Let’s not make a mistake about what’s going on with a bailout like this one. The UAW is a reliable source of money and votes. If you were a politician, would you let the UAW go out of business? It’s the same with all the teaching jobs Obama supposedly saved with his so-called stimulus funds. These were big payoffs to organized workers who support Democrats. The White House PR operation has been relentless about all the jobs they’ve created, all the jobs they saved. If you’re in a union, you’ve had it good under the Democrats. If you’re among the millions of people who lost your job during the country’s economic collapse, and you don’t belong to a favored group like the United Auto Workers or the American Federation of Teachers, forget it. We’ll pay you unemployment benefits until everyone forgets about you, and you can watch your family’s spirit shrivel as you waste the rest of your life unemployed.

Does that sound a little too bitter? It’s not bitter enough. Suppose Obama says in his campaign rhetoric, “Look, here’s how the system works. You turn out the votes, and I pay you off. It doesn’t matter where the money comes from – you’ll get your reward.” At least that would be honest. Instead, he pays off his supporters with our tax money and claims that he’s creating jobs! Somehow, other politicians who go for the White House manage to be less blatant about the operation. The country faced a large-scale collapse when Obama took office, so he thought he could mount a large-scale payoff and call it job creation. Nearly three years later, the Democrats’ propaganda machine still calls it job creation! The payoffs did work, but not as the propaganda claims they did. The Democrats still enjoy union support. Go to Wisconsin and ask the teachers there what party they support. Ask how they’ll vote in the governor’s recall election.

Ask an unemployed engineer, a newly graduated college student who can’t find work, or any of the millions of people who are idle now, not through anything they did. Ask them who they support. They’ll likely reply that they don’t support anyone who gives away their money. They just want the government to keep its hands out of the economy rather than gum it up. Given the choice between fairness and a job, a person will take a job every time. When the White House claims that it wants jobs, too, you have to give it credit for believing its own propaganda. Look at its actions, and you can see what it actually wants. It wants reliable support from Democratic workers in the next election – and it’ll give away your money to get it.

It is no secret that online piracy is a very serious problem in our Technology Age.  The Stop Online Piracy Act (SOPA) is a measure before Congress meant to confront the sale and distribution of pirated movies, drugs, music and other consumer goods by rogue overseas sites.  Supporters of the legislation include big media, pharmaceutical companies, and the fashion industry.  They have overwhelmingly outspent the Internet industry supporting the measure.  For its part, Internet companies have stuck to their belief that the measure goes too far and could disrupt creativity, violate the First Amendment, and could give the U.S. government free reign in shutting down sites it deems illegitimate.  As is true of most legislation before Congress, this one is put forward with the best of intentions, but ultimately if passed could spell the ruination of the Information Super Highway.  Thank goodness, the Internet was around to protect itself yesterday.

The DailyPaul, Wikipedia, Reddit, and over 7,000 other high-traffic websites blacked themselves out or supported the protest of SOPA yesterday online.  The blackouts not only were a form of protest, but were meant to show Internet users how things could be if SOPA becomes law.

Apparently the tactic worked.  After being deluged with emails and phone calls many senators including co-sponsors of the measure, Marco Rubio of Florida, John Cornyn of Texas, and Orrin Hatch of Utah withdrew their support.  Rubio used the same medium used to protest the bill when he announced to his followers on facebook:

“Earlier this year, this bill passed the Senate Judiciary Committee unanimously and without controversy. Since then, we’ve heard legitimate concerns about the impact the bill could have on access to the Internet and about a potentially unreasonable expansion of the federal government’s power to impact the Internet.  Congress should listen and avoid rushing through a bill that could have many unintended consequences.”

At this point in time SOPA has been essentially tabled and had its most controversial parts removed.

A potentially disastrous bill that seemed to have a relatively easy path to passage in Congress was suddenly halted and potentially killed.  And we owe it all to Internet activism.  Like the invention of the printing press during the Renaissance, the Internet is the great equalizer between moneyed interests and common folks.  The printing press spread the message of the Protestant reformers breaking the stranglehold of the Catholic Church over Europe.  It proliferated Enlightenment ideas dealing with the relationship between people and their government which eventually ushered in a new era of liberalism, representative democracy, and free market capitalism.

The Internet of course has similar potential to transform our world today.  Young folks are in tune with what is happening in their world through it.  My 8^th graders in Qatar, who are usually a little behind the curve when it comes to current events, were keenly aware of the SOPA controversy because some of their popular sites were participating in the protest.  It was amazing to me how well read many of them were on the potential harm SOPA could do to the medium they rely on to function.

And there is no question that the Web has been an effective tool used by Ron Paul and his supporters to win over young voters.  It is a place where anti-establishment types can organize and spread information without interference from the corporate/state controlled mainstream media.  And that is the point here.  Any time real Americans can circumvent the bias of the Establishment media to deliver an important message they now can.  So, the Internet didn’t just protect itself yesterday, it protected all of us.

To listen to Republican Presidential candidate Ron Paul’s speech after placing a strong second in the New Hampshire Primary you would have thought that he had just won the contest.  Filled with his usual attacks on the Federal Reserve, Military/Industrial Complex, the bloated federal government, and an ever expanding police state, Dr. Paul’s speech was also an inspiring rallying cry for his ever growing base of fervent supporters.  In many ways he did win the New Hampshire Primary.  He tripled his vote total from four years ago.  He finished a strong, undisputed second behind a candidate with home field advantage and tons of Wall Street cash.  He also proved the naysayers wrong who have been preaching for months that he is unelectable.  Most importantly, the New Hampshire Primary results have made the race for the GOP nomination for president a two man contest between Mitt Romney and Ron Paul.

Look at the facts so far in this race.  Ron Paul is the only other candidate besides Mitt Romney to do well with two totally different bodies of voters.  In Iowa, both men garnered support from evangelical and socially conservative voters while in New Hampshire more socially moderate and fiscally conservative voters.  For his part, Paul got the most support of disaffected Democrats and Independents of any of the other Republicans running.  This trend bodes well for him since as many as 13 states hold open primaries and caucuses where his support outside of his own party will be a distinct advantage for him in those states.  Overall, in the first two contests in Iowa and New Hampshire Dr. Paul has collected 25,000 more votes than his nearest competitor Rick Santorum.

Besides broad support, financial backing also differentiates candidates from one another.  The Paul Campaign reported that it raised $13 million in the fourth quarter of 2011.  The only other Republican candidate to raise more was Mitt Romney.  The sum Paul has collected in donations has allowed him to not only purchase air time in South Carolina, but to jump ahead and spend money on direct mail in Louisiana, Nevada, Maine, Colorado, Washington, and North Dakota.  Additionally, a pro-Paul Super PAC Revolution PAC plans to spend millions more on the congressman’s quest for the presidency.  And recently the Santa Rita Super PAC which was just created on January 4 bought over $300,000 worth of ad time in South Carolina promoting Paul’s candidacy.

Then there are the recent poll results.  A CBS News poll released a day before the New Hampshire Primary found Romney and Paul to be the strongest Republican contenders against President Obama.  Romney leads the President 47 to 45 percent while Paul trails Obama by 45 to 46 percent.  But even more important to the moment, an American Research Group poll conducted over the last two days indicates that Congressman Paul is getting a massive bump from his strong showing in New Hampshire.  The good folks of the Palmetto State are now paying attention to the race because their turn to vote is coming up quickly.  In less than one week Paul’s support in SC has risen from 9 to 20 percent placing him third in that race.

To be sure, the campaign for the presidency is a long drawn out affair.  Staying power is essential.  After South Carolina, lower tier Republican candidates will begin to drop out or become irrelevant.  Two things will happen.  Their supporters’ votes and money will need a new candidate and all media attention will focus on Romney and Paul.  Given Paul’s appeal to a broad base of voters and conservatives’ mistrust of Mitt Romney, I like the Texas Congressman’s chances.  In fact, it is highly probable that he will deliver

many more inspiring, rallying cries for his ever growing base of fervent supporters.

Article first published as Ron Paul is Nibbling at Romney’s Heels on Blogcritics.

This evening I’d like to edit and arrange that series of tweets. I typed them during the day, as the news reports came in:

Police shoot to kill eighth-grade student in Brownsville, Texas: http://t.co/snbIv045. Shoot first, ask questions later.

Armed Texas 8th-grader shot and killed by police: mid-PM, and no details! No name of victim, no account of what happened? No discussion?

Police kill armed 15-year-old at school: “The individual confronted the officers, at which time they had to shoot him.” Good explanation!

Brownsville police kill teen at middle school – http://t.co/p8Z8tCTK. Zero tolerance acquires new meaning.

Student killed by officers had pellet gun. The policemen were in the wrong here, and they will never admit it. They protected themselves.

Police kill teen at school. And the school requires parents to sign a release form to pick up their children? What did the release form say?

Once again: the police are wrong here. Gunning down an 8th grader in the school hallway with three bullets?

Texas police kill eight-grader with pellet gun. This would not have happened without Columbine and hyper-charged police. Police protection? Think again!

Jaime G. Dead – http://t.co/8H0ReiMX. They shot him in the back of the head – after the entire school was locked down! They shot to kill!

Here’s a longer tweet, written the next day:

Here is confirmation of yesterday’s tweet, that the police will never admit they are wrong. They actively justify what they did! Here is an excerpt from http://news.yahoo.com/texas-school-shooting-many-questions-loom-234525229.html:

Jaime Gonzalez’s “parents have lamented police for their actions Wednesday, saying they could have taken non-lethal action. But there was broad agreement among law enforcement experts: If a suspect raises a weapon and refuses to put it down, officers are justified in shooting to kill.”

And that goes for a fifteen-year-old with a pellet gun in a school hallway! A frightened student who, on that morning, decided to die. If you don’t think we live in a police state, think again.

Update: Jaime Gonzalez died of gunshots to the torso. The wound at the back of his head occurred when he fell.

Lastly, here’s a message I wrote to a friend about the same event:

You might read this article, then my series of tweets on the subject:

    http://news.yahoo.com/texas-police-kill-8th-grader-carrying-pellet-gun-003818851.html

I was extremely critical of the police response to Columbine. This killing is amazing to me, and for me grows directly from our acceptance of the way police behaved at Columbine. I can explain later.

Here are my tweets, along with a few on other subjects:

    https://twitter.com/#!/sgreffenius

I think of those parents saying goodbye to their son in the morning. Then a few hours later they find out the police have gunned him down because he had a pellet gun. An official says the police probably had legal justification to use lethal force. Good God! Legal justification is not the point. Police charged into a middle school and gunned down a fifteen-year-old who had a pellet gun! Of all the poor police work we’ve heard about, this is among the worst.

My mom used to talk frequently about police training, police maturity, police having the skills necessary to resolve difficult situations without violence. Policemen with the right qualities could have calmed the student down. They certainly did not need to kill him.

The accounts I’ve read say the police charged in, shouted at Jaime to drop the weapon, then fired three shots at him, shooting to kill. From the moment they arrived, they brought nothing but force and violence. It bothers me so much that this killing happened, and even more, in a way, that so many of us seem to accept it. They seem to be saying, largely with silence, “It’s unfortunate, but if we want safety in our schools, we have to accept this kind of policing.” No. If we let police turn their guns on a fifteen-year-old in a middle school hallway, they will turn their weapons on us. When you look at police behavior in response to the Occupy movement, you can see they already have.

Here’s one more comment: why could the police not use rubber bullets? They came prepared for nothing but death – and self-protection. I know after 9/11 we just don’t call policemen cowards, but that’s what this is. Shooting a fifteen-year-old to prevent him from shooting you first is just cowardice. It’s not doing your job.

The matter of police not doing their jobs dates back to Columbine. The massacre at Columbine was an unusual situation at the time, and police were not especially well trained to handle it. Because of that, they followed standard procedures. They set up a command structure. They cordoned off a perimeter. They set up their communications. They searched students exiting the school. They dealt with the administrative tasks the come up when a disaster occurs. They stayed outside the building until they could enter safely. They wanted to get organized.

What should they have done? They should have entered the building immediately to save the wounded. Yes, that would have been dangerous, but so what? They should have followed the example of the Marines. The Marines are trained to go straight into the fiercest enemy fire to save a buddy. They don’t give up their lives foolishly, but they never leave a wounded buddy behind. When you go into battle with your fellow Marines, you know your friends will help you if you need it.

The police at Columbine did just the opposite. Their job in the community is to help people, yet they let the wounded bleed to death inside the school. I imagine students or faculty on that terrible morning thought to enter the school building to save their friends, but I’m sure if they tried the police would have kept them out. No one goes in, they’ll say, until we make sure it’s safe.

What’s the connection to Cummings Middle School in Brownsville? I expect police heard the criticism of their procedures at Columbine. They try to enter the building sooner now, not stay outside while they organize and evaluate. Their emphasis, however, is still on self-protection. They do not take time to evaluate the situation based on the evidence in front of them. Take the nature of the weapon Jaime Gonzalez held in his hand. Police officers know that a regular handgun and a pellet gun look similar. Yet they did not take time to determine what kind of gun Jaime had. They shot first and asked questions after it was too late.

Without doubt, policing can be hard, dangerous work. Sometimes an individual who wields a handgun shoots a policeman. That doesn’t mean if you encounter a fifteen-year-old student in a middle school hallway holding something that looks like a handgun, you shoot to kill him. It means you act with caution and some measure of courage. You don’t have to shout at the student so loudly that he becomes still more scared. You don’t have to fire first. You don’t have to fire at his torso. You fire at a person’s heart when you want to kill him with the fewest number of bullets possible. Nothing about the situation in the Cummings hallway ruled out warning shots. Nothing precluded rubber bullets.

In fact, no factor in that school situation called for firing any shots at all, except that policemen put self-protection ahead of community protection. If you confront a person who holds what you believe to be a lethal weapon, and the person refuses to drop it, the self-protective instinct if you have a gun is to shoot. But police officers weren’t called to the school to protect themselves. The principal called the police to protect the other students. Yet no other students were in the hallway when police shot Jaime Gonzalez. They killed Jaime not because he threatened other students at the moment, but in order to protect themselves.

The lesson of Columbine is not only to rescue the wounded as soon as you can. It is not only to enter the school building with guns drawn and safeties off, to be ready. Policemen have an obligation to gather information and assess the situation as well as they can. That assessment takes a little time. You can gather a lot of information in sixty to ninety seconds. I would like to know how much time elapsed between the end of the policemen’s shouted warning to Jaime to drop the gun, and the first shot fired at him. I expect you would measure the elapsed time in seconds, and that the number of seconds would be in single digits.

What has happened to police officers who are calm and courageous? Does the militarization of police forces mean they cannot fulfill their community functions any longer? Does it mean that their main function now is to intimidate, injure and kill? When you see the security officer pepper spray students at UC Davis, his matter-of-fact behavior as he walks down the row of peaceful young people is astonishing. The policemen at Cummings found themselves in a confrontation with more danger, but the main lesson is equally disturbing: police act with unnecessary force, then justify their behavior afterwards.

In one moment, Jaime sees police officers rush into the hallway. It’s hard to hear what they say, as they’re shouting at once and the hallway has an echo. They have their guns drawn. What should I do?

A few moments later, Jaime lies on the floor, gunned down and dying. I wonder what the policemen said to Jaime as they approached him? I wonder if he could hear it.

