Archive for May, 2010

Most Agree, Under Obama the Country is Headed in the Wrong Direction            

While liberal pundits and media types this week had their hissy fit over Rand Paul’s spot on comments about how a portion of the Civil rights Act of 1964 is unconstitutional and un-American, those of us that really care about the future of the United States took notice of how the current administration is destroying it. 

Now, before you say this is just another rant by a fire breathing libertarian bent on desecrating the good name of the president, read on.  In a recent Rasmussen poll, 67 percent of Americans agree with me that the nation is on the wrong track.  Only 28 percent think things are honky dory.  Of course, the president’s approval rating continues to languish below fifty percent.  Even with his success in passing nationalized health care, he just can’t seem to enjoy the support of a majority of Americans.

So, what specifically is wrong with the direction of the country?  For one thing, the government just reported that it passed the $13 trillion debt mark.  Now, many will say, so what?  “We have had higher debt to GDP ratios in our nation’s history and our economy is big enough to weather the storm.”  That could be the feelings of the president as well since in just 16 months in office he is responsible for nearly $2.4 trillion of that total.  And it is true that just after World War II our debt to GDP ratio was higher (120 percent) than it is now.  But, honestly our national debt is much higher than $13 trillion that Uncle Scam reports.  We have to take into account the future unfunded liabilities of Social Security and Medicare.  When those future commitments are added in the current debt to GDP ratio is off the chart at 435 percent.  Even if we only consider the bogus government debt number of $13 trillion, when Bernanke and his counterfeiters at the Fed eventually raise interest rates significantly to combat the hyper-inflation caused by their fraudulent acts the interest on the debt alone will bust the federal treasury.  Foreign lenders will disappear and the French Revolution will look like a walk in the park compared to what will happen on American streets.

And after President Obama is done making most Americans dependent on Washington the austerity measures that will have to be enacted will cause serious civil unrest from coast to coast.  It was reported by USA Today this week that pay from private business decreased to its smallest share of personal income in U.S. history in the first three months of this year (so much for economic recovery).  Meanwhile, during the same time period government programs like Social Security, unemployment insurance, and food stamps rose to record highs.  I understand that we have just experienced the worst economic downturn since the Great Depression and these numbers should not be unexpected, but according to the administration we have been in a recovery for some time now, thus I would think the number of folks on welfare should be lessening not still increasing. 

The reason they are increasing is because the Obama Administration has a goal to build the welfare state like we have never seen it before.  Remember when Bill Clinton proclaimed, “We’ve ended welfare as we know it”?  That was a lie, but at least his reforms put time limits and other restrictions on receiving welfare.  Since the legislation was passed in 1996 welfare caseloads have decreased by 70 percent, child-poverty rates have dropped, and teen pregnancies are down.  Folks from across the political spectrum agree that Clinton’s reforms have helped the poor get on their feet in a humane manner. 

While the restrictions are still in place, starting with his so-called $862 billion stimulus package last year Obama has changed the way states receive welfare subsidies from Washington.  The Feds now pay states 80 percent of the cost for each new family added to the welfare rolls.  No longer do states have an incentive to drive welfare recipients into the job market.  To prove further that Obama wants a permanent underclass in America his budget projections show that he intends to spend $10.3 trillion on welfare for the 10 year period FY 2009 to FY 2018.  The question that has to be asked is: why is Obama so bent on destroying successful welfare reform and putting so many more folks on the public dole at a time when our treasury is so busted?  Perhaps this question and why it is that he wants to grant citizenship to illegal aliens have the same answer – to make the Democratic party the dominant party in American politics for a long time to come.  In any event, when the collapse comes all those on government benefits will have to find sustenance elsewhere.  Recent events in Greece are a preview of what could be coming to America.

Gargantuan debt and an expanding welfare state are just two reasons a large majority of Americans believe the country under Obama is on the wrong track.  Then, there are also the matters of illegal immigrants and expanded wars in the Middle East.  If only the liberal pundits and media would focus on the events that are destroying America instead of a gotcha interview with a Republican nominee for the Senate.  Then again, maybe that was the liberal establishment’s ploy all along – to distract the rest of us from reality?    

Article first published as Most Agree, Obama is Heading the Country the Wrong Direction on Blogcritics.

