -making it worthless.  No responsible leader would let this happen.  In fact, this system worked well at preventing high inflation and huge debt accumulation until 1971.  However, increased spending on the Vietnam War and Lyndon Johnson’s so-called “Great Society” caused the dollar to lose value.  Instead of cutting federal spending to remedy foreigners redeeming their dollars at an alarming rate for our gold, President Nixon ended dollar to gold convertibility altogether.  You be the judge, since that fateful event in 1971 our national debt has soared and general prices in the U.S. have skyrocketed by 435 percent!  It’s no wonder the poor are getting poorer and the rich are getting richer.

And Bernanke’s current lending to foreign banks will only exacerbate the situation.  The supply of dollars will continue to increase and at some point soon prices will go much higher.  The bankers who represent the rich will be okay while the poor will be devastated by inflation.  All because our dollar is not backed by gold.  Let’s hope that grocery stores continue to throw away expired food into dumpsters and the price of nylon tents do not increase.

Article first published as A Return to the Gold Standard is a Must on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Bill O’Reilly Should Do His Homework

Last week, O’Reilly Factor producer Jesse Watters confronted Congressman Ron Paul at New England College to ask him why he was not interested in appearing on Bill O’Reilly’s show.  One thing led to another and eventually Watters asked Dr. Paul about his position on the Gold Standard.  Dr. Paul responded that he wanted the country to return to the constitutional mandate that money should be either gold or silver.  At the end of their discussion, Watters asked Dr. Paul why he couldn’t have just come on the show and explained gold and silver to O’Reilly.  Dr. Paul responded, “He wouldn’t have understood it”.

Dr. Paul couldn’t have been more accurate in his assessment of O’Reilly’s knowledge of the Constitution.  On his show on September 7, Bill O’Reilly had a segment where he and Watters ridiculed Dr. Paul for his constitutional position on gold and silver.  They stated their joint belief that the Constitution ”…doesn’t say anything about gold and silver”.  Both men indicated that Dr. Paul was misinterpreting the Constitution.  O”Reilly even asked Watters if Paul is a “loon”.

If O’Reilly or his producer would have just done a little research (I mean it’s fairly easy today given a little thing called the internet) they would have understood that Dr. Paul was spot on with his interpretation of the constitutional mandate that gold and silver be used for money.  .

If O’Reilly and Watters had done their homework they would have known that Dr. Paul bases his position about gold and silver as money on Article 1, Section 10, Clause 1, of the Constitution:

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

Now, on the surface it appears that Congressman Paul did misinterpret the Constitution given that Article 1 Section 10 specifically states that “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts…  This clause clearly only relates to the states and what they are prohibited from doing.  But, sometimes an issue is more than meets the eye.

As renowned constitutional lawyer, Edwin Vieira Jr. has written, during the colonial period of our history, the Spanish milled (silver) dollar was the predominant medium of exchange in the original Thirteen Colonies.  This had to do with Spain’s important commercial and political power of that time.  In July of 1785, Congress voted unanimously to make the dollar the monetary unit of the United States to emulate the Spanish milled (silver) dollar.  On August 8, 1787, Congress resolved that the new American dollar would contain three hundred and seventy-five grains and sixty-four hundredths of a grain of fine silver.  This measure of silver made the new American dollar equal in value to the Spanish dollar.

At the same time in Philadelphia, the Constitution was being written by many of the same people who adopted the silver dollar standard for the country in the Continental Congress.  Thus, these men as well as their Constitutional Convention colleagues were well aware that the silver dollar had become and was the official monetary unit of the United States. As a matter of fact, the term “dollar” is referred to twice in the Constitution – Article 1, Section 9, Clause 1 and in the Seventh Amendment.

I suppose what confused O’Reilly and Watters was that under Congress’ powers in Article 1 Section 8 the terms dollar, gold and silver are not mentioned.  The only requirements for money in that section are that Congress has the power “…to coin money and regulate the value thereof…”  And a month before the Constitutional Convention adjourned Congress did just that by making the silver dollar with three hundred and seventy-five grains and sixty-four hundredths of a grain of fine silver the monetary unit of the country.