Of course, this opinion won’t be heard anywhere on the Establishment-run media.  Instead the talking heads and so-called journalists which grace our TV screens continue to babble on about how Ron Paul is a kook, crank, nut job, etc… incapable of winning the nomination.  Their portrayals of the Good Doctor are more a result of their fears about him actually winning and ending their cushy establishment lifestyles than it is about reality.  But, I digress.  To back up the claim that the race has come down to Paul and Romney here are the facts:  both lead the field in money and organization.  Additionally, Paul has picked up steam in recent polls since Iowa and has demographics on his side.

Money – The Ron Paul Campaign is reporting that they raised $13 million in the fourth quarter of 2011.  The only other Republican candidate to raise more was Mitt Romney.  The sum Paul has collected in donations has allowed him to not only purchase air time in New Hampshire and South Carolina, but to jump ahead and spent money on direct mail in Louisiana, Nevada, Maine, Colorado, Washington, and North Dakota.  The Congressman’s base of financial support is unshakeable and as he rises in the polls it will become much broader.

Organization – As the Establishment candidate and someone who has been running for president for the last six years, Mitt Romney has a solid campaign organization.  But what the media and pundits alike have ignored is the ability of the Paul campaign to organize a first rate political operation as well.  The fact that only Romney and Paul were able to abide by Virginia’s strict ballot access laws and get on the primary ballot in that state is a testament to the quality of their organizations and the mediocrity of the other campaigns’.

The Paul campaign has gone to great lengths in building a strong presence on the Republican State Central Committees across the country.  In Iowa alone his supporters comprise one-third of the members of that state’s Republican State Central Committee.  It is from this committee that actual delegate selection for the National Convention will be done.  Besides Iowa Paul has supporters in the next ten caucus states that are virtually unopposed for delegate seats.

But besides ample war chests and strong campaign organizations, recent polling and demographics indicate that the Republican field has been winnowed down to two contenders.  The next contest on the docket is the New Hampshire Primary.  Two polls last week indicated that the race in the Granite State is between Romney and Paul.  The New Suffolk University Poll had Paul gaining 6 points on Romney in one day.  While Paul stood at 18 percent support, no other candidate garnered more than 8 percent.  At about the same time, a new Washington Times/John Zogby Analytics Poll had Romney at 38 percent, Paul at 24 percent, and no other candidate had more than 11 percent.  It is true that national polls do indicate that Romney leads the race while Paul lags behind other candidates, but two points need to be made.  The Republican nominee will be chosen from more than 50 contests not one national ballot.  And most voters in states with contests in the future have not paid enough attention to the race to make an informed choice.  Thus, given the results in Iowa and current polling in New Hampshire Romney and Paul are the two front-runners going into New Hampshire voting this week.

Lastly, demographics will play a huge role in winning the Republican nomination.  In light of his past poll numbers Romney’s support in relation to other Republican candidates has been steady.  As one after the other anti-Romney candidates rose and fell from front-runner status only one other candidate has seen steady upward poll numbers – Ron Paul.  Santorum in Iowa was just the final shooting star of the lot.  Fortunately for him his star rose at exactly the right moment.  Had there been more time to dissect his record he too would have fallen back to the pack of also-rans.

But Paul’s support has been a slow steady trajectory upward because it is solid, unwavering support.  Besides Evangelical and conservative Republicans the Congressman garners the most support from disaffected Democrats and Independents of any of the other Republicans running.  Since as many as 13 states hold open primaries and caucuses his support outside of his own party will be a distinct advantage in those states.

At the end of the day, the Establishment media and talking heads will babble on about the comeback of Newt Gingrich or the surging Rick Santorum.  They will resort to any distraction to cover the truth.  The truth is that we have a two man race for the Republican nomination.  Because of money, organization, demographics, and recent polling numbers that race is between Mitt Romney and Ron Paul.

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

Have you noticed some of the adjectives the reporters have used about Paul lately? The best one I’ve seen is batty. That’s better than nuts. You also see fringe, extreme, and consistent. The last one is not generally meant as a compliment, as the reporters usually suggest that Paul is consistent in his foolishness.

Let’s see how foolish this man is. Here are some of the predictions, observations, prescriptions, and warnings for which Ron Paul is called batty:

• Paul warned that if the Federal Reserve enjoys unchecked power, what Andrew Jackson called the money power would capture our government in Washington. With the 2008 financial collapse and its aftermath, we see that it has already happened.

• Paul has said that if we continue to act the way we do overseas, we will make more and more enemies. People who were not our enemies now hate us because we have killed their family members, imprisoned them, tortured them, humiliated them, frightened them, and made war on them until everything that sustains them is destroyed. This observation about the effects of our foreign behavior is so obviously true that the criticism directed at Paul for saying it tells you something. It tells you some people are blind when it comes to discussions about their own country.

• Paul has criticized the so-called drug war on many counts: it doesn’t work, it’s immoral, it grants government more power than it should have, it doesn’t work, it’s costly, it suppresses both personal freedom and personal responsibility, and in addition to everything else, it doesn’t work. People used to be aghast at this kind of critique. If we don’t fight drugs, then what do we fight? If drugs are permitted, everything is permitted! Interestingly, Paul’s position on drugs has not become a big issue for reporters. Perhaps he is not ahead of his time on this issue any more.

• Paul predicted that if we let the national government grow in power and authority – with no effective checks on its ability to control money, time, lives, commerce, institutions, tools of surveillance and communication, weapons, and all manner of personal choices – it would destroy our democracy. It has already happened. Long established traditions die slowly – that is true of democratic traditions as well as democracy’s institutions. By now, though, we can say that Paul has been right. He has been so emphatically right on this point that one wonders if even he thinks he could revive our democracy were he to win the presidency.

Let’s end with these four points. Read Andrew Sullivan’s endorsement of Ron Paul. The next time you read a reporter who mocks Paul’s ideas, who says he is dangerous and a harbinger of chaos, ask yourself why a person who has been right so often should be charged with battiness. Remember what Jesus said in the New Testament: “You shall know the truth, and the truth shall make you odd.”

If Paul’s ideas seem odd to you, forget about it. Forget about what other people think. Concentrate on Ron Paul’s truthfulness. If you can’t focus on that, no one will be free: not now and not ever.

Americans should be used to the high political drama coming out of Washington.  Oh, there are the stories of marital infidelities, disappearing Congressional aids, toe-tapping senators and the like.  Then there are the great debates where both sides of an issue scrap and claw their way to political pay dirt.  Healthcare reform and the recent battles on raising the debt ceiling come to mind.  Funny how things always come together at the 11^th hour?

Currently on the docket is the payroll tax cut extension. Passed in 2011, the payroll tax cut reduced a taxpayer’s contribution toward Social Security from 6.2 percent to 4.2 percent.  The goal of the legislation was to put more money in taxpayers’ hands in order to stimulate the economy.  The measure expires on December 31, 2011.

Now, the drama comes in because the Democratic controlled Senate approved a two month extension to the measure while the Republican controlled House rejected the Senate plan in favor of a one year extension.  Democrats are bent on their bill and Republicans on theirs with time quickly running out.  If an extension is not approved by December 31, 148 million Americans will see their taxes go up – at least that is the story coming out of the White House.

In the first place the name of the measure is a bit of a misnomer intended I am sure to confuse many taxpayers.  The payroll tax cut is not a cut to a worker’s income tax amount.  It is a reduction in the amount that workers pay into the so-called Social Security Trust Fund.  In other words, it is akin to paying less on a retirement annuity each month but still maintain eligibility for full retirement benefits under the original policy.  An annuity holder would never expect this allowance.  For the life of me, I can’t understand how the average taxpayer would – unless they have been confused.

Secondly, the propaganda pundits on the MSM are claiming that if the tax cut is not extended it will potentially push the U.S. economy into a recession.  Of course, that is the knee-jerk reaction of all Keynesians when it comes to government intervention in the economy.  They believe in the more the better with no regard for tomorrow since “in the long run we are all dead”.

And essentially this tax cut extension is a Keynesian spending program because the tax pays for an entitlement that has to be paid to retirees.  With a drop in tax revenues the government will have to print money in order to meet Social Security obligations.  Those obligations simply aren’t going away and have to be met.

The problem with more spending is that it doesn’t work to stimulate the economy out of recession.  Since January 2009 the federal government has spent $4.5 trillion. Unemployment is higher, food stamp rolls are at an all-time high, and many Americans are still losing their homes.  When is enough enough?

Lastly, how smart is it to cut funding for a program that is already bankrupt?  The Social Security Trust Fund already pays out more than it receives in tax revenues.  Future unfunded obligations for both Social Security and Medicare are over $50 trillion.  Given the program is not going to end anytime soon, putting it in even worse fiscal condition borders on the criminal.

The payroll tax cut is nothing more than another something for nothing proposition.  It has not helped the economy so far and an extension would further devastate the fragile balance sheet of Social Security and Medicare.  Once again Washington is offering the world – more free money, Social Security intact, no spending cuts, and a blind eye to trouble down the road.  It is amazing that Congress and the President can’t find a measly $100 billion to cut from the enormously bloated federal budget to pay for the plan.  With leadership like that in Washington it will be a miracle if the economy doesn’t eventually fall over a cliff.  But have no fear, I am sure Congress and the President will get together at the 11^th hour to produce the tax cut extension.

Article first published as We Can’t Afford the Payroll Tax Cut Extension on Blogcritics.

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

In the debates for the Republican nomination for president, it is no accident that Newt Gingrich constantly invokes the name of conservative icon Ronald Reagan.  Gingrich continually reminds us that he was in Congress fighting for Reagan’s tax cuts and his military budgets in the early 1980s.  Naturally this is a calculated political strategy   on the part of Gingrich since the most faithful Republican primary voters are Reaganites.  But, the strategy is more than political; it is an indication of how he would govern if elected president.

According to Gingrich’s official campaign website, the former Speaker of the House of Representatives is essentially proposing the same program that Reagan foisted on America in the 1980s.  The key elements of which are huge tax cuts and military spending.

In terms of taxes, Gingrich’s plan would lower individual tax rates, lower the corporate tax rate from 35 percent to 12.5 percent and eliminate the capital gains tax.  Any lover of small government should love these proposals, however Gingrich never addresses how he would pay for the tax cuts.  On his site, he proposes no specific spending cuts and claims he will balance the budget by “growing the economy” through tax cuts.

For his part, Ronald Reagan based his entire economic platform to get the economy moving again on tax cuts.  He also claimed that lowering taxes would grow the economy and balance the federal budget.  After eight years in office he managed to triple the federal debt.  The problem with Reagan wasn’t that he cut taxes (he also was the biggest tax raiser in history to that point) it was that he didn’t cut spending.  He proposed cuts when he ran for president, but didn’t follow through on his rhetoric.

At least Gingrich is not being dishonest about his intentions not to cut federal spending, but his overall policy will have the same effects as Reagan’s – an enormous increase in the national debt.  Given that our debt has already reached a critical point, we can ill afford a return to 80s style economics; thus we can ill afford a President Newt Gingrich.

Gingrich is also proposing Reaganesque militarism if he is elected president.  Of course that is the path we have been on since the 1980s anyway.  He has no intention of making any military cuts a part of debt reduction.  In fact, according to his campaign website, under President Gingrich the U.S. would continue to be the world’s military policeman:

“America’s foreign policy must begin by understanding who we are as a country.  We are, as Ronald Reagan said, the world’s “abiding alternative to tyranny.” Therefore, America’s foreign policy must be to ensure our own survival and protect those who share our values.”

So while he proposes to cut taxes drastically and offers no spending cuts, he also would seek to at the very least keep spending enormous amounts of money on military adventures that don’t contribute to our safety and security.  In fact, by defending Israel unconditionally his policy would make us much less safe.

There is no doubt that Ronald Reagan’s legacy is still very much with us today.  Indeed, Newt Gingrich has co-opted the Reagan governing plan as his own.  It is a simplistic plan that set us on the road to an astronomical national debt.  We are currently at a breaking point with that debt and all Newt Gingrich can do is propose more of the same?

In a recent interview with 60 Minutes’ Steve Kroft, President Obama was asked if he felt he overpromised during the last presidential campaign when it came to fixing the economy.  The President responded:

“I didn’t overpromise. And I didn’t underestimate how tough this was gonna be…Reversing structural problems in our economy that have been building up for two decades — that was gonna take time. It was gonna take more than a year. It was gonna take more than two years. It was gonna take more than one term. Probably takes more than one president.”

It is uncommon, but I must admit that I totally agree with Obama.  However, my agreement with him is for a reason that he did not intend with his remark.  He was espousing the view that it would take many more years of Keynesian economic policies to dig ourselves out of the economic ditch.  I am saying his position is precisely why it will take many years to recover from the Great Recession.  Essentially history proves that Keynesian economic theory does not work.  In fact, it has been proven to make things worse.

An often forgotten (either intentional or not) economic depression took place in 1920.  It was in 1920 that the spending of Congress and the inflation of the dollar by the Federal Reserve in order to fight World War I finally caught up with the U.S. economy.  After the artificial boom brought on by government policy busted, unemployment increased from 4 percent to 12 percent.  At the same time, GNP contracted by 17 percent.  Relatively speaking, the depression of 1920 was as severe as any in U.S. history.

In those days America still believed in free market capitalism.  President Harding’s response was to slash the federal budget almost in half between 1920 and 1922.  He also reduced tax rates for all income groups and decreased the national debt by one-third.  Additionally, the Federal Reserve did not use its powers to increase the money supply to fight the contraction.

No, the federal government and the central bank’s response were to let the economy liquidate the mal-investments that had built up during the spending and inflating of the war years.  It wasn’t to try to “stimulate” the economy back to growth and the Federal Reserve did not attempt to re-inflate the economic bubble.

By 1922, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.  Recovery occurred within two years of the onset of depression and opened the gate for a decade of enormous economic growth.

Now fast forward to the Great Depression of 1929-1946.  The common myth is that Franklin Roosevelt brought us out of the Great Depression with his New Deal policies.  The New Deal represented the first time in our country’s history that the federal government attempted, in a robust way, to remedy an economic downturn with “stimulus” spending and other bureaucratic interventions.  Roosevelt’s program included make work schemes, industrial codes of fair competition, guaranteed trade union rights, the regulation of working standards, minimum price fixes on agriculture, petroleum and other products, and other assorted welfare programs.  Essentially Roosevelt had taken over the U.S. economy and then over time he found it necessary to raise excise taxes on business to pay for his schemes.

The result was a prolonged depression.  The New Deal did not allow the mal-investments of the previous boom to liquidate.  It discouraged entrepreneurs from investing and the artificially high prices it imposed squelched consumer demand.  It was such a failure that in 1939 Henry Morgenthau, Roosevelt’s confidant and Secretary of the Treasury, proclaimed:

“We have tried spending money. We are spending more than we have ever spent before and it does not work…We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started.…and an enormous debt to boot.”

And this is why Barack Obama was correct in his statement that it will take many more years to turn the economy around.  History proves that government intervention in an economic downtown only worsens the situation.  Since taking office in 2009, Obama has spent trillions through make work projects, Cash for Clunkers, First Time Homebuyers’ credits, extensions to unemployment benefits, and other schemes.  He reappointed Ben Bernanke to Chairman of the Federal Reserve precisely because he favors the Fed’s long term quantitative easing program which has pumped trillions more new cash into the economy.

What do we have to show for it? – an economy still in shambles 4 years after the downturn with real unemployment north of 16 percent, a lackluster GDP, 46 million Americans on Food Stamps, and $4.3 trillion more in debt.  Obama is right, it will take years to undo the damage caused by his policies.  The question is, why doesn’t Timothy Geithner have the same honesty that Henry Morgenthau Jr. did?

Article first published as Obama is Correct But for the Wrong Reason on Blogcritics.