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

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Mexican president Felipe Calderon used his state visit to the United States this week to lambaste Arizona’s new self-defense, anti-illegal immigration legislation and the 2nd Amendment to our Constitution.  Speaking before a joint session of Congress, no less, the Mexican leader criticized the new Arizona law because it “criminalized migration and could encourage discrimination” against Mexican “citizens”.  He also blamed U.S. gun laws for the increase in violence in his country.  For his remarks Calderon was given a standing ovation by more than half the members of Congress.  By allowing Calderon to use such a privileged forum as a joint session of Congress to lambaste our laws and to applaud him so loudly, Congress has once again shown how demagogic it is and how far out of touch from the American people it has become.

In the first place, the Arizona law is a good one.  It allows law enforcement to stop suspected illegal aliens only if they are suspected of breaking some other law.  This happens every day in America.  Police stop a motorist for speeding or because a headlight is out, they check the tag number and the next thing you know a different crime has been detected.  The state of Arizona is also providing further safeguards against violations of civil rights by ordering the state’s law enforcement licensing agency to mandate a training course on how to implement the law without violating civil rights.  Lastly, according to Jack Cafferty of CNN, parts of the Arizona law are word for word the same as the federal immigration statutes on the books.  Thus, in his criticism of the law, Calderon was way off base and members of Congress who rose to their feet to applaud his remarks were also showing their ignorance.  But, what can we expect from a legislative body that doesn’t read its own bills let alone those of other bodies?

Secondly, Calderon is nothing more than a welfare-pimping hypocrite.  He supports all types of migration to the U.S by his people because more than $17 billion is sent back to Mexico each year.  This amount that migrant workers, some of them illegal aliens, send back to their families in Mexico is more than the total amount of direct foreign investment in the country.  Calderon appreciates having this side welfare program sponsored by American business to prop up his economy.  Of course, Mexico also enjoys welfare courtesy of our state and federal government.   Billions are spent each year in the U.S. that doesn’t have to be spent in Mexico to educate, medicate, and incarcerate illegal aliens.  It is no wonder Calderon went all out in criticizing the Arizona law since its enforcement may cost his regime a bundle in the long run.

But, that is not all.  Calderon is also a hypocrite.  Amnesty International has reported that illegal immigrants on their way through Mexico to the U.S. from Central America regularly face beatings, rape, and even murder at the hands of the Mexican people.  What’s worse is that evidence has been uncovered linking government officials at various levels to these crimes.  Perhaps Calderon should tend to the problems in his own country before criticizing ours.

And boy does he have problems in Mexico.  Thing is, he made them himself.  Since his intensified war on drugs was instituted in December of 2006 close to 23,000 people have been killed in Mexico in drug related crimes.  The victims include judges, police, politicians, and a U.S. Embassy family.  The really bad part is that Calderon’s war is spilling over our southern border with Mexico and is already responsible for numerous kidnappings and the murder of at least one American.  Thus, there can be no question that Arizona is justified on the grounds of self-defense to enforce the new anti-illegal immigration law.  Recent polls indicate that more than a majority of Americans agree.  Again, Felipe Calderon should clean up the mess that he caused in his own country before he comes to America and criticizes ours.

Getting back to America, Article 4 Section 4 of the U.S. Constitution guarantees each state that the federal government … “shall protect each of them against invasion.”  Arizona and other states of the southwest are under attack from illegal aliens from Mexico and other parts of Latin America.  This is yet another provision of the Constitution that Washington has ignored for too long.  Members of Congress can use demagoguery to defame Arizona’s law all they want.  Rep. Yvette Clarke (D-N.Y.) can claim the statute is “akin to apartheid” and Rep. Jared Polis can proclaim the law was like Nazi Germany.  The bottom line is that Americans are in danger in Arizona and Washington doesn’t seem to care.  Arizona acted justly in its own self-defense.  Outrageous remarks and especially inviting the welfare pimping hypocritical president of Mexico to lecture Americans on the errors of our ways is just another indication of how far from reality this Congress has become.       

Article first published as Hold DN: Calderon Is a Welfare-Pimping Hypocrite and Congress Out of Touch  on Blogcritics.

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Crony Capitalism Caused the Crisis                                                      

Our power-grubbing politicians never shy away from blaming the shortcomings of capitalism for the “Great Recession” of the 21st Century.  The old mantra goes, “capitalism is a flawed system that requires government intervention to alleviate the suffering caused by its shortfalls”.  Supported by their tax dollar dependent cronies in academia and their big government loving mouthpieces in the mainstream media, our ruling elite has been effective in socializing the masses that they know what they are talking about.  It is of course all an attempt to justify expanding the size of government even more so there is more for the politicians to give away to their faithful supporters.