Thus Ron Paul is correct when he says the Constitution calls for gold and silver money.  It was implied in Article 1 Section 8 Clause 5 because that is what existed at the time of the writing of the Constitution.  Article 1, Section 10, Clause 1 was a reaffirmation of that fact and a prohibition for states to use anything but gold and silver in payment of debts.  After all, what’s good for the goose is good for the gander.  Why would the states be prohibited from using non-gold and non-silver coins when the federal government isn’t?  That would make no sense.

If Bill O’Reilly or Jesse Watters had done about a half hour of research on the internet they would have known what the Constitution said and the historical context of the issue.  They would have known that the Constitution does call for money backed by gold and silver.  Does O’Reilly’s egregious mistake give me the right to question whether he is a loon?  No, perhaps a more appropriate question to ask is, is he an intellectual sloth?

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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Revisionism is Alive and Well

“There is no credibility left for the Republican Party as a force to reduce the size of government.  That is the message of the Reagan years.”

Ron Paul 1987

Politicians have a tendency to change history to suit their purposes.  The revising of history by Soviet dictators was legendary.  Our own leaders have been on occasion guilty of distorting, reconfiguring, or downright lying about past events.  Most notable are the claims that Abraham Lincoln launched the Civil War to end slavery and that Franklin Roosevelt’s New Deal ended the Great Depression.

One of the greatest revisionist histories perpetuated in the latter part of the 20th Century by both Republicans and Democrats alike is that Ronald Reagan was a conservative, limited government president.  Republicans praise him for his “record” of getting the government off our backs and dramatically reducing the size of the federal leviathan.  Democrats vilify him for weakening programs that helped the underclass and reducing the scope of government needed to ensure economic prosperity.  Both Republicans and Democrats couldn’t be farther from the truth in their thinking.

In the first place, government got exponentially larger during Reagan’s eight years as president.  For instance, during the 1980 race for the White House, Reagan made a cornerstone of his campaign the elimination of federal agencies and departments.  In particular he proposed abolishing the Departments of Education and Energy.  Instead of eliminating those wasteful departments, by the end of his term Reagan had doubled their budgets and created another department – the Department of Veterans’ Affairs.  In 8 years as president, the former B Actor hired 230,000 more bureaucrats.  How is that the work of a small government president?

Reagan is also portrayed as a tax reducer by both sides.  Up to that point in our history, he was one of the biggest tax increasers of all time.  He increased taxes and fees on everything from gasoline to trucking to Social Security.  The Tax Equity and Fiscal Responsibility Act of 1982 was the largest tax increase in American history to that point.  It rolled back many business tax cuts enacted during his first year in office.  The remarkable thing is that given his reputation for being a dedicated tax cutter by the time he left office in January 1989 tax revenues were still 24.7 percent of national income – only slightly down from 25.1 percent when he took office in 1981.  The facts bare proof that Reagan was no tax cutter.

“Thanks to the President (Reagan) and Republican Party, we have lost the chance to reduce the deficit and the spending in a non-crisis fashion.”

Ron Paul 1987

Lastly, analysis of Reagan’s conservative credentials would be grossly incomplete without a review of federal spending during his administration.  One could conclude by looking at Reagan’s spending alone that he was not a free market dyed in the wool capitalist but a big state liberal.  In eight years as president the Gipper never proposed a budget smaller than the year’s before.  Federal farm program spending went from $21.4 billion in 1981 to $51.4 billion in 1987, a 140 percent increase.  Entitlements, which cost $197.1 billion in 1981, cost $477 billion in 1987, another 140 percent increase.  Even foreign aid, long a target of conservatives’ wrath, was doubled under Reagan.  As everyone knows by now, the welfare state was not inaccessible to the military industrial complex either.  Reagan increased military spending enormously during his presidency.  At the end of his spending binge he managed to triple the federal debt to $2.7 trillion by 1989 and paved the way for future administrations to spend like drunken sailors.

While most conservatives celebrate Reagan for his “small government” credentials and most liberals slander him for dismantling the federal government, remember that actions speak louder than words.  Reagan spoke a good game about eliminating government but rarely produced those results.  After 8 years of his presidency, the federal government was much larger and more intrusive in our lives.  Thus revisionist history is alive and well at least when it comes to the Great Communicator’s presidency.  So the next time you hear Perry Romney, or some of the other unprincipled Republican candidate for president praise the Gipper and claim they are his heir apparent, remember Reagan’s real record and consider if we can afford another president like him.

Article first published as Revisionism is Alive and Well on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

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