How could the panic not happen? When something cataclysmic occurs, we can’t predict when it will arrive, and we don’t know just how it will unfold, but no one who looks up can doubt that something is on the way.

The same holds true now for the social turmoil that is on the way. We don’t know exactly when it will arrive, and we don’t know just how it will unfold. Actually, the Tea Party and the Occupy movements have yielded some interesting evidence about where we are headed. So has the government’s response to any number of questions about civil liberties. We are headed for a period of turmoil that could make the 1960s look quiet by comparison. We just don’t know how it will unfold.

Just as we prepare our houses when we know a hurricane coming, we can do a few things to prepare our country for the coming storm. Our republic almost didn’t make it through the Civil War. At that time, 150 years ago, democracy survived while the country fell apart. Today the nominal country stays intact while democracy dies. We have to prepare for the worst. Three items come to mind. The first two I have discussed elsewhere: I’ll mention them briefly here. The third one sounds over-dramatic, but it’s worth thinking about.

Item one: Look for new leaders in unusual places. We will not find leaders we can trust in the usual way. The usual way relies on two political parties to recruit candidates for high office. Citizens vote for candidates based on their expectations about the quality of leadership they can expect from the candidates. We have reached a point where the citizenry is fed up with its leaders. The current, institutionalized system for selecting leaders has not served the country well. It has given us leaders who do not preserve and protect our Constitution. Therefore we have to ignore them. They claim legitimacy, all the authority of law and tradition, but we have to turn our backs on them. We have to do so with faith that we’ll find new, effective leadership in unlikely places.

Item two: We have to seek constitutional change that occurs without undue violence. We want to avoid violence not only because non-violence is more defensible morally, or because it is less painful physically and emotionally. These statements may be true, but as citizens we choose non-violence primarily because it yields better outcomes. It is clearly the most demanding path: non-violent constitutional change requires discipline, commitment, a high degree of skill and planning, restraint, faith, joint action, courage, sacrifice, and judgment. We as heirs of the Founders have not shown a clear willingness to go down this path – yet. I would say the willingness will come when we have found leaders we want to follow.

Item three: The last thought arises in connection with the violence we can expect from the government during the upcoming storm. The Syrians have lost 5,000 of their number in a non-violent effort to rid themselves of the tyrant who rules them. That is no small amount of violence. What if something similar happens here? What if government responds with force to arrest large numbers of citizens who want their voices heard? It has already done so.

We want to prepare for the time when people who have to use force against their fellow citizens begin to defect. We have seen the phenomenon already in Syria. Many members of the armed forces no longer want to shoot at their unarmed brothers. If they depart their station to defect, though, they have no place to go. They’ll be shot in the back if they walk over to the other side. Fear restrains them: the same tyrant who orders them to shoot at crowds will shoot them as well without thinking twice.

Our government is not so wicked as Syria’s right now, and we cannot tell how it will react to extreme pressure. It’s behavior during the last ten years is not encouraging. It places security ahead of liberty – especially its own security. It places force and intimidation ahead of its own legitimacy. It places lies, propaganda, chronic dishonesty and hypocrisy ahead of anything that even resembles candor. When political speech becomes this corrupt, government itelf becomes illegitimate. When government trashes the Constitution, it commits a unique form a betrayal. It practices gradual treason from inside the republic’s own institutions of power.

To prepare, then, we have to think about how to help those who wield instruments of force against unarmed citizens. We have to help people who reveal the truth about how government operates. We must offer people who refuse to follow orders some protection, some place of refuge. People who say “Enough,” who turn and set an example of courage, should not be left alone and vulnerable. They need to know they have support. They need some place to go for help during the storm. They need to have an option to go underground long enough to protect themselves and their families.

I’m thinking of course of Bradley Manning’s example. He said “Enough,” even though he was completely vulnerable and without any kind of protection. We have seen how government treats people who act on behalf of the truth. We have seen how government deals with anyone it regards as a threat. It has held Manning in solitary confinement since May 2010, without bringing charges and without granting a hearing of any kind. We have seen how government deals with people who are vulnerable and who act to reveal government’s crimes.

In the coming struggle, we want to offer assistance to people who have courage to resist. We want to help them before government can imprison them. We want people who take the lead in this struggle to know that their fellow citizens stand behind them. Then non-violent action with good leaders can happen. Then civil resistance that leads to change can occur. Then citizens can restore constitutional governance.

So why would Secretary Clinton deliver a speech like that? A number of possibilities come to mind:

• The invitation to speak at the conference came from a friend, and she didn’t want to say no.
• The invitation came from some other source where circumstances made it difficult to say no.
• Secretary Clinton does not know the meaning of hypocrisy.
• The Obama administration needed a prominent person to say all the right things about Internet freedom. As our chief ambassador overseas, Secretary Clinton was a good pick.
• Secretary Clinton, together with other Washington mucky-mucks, lives in a bubble. Therefore she doesn’t realize, or doesn’t care, what people think of her.
• People have short memories. Politicians have even shorter ones. Secretary Clinton just forgot about the Wikileaks business.
• It suits a diplomatic, public relations, or other short term purpose of the Obama administration to speak out on a non-controversial topic like Internet freedom. See the point about ambassadorial pronouncements above.
• Secretary Clinton knows she’s hypocritical, and doesn’t care if other people know it, too. From this point of view, you don’t care because we all play the same game.
• Secretary Clinton tries her best to do the job in front of her each day. If that job involves saying contradictory things from one day to the next, so be it.

Unless Secretary Clinton tells us why she gave the speech, we can only guess the reasons. In fact, we would have to guess the reasons even if she did tell us why she gave the speech. So let’s set guessing aside and linger a bit over the third point. We know hypocrisy when we see it. It’s pretty common. Adolescents become aware of it fairly soon. They talk about it because it’s not something they were aware of when they were children. When they do become aware of it, they wonder how they could have lived so long without seeing it.

What exactly is hypocrisy? The definition I remember from early on is to say one thing and do another. The meaning is actually a little more complicated than that. It means to pretend, to act, to play a part. Now of course playing a part is integral to almost everything we do, where we take on roles in our families, our workplaces, and so on. Hypocrisy is different because the pretense takes on a moral component. You actually tell people to behave one way, when it’s obvious to everyone who listens that the example you set is just the opposite. Even if people don’t follow your example, they will dismiss your words.

That’s why we want to ask the question, why would Secretary Clinton deliver a speech about Internet freedom on the world stage in the Hague? Why would she waste her time? The destruction of Wikileaks transpired recently. Secretary Clinton did not wield the hammer, but in her position as head of the State Department she publicly approved the actions of all who did. The federal government would not have destroyed Wikileaks had she disapproved.

When she delivered her address, Secretary Clinton spoke for her government and her country, not for herself. Why she thinks blatant hypocrisy serves her country’s interests is the riddle. More narrowly, why would she think hypocrisy serves her government’s interests? Hillary Clinton is not dumb, clueless, or parochial in her outlook. She can recognize moral contradiction just as well as we can. She can see that the destruction of Wikileaks is clearly inconsistent with her remarks at the Conference on Internet Freedom.

Let’s take up the obvious response on Secretary Clinton’s behalf. She and the rest of the government would say that the Wikileaks disclosures were not just embarrassing. They bore on key issues of national security. The nation’s chief diplomat would say that the nation’s security is in jeopardy when diplomats cannot conduct their business confidentially. She and the government she represents would argue that national security trumps Internet freedom. Freedom of information has to give way when the survival of the state is at stake. Wikileaks had to be destroyed that the state might thrive.

