Almost forgotten within the whirlwind of last week’s columns and news stories covering the Obama Administration’s scandals was a piece from The New York Times discussing the “onset of woes” he’s had to deal with. Various aides told The Times on, and off, the record how the President is doing all he can to make sure his second term agenda gets accomplished. They also mentioned how Obama is frustrated and “exasperated “with Washington, something which isn’t new to anyone who’s watched one of his news conferences.
The most telling comment in the piece is how Obama has talked about “going Bulworth” and just saying what he actually thinks. This is a reference to the Warren Beatty/Halle Berry film about a California senator who decides to tell everyone what he believes, no matter the consequences. The New York Post has taken it to mean Obama wants to come out and admit he’s a socialist, which the Bulworth character is. This could be true, but it also reveals a problem with our political system.
Politicians have a problem with being 100-percent honest. Big surprise, but a David Axelrod quote following the Bulworth revelation is even more telling. Axelrod told The Times, “But the reality is that while you want to be truthful, you want to be straightforward, you also want to be practical about whatever you’re saying.”
It’s not that politicians can’t tell the truth, it’s that they don’t think the public wants to know the truth.
The sad part is…they’re probably right.
More people would rather be told that things are “going to be okay,” instead of hearing the horrific reality of the situation.
The 2012 election is a perfect example of this. Mitt Romney and Paul Ryan were vilified for discussing the nation’s $16-trillion in debt. Columnists like Paul Krugman claimed the nation’s debt isn’t an issue, while Obama told David Letterman “we don’t have to worry about it short term.” Letterman asked only one follow up but that shouldn’t be surprising. He’s not Jake Tapper.
When Romney spoke his mind in the “infamous” 47-percent quote, he was said to “not represent all Americans” and to have “written off half the nation.” Obama, again, told Letterman about how he wanted to represent the “entire country,” but didn’t talk the substance of Romney’s quote, why he may have said it or the context.
Guaranteed: more people saw Obama make those comments than any of Romney’s speeches on the debt.
However, it’s not just Romney who was vilified. Ron Paul was called a “dangerous man” for some of his positions. A look at the jokes the late night talk show hosts said about Paul, shows they saw him more as a “crazy uncle” and not a real candidate. Now, Paul is a horrible messenger from time to time (see his Chris Kyle tweet and his September 11th comment) but he’s at least willing to speak his mind and tell the truth. Something refreshing in politics.
As much as people claim to want the truth, the reality is much different. The truth hurts and people prefer “flowers and sunshine” to reality. There’s a difference between pointing out problems and solutions, and just telling people it will be okay. This is why politicians use double-speak and seem distance. A majority of people don’t want reality.
There is a way for conservatives and libertarians to break through this. Outreach. Real outreach, not the failed attempt of Project ORCA by Romney’s team during 2012. Get out in the community and be with people. See what they experience. Explain to them how freedom and liberty is important and show them how it can make their lives better. Support what Deneen Borelli and Wayne Dupree are doing in the Black community and what “True the Vote” is trying to do with the Hispanic community. Talk to friends. Engage them.
And keep politicians accountable. It’s not always pragmatic to change one’s mind. Sometimes it’s simply political. Get them to explain why they do what they do. Get them to tell the truth.
It’s the only way to prove Axelrod and his ilk wrong.
And to make sure Bulworth isn’t “just” a movie but reality.
Kentucky Senator Rand Paul has learned another key lesson of the “age of sound bytes.” During an appearance on Neil Cavuto’s Fox Business Network show, Paul pointed out he didn’t mind using drones or any kind of technology against an “imminent threat,” whether it was a terrorist or “someone coming out of a liquor store with a weapon and 50 dollars in cash.” He also said it didn’t matter if it was a cop or a drone who killed the criminal. To fans of his father, ex-Texas Congressman Ron Paul, the reaction was fast and it wasn’t pretty.
However, people are ignoring the second half of his quote. Paul specifically said it was different if a drone wanted to go over someone’s hot tub or yard just to look at you. Even when Cavuto asked what if police were searching for a criminal and accidentally found something “bad,” Paul didn’t budge. He said no one should be looking into someone’s backyard and didn’t want surveillance when there wasn’t “probable cause.” Paul made it very clear police must have a warrant to use a drone, unless there was a “killer on the loose” or someone “running around with a gun.”
This is very similar to what he said during his 13 hour filibuster and the comments he made afterward. It’s also part of the no domestic drone strike legislation he and Texas Senator Ted Cruz co-sponsored. Drones can only be used on “dangerous criminals” and people who poses an “imminent threat of death or serious bodily injury” to another person. So Paul is being consistent.
There are still problems with how Paul worded what he said. The definition of a “dangerous criminal” may mean someone like the Boston terrorists, who engaged in an active shootout with police. But, as Paul pointed out in his filibuster, the Fusion Center of Missouri considers “dangerous criminals” as people who have pro-life bumper stickers, people who may want more border security, support third party candidates or might be in the Constitution Party. Unless the “dangerous criminal” terminology is strictly defined, the use of drones by governments on American soil could end up being as slippery of a slope as warrant-less wiretapping. Even with the strictest of definitions, it may not be worth it, despite how awesome the technology is.
By making broad comments on an issue, Paul giving potential political enemies more ammunition against him. It also disappoints his supporters and those who consider him a “political hero.” Plus, the liquor store example is a bad example, which Paul realized. He made it clear in a statement he released Tuesday. After all, hindsight is 20-20.