Capitalism did not cause the financial crisis that we are still mired in some 29 months after it began; crony capitalism did.  Crony capitalism is loathed by every proper capitalist because it is more akin to the corrupt socialist systems of the past than to true capitalism.  In true capitalism, the primary responsibility of the government is to protect private property rights and prevent and punish fraud.  How can a system that confiscates private property through taxes (income and property) and transfers that property to others (domestic and foreign welfare) be called capitalist?    How can a system that takes from one to prop up the failure of another be called capitalist?  In terms of fraud, how many bank loan officers and borrowers who provided false information on the mortgage applications that contributed to the crisis have been prosecuted and jailed?  Uncle Sam has a weak record at best when it comes to exhibiting the qualities of a government operating in a capitalist system.

Instead, Washington has built a system based on favoritism and patronage.  Look at “Too big to fail”.  This should be translated into “Our Friends are the best”.  Hundreds of billions, if not trillions of taxpayer dollars, have gone into bailing out companies that in return can be counted on to contribute billions of dollars to Republican and Democratic campaign coffers.  The rationale we were told is that if any one company went under our economy would fall off the cliff.  Really, I don’t remember being airborne when Lehman Brothers was allowed to go belly up.  “Too big to fail” was a hoax perpetrated on the American public so the politicians could repay their campaign benefactors.  And they are at it again with their attempt to institutionalize “too big to fail” in financial reform legislation before the Senate.

In a true capitalist system GM and Chrysler would have been allowed to go bankrupt.  Their assets would have been purchased by other entities and workers would have been hired for hopefully a more profitable endeavor.  The economy would have been rid of a drag on it and therefore would be more able to operate at an efficient level.  Instead, what we got from our crony capitalist system was a huge taxpayer bailout that primarily benefitted the United Auto Workers Union (UAW).  In fact, it’s telling that the entity which for years demanded higher wages and benefits and was most responsible for the demise of GM and Chrysler was able to claim a huge stake in both companies ownership as a result of the government’s bailout deal.  At the end of the day, the UAW is richer, the politicians get their campaign contributions from Motown and the American taxpayer will ultimately have to bail out the car companies again sometime in the future.  

Now, it is true that if the bailed out financial companies were left to go under a lot of honest folks would have lost a lot of money.  But, that is only because of the system the crony capitalists have built.  The Federal Deposit Insurance Corporation (FDIC) allows depositors to place their money in banks without any worry that regardless of how irresponsible their bank may be they will always get their money.  Would you eat at a restaurant that was known for food poisoning?  I didn’t think so, but it doesn’t matter to you that you probably still have your money in a bank that acted irresponsibly and lost it in the early 2000s.  Even though they have brought the economy to its knees you will still get your money through government insurance.  Then, there is Fannie and Freddie Mac who really work on behalf of mortgage lenders and the real estate industry.  These two entities guaranteed (with taxpayer money) all the irresponsible behavior of the failed banks.  When the crisis unfolded what did Uncle Sam do to them?  He bailed them out and allowed them to add even more mortgages to their portfolio.   

In a true capitalist system much of the behavior that brought on the financial crisis would not have happened.  Bankers would have known that they faced the possibility of losing everything, their wealth, career, and even their freedom through reckless and/or fraudulent acts.  Government would not have been there to cushion their fall.  Of course, the biggest thing that would not have been there for them in a capitalist system would have been the existence of a central bank.

Indeed, the Federal Reserve Bank is certainly the most anti-capitalist feature of our economy.  In essence, it is a secretive small cabal of monetary central planners that determine the value of our money and stands ready to act as lender of last resort for over-leveraged banks.  It has been responsible for all of the big economic crises since its inception in 1914.  It caused the Great Depression with its easy credit policies towards banks and Wall Street.  It was responsible for the hyper-inflation of the 1970s and the savings and loan crisis of the 1980s because it monetized the Vietnam War and the social programs of Johnson’s “Great Society” of the 1960s.  In just the last fifteen years, it inflated the dot com and housing bubbles causing the biggest economic downturn since the Great Depression.  The Fed’s answer to the crisis, lower interest rates and bailout the banks.  There is no question where the Fed’s loyalty lies.  And this loyalty has paid off handsomely for its constituency – Goldman Sachs (GS), JPMorgan (JPM), Bank of America (BAC), Wells Fargo (WFC), Morgan Stanley (MS), and Citigroup (C) — together have posted $62 billion in after-tax profits in just the last 18 months!  Meanwhile, the true unemployment rate continues to hover around 17 percent, foreclosures are up, and the cost of health care is through the roof.