People who see blatant hypocrisy in Secretary Clinton’s words believe the opposite. They believe that when a government conducts its business in secret, as our government does, the state is already destroyed. At least, the democratic state we cherish is gone. The only important goal is to open the government’s conduct to public scrutiny in order to retrieve the democracy we cherish. Blatant hypocrisy on the world stage does not advance that goal. Moral misconduct like that means we continue to play our designated part, where our government lectures other countries about how to behave. In secret, we do what we like.

~~~~~~~~~~~~~~~~~~~~~~~~~

Here is a brief history of the word hypocrisy:

ORIGIN Middle English : from Old French ypocrisie, via ecclesiastical Latin, from Greek hupokrisis ‘acting of a theatrical part,’ from hupokrinesthai ‘play a part, pretend,’ from hupo ‘under’ + krinein ‘decide, judge.’

While the so-called “mainstream” media is reporting with great glee that 2011 Black Friday retail sales was up 6.6 percent over last year to a record $11.4 billion one other tidbit of data was ignored that probably says more about our social condition than anything: the FBI reported that background check requests for prospective gun buyers on the same day shattered the single-day, all time high by 32 percent.  According to Deputy Assistant FBI Director Jerry Pender on November 25^th, 129,166 checks were submitted far exceeding the previous high of 97,848 on Black Friday 2008.

Now it could be argued that the record gun sales are a result of more Americans all of sudden taking an interest in hunting or gun collecting.  But this explanation seems far-fetched as these two things are not normally associated with fad behavior.  Furthermore, the recent surge in gun sales is part of a larger trend in gun ownership.   According to the Gallup Organization, 47 percent of Americans report they keep a gun on their properties.  This is up 15 percent from a year ago and the highest Gallup has reported since 1993.

Make no mistake about it, the massive increase in firearm purchases has everything to do with the miserable shape America is in socially.  For one thing, as the economy continues to deteriorate with rising price inflation and chronic high levels of unemployment, Americans know that it is only a matter of time before they could become the victims of crime.

Americans also understand that social unrest like has been seen in Europe is possible in the U.S.  Even though it has been relatively peaceful, the Occupy Wall Street Movement is seen by many as a harbinger of things to come.  Given that there are many Americans who feel betrayed, disenfranchised, and totally frustrated by a system that has taken their sustenance in order to bailout those that produced the Financial Crisis of 2008 and the resulting prolonged depression, it is possible that as a society we could be one financial shock away from social upheaval.  This may sound paranoid, but given the recent surge in gun sales I may not be alone in my thinking.

So while robust retail sales on Black Friday is being construed as a hopeful sign for the economy, the surge in gun sales on the same day is an indication that many Americans don’t feel the optimism.  Things are bad everywhere and they are going to get a lot worse before they get better.  Black Friday gun sales are proof that this commentator is not alone in his prognostication.

When Richard Nixon signed the so-called Economic Stabilization Act of 1970 into law the hope was that wage and price controls would put a halt to rising price inflation.  The program was a reaction to the spendthrift ways of the federal government in the 1960s that attempted to finance both the Vietnam War and Lyndon Johnson’s so-called Great Society.

Nixon’s plan to impose his will on the economy ended in utter failure.  For instance, his price ceiling on red meat did not stabilize the price of beef, it kept rising.  What it did do was put many small plants out of business because they found themselves selling on smaller and smaller margins.  No amount of price controls could remedy the overall price inflation of the 1970s.  It wasn’t until the double-digit interest rates of the early 1980s that it finally subsided.

The President’s economic advisors should have known better.  Besides many instances throughout history where price controls have caused much more harm than good, all they had to do was study rent control effects in New York City since World War II.  Again, the effects of price controls have been an utter failure.  While stabilizing prices at the proscribed government level, rent price controls negatively affect the very low-income renters they are meant to help.  Because landlords are required to rent their properties at below market prices, they provide inferior dwellings in short supplies.  While a 7 percent vacancy rate is considered normal and non-rent control cities like Dallas, Houston, and Phoenix often have vacancy rates about 15 percent, New York City has not had a vacancy rate above 5 percent since World War II.  Any way you look at it, government price controls distort the market and cause much more harm than good.

The reason is because they abrogate the important relationship between supply and demand.  Economics 101 tells us when government mandates a price for a product that is above market value a surplus results.  Since the 1920s, government farm price supports have caused prolonged surpluses in agricultural goods.  Conversely, when government mandates a price below market value shortages arise because consumers are willing to buy more than what suppliers are willing to provide.  At the end of the day, price supports always disrupts the link between supply and demand that the market relies upon to run efficiently.

Even most mainstream economists agree that government price controls are bad because they cause dislocations in the economy.  However, what’s funny is they don’t see how the actions of the Federal Reserve Bank are essentially price controls of our money that also cause much more harm than good.  When the Fed sets interest rates, buys and sell assets, monetizes federal debt, or simply creates money or credit out of thin air it is setting a price level for the cost of money either directly (interest rates) or through the supply of money in circulation.  In other words, mortal men and women are fixing the price of money not the market.

The result of monetary price fixing by the Fed has been no less damaging than government’s price fixing of goods.  It is responsible for a continuous cycle of booms and busts in our economy.  The scenario that is repeated time and again is as follows:  usually in response to a downturn, a sluggish economy, or a crisis, the Fed sets interest rates artificially low; a cheap and abundant money supply promotes mal-investment into unproven enterprises like the dot.com bubble of the 1990s; a cheap and abundant money supply also promotes irresponsible investment and speculation like the housing bubble of the 2000s.  The fake boom ends when bank credit expansion ends.  That is to say, the bust begins when adequate returns on investments can no longer be found at prevailing interest rates.  What is then needed is a liquidation of all the mal-investments made during the boom.  This is referred to as a recession.  The ensuing recession starts the cycle over again with the Fed lowering interest rates to stimulate growth.

The booms and busts caused by Fed price fixing of the dollar have serious consequences.  Besides the up and down economy, savings rates remain low because it doesn’t pay to put your money in a low-interest bearing bank account.  This in turn denies start-up capital to the markets.  The Fed then prints more money and its member institutions use fractional reserve banking to increase the money supply.  This accelerates general price inflation.  To put it in perspective, the dollar has lost over 95 percent of its value since the Fed began operations in 1914.  Much of that erosion has taken place since Nixon closed the gold window to foreign redemption in 1971.  The result has been a declining standard of living for most Americans and an ever widening gap between rich and poor.
What is needed is a free market approach to money where the market dictates the price of a dollar, not central bankers.  Thus, the Federal Reserve should be abolished and with it the practice of fractional reserve banking.  In its place should be a 100 percent gold convertible currency.  Since market forces push the market to equilibrium, boom and bust cycles would become a lot less pronounced.  A gold backed dollar would protect savings and investments from the ravages of price inflation and provide an ample pool of capital for entrepreneurship.  At the end of the day, Washington abandoned product price controls because they failed to end the price inflation of the 1970s.  Now, it should abandon monetary price controls because they have failed to give us a prosperous economy.

The Laffer curve underlies the Republicans’ logic about tax rates and revenues. A single straight line proceeding up and to the right underlies the Democrats’ logic. I have not surveyed the economic literature on this question, and I have to say I would not have that much confidence in economists’ findings if I did. Usually findings in the academic journals find their way into public debate, especially if they are compelling or if they agree with one or another political position. No findings about the Laffer curve or the single straight line have emerged in public debates about taxes. You’d almost think these two models about the relationship between tax rates and revenues don’t exist. These irreconcilable models drive our public debate on this subject, yet we don’t acknowledge them.

The Republicans want to lower rates, whatever the impact on revenues. The Democrats want to raise revenue, whatever the impact on rates. Interestingly, the two parties don’t even agree about whether current tax rates are high or not. Democrats look at income tax rates, and argue that they are historically low. No doubt about that: you go back to the fifties and you’ll see marginal income tax rates so high they would make your hair stand on end. The Republicans look at the overall tax burden that business firms and workers carry, and they see a proportion of money going to governments that is way above the twenty-five percent that has historically marked the threshold between healthy economies and troubled ones.

Republicans want to get us back down to twenty-five percent. Democrats respond that citizens would never tolerate the deficits and benefit cuts that would accompany tax rates that low. In fact, American citizens have tolerated fairly high tax rates in exchange for public benefits. The Tea Party has said, no more. The Democratic party, especially with health care reform, said yes, more – more benefits and more taxes to support them.

Let’s take a closer look at the Laffer curve. Reagan and his revolutionaries embraced Laffer’s logic. The Democrats laughed at it, then ridiculed it. The Kennedy tax cuts in the early 1960s did in fact increase federal tax revenues, however, so ridicule and laughter do not make the Democrats’ case so well. If they want to assault this model, they should do so with some logical rigor. Clear evidence about the relationship between tax rates and revenues is in fact not that easy to collect. We have a lot of governments, a lot of tax revenue streams, a lot of rates, and a long period of history to study. The empirical side of this question is not simple.

Laffer’s logic is simple and compelling. Let’s consider one tax rate and one revenue stream. Think of it as a sales tax on beans if that helps. We know that when the tax rate is zero, revenue is zero. We know that when the tax rate is one hundred percent, revenue is zero. No one in private business would produce, buy, or sell beans if the government took all the proceeds. Lastly, we know that when the tax rate is between zero and one hundred percent, revenue from the tax is some positive number. Therefore the relationship between the tax rate and tax revenue between zero and one hundred had to look like an upside down bowl. Or maybe a two-humped camel. Or perhaps a gun barrel. It could even look like a steady line up and to the right, until it drops back down to zero at 99.9 percent.

That tells you something. The logic behind the Laffer curve is compelling, but we don’t actually know the shape of the curve. Collecting real data to discover its shape is devilishly difficult. You know that’s so because if it were easy and the findings were conclusive, someone in the Republican party would have those findings translated into talking points and we would never hear the end of it. We don’t even know if the shape of the curve depends on what kind of tax we’re talking about. The same person who might buy a house where property taxes are high might quit working if the income tax rate is high, or might quit investing if the capital gains tax rate is high.

Let’s say we can figure out the actual shape of the curve, form fitted to take into account the variations that may exist among different taxes. Suppose revenues max out at a twenty-five percent rate, and decline after that. The Republicans are in heaven. Now suppose revenues max out at seventy-five percent, then decline as you move toward one hundred percent. Now the Democrats are loving it. That shape gives them much more room to pile on benefits and pay for them. You know that Republicans will oppose a rate that goes much above thirty percent, no matter how much revenue it raises. If you try to take their money, they’ll say Taxed Enough Already.

If the Democrats are wrong about their line that goes steadily up and to the right – that is, if revenues go down when we increase taxes – we make a big mistake if we raise rates in the current situation. If the Republicans are wrong about the Laffer curve – that is, if revenues actually do continue to increase when you increase the rate – they may have some ‘splaining to do. I think revenues probably do peak when local, state, and federal governments’ total take is about twenty-five percent. After that taxes begin to eat away at productive activity. Right now we are so far above a twenty-five percent total I don’t care to contemplate it.

It’s just a gut feeling, though. I can’t show that twenty-five percent is the magic number for the total tax rate. Nor can I show how much revenue we are sacrificing because the total tax rate has crept up toward fifty percent over these many years. We know that employers have willingly shed workers in order to shed the financial burden of keeping them on, even though cutting employees generally means cutting profits as well. We know that small businesses have difficulty starting up and expanding in an environment where hiring new workers is so expensive. We can’t measure the amount of economic activity we forego because the total tax rate is so high. We can only lower the rate to see what happens.

We know from a few decades of experience that we are not going to see lower tax rates. We hear about the Bush tax cuts again and again, but that is one modest, temporary reduction in one tax. If you focus on one thing, you wind up distracted from other things. To add up the total tax burden in our economy is one depressing exercise. I stopped doing it a long time ago. The total take by local, state, and federal governments has not subsided since I stopped.

If you feel the super-committee let us down, consider this idea. We are going to have to proceed on principle here. Neither party can persuade the other based on convincing data about the relationship between tax rates and revenues. Even if you consciously rule out the complexity one encounters in  arguments about taxes, you cannot sufficiently simplify the arguments in this case if you try to collect comprehensive data. You cannot hold other variables constant when you try to measure the impact of rate reductions or increases on revenues. Because taxes operate in such a complex environment, conclusions you draw about the relationshp between rates and revenues are open to challenge from some quarter.

Consequently people eventually have to choose between small government with low taxes, or large government with high taxes. We could go for something in between, but no one is talking about compromise right now. From the 1930s on, we have embraced government benefits. We haven’t felt so comfortable about the cost, but we have consistently settled for gradually increasing taxes in order to pay for public benefits. Ask anyone who has voted for a bond issue to fund a local library or a new school, knowing how much it will add to property taxes in the near term. People are willing to pay.

Until now. The tax revolt has begun. The revolt comes when we have big government deficits at all levels. The deficits make people anxious. We want to address them, but we’re not sure how. We want our leaders to address them, and they clearly don’t know how. We need better leaders and better discussions. Where we’ll find better leaders is open to question. Meantime, we can improve our discussions if we’re more explicit about the mental models we use to analyze tax issues.

Does anyone other than politics junkies or James Stewart fans even know what a filibuster actually is anymore? I Googled when was the last filibuster in the United States Senate. Do you know the answer? It was in 1992, almost twenty years ago. That was shortly after Ronald Reagan left office. Most filibusters last from ten to twenty hours. Strom Thurmond spoke for twenty-four hours on the Senate floor in 1957. A team of Southern Democrats conducted a talkathon in the 1960s that lasted about seventy-five hours, or three days. That’s it. Every senator has an internal timer that will take him off the floor no matter how little water he drinks. Ten to twenty hours is the longest a senator can hold the floor without going to the bathroom – no chamber pots allowed in the senatorial chamber.

So ask a Washington know-it-all why we don’t have filibusters anymore. Why don’t they occur, even though filibusters supposedly explain why the Senate needs sixty votes to pass anything? You’ll get some complicated procedural answer about how Senate rules require a three-fifths majority for a vote of cloture. Don’t you even pause to consider whether the answer is true or not. Every word of it is true, but it doesn’t answer the question at all. The reason you don’t see filibusters in the Senate anymore is that the senators don’t want to filibuster.

Let’s say the Democrats want to bring a bill to the floor for a vote, but they have only fifty-nine votes to support it. The Republicans have forty-one votes in opposition. The Republicans say they’re going to filibuster the bill, which means they threaten to take the floor and debate the bill for some indefinitely long period of time, measured in hours. The speaker may read from the Bible or from a cookbook, he may talk about his hometown or he may even talk about the bill. The Democrats can’t stop him because they need sixty votes to cut off debate. One vote shy of a three-fifths majority, they have to listen to the speaker blab.

Why is this matter of Senate procedure even a question? For years now we’ve said the Congress is dysfunctional. What is the main reason we know it’s dysfunctional? Well, you can’t pass anything in the Senate without sixty votes, and the majority party rarely has sixty votes. Why do you need sixty votes to pass legislation in the Senate? Because the minority threatens a filibuster in every case. Since the majority can’t muster sixty votes to force an end to debate, and because it expects the minority to make good on its threat, it backs down.

Have you heard anyone explain why the majority backs down in every case? I haven’t. Perhaps someone thinks it would harm the Senate’s reputation if its business ground to a halt for twenty-four hours. Perhaps they think the mere spectacle of a filibuster would be the type of political theater the Senate’s reputation doesn’t need right now. Get real. The Senate’s reputation is about as low as it can go right now. It has been low since it stopped passing bills. No filibuster will harm a reputation that’s already in the toilet.

The behavior surrounding filibusters has become so institutionalized that the minority doesn’t even have to threaten a filibuster anymore. All the senators assume now that you need sixty votes to pass anything, and that’s the end of the matter. If these sorry creatures took their jobs, their conflicts and their legislative duties seriously, the majority party would force the minority party to carry out its threat. Challenge the filibusterers to hold the floor as long as they can. Give them the satisfaction of making their demonstration, then pass the bill when the opposition party fags out. That’s what happened in the civil rights debates nearly fifty years ago. Southern Democrats tried filibusters to block new civil rights legislation, but the bills passed anyway. A filibuster is a visible demonstration of dissent – it is not a successful parliamentary tool to block legislation over the long term.

Reputations aside, the only other argument in favor of the current practice is the argument to efficiency. You avoid filibusters to keep the Senate’s business going. But the Senate’s productivity is already near zero, partly because the insitutionalized sixty-vote requirement resigns everyone to helplessness. That’s not quite true – the Senate occasionally passes something. Not so long ago, it managed to pass the Dodd-Frank financial reform bill with votes from both parties. I’d say that bill was quite an exception. It was so general and so symbolically important, it couldn’t help but pass.

These arguments also ignore the Senate’s ability to change its own rules. The Senate could easily agree to a change that requires a vote of only fifty percent plus one to end debate. Within the Senate chamber, that option seemed so radical that insiders dubbed it the nuclear option. What is so destructive about changing the rule? Nothing much, except that to change Senate tradition does seem rather apocalyptic to club members. To outsiders, it certainly seems an unnecessary tempest, since the Senate doesn’t allow real filibusters anyway. The institution found itself tied in knots over a rule change that would affect something that doesn’t happen anyway.

All of these reflections return us to the dysfunctionality we alluded to above. The tacit agreement between the parties not to allow filibusters forms an interesting foundation stone in this pattern of dysfunctionality. When partisanship has worn you down, you think: “Well, at least we don’t have to worry about filibusters. Do you know how tiring they are? That kind of theater sucks up a lot of oxygen, even when you’re not the speaker. Thank God we don’t have to go through those.” In other words, stay with the devil you know. Stay with an institutional pattern of behavior that’s discouraging but predictable. Stay with a pattern of behavior that lets you make excuses. When citizens complain, senators can point to their poor reputations and say with still more pessimism, “What have we got to lose? We’re doing our best. Get off our backs.”

You can tell yourself that, but the citizens who gave you this high honor and responsibility know better: you’re not doing your best.

Things are really a mess economically in the United States and it isn’t really an exaggeration to say it is all Washington’s fault.  I mean through the easy money policies of the Federal Reserve and the legislative and monetary support of Congress and the previous administration many Americans who couldn’t otherwise afford to buy a house bought one.  This coupled with reckless lending policies on the part of primary lenders due to explicit and implicit government loan guarantees set the economy up for a massive failure.  Then, when their low teaser rates readjusted up and many could not afford their new higher payments the housing bubble burst.  And what was Washington’s response?  It was to provide trillions more in easy money and a policy of encouraging Americans to borrow and spend it to “stimulate” the economy.

Now that, that policy hasn’t worked we are facing a massive debt crisis, with real unemployment north of 16 percent and price inflation eating away at the standard of living in America.

If that is not bad enough, last week it was reported that bailout beneficiaries and mortgage guarantors Freddie Mac and Fannie Mae asked the federal government for more bailout funds.  Freddie asked for $6 billion more bringing that GSE’s total bailout figure to $72.2 billion.  Fannie asked for $7.8 billion more bringing its total Treasury draw to over $120 billion.

The main reason why Freddie and Fannie are still losing money and require more federal largess is because of the policies coming out of Washington.  Freddie reported $4.8 billion in derivative losses alone due to declining interest rates.  Fannie’s president and CEO, Michael Williams claims his firm’s woes are due to homeowners paying less interest on loans refinanced at historically low mortgage rates.  So while Washington brought on the original crisis that forced Freddie and Fannie into U.S. conservatorship, its response to that crisis has only made the financial conditions of those entities worse.

At the end of the day, Henry Hazlitt’s words from his famous book, Economics in One Lesson ring prophetic.

“The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

In both instances, Washington’s policies leading to the financial crisis of 2008 and its policies since have helped some groups ( i.e. bankers) and hurt others (Fannie and Freddie).  Since no mortal man can determine with precision how a given economic policy of government or a central bank will affect every group in a society it is best for government and central bankers to abstain from imposing their will on the economy.  Certainly we would be much better off now because our economy wouldn’t be in the mess that it is in.

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

How law enforcement responds is the test. The occupiers demonstratively stayed on good terms with the police during the early stages of their protest. They had the right instincts and the right strategy. After these expressions of good will, the police could not move in with force to remove the protesters without harming their own reputations. They had no justification for abuse.

Civil disobedience is hard. It’s hard on the people who practice it. They suffer all kinds of public abuse for the stand they take. It’s hard on law enforcement officials, as it poses problems for them that they don’t normally face. It raises hard questions about public duties and public rights. Lastly, civil disobedience is hard to sustain long enough to have an effect. It requires discipline, good leadership, effective planning, and clear goals. The Occupy movement had not developed these qualities before policemen all across the country moved in with riot gear and disproportionate shows of force designed to deter future public nuisances.

The occupiers have drawn attention to themselves and to their slogans. In that way they’ve been successful. Because they have not articulated other aims, we don’t know yet whether they’ve been successful otherwise. If we base our judgments about the movement on whether or not the protests are legal, however, we’ll certainly miss the occupiers’ point. They could say, “Of course the occupation is illegal: that’s why we did it.” If it were legal, no one would have paid attention to it.

More specifically, you cannot justify disproportionate force with a claim of illegality. A person may trespass on my lawn, he may urinate on my rose bushes, but I cannot set my Rottweiler on him or attack him with pepper spray. The police who attack occupiers act with disproportionate force not primarily because the encampments are illegal, but in order to intimidate and deter. They do not want the occupiers to return. You don’t need riot gear to turn people out of their sleeping bags. You need riot gear to scare people into obedience.

Securities fraud is hard to specify for a lot of reasons. One is that a lot of institutional layers and middlemen generally exist between buyers and sellers. The securities market is more opaque than many other markets. So we tend to regulate what we’re able to regulate, things like insider trading. Insider trading isn’t even fraud, strictly speaking. It is, however, a type of unfairness that we have fastened on in our regulatory regime for securities. The elements of proof for insider trading are fairly clear-cut, so prosecutors are on familiar ground when they bring a case of that type.

Along comes Bernie Madoff, who gives all of us an example of true fraud. Everyone has heard of a Ponzi scheme, and everyone has a general idea how it works. When we observe a skillful, sophisticated practitioner of Ponzi schemes, we know what to do. We prosecute and put the person in jail. We are all angry that Madoff made off with so much money. Widows suffered. Bernie Madoff will die in the prison infirmary.

Now consider credit default swaps. People in the financial industry call these CDSs. Or consider collateralized debt obligations. These are CDOs. Or how about mortgage backed securities, or MBSs for short? We could regulate all of these instruments, and in fact we have tried to regulate them. But how do you separate legitimate trading in these securities from fraudulent activities? How do you distinguish right from wrong in these markets?

I’d argue that fraud is fraud, and that it’s not so difficult to recognize it when you see it. As a well quoted judge said about obscenity, “I know it when I see it.” When you have a regulatory regime that depends on an over-detailed specification of the crime, however, you run into trouble fast. Regulators in the 1960s wanted to say that depiction of female genitals was obscene and not to be permitted. What about Renaissance painters who depicted nude female bodies? Were they all pornographers, and will we destroy all the books that contain images of these paintings? Of course not. Does that mean we can’t regulate obscenity? Of course we can regulate it, but we want to think about how we do it.

The same goes for securities fraud. It’s doubtful that a detailed specification of what counts as fraud in the market for mortgage backed securities would be that effective. You want to craft laws that prevent fraud, no matter what instruments are traded. You want to craft laws that take into account the kinds of difficulties that arise when you regulate obscenity. Lenny Bruce used words in his performances on stage that landed him in jail. Today we regard his prosecution and punishment as absurd. You can say that community standards have changed, or you could say the laws governing obscenity were wrong. Even if both factors are at play, good obscenity laws would not have sent Lenny Bruce to jail.

We want good laws to prevent securities fraud. We want people who commit fraud to be punished for it, and we want people who conduct their business affairs honestly to be free to continue their pursuits for everyone’s benefit. If people who commit fraud go unpunished, that produces both anger and disillusionment. That makes people say, “I play by the rules. Why shouldn’t they? Even more, why should my money go to pay off people who gambled and lost, and gambled dishonestly at that?”

During the recent financial crisis, analysts frequently commented that the people who did this didn’t break any laws. They may have played fast and loose, but we can’t punish them because under our statutes, they didn’t commit a prosecutable offense. Still, fraud is fraud, and we all know it when we see it. If you rely overmuch on detailed regulations, you are going to get into trouble. You will be forced to burn books of Renaissance paintings in order to keep Hustler out of your child’s private stash.

We already know how to prevent fraud, but we have to act quickly and decisively to prevent it when it appears. By 2008, people in the banking industry could rightly claim, “Everyone is doing it.” That is actually a powerful claim, if you believe that scapegoating is not a legitimate legal strategy. Scapegoating singles people out to make an example of them. Scapegoating piles another unfairness on top of the original crime. To avoid scapegoating, prosecutors have to go after criminals early, before the crime becomes organized and established as a widespread and therefore legitimate activity. If criminal behavior does become established, prosecutors don’t have any good choices.

We know now that Wall Street firms committed fraud. I commented to people after reading The Big Short by Michael Lewis, no matter how bad you think the financial dealings that led to the crisis were, it was worse. It was a lot worse. The fraud was so massive by the time the bubble burst in 2008, no regulatory regime or legal proceeding would have done much to end it by then. The only way to end it was what actually happened: a complete collapse of the bubble. The institutional fraud ended at the same time.

A proper end to these comments would be to suggest some well crafted regulations to prevent securities fraud. I’ll demur on that. It’s a hard job, best undertaken by people who know more about banking than I do. Certainly banks themselves do not like to endure what they endured during the recent collapse. We can also be confident that bubbles will occur from time to time no matter what regulatory actions we undertake. Whatever the future brings, though, we know one more thing with certainty. If people who commit fraud not only escape punishment, but receive compensation from the public treasury, the people who paid that compensation will want to know how that could happen.

Even though he continues to dwell in the “top-tier” of Republican candidates for president, former Massachusetts’s Governor Mitt Romney continues to draw the distrust of many Republicans primary voters.  Questions continue to surround his positions on the high priority conservative issues of abortion, gun control, taxes, federal spending, and socialized medicine.  Many conservatives are just not sure they can trust Romney given his previous actions and statements on these issues.

But as governor of Massachusetts, Mitt Romney has a relatively blank slate of positions when it comes to foreign policy.  However, his foreign policy appointments to his presidential campaign and recent statements he has made are more than enough to please conservative voters in the Republican Party.  As a matter of fact, they make it hard to determine if Romney is running for President of the United States or prime minister of Israel.

Take Romney’s appointment of Walid Phares to chair the Middle East and North Africa working group of his Foreign Policy and National Security Advisory Team.  Mr. Phares currently serves on the board of ACT! For America, a lobbying group that Politico described as being part of an “effort to transform anti-Islam crusading into a mainstream lobbying effort”.  He has stated that global jihad is already in progress and within a short period of time jihadists will have ten million suicide bombers ready to wreak devastation on the West.  To beat jihadists he is a strong proponent of preemptive strikes and “putting our allies’ forces on existing and new battlefields.”

The problem with Walid Phares is that he sees the world in black and white.  You are either for us or against us.  This of course has been proclaimed before and the consequences of this mentality have been disastrous for America – trillions spent on the War on Terror, two almost decade long wars, and erosion of our civil liberties.  Phares’ anti-Islam/pro-Israel positions will certainly help Romney with neoconservatives.  But, an advisor with such extreme views on Romney’s staff should raise red flags for the rest of us.  Phares’s positions would be great if he was advising a candidate for Israeli prime minister, but he is not.  He is advising Mitt Romney.

Now, if Romney’s appointment of Walid Phares isn’t bad enough, the web site Think Progress Security reports that Romney has admitted that if he becomes president he will leave his foreign policy decisions as they relate to Israel to Israel.  Specifically, when questioned by an Israeli reporter if he would consider moving the American embassy in Tel Aviv to Jerusalem Romney responded, “The actions that I will take will be actions recommended and supported by Israeli leaders. I don’t seek to take actions independent of what our allies think is best, and if Israel’s leaders thought that a move of that nature would be helpful to their efforts, then that’s something I’ll be inclined to do. But again, that’s a decision which I would look to the Israeli leadership to help guide.”

Two points need to be made.  First, Jerusalem is an incredibly sensitive issue.  Every American leader has understood that moving our embassy there was out of the question because it would lend legitimacy to Israel’s claim over that city and immediately squash any hope for a peace settlement between Jews and Arabs.

Secondly, what leader of a country would give up his authority over policy to leaders of another country?  That is called a dereliction of duty and certainly violates the confidence of American voters that their president will advocate for their interests 100 percent of the time.  Romney is running to be our president, not the de facto prime minister of Israel.
At the end of the day, Romney’s appointment of Walid Phares to his campaign staff and his comments on his policy towards Israel are indications of what we could expect from the foreign policy of a Romney Administration.  At the very least, it would be a continuation of Bush/Obama foreign policies. At the worst, it would be an escalation of those policies.  American can ill afford either.

”I spent 33 years….being a high-class muscle man for Big Business, for Wall Street, and the bankers.  I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912.  I helped make Mexico and especially Tampico safe for American oil interests in 1916.  I helped make Haiti and Cuba a decent place for the National City (Bank) boys to collect revenue in.  I helped in the rape of half a dozen Central American republics for the benefit of Wall Street….  In China in 1927 I helped see to it that Standard Oil went its way unmolested.”

Marine Major General Smedley Butler

August 21, 1931 to an American Legion convention

The more things change the more they stay the same.  America has a long and illustrious history of imperialistic feats as was so eloquently portrayed by Smedley Butler in 1931.  The recent intervention of NATO led by the United States in the Libyan civil war is just the latest example of U.S./Western imperialism.

It all started with a massive deception.  Security Council Resolution 1973 was limited in scope and simply called for the imposition of a “No Fly Zone” over Libya to protect threatened civilians from tyrant Muammar Qaddafi’s wrath.  The intent was clear and mostly responsible for its passage through the Security Council as members Russia, China, India, Brazil, and Germany voted to abstain instead of against the resolution.

However, from the very beginning NATO’s intent to liberate Libya not just protect its citizens became clear.  NATO bombings went beyond aircraft, anti-aircraft batteries and the like to troop formations, oil installations, and other infrastructure.  Even though Obama said there would be no need for “boots on the ground”, reports broke that American Special Forces had been on the ground prior to the beginning of the social unrest?

Why the special interest in Libya?

There is no doubt it has nothing to do with the well-being of the Libyan people.  It is all about Libya’s oil reserves.  In 2004, after Qaddafi ended his quest for weapons of mass destruction, President George W. Bush lifted sanctions against Libya.  Since then American companies have invested heavily in Libya.  For instance, energy giants ConocoPhillips and Marathon have each invested about $700 million.

Perhaps not understanding how the system of Western corporatism functions, Qaddafi over time began demanding tougher contract terms, big bonuses up front, and most remarkably he demanded that global oil companies operating in Libya pay the $1.5 billion bill for Libya’s role in the attack on Pan Am Flight 103 and other terrorist attacks or face “serious consequences” for their oil leases.  Possibly the last straw for Western imperialists was Qaddafi’s plan to unite African and Arab states under a new currency to rival the dollar and Euro.  Under the proposal, oil and other resources would be sold only for gold dinars.  The economic implications for the West would be immense.

So when Secretary of State Hillary Clinton was in Tripoli last week shortly after Qaddafi’s slaying in the streets of Misrata, it was difficult for her to hold back her glee at another conquest for Western corporate interests.  Even before Qaddafi’s death on October 20, representatives from 80 French firms arrived in Tripoli to meet officials of the Transitional National Council.  And in the meantime, British defense minister, Philip Hammond strongly advised British companies to “pack their Suitcases’ for Libya.

If you look up ‘western companies returning to Libya” on Google News there are a slew of articles about American and European security, construction, infrastructure, and oil companies being ready, willing, and able to “carve-up” the spoils of war there.  Funny how those same corporations didn’t spend the billions of dollars it took to “liberate” Libya.  Of course, that was done by the taxpayers in NATO countries.

And so the more things change the more they stay the same.  In Smedley Butler’s day, the admissions in his speech rocked the country to its core.  Perhaps someday in the future another courageous American commander from the Libyan war will make a similar speech acknowledging his complicity in Western imperialism in that country.  But with the internet and the growth of the alternative media that speech is unnecessary.  Anybody has the ability to find the truth on their own.

Article first published as The More Things Change, the More They Stay the Same on Blogcritics.

By just about every measure the U.S. economy continues to be mired in a depression.  Unemployment remains high.  Housing prices are still falling. Retail sales are lackluster.  Since Barack Obama became president in 2009 the national debt has ballooned by about $4 trillion with very little to show for it – unless you consider the rebound and hearty growth of the stock market.

Yes, while Main Street continues to struggle to make ends meet, Wall Street is prospering.  After losing more than half of its value due to the financial crisis of 2008, the Dow Jones Industrial Average has bounced back brilliantly recapturing more than 75 percent of its value lost.  The numbers are enough to make even a casual observer of the markets sit up and take notice.  The big question is why the disconnect between a significantly rising stock market on the one hand and a depressed economy on the other?

When the Dow was making its precipitous decline in November 2008 Ben Bernanke and his Federal Open Market Committee (FOMC) announced Quantitative Easing 1 (QE1).  From November 25, 2008 to March 31, 2010 the Federal Reserve Bank pumped about $1.5 trillion into the economy by purchasing treasury bonds from its primary dealers (banks such as Goldman Sachs and J.P. Morgan).  After bottoming out at 6626 in March 2009, the Dow went up a remarkable 65 percent to 10927 by the end of March 2010.

After QE1 ended, the markets began to drop once again.   In August 2010 Bernanke formally announced that QE2 would start in November.  On August 27, 2010 the Dow closed at 10150. When QE2 concluded at the end of June 2011 after close to $700 billion more was pumped into the economy through treasury purchases the Dow closed at 12582 – a 24 percent increase.

When QE2 ended the Dow experienced a 15 percent drop in value.  But In the last two weeks with no fan fair, the Fed has purchased $39.9 billion of treasuries from banks in the same fashion it did during QE1 and QE2.  Needless to say, stocks made an about face and have rebounded higher by about 9 percent.