True capitalism is not perfect, but then again no system is.  To blame capitalism for the financial crisis is absurd.  We have a crony capitalist system in the United States where politicians pander to corporatists and unions and in return get huge amounts of money to monopolize the political system.  It’s a vicious cycle that benefits Washington.  No wonder it spends all of its time blaming capitalism for crises.


Article first published as Crony Capitalism Caused the Crisis on Blogcritics.

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

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Greece is a Harbinger of Things to Come                                              

Greece’s bankruptcy proves one thing: welfare states are wasteful and unsustainable.  Since the early 1970s when Greece transitioned from a military dictatorship to a republic, the country has had one socialist government after another.  Years of government largess in the areas of education, health care, paid vacations, and early retirement has brought the nation to its knees and has made it the current number one beggar nation in the world.

Of course, it wasn’t just the wild spending that got the Greek people in trouble.  It was the fraudulent financial records their government submitted to its benefactors to keep the gravy train rolling.  It was also the lack of courage Greek politicians had in making sure that all those government goodies were paid for with tax increases.  You see, Greek politicians for too long were like the parent who just couldn’t say no to their children – ever.  Now, out of necessity, some of the toys bestowed on the Greek children by their government are being taken way and they are throwing a tantrum in the streets of Athens.

Governments like Greece that ultimately do not control their own currency have about two options when the bills come due and the till is dry – default or grovel at the feet of big bankers to loan you more money with which to financially hang yourself.  Greece, of course, has turned to groveling, but at a huge cost.  In order to get bailed out, the Greek government had to enact measures that are foreign to the Greek people.  It had to get its financial house in order by cutting benefits to the citizenry.  Hence, all the stomping of feet, banging of heads, crying, and screaming in the streets.

But, enough about Greece, let’s discuss why this matter is important to the average American.  It is because our gravy train is on the same track as Greece’s.  The only difference is that we can inflate our currency wildly to pay the bills, but only to a point.  Remember the opening line of this article:  welfare states are wasteful and unsustainable.  They are wasteful because they entail taking resources from productive members of society and giving them to unproductive members of society.  Thomas Jefferson warned us about that when he said, “I predict future happiness for 
Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them”. In other words, government should not be in the business of diverting money away from enterprises (new factories, inventions, jobs) that make our economy grow and giving it to groups that contribute little to the well-being of society.  Yes, these groups I speak of include the banking cartel, the military industrial complex, and individual welfare kings and queens.

Welfare states are also unsustainable because you have to fool all the people all of the time, but at the same time you cannot fool the laws of nature.  It is easy to convince a large segment of society that welfare spending is compassionate and is the cost of building a civil society especially since you aren’t raising their taxes to pay for it.  It‘s a piece of cake to convince the underprivileged that they are entitled to public assistance because they somehow are the victims of a harsh economy   As for the banking cartel and military industrial complex, they will gladly accept low-interest loans, bailout funds, and big government contracts as a normal course of doing business.  In this scenario everyone wins.  The working man has low taxes, the underprivileged have income security, the corporate elites have implicit government guarantees against failure, and most importantly the ruling elite collects campaign contributions and votes which install them in office usually for however long they want to “serve”. 

For the last forty years in America this has been the routine.  And our leaders kept telling us that this was not too good to be true.  “We are the United States.  We have the strongest economy in the world.  Someone will always be there to buy our debt – the Europeans, Japanese, Middle East, and China.  Besides, the deficits and national debt don’t matter.”  Do you remember when Dick Cheney told us that one?

But, deficits do matter.  And our national debt is a powder keg waiting to explode.  The laws of nature will catch up with us just like they caught up with Greece.  If and when the Federal Reserve raises interest rates to attempt to quell inflation, the new interest payment on our national debt will be crippling to the federal budget.  If the Fed never raises rates again, our economy will be relegated to the same level as Zimbabwe’s.  At that point, perhaps the Fed governors will attempt to print our way out of trouble.  The only problem is that no one will be interested in buying our debt.  

Article first published as Greece is a Harbinger of Things to Come on Blogcritics.org      

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

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