So what does all this tell us?  It tells us that the boom and bust theory of the Austrian School of Economics is vindicated.  That is to say that monetary policy conducted by the Federal Reserve (low interest rates, monetizing federal debt, and asset purchases) causes artificial booms (bubbles) in the economy.  There is no economic reason for the stock market to be up in the current economy except for the aforementioned correlation between Fed asset purchases and rising stock prices.  It is clear over the long haul that the current stock market cannot maintain its price level without the Fed propping it up. Similar to the dot.com and housing bubbles before it, when the Fed pulls support from the current stock market bubble it begins to burst.  It is only a matter of time before a permanent bursting of the bubble happens.

There is only one way to prevent the Fed from inflating the dollar to benefit its member banks and therefore wreak havoc on the rest of us.  There is only one way to prevent the Fed from inflating the dollar thereby causing financial bubbles which have contributed greatly to the widening gap between rich and poor.  A gold backed dollar would restrict the Fed’s ability to manipulate the currency.  It would protect savings and purchasing power.  And in the above case it would have prevented the current stock market bubble which when it bursts will devastate millions of Americans who will then realize how phony their financial health actually was.

On May 1, President Obama announced the end of Osama bin Laden’s life. That evening I talked with my son on the phone. He lives in Washington, DC, and mentioned the celebrations in his city that night. He noted the celebrations as troubling, and also noted in passing that many celebrants were students who had some alcohol to assist their energetic cheering in the streets. I took some heart from that, and I suppose from knowing that up here in Boston the response was more temperate.

Then came the Awlaki killing. That assassination represented a breakthrough in our constitutional history – not just a chip but a huge chunk removed from our Constitution. If the government will assassinate an American citizen without due process – a plain violation of the Fifth Amendment – what won’t it do? Which is worse: torture or summary execution? Don’t trouble yourself: both acts count as a crime. They are criminal acts not because the Constitution and international law specifically prohibit them. The Constitution and international law prohibit them because they are criminal acts.

The distinction matters. We may ask, how do we know something is a crime? Then we look at the wording of our laws to determine if a particular act counts. If legal language and precedent leave room for maneuver – they invariably do – you write a long memo to explain why the act you want to commit does not count as a crime. Such legalistic reasoning reverses the relationship between legal and moral thought. You can’t resolve ambiguity in the moral sphere with a legal memo. We do – and ought to – resolve legal ambiguity with moral reasoning. Moral reasoning tells us that civil – not savage – societies cannot permit torture and summary execution. Civil societies use legal frameworks to codify these moral conclusions.

I’ve written a lot about torture, so let’s concentrate on summary executions. To celebrate summary executions is beyond anything we could have imagined before 9/11. After 9/11, I argued that we would have to find new legal frameworks to govern the prosecution of this war. I did not like the idea that every time we captured someone suspected of waging war against us, we would haul the individual back to the United States and inaugurate the same legal process we undertake when an American citizen is charged with a crime. Yet we had little precedent to guide us. Strictures of international law reflect precedents and rules used to govern wars among states. International law had virtually nothing to say about war between a state and a loose network of combatants scattered around the globe. I said that we would have to work with our allies in Europe to fashion new rules for this kind of warfare.

It didn’t happen. We build Guantanamo, Bagram, and Abu Ghraib on our own. We instituted extraordinary rendition, indefinite detention, extra-judicial capture and punishment, enhanced interrogation techniques, exculpatory memos and executive orders, targeted assassinations, secret drone operations, warrantless surveillance, military tribunals, executive findings, and compliance positions for prisoners on our own. We decided that collaboration with our allies would unduly delay and hamper prosecution of the Global War on Terror. So we acted on our own.

As a result, new international rules to accommodate new forms of warfare did not evolve. As a result, we’re compelled to choose between apparently legal but plainly immoral procedures of our national security state, and cumbersome, long procedures embedded in our criminal law. No one cares to argue that we should infuse our domestic criminal courts with prisoners captured in Afghanistan, Pakistan, Yemen and elsewhere. The debate over Guantanamo shows we don’t want them here as prisoners, let alone as defendants in criminal trials. Yet we have no procedures to handle prisoners other than the ones we have seen develop since 9/11. We have not consulted with our allies, launched any proposals, or pursued any public initiatives to determine how to treat individuals captured in the current war.

This determination to develop our own procedures for prosecution of this war – unilaterally and secretively – affects our domestic legal environment, our political culture, and the sanctity of our own Constitution. Consider two instances of warfare, one in September 2001, the second ten years later in September 2011. An emotional, indignant reaction to bin Laden’s attack on 9/11 would have been, “You can’t do that!” Bin Laden replies, “Of course I can. Look, I just did.” That’s your enemy taunting you. An American citizen would rightly utter the same words after Awlaki’s killing in September 2011: “You can’t do that!” Obama responds likewise: “Of course I can. Look, I just did.” In the latter case, the speaker isn’t your enemy taunting you, it’s your own president! Your own president claims he can do whatever he wants.

This presidential claim of authority to assassinate an American citizen isn’t only a general statement of powers the president says he needs to prosecute this kind of war successfully. This claim extends to every American citizen individually: to you, and you, and you. The claim says, “If we the authorities determine that you endanger the state’s survival, we will kill you. If you speak against us, if you advocate the state’s abolishment, we will kill you. You have no right to counsel, you have no right to hear the charges against you, nor have you the right to respond to our charges. We will kill you.”

The next time government produces a dead body and expects you to cheer about it, think about that.

______________________________

Steven Greffenius writes for The Jeffersonian, Next Free Voice, and Pacific Sunrise. Preview his recent books, Revolution on the Ground and Revolution in the Air, available at Amazon, Barnes and Noble, Smashwords, and Apple Books. To contact Steve, write to steveng @ techwritepublishing.com.

The drumbeats for war with Iran are pounding fast and furious in Washington.  The Obama Administration claims that it foiled a plot financed and directed by the Iranians to assassinate the Saudi Arabian ambassador to the U.S. on American soil.  According to Attorney General Eric Holder, the Iranians acting through an Iranian-American intermediary were in the process of hiring a Mexican drug cartel to make the hit when DEA agents intervened to save the day.  Obama and Holder are accusing the Quds Force, a special unit of Iran’s Revolutionary Guard, of orchestrating the whole plot.  Those that desire war with Iran are using the allegation as a pretext for military engagement with the Islamic Republic.  For his part, Obama claims that all options are on the table for the U.S. to deal with the most recent “dangerous and reckless” behavior of the Iranian government.

But Iran specialists who have followed the operations of the Quds Force for many years say the plot just doesn’t make any sense.  They question what Iran would have to gain from assassinating the Saudi ambassador to the U.S. on American soil.  At a time when Iran has been focused on evading further sanctions against it by hiding its nuclear program and building relationships with non-Western allies why would it risk all that for bumping off the Saudi diplomat?  Why would it draw attention to itself through an act that has no conceivable benefit?

Additionally, experts say that the Quds Force is a sophisticated special operations unit.  They doubt it would utilize the likes of a former used car salesman, Mansour Arbabsiar, the Iranian-American intermediary implicated in the plot, and a Mexican drug gang infiltrated with both Mexican and U.S. intelligence agents.to carry out this sensitive operation in the U.S.  The whole scenario is beneath their modus operandi.

But, Obama and his Secretary of State Hillary Clinton press on with their story.  Secretary Clinton stated that the plot is “”a flagrant violation of international and U.S. law and a dangerous escalation of the Iranian government’s long-standing use of political violence and sponsorship of terrorism.”  The hypocrisy should not be lost on anybody who even remotely follows international news.  The Iranian regime is certainly a rogue cabal of henchmen and butchers, but the United States government is also engaged in “flagrant violations of international and U.S. law”.  What about “Fast and Furious,” the ATF’s operation which allowed Mexican drug lords to illegally purchase guns in the U.S. to be used in Mexico so the agency could “track” the weapons and facilitate arrests?

And there are far more serious violations of international law committed by the U.S. government.  Currently we have secret commandos (special hit teams) on the ground in more than 70 countries and that number is expected to rise to 120.  And let’s not forget about our undeclared drone war in Pakistan which has killed hundreds if not thousands of non-combatants.

At the end of the day, we live in very dangerous times.  Many in and out of our government will always need an enemy to demonize.  With the economy headed for an even bigger collapse than the 2008 financial crisis, scapegoats and distractions will be needed to deflect the blame from those that deserve it.  When all else fails failed regimes turn to war to rally the masses.  Americans need to question the veracity of our leaders even more and understand that in many cases what we allege of others we also are guilty of and therefore contribute to an unsafe world.  The last thing we need is war with Iran.  If Americans become more vigilant they can silence those drumbeats.

Interestingly, the people who cited the statistic did not show any interest in questions like that. The number was enough. For advocates the size of the number mattered: the more Americans uninsured, the more urgent the need for reform. You can beat down the opposition if you repeat a number like that often enough.

The advocates for reform never did address the so what question, but after their triumph in early 2010 they began to reveal their thinking a little more candidly. You saw more references to the Massachusetts plan after the bill passed. Massachusetts originated the idea of an individual mandate to achieve nearly universal coverage in 2007. The reformers held up the Massachusetts plan as their model in 2010. Look what Massachusetts achieved with their health care reform: we can accomplish the same thing all across the nation.

I live in Massachusetts. I can tell you that RomneyCare is not a model for the rest of the country. It has not achieved what its advocates said it would achieve. Neither does it have any prospect of success. Yet people look to this plan as a reform model for all the other states. Why would that be?

I want to say something that reveals my prejudices, but I’m not sure that’s helpful. The fundamentals of the Massachusetts plan come from the mind of a pointy-headed professor at MIT. Whenever I learn that a professor conceives something that’s supposed to work in the real world, I know it’s destined for failure. I used to be a professor. Professors don’t have any idea about the real world. That’s why they’re professors. That’s my prejudice, based on my experience as a professor. People who teach at academic institutions do a lot of good work, but devising reform plans that change real institutions for the better is not something academics do well.

I heard the reasoning behind the Massachusetts plan on the radio not long ago. The simple-mindedness of the reasoning dismayed me somewhat. Ordinarily I like simple explanations and simple reasoning. It’s elegant and rapidly carries you from premises, through connections and reasons to conclusions. Simple reasoning won’t do for health care reform, though. It just won’t.

The main goal and motivation for health care reform in Massachusetts was to cut costs. Health care was too expensive for everyone: for individual patients, for taxpayers, for the state government, for the insurance carriers, and of course for health care providers as well. Everyone involved stood to gain from making health care in Massachusetts more efficient and therefore less costly. The state government in particular stood to gain a great deal, as its outlay for health care expenses greatly exceeded its resources.

The professor at MIT reasoned this way. If you want to pay for an expensive health care system, you have to expand the number of people who pay to support it. High quality health care, after all, is a collective good. If you have too many free riders, the cost becomes unbearable for the people who actually pay. That’s how professors reason. They think in terms of collective goods. If you see health care as a collective good, you have to solve the free rider problem in order to make the system work for all participants. To solve the free rider problem, you have to force people to participate. Thus the individual mandate.

How does an individual mandate contribute to lower costs? If you bring all parties together in a health insurance exchange, the purchasers of health insurance have more bargaining power than they do under the current system. Therefore they can keep prices lower, or at least keep them from rising so rapidly. That’s the reasoning. Universal coverage means greater bargaining power.

I don’t want to criticize the Massachusetts plan or the reasoning that underpins it here. I did that at length in another article. I do want to point to the intellectual dishonesty of that statistic we heard so often. When you cite a number – or any piece of evidence, for that matter – so often that it becomes a cornerstone of your argument, you owe your listeners an explanation. You can’t cite your argument over and over, and presume that its significance is self-evident. You have to answer the so what question.

Advocates of health care reform would difficulty were they to explain why thirty million uninsured is a significant number. They would have to break the number down to see why people are uninsured, whether they want to be uninsured, or whether they even care. Advocates of health care reform take the desirability of universal coverage as a given. That’s obvious enough. Once you take universal coverage as your goal, however, you can’t use the number of uninsured to show why the goal is desirable. That begs the question.

Here’s why. If you reason forward from the number of uninsured, you would include analysis of people who are insured as well. If you reason backward from the desirability of universal coverage, you would compare systems that have an individual mandate, or some other means to ensure universal participation, with those that don’t. If you do both, though – if thirty million uninsured becomes your reason for advocating universal coverage – you bypass all analysis and comparison. Your argument is self-contained because you don’t look at anything else. If thirty million uninsured is a bad thing, then of course universal coverage is a good remedy.

Here’s where we rest. Honesty leads to the truth. Dishonesty leads to disaster. When lawmakers and leaders say they will make health care less expensive for employers and for individuals, but enact a plan that does nothing of the sort, that’s dishonest. When lawmakers and leaders say they will make health care more rational and efficient, easier for all participants to understand and navigate, they ought to do so. If they enact legislation that instead makes health care more complicated and costly, that’s dishonest.

The dishonesty started with the initial statistic of thirty million uninsured. Health care reform advocates didn’t appear to care that much why thirty million people lacked health insurance. Yet they made that high number their rhetorical centerpiece. Advocates wanted universal coverage, no questions asked. You want to know why thirty million is unacceptably high, why we should have an individual mandate to bring the number to zero? Don’t answer questions like that. Honesty won’t get you anywhere.

Many libertarians and conservatives have been criticizing Occupy based on a list of proposed demands that has not been approved which is all about big government economic proposals only.

This list is more official:

A Message From Occupied Wall Street (Day Five)
Published 2011-09-22 07:51:42 UTC by OccupyWallSt
at OccupyWallStreet.org

p] I’ll highlight the demands I agree with and explain where I differ:

On September 21st, 2011, Troy Davis, an innocent man, was murdered by the state of Georgia. Troy Davis was one of the 99 percent.

Ending capital punishment is our one demand.

p) I agree!

On September 21st, 2011, four of our members were arrested on baseless charges.

Ending police intimidation is our one demand.

p] I agree!

On September 21st, 2011, the richest 400 Americans owned more than half of the country’s population.

Ending wealth inequality is our one demand.

p] I sort of agree. My belief is that right now government taxes and regulations serve to preserve entrenched privilege and keep poor people down. I don’t support forced wealth redistribution schemes by the government (or looting mobs), but I do believe a truly freed market would serve to redistribute wealth more evenly because it would be more turbulent, with fewer people sticking to the top and bottom, and for shorter lengths of time.

On September 21st, 2011, we determined that Yahoo lied about occupywallst.org being in spam filters.

Ending corporate censorship is our one demand.

p] I disagree with government (or looting mobs) forcing owners of websites to convey information they do not wish to convey. However, I do believe that in a truly freed market, without all the ways government currently tilts the playing field towards the big established players, news and information exchange sources that do anything akin to what yahoo did in this case would find themselves displaced so fast that it would not be long before any sane organization trying to remain either profitable or relevant would not even think about it.

On September 21st, 2011, roughly eighty percent of Americans thought the country was on the wrong track.

Ending the modern gilded age is our one demand.

p] Hard to interpret. There are many ways in which the country is on the wrong track. See discussions above and below for more specifics.

On September 21st, 2011, roughly 15% of Americans approved of the job Congress was doing.

Ending political corruption is our one demand.

p] I agree!

And some, but not most, protesters would agree with me that the only real way to end political corruption is to reduce the power of politicians.

On September 21st, 2011, roughly one sixth of Americans did not have work.

Ending joblessness is our one demand.

p] I oppose government make work programs. In the USSR we had full employment (by law) and the 99% lived in shared misery. However, I do believe that in a truly free market, there would be such an explosion of economic creativity that involuntary joblessness would be a thing of the past. It would also mean an explosion in immigration of people from all parts of the world, so racists and cultural homogeneists wouldn’t be happy. I don’t see that as a bad thing.

On September 21st, 2011, roughly one sixth of America lived in poverty.

Ending poverty is our one demand.

p] See points above regarding joblessness and
wealth inequality.

On September 21st, 2011, roughly fifty million Americans were without health insurance.

Ending health-profiteering is our one demand.

p] See detailed answer at

http://www.independentpoliticalreport.com/2011/09/open-thread-for-september-2011/#comment-605009

http://www.ruwart.com/Healing/chap5.html

and

http://www.ruwart.com/Healing/chap6.html

On September 21st, 2011, America had military bases in around one hundred and thirty out of one hundred and sixty-five countries.

Ending American imperialism is our one demand.

p] I agree!

On September 21st, 2011, America was at war with the world.

Ending war is our one demand.

p] I agree!

On November 25, 2001, American citizen turned Taliban fighter John Walker Lindh was captured on the battlefield in Afghanistan by Afghan Northern alliance forces.  Eleven months later after confessing to fighting with the Taliban against the U.S. and its ally in Afghanistan he was sentenced to 20 years in prison without parole.  On September 30, in Yemen, American citizen and alleged terrorist organizer Anwar al-Awlaki was killed by two Predator drones firing hellfire missiles.  Two Americans treated in two totally different ways.  What could account for the difference in treatment?

Perhaps it’s racism?  John Walker Lindh was a white man from California.  On the other hand, Anwar al-Awlaki was a person of color and worse yet of Arab descent.  Now, if I were a so-called progressive this explanation would fit right in with my world view that whenever anybody who lacks even a drop of Caucasian blood is treated differently than their white counterparts racism is to blame.  But I am not a progressive and therefore have an open mind about why the two men were treated differently.  There are many potential reasons why the two men were treated differently and I don’t believe racism was one of them.

Let’s not forget what happened when Attorney General Eric Holder announced that the Administration intended to try Gitmo detainees in federal court in New York City.  There was outrage from the families of 911 victims and Americans in general.  Going into an election year with his approval rating at rock bottom anyway, Obama could ill afford to be in a position where he had to decide the fate of an American in custody accused of terrorism.  Would he grant al-Awlaki his constitutional protections as an American citizen and try him in a federal court or would he throw the Constitution out the window and try him as an enemy combatant in a military tribunal? He certainly would have alienated a portion of voters with either decision.  Maybe Obama decided that Americans have short memories and it would be politically expedient to murder al-Awlaki now more than a year before Americans cast their votes to give them time to forget?

A third explanation for the difference in treatment of Lindh and al-Awlaki could be that our leaders have just become more fascistic over time.  Way before al-Awlaki was murdered, the administration proclaimed its right to murder Americans “suspected” of plotting terror attacks against Americans.  Under this edict, John Hinckley, Jr. Tim McVeigh, and Jared Loughner would simply have been killed after committing their heinous acts.  But instead, the first two were afforded a fair trial and the third is awaiting his date with justice.  What if al-Awlaki was insane like Hinckley?  Because of Obama’s kill order we will never know.

And if anyone thinks congressional leaders or the top two Republican candidates for president were going to speak out against Obama’s homicide you had another thing coming.   Republican frontrunner for the presidential nomination Mitt Romney was quoted as saying, “The killing of Anwar al-Awlaki is a major victory in our fight against Islamist terrorism and proper justice for the numerous attacks and plots he inspired or planned against America”.  Romney went on to commend Obama for his “continued efforts to keep Americans safe”.  Not to be outdone by Romney, Republican presidential candidate, Texas governor Rick Perry called al-Awlaki’s demise “an important victory in the war on terror.  Perry also congratulated Obama for “sticking with the government’s longstanding and aggressive anti-terror policies – for getting another key international terrorist.”

Neither candidate expressed any concern whatsoever about Obama’s total disregard for the rule of law and the rights of an American citizen.  It is not like al-Awlaki was killed on the battlefield.  The hit took place in a desolate part of northern Yemen.  He was riding in a vehicle and had been tracked by intelligence sources.  The U.S. military knew exactly where he was and could have dropped commandos in to capture him like Seal Team 6 allegedly did with Osama bin Laden.

Killing al-Awlaki without regard for his constitutional rights as an American citizen is a threat to every American’s protection against tyrannical government.  In fact, more killings may be coming soon.  Reuters has reported that the White House has created a secret panel in charge of building a kill or capture list of suspected militant Americans.  The panel was established under the authority of no law and without any requirements to keep public records of its decisions or operations.  Reminiscent of what Nazi Germany did to its own citizens, Obama has fully assumed the power to unilaterally assassinate Americans he suspects are a threat to America.  Thus, the explanation for the difference in treatment between Lindh and al-Awlaki:  our leaders have become more fascistic.

Article first published as Why Was al-Awlaki Denied His Constitutional Rights as an American Citizen? on Blogcritics.

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

Where do these ideas come from? One argument holds they come from Karl Marx and more generally from the socialists. That might be true in Europe, but here in the United States Marx didn’t have that kind of influence. You might say here in the United States these ideas came from Theodore Roosevelt. I know, the argument sounds a little odd: the evidence for it is scattered and somewhat obscure. Moreover, Roosevelt had plenty of help to promote these ideas during the Progressive Era. But in fact, our attitudes about corporations formed not long after some corporations – notably Standard Oil and the railroad trusts – became powerful. Corporations grew large enough to become powerful not so long before the advent of the Progressive Era. The fourth president on Mount Rushmore, TR, became president during this time of corporate growth. He was America’s first Progressive president.

Contemporary criticisms of corporate power sound like a broken car alarm where the horn honks again and again. Let’s take a quick example. Suppose a couple starts a small business. They incorporate, higher some employees, work their tails off for a decade or more and at last force it to make a little money for them. Are they evil because they started a for-profit corporation? Of course not, the Progressives say. Size is what counts – you can’t have pernicious corporate power without large size. Alright then, let’s take General Motors: large and powerful in its day, now large and conspicuously weak and dependent because it has difficulty making a profit. Is that our example of bad corporate power? No, no, says the Progressive, you want to constrain corporations that are large and healthy. Those are the ones that can do so much damage. The healthy corporations have power.

Like Microsoft? Is that why the government pursued Microsoft, because it was large and healthy? That’s exactly right! You can’t let any corporation get too large or powerful. You let it get too big, and it can challenge the government itself. No private business organization should be powerful enough to do that.

I guess that argument speaks for itself: no private business organization should be powerful enough to challenge the government. That tells you why Progressive attitudes about corporations have endured for such a long time. When you honestly believe that government protects you, protects you moreover from business firms that have so many ways to threaten you, you hope that no corporation has sufficient power to challenge your protector. You want your protector to have the upper hand in the struggle, all the time. You want your protector to make the greed and the power go away.

Let’s make a brief comparison between General Motors and BP before we close. As BP struggled to contain the oil gusher at the bottom of the gulf, President Obama assured Americans that we – the government – “will keep our boot on its neck.” What sense does an image like that make, if not within the framework of corporation as villain and government as protector? In the middle of a crisis, why would you talk like that unless you see large corporations as the source of bad things?

Around the same time, the U. S. government applied the too big to fail standard to General Motors. Here lay a sick company – it had been in poor health for a long time. Now it’s financial health was so poor that jobs were at stake, not only at GM but throughout the automobile industry. In the balance  between evil corporate power and good corporate jobs, good corporate jobs (with benefits) held the stronger hand in this instance. In the government’s estimation, a sick corporation is safer and more deserving of help than a healthy one.

At this point Obama would say, the oil spill was a bad thing, and GM was too big to fail. I don’t care to argue those points. I only want to highlight the contrasting treatment these two companies in trouble received from the U. S. government. In both cases, Washington was aggressive, both in wringing money from BP and in forcing money on GM. In both cases, government made a point of maintaining the initiative. In the contest between government and large corporations, you don’t want large corporations to fight back. You don’t want to deal with CEOs like Bill Gates. You want everyone – from insecure, fearful citizens to angry, contemptuous progressives – to depend on you for protection and catharsis.

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

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

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

“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 20^th 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

“Ghastly as it may seem to say this, the terror attack (911) — like the original day of infamy, which brought an end to the Great Depression — could even do some economic good.”

“If people rush out to buy bottled water and canned goods, that will actually boost the economy.”

“First, the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending.”

Paul Krugman (Princeton Professor, New Times Columnist, and Keynesian Extraordinaire on how the September 11^th attacks could “stimulate” the U.S. economy)

The above quotation from Paul Krugman represents his economic philosophy embedded in the deepest part of his soul.  That is that spending of any kind during economically distressed times is all that is needed to turn things around.  Following Krugman’s logic, Hurricane Irene with the destruction it wrought in the hundreds of millions if not billions of dollars along the eastern seaboard could be just what the doctor ordered to give the sputtering U.S. economy a jump start.  After all, roof tops will have to be repaired.  Structures and piers will need rebuilding.  And infrastructure like power lines, drainage systems, and roads will need revamping.  According to Krugman’s philosophy the carnage from the storm should be an economic bonanza for workers, tax authorities, and producers of goods.

But, hold on for one minute.  Not only did Krugman’s prediction about the economic benefits of the World Trade Center being destroyed not come to fruition, his philosophy represents an economic fallacy explained by Frederic Bastiat, political economist and member of the French Assembly, in 1850.

In Bastiat’s Parable of the Broken Window, shopkeeper John B. has a careless son who breaks one of his shop’s window panes.  The shopkeeper pays six francs to the glazier to fix his window.  According to many of Bastiat’s contemporaries and Keynesians today this is a good thing since the glazier is six francs richer and will presumably spend that six francs on other goods and services thus providing employment to others.  This sounds great and given the potential to the economy of one broken window you might think that John B. should be hopeful that his son never learns to be careful and breaks many more of his windows in his lifetime.

Naturally, the good shopkeeper doesn’t want to spend all of his profits on new windows and here is where the fallacy of Krugman’s thinking comes into play.  Krugman and his Keynesian brethren only focus on what can be seen in the parable, namely the windfall to the glazier and his potential expenditure thereof. They totally ignore the fact that if the window had never been broken the shopkeeper would have had it and six francs worth of some other good or service to enjoy.  Like the glazier’s expenditure, the shopkeeper’s outlay on other goods and services would also provide employment to others.  Thus destruction of property spending through carelessness, vandalism, violence, or natural disaster enjoys no advantage over ordinary consumer spending.  If it did Europe would have gotten rich immediately after World War II.

That’s why Hurricane Irene will not be a blessing in disguise for our economy.

Article first published as Will Hurricane Irene be a Blessing in Disguise? on Blogcritics.

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

During the GOP Presidential Debate in Ames, Iowa, on August 11, the most significant exchange between any two candidates came when Rick Santorum called Congressman Ron Paul out for his position on our relationship with Iran.  Santorum, neoconservative extraordinaire, accused the congressman of being naïve about the seriousness of Iran developing a nuclear weapon of its own.  The accusation brought an emotional rebuke from Dr. Paul as he delivered a history lesson of Iran/American relations to Santorum while at the same time launching an emotional appeal for the policy of endless wars to seize.  The exchange highlighted the irreconcilable differences that exist between those who believe there is a bad guy under every rock and those who actually know history and understand international relations.  Santorum and his neoconservative brethren are the former while Ron Paul represents the latter.

It’s only common sense that if you corner an animal it will act aggressively in order to defend itself and escape.  Countries are no different.  As Congressman Paul noted in the debate, the United States military has Iran surrounded on all sides.  Our military currently occupies Iraq to Iran’s east, Afghanistan to Iran’s west.  Obama has escalated U.S. bombings in Iran’s other neighbor to the east, Pakistan.  There are also 3 American military bases in the Persian Gulf south of Iran.  A large naval base is in Bahrain and army and air force bases are in Qatar.  With all of that hostile American fire power situated so close to its borders, it’s no wonder Iran is feeling a bit vulnerable and in need of a little defensive weaponry.

Santorum argued that we have some special obligation to protect Israel from a potentially nuclear Iran.  It’s amazing how Israel seems to enter the conversation when our politicians speak of war.  In Santorum’s case it’s all a part of his pandering to Jewish and Evangelical voters.  But, as Ron Paul indicated to the former senator from Pennsylvania, Israel can defend itself.  As a matter of fact, Israel possesses nuclear weapons of her own.  Even Israeli Defense Minister Ehud Barak has stated that he doesn’t think Iran will drop a bomb on Israel or any other country in the region.  The ruling cabal in Teheran may be brutal to its own citizens but it is not suicidal.

This, of course, is reminiscent of a former foe, the Soviet Union.  As Congressman Paul continued to school Santorum he pointed out that there was no regime more brutal to so many people for so long as the communist Soviet Union.  Under Joseph Stalin and various other crazy Soviet dictators, millions were slaughtered or left to die of starvation and all of Eastern Europe was subjected to Soviet domination for close to forty-five years.  After the Soviets stole our nuclear secrets and developed their own bomb we sold them grain and negotiated arms deals with them.  Both sides realized the importance of doing what was necessary in order to co-exist in a vastly more dangerous world.  At the end of the day, Iran has no chance of attaining the economic, political, and military capabilities of the now defunct Soviet Union.  As a matter of fact, chances are very good that if the Iranian leadership took the same path (military buildup) as the Soviet oligarchs they would end up ultimately in the same place – on the ash heap of failed regimes in history.

When the Soviet Union collapsed and the Cold War ended neoconservatives like Rick Santorum needed a new enemy.  Given America’s decades’ long meddling in Middle Eastern affairs and our unconditional support for the State of Israel, it was only a matter of time before blowback for our past sins would come to fruition.  September 11^th 2001 was that blowback.  Santorum and his ilk had their enemy – Islamists.  In ten short years they have spent trillions on that foe with no let-up expected any time soon.  Now they have their sights set on Iran.  In order to prevent the next catastrophic war, the choice is clear in the next presidential election.  You can either vote for the candidates who see bad guys under every rock or you can vote for the candidate who actually knows history and understands international relations.  That candidate is Ron Paul.

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

It has become cliché for political pundits to proclaim every four years that the presidential election campaign is the most important in the nation’s history.  Given that our economy is on the brink of collapse, we are currently engaged in 5 wars, and our civil liberties are under attack like never before, next year’s presidential election will truly rank right up there with the most important elections in our country’s history.  Accepting that view, there is only one candidate in the race for the White House in 2012 who has what it takes to restore America to its previous greatness.  That candidate is Congressman Ron Paul.

No other candidate saw the financial crisis of 2008 coming.  As early as 2003, Congressman Paul predicted Federal Reserve and Bush Administration policies would lead to the housing bubble and its inevitable collapse.  He predicted this based on his understanding of free-market economics and the Austrian Business Cycle Theory.

Now, it is true that Newt Gingrich did allude to the corruption of the Federal Reserve in last week’s GOP debate in Ames, Iowa, but he and every other Republican on stage except Ron Paul do not understand the connection between Fed policies and our economic ills.  All they can propose are more tax cuts to remedy the situation.  Congressman Paul has been preaching about the need to restore sound money to our economy for over 35 years.  He recognizes that the destruction of the middle class in America is primarily the result of the price inflation (over 450 percent since 1971) perpetrated on the American people by the Federal Reserve.  He knows that spending our way out of our current crisis will not work.  He is the only candidate for president who would take a holistic approach to getting our economy back on track – mal-investment liquidation, rein in out of control federal spending, responsible military budgets, and of course sound money.

But, Dr. Paul’s superiority over the other candidates for president doesn’t end with economics.  He is by far and away the only responsible candidate in the field when it comes to war and peace.  He did not fall for the war propaganda launched by the Bush Administration against Saddam Hussein.  He voted against giving the president authority to invade Iraq.  As president he would end the 8 year war in Iraq, the 10 year war in Afghanistan, and our wars in Libya, Pakistan, and Yemen.

As was highlighted in the Ames, Iowa debate last week he is well-read when it comes to international affairs.  He knows the history of our troublesome relationship with Iran and understands that incendiary remarks and threats toward her are not going to make the world safer.  As president, Dr. Paul would end American occupations in countries that surround Iran, thereby lessening tensions and opening the door to peaceful relations.  Contrary to the positions of other candidates for president, Ron Paul knows that another war is not in our best interest.

Lastly, no other candidate for president has as strong a record on civil liberties as Congressman Paul.  He has been a consistent opponent of Washington’s relentless assault on our civil liberties and constitutional rights.  As president, the so-called “Patriot” Act which has radically expanded the federal government’s ability to use wiretaps without judicial oversight; has made it far easier for the government to monitor private internet usage; has authorized “sneak and peek” warrants enabling federal authorities to search a person’s home, office, or personal property without that person’s knowledge; and has required libraries and bookstores to turn over records of books read by their patrons, would be priority one on his chopping block.  The TSA’s grope fest at our airports would also end.  As important as civil liberties are none of the other candidates for president have shown any interest in protecting them.

The above comparison includes the current occupant of the Oval Office Barack Obama.  In 2 ½ years as president, Obama continues to support the same failed economic policies (spending and easy money) that got us into the mess in the first place and has only made matters worse since.  He not only broke campaign promises by continuing Bush’s wars in Iraq and Afghanistan but has escalated one other in Pakistan and started one of his own in Libya.  And, as for civil liberties and constitutional rights, he has shown his true colors by signing a four-year extension of expiring provisions of the “Patriot” Act and authorizing his Director of National Intelligence to notify Congress that the administration reserves the right to assassinate American citizens believed to be terrorists.

Yes, next year’s presidential contest will be truly one of the most important in American history.  With more than 14 million Americans out of work and millions more involved in the administration’s war machine what we need is a new president with an understanding of economics, knowledge of international affairs, and a complete dedication to civil liberties and constitutional rights.  The only candidate that fits that profile is Congressman Ron Paul.

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

It seems like every time I listen to a politician talk I always come away with more questions than answers.  Take President Obama’s nationally televised speech this week on the debt ceiling crisis.  The President spoke to the nation for about 15 minutes but I still don’t have a clue as to what he is proposing to do about our debt crisis.  In fact, all I know is that he wants a “balanced” approach to meeting our fiscal woes.  Clearly, his pollsters have indicated to him that independent voters crave “balanced” approaches to problems – but I digress.  What follows are several questions I had after listening to the President.

First and foremost, Obama spent a good amount of time lamenting the deficiencies of the tax code.  He talked about credits, subsidies, and loopholes that allow the very rich to avoid paying their “fair” share in taxes.  Now, there is no doubt that the income tax code is in need of a total revamping, but the question is why did Obama wait for a crisis to take an inflexible stand on raising taxes?  He has been president for two and one-half years and he was a senator for three years before that.  Why didn’t he propose changes to the tax code in all that time that would have closed loopholes and eliminated special breaks for politically connected hot shots?  Could it be this is all just political rhetoric to arouse his base going into an election year?

Speaking of the rich paying their “fair” share of taxes, naturally the President harped on this class warfare theme repeatedly.  Fair is a very subjective word.  Chances are good that what the President considers fair I don’t.  By “fair” does Obama believe the rich should pay the same percent of income in taxes as everybody else?  Or does he believe they should pay an amount equivalent to the amount of government services they use?  In either case they don’t.  I did a little research and found that the rich actually pay most of the federal income taxes in America.  For instance, the richest 10 percent of taxpayers pay 70 percent of all taxes.  Could it be I misunderstood the President?  Perhaps he meant that the rich already pay more than their “fair” share of taxes and deserve a tax cut?

But I suppose the position of Obama’s that I can’t understand the most is his insistence that without raising the debt limit the U.S. Government would be in default.  According to the Bipartisan Policy Center there would be enough revenue per month to pay the interest on the debt, social security, Medicare and Medicaid and unemployment benefits.  If we ended the wars we could use the $31.7 billion earmarked for the military industrial complex (defense venders) for military pay, veteran’s benefits, IRS refunds, and welfare.  Under this scenario, our debt obligations are met thus avoiding default, vital services are provided to the American people, and only the massive bureaucracy which has become Washington will shut down.  I think this sounds like a great deal.

At the end of the day, politicians are puzzling and the current occupant of the White House is no exception.  They talk and talk and talk and produce more questions than answers.  It is amazing that with all the talk in Washington over the debt ceiling no one has mentioned how presidents and Congresses for decades have been ignoring what is already the law of the land.  Section 7 of Public Law 95-435 passed by the 95^th Congress and signed into law by President Carter requires a federal balanced budget.  Perhaps if this question were asked of Washington a long time ago we wouldn’t be in the financial mess we find ourselves in today.

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

“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies.”

Senator Barack Obama

Senate Floor Speech on Public Debt

March 16, 2006

Senator Obama ended his speech with a profound yet often neglected fact, “Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.”  He went on to vote against raising the debt ceiling in 2006.

What a shame Barack Obama has such a short memory.  If only he would have paid heed to his own words once he became president in 2008 we wouldn’t be about $3 trillion more in debt and in the worst fiscal crisis the world has ever seen.  But, of course, the President and his supporters claim that he had no choice but to spend us even farther into oblivion.  After all, he inherited an awful economy from his predecessor.  The story goes that his spendthrift policies are what saved us from an economic meltdown.  How they know that exactly is not clear?

What is known is that Obama’s policies have not solved our economic woes.  In fact things have become far worse under his leadership.  The two statistics that the ordinary American cares most about are unemployment and price inflation.  Both have headed in the wrong direction since Obama assumed the reins of power.  The government’s unemployment figure stood at 7.8 percent the month Obama became president.  Today, 9.2 percent of our workforce is without work.  In spite of his “stimulus” spending the unemployment rate has increased 18 percent!

Naturally, with all the new spending and monetized debt over the last two and one-half years, it is reasonable to expect that goods priced in dollars would see an increase.  As I have predicted many times on this post, they have.  If we just use the government’s CPI numbers it is easy to see that prices under Obama’s program have taken off. When Obama took office the government’s CPI number stood at 0.0 percent.  The number released for June 2011 stood at 3.6 percent.  Additionally, gas prices have doubled under Obama and food prices are soaring.

If one were to calculate unemployment and price inflation like they were prior to 1980, we are clearly in a depression.  Bread lines have simply been replaced by food stamps.

The point is that Obama’s polices have been a dismal failure.  The current issue before Congress is whether to raise the current debt ceiling.  It is interesting to note that Obama and his ilk will only talk about what alleged calamities will befall us if the debt ceiling is not raised.  Seniors, soldiers, and the disabled will be relegated to the streets begging for change to support their families they tell us.  No mention is ever made of what calamities will befall us if the debt ceiling is raised and the reckless spending is allowed to continue.  Right now, 43 cents of every dollar Washington spends is borrowed.  Over the next decade, interest payments on that debt assuming interest rates rise gradually will total $5.5 trillion.  That is revenue that cannot be used to invest in America – roads, schools, jobs…  If the current debt ceiling is raised for further deficit spending a greater percentage of each future dollar will not be available for American investment or as Senator Obama put it so aptly in 2006, “Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities.”

The President and Congress have tried to spend our way out of economic crisis.  Predictably, it has failed and even made things worse.  Raising the debt ceiling further will only exacerbate the crisis.  To avoid a “leadership failure” Obama should do whatever it takes to cut trillions in spending.  It is the only way to get “our Government’s reckless fiscal policies” under control and ensure a viable economic future for all Americans.

Article first published as We Can’t Afford to Raise the Debt Ceiling on Blogcritics.

The death-knell of the republic had run as soon as the active power became lodged in the hands of those who sought, not to do justice to all citizens, rich and poor alike, but to stand for one special class and for its interests as opposed to the interests of others. ~ Theodore Roosevelt

Today we want to consider the idea of state capture. What does this concept mean, and why should we care about it? State capture occurs when one class or group or interest asserts enough control over the state, that the state acts on behalf of that group rather than for the polity as a whole. Given the mortal threat state capture poses to a democratic republic, we want to recognize it when it occurs, understand its consequences, and know how to respond to it.

When the founders of our republic praised the checks and balances in our Constitution, they pointed not only to the branches of government, but also to constitutional balances that would prevent one faction, among competing interests, from obtaining too much influence. Historically, democratic republics quickly fail if one powerful interest manages to gain control of some significant portion of the state’s organs of power. These organs include the treasury, the army or the military more generally, the judiciary, the executive, or even basic administrative functions. Once the external faction has control, it is hard to dislodge.

Democratic checks on state power quickly disappear after state capture occurs. In fact, state capture indicates that the equipoise essential to pluralist democracy has already disappeared. If checks and balances among groups outside as well as inside the state remain effective, state capture cannot occur. When one group captures the state, or a portion of it, democratic controls and processes that compel a state to act in the interest of all groups – or at least to balance the interests of all groups – suffer a serious setback.

Why should we even think about state capture in the United States? Don’t we have a Constitution where that kind of thing cannot happen? Think again. State capture occurred in the United States in 2008, when large financial firms used taxpayers’ assets to ward off bankruptcy. The firms committed fraud, lost trillions as a result of their activities, and drew on public resources to protect themselves from ruin.

During the collapse of 2008, we heard phrases like moral hazard, too big to fail, and Washington looks out for Wall Street but not for Main Street. If you hear these phrases often enough, they begin to obscure what actually happened. State capture actually happened. A financial panic unfolded, and financial firms responsible for the panic took what they needed from us to protect themselves. The firms that practiced fraud could not have rescued themselves had they not asserted sufficient control over the United States Treasury and the assets in it.

Now we come to the last question: how should democratic citizens respond to state capture? If they respond with confused apathy, the new status quo experiences no challenge. If they respond with conventional regulations and appeals for stricter oversight, they are unlikely ever to redress the balance of power that went awry when the state suffered its initial defeat. To redress the balance of power – to assure restoration of democratic checks on the state and the entities that captured it – citizens must replace the government that allowed itself to be captured in the first place.

That is not easy. No group relinquishes power voluntarily. No group, having captured a key arm of the state’s apparatus, will give up its advantages without resistance. Similarly the state, even if it knows it suffered a defeat, rationalizes the errors that led to its ignominy. It is compromised and cannot self-correct. To return to democratic control, the state must have new leadership. To give the state new leadership, citizens must replace both leaders and the institutions they lead. History does not hold a promising outlook for citizens who try to do less.

Presidents are supposed to be compassionate.  President Obama is showing his true colors as his Department of Justice (DOJ) sent out a memo last week on medical marijuana use.  The memo directed the head of the Drug Enforcement Administration and U.S. Attorneys’ offices nationwide to crack down on medical marijuana shops by making the investigation and prosecution thereof a top priority.  Even though the (DOJ) denies it, this newest memo reverses the Administration’s previous policy on medical marijuana use.  Under the so-called “Ogden memo of 2009, Obama gave habitual pain sufferers and the terminally ill “hope”  by making enforcement of the Controlled Substances Act (CSA) with regards to medical marijuana use a low priority.  His election cycle about face is not compassionate as it will bring great harm to many who rely on cannabis for relief.

It has been determined that medical pot is effective in treating the symptoms of cancer, AIDS, multiple sclerosis, glaucoma, and epilepsy.  As far back as 1975, the New England Journal of Medicine published a study that showed oral ingestion of marijuana is effective in relieving nausea and vomiting caused by chemotherapy.  Other benefits include the lessening of depression caused by cancer and an increase in appetite which allows cancer patients to live better more comfortable lives.

But the Administration is bent on denying this needed drug to patients.  In last week’s DOJ memo, the reason given for increased enforcement of the CSA was that, “Congress has determined that marijuana is a dangerous drug and that the illegal distribution and sale of marijuana is a serious crime that provides a significant source of revenue to large scale criminal enterprises, gangs, and cartels.”  Well, in the first place, marijuana’s danger is surely negated by the medical benefits of the substance.  In the second place, the reason criminal gangs and cartels are making so much money on pot is precisely because Congress has made it illegal!  Is there no sanity in Washington?

In the final analysis this is not the federal government’s issue to legislate.  Article 1 Section 8 of the Constitution does not give Congress the authority to regulate what we ingest into our bodies.  The 10^th Amendment reserves that power to the states.  Referring back to the memo, it states that individuals, who cultivate, sell or distribute marijuana “…are subject to federal enforcement action, including potential prosecution. State laws or local ordinances are not a defense to civil or criminal enforcement of federal law with respect to such conduct, including enforcement of the CSA.”  Nonsense, just because Congress doesn’t consult the Constitution before enacting legislation doesn’t mean what it says goes.  It is proper and necessary for the states to interpret the Constitution and in this case take a stand against the federal government for violating their sovereignty over substance policy by nullifying the CSA.

Of course the President could nullify the CSA as well in much the same way he has stated that he will rightly nullify the Defense of Marriage Act.  He simply could refuse to enforce the law.  But, he answered that question in the memo released by his DOJ last week.  Apparently, political points are more important to the President than relief for the suffering and the supremacy of the Constitution.

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

In his 2005 exposé, Confessions of an Economic Hit Man, John Perkins describes his life as an economic hit man in the 1970s.   As a chief economist for the consulting firm Chas. T. Main, Perkins worked with U.S. intelligence agencies and multinational corporations to convince foreign leaders to build infrastructure projects in their countries financed by billions of dollars of loans from the World Bank and other lending institutions.  Perkins’ job was to provide phony or exaggerated predictions of the economic benefits of such programs for the country undertaking the massive loans.  Once hooked into loans it ultimately could not repay, the victimized country was then used as a pawn to further U.S. foreign policy and economic interests.

In the classic one hand washes the other and both hands wash the face scheme, the loans were given with the stipulation that the construction and engineering contracts for the projects were awarded to American companies.  In return, handsome bribes and kickbacks were provided to the signatories (heads of state).  Those on the hook were the taxpayers in the developing countries who were stuck with massive debt they could not repay.  Not only did the imperialistic scheme destroy any hope the world’s poor had for developing their countries, when default happened the U.S. or the International Monetary Fund would move in and dictate the terms of bankruptcy which included everything from control of its budget to dictating its United Nations votes to security agreements.

According to Perkins, from time to time there were foreign heads of state that refused to play ball, refused to accept financial remuneration for acquiescing to loans that would enrich American companies and ultimately place their countries in bankruptcy with the U.S. government acting as receiver.  When that happened jackals were sent in to eliminate the obstruction.  Perkins mentions at least two leaders, President Jaime Roldos Aguilera of Ecuador and General Omar Torrijos of Panama who were assassinated because they put the best interest of their countries ahead of their personal greed.  If assassination were not possible pretences for full military invasion were produced to bring the rogue leader to justice.  Panama’s Manuel Noriega was “brought to justice” in this manner.

And that brings us to our current involvement in Libya.  It is a well-known fact that Muammar Gadaffi has been an international pariah for most of his 42 years ruling Libya.  However, in 2004 after Gadaffi ended his quest for weapons of mass destruction, President Bush lifted sanctions against Libya.  Since then American companies have invested heavily in Libya.  For instance, energy giants ConocoPhillips and Marathon have each invested about $700 million.  Everything seemed to be going great.

However, let’s not forget that Gadaffi has always marched to his own tune.   Over time Gadaffi began demanding tougher contract terms, big bonuses up front, and most remarkably he demanded that global oil companies operating in Libya pay the $1.5 billion bill for Libya’s role in the attack on Pan Am Flight 103 and other terrorist attacks or face “serious consequences” for their oil leases.  But perhaps the last straw for American imperialists was Gadaffi’s plan to unite African and Arab states under a new currency to rival the dollar and Euro.  Under the proposal, oil and other resources would be sold only for gold dinars.  The economic implications for the West would be immense.

All of these moves by Gadaffi have not only made it difficult for western oil companies to operate in Libya, his gold dinar proposal could be the beginning of the end for western currency hegemony.  Gadaffi had not held up his end of the deal with western corporatists.  He was not “playing ball”.  Western special operations forces on the ground in Libya were unable to covertly assassinate the Libyan leader.  Thus, under the pretense of protecting civilians, NATO instituted a military “no-fly zone” over Libya.  Make no mistake about it, military operations in the skies over Libya have always been about regime change in Libya.  NATO forces care about the civilians on the ground in Libya about as much as American forces cared about the more than one million Iraqis who have been killed as a result of our eight year war of “liberation” in that country.

At the end of the day, the Libyan experience doesn’t fit perfectly into the Economic Hit Man box but it does prove that western imperialism is alive and well in Libya.  President Obama brilliantly employed Rahm Emanuel’s mantra “….never let a serious crisis go to waste” by using the protection of civilians as a pretense to eliminate a foreign leader who wouldn’t “play ball” with western corporate interests.  Like Noriega before him, Gadaffi will go down in history as a leader who defied the global elite, escaped assassination but fell to military invasion.  Anyone who doesn’t believe history repeats itself is a fool.

Article first published as Western Imperialism Strikes Again on Blogcritics.

One thing is for sure, Federal Reserve chairman Ben Bernanke’s second round of quantitative easing (QE2) will come to an end sometime this month.  Since November of last year the Fed has pumped close to $600 billion into the economy by buying treasury bonds from the balance sheets of banks.  This was intended to keep interest rates low, encourage lending by banks, stabilize housing prices, and consequently stimulate growth in our economy.  As of yesterday, interest rates are still low and banks have begun to lend some, but housing prices are lower than before QE2 began, economic growth has slowed, price inflation is significantly higher, and unemployment has climbed back up to 9.1 percent.  For the average American trying to eke out a living, QE 2 has been an utter disaster.  Of course for Wall Street banks it has been another bonanza courtesy of the Creature from Jekyll Island.

After all, Chase, Wells Fargo, Goldman Sachs and Bank of America are all doing fairly well given the general economic misery still experienced by the rest of us.  Interest bearing reserves of depository institutions held at the Fed are way up and the Dow Jones Industrial Average is 1100 points higher than it was at the end of the first month of QE2.  Why are these two facts so important?  You see even though banks still are not lending a lot to businesses and ordinary Americans they are making huge amounts of profits using our money courtesy of the Fed to save at the Fed and invest in the stock market.  Once again Bernanke inflates, his buddies on Wall Street cash in, and the rest of us are left holding the tab in the form of higher debt and prices.

The big question is what comes next?  After QE2 expires will we see a QE3?  Chances are good.  Let’s be honest, the economy is still in awful shape.  This is because Washington did not allow it to liquidate all the mal-investments from the financial crisis of 2008.  The only thing that has kept the economy afloat is the monetary and fiscal stimulus coming out of Washington.  The fact is that if Uncle Scam had let nature take its course and permitted the economy to crash there would have been intense short-term pain, but by now we would be well on the way to recovery.  Instead, Bernanke and first Bush then Obama have pumped trillions into the economy to “stimulate” it back to health.   What has transpired are new bubbles notably in the stock market and mergers and acquisitions.

And that is why I believe we will see QE3.  When QE2 ends the money supply’s rate of growth will slow.  Somewhat similar to an interest rate hike the end of Bernanke’s largess will put pressure on the new bubbles.   Given that a presidential election is just around the corner and member banks will see their bottom lines slashed, Bernanke will accommodate his benefactors in the White House and on Wall Street by commencing QE3 to stave off the next crisis.  The can will be kicked down the road at least until after Election Day 2012.  Hundreds of billions of dollars more will be pumped into the economy.  If you think price inflation is bad now you ain’t seen nothing yet.

The bottom line is that whichever course Bernanke chooses QE3 or no QE3 the economy will eventually have to crash.  Because it was not allowed to do so in 2008 the crash will be bigger and probably longer in duration.  So I guess I was wrong at the outset of this article.  Two things are for sure.  QE2 will end in June and  inevitably Americans are screwed economically.

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