There may be ways to figure out how people in the private sector (i.e. farmers) could use drones, without raising questions about privacy. Drone countermeasures are already being developed and sold to those who can afford it. That may be the ultimate solution.
But in the end, Lucius Fox may have it right when he raised questions about technology Bruce Wayne developed in The Dark Knight. Even when it was obvious Batman could use a city-wide tracking device to find the Joker, Fox said, “No one should have it,” because the tracker could be abused.
It may be time for us to listen to Lucius Fox on drones. Cool technology, but not worth using.
Tom Woods, the Senior Fellow at Ludwig von Mises Institute, testifies in the Federal Reserve Oversight Hearing before the House Financial Services Committee on why we need to audit the Fed. As the well-known author put it:
As the fiscal cliff looms, it is prudent to discuss how we got here. As our crisis moves from housing to student loan and then into health care, it should be noted what, how and who got us into this situation.
“…because this financial crisis just wasn’t the result of decisions made in the executive suites on Wall Street, it was also the result decisions made across kitchen tables across America by folks who took on mortgages and credit cards and auto loans,”
During a 2010 speech at Wall Street, President Obama blamed Wall Street and Main Street for irresponsible financial practices but he neglected the true culprit of the housing crisis…the federal government. When third parties such as Washington politicians, bureaucrats and community organizations get involved, it perpetuated the housing disaster in what we have today.
So, how do you collapse the housing market? You start with the philosophy of “Overloading the system” with an approach known as “Top Down, Bottom Up and Inside Out. Van Jones explains this concept below. Politicians and bureaucrats wrote legislation that entice community organizations, citizens and lawyers to force banks in giving loans they should not have given. This concept begins with the passage of the Community Reinvestment Act, then relaxing HUD policies with unrealistic goals. The Clinton Administration and Congress put pressure on banks, this represents the “Top Down” portion. This placed the legal ability for banks to make risky “subprime” loans. The “Bottom Up” is community organizations, like ACORN and lawyers who push the written law through the court system. These community organizations put pressure or extorted banks through threats of lawsuits. With Fannie and Freddie’s loan goals increased, pressure from federal agencies and community groups demanding risky loans to be made, this is the “Top Down, Bottom Up” scenario. The “Inside Out” scenario is where people within the system begin to work with the community organizations or replaced with people who are friendly to organizations that caused the problems.
So, what caused the subprime lending crisis? Let’s start with the Community Reinvestment Act.
In 1977, the Community Reinvestment Act (CRA) established the foundation for the housing crisis and “encouraged” financial institutions to provide loans to low- and moderate-income communities. It eliminated “redlining”, a practice where banks identify and eliminate lending to certain high-risk communities. But one of the most damaging aspects of the act was the creation of a rating system that evaluated banks on several factors, one being their subprime loan record. The CRA addressed concerns of the deteriorating conditions of cities like urban flight and declining neighborhoods, this was due to limited credit availability. After the CRA was enacted, the federal government continued to tweak previsions for the next 30 years to provide loans to risky borrowers, loosen restrictions so banks were able to give these loans and provided legal grounds for community organizations and lawyers to force these loans.
After the passage of the CRA, trends of outstanding consumer credit skyrocketed. (See chart below)
The Glass-Steagall Act of 1933 kept banks in check. It limited the affiliation between commercial banks and security firms, this also eliminated financial transactions being granted within the same credit, lending and investing institutions, also known as “too big to fail.” What this would do is tie loans to the banks physical assets. Back in 1933, this act gave additional oversight authority to the Federal Reserve. In addition, the FDIC would be able to guarantee loans up to a certain amount.
Ben Bernanke explained that the CRA encouraged many banks to make high-risk loans to low and middle-income communities at low interest rates. The Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA) publicized these CRA reports public. This allowed community organizations and lawyers to “perform more-sophisticated, quantitative analyses of banks’ records.” If a bank’s ratings were not adequate, community organizations such as Association of Community Organizations for Reform Now (ACORN) sued banks for the lack of loans in low income communities.
In 1980, Jimmy Carter signed the HR 4986, “Depository Institutions Deregulation and Monetary Control Act” forcing banks to adhere to Federal Reserve rules. It allowed the merger of banks and raised deposit insurance from $40,000 to $100,000.
In 1992, the Housing and Community Development Act of 1992 “establish(ed) specified housing goals for each enterprise, including goals for purchase of mortgages on housing for low- and moderate-income families”. These two Government-Sponsored Enterprises (GSE), Fannie Mae and Freddie Mac, encouraged “subprime” lending by authorizing a “flexible” criteria whereas high-risk borrowers could be qualified for home loans. These GSEs were intermediaries who loan to banks and not directly to homeowners. Banks were directed to accept welfare payments and unemployment benefits as “valid income sources” in qualifying for mortgages. If banks didn’t accept these documents, they could face lawsuits.
In 1994, Housing and Urban Development (HUD) instituted a “top down” policy where ten federal agencies adopted a policy, entitled “Policy Statement on Discrimination in Lending”. According to the news release “The following Federal Agencies—HUD, OFHEO, DOJ, OCC, OTS, the Board, FDIC, FHFB, FTC and the NCUA—sharing a concern that some prospective homebuyers and other borrowers may be experiencing discriminatory treatment in their efforts to obtain loans, formed an Interagency Task Force on Fair Lending to establish uniform policy against discriminatory lending.”
Community organizations increasingly used the public comment process to pretest bank applications on CRA grounds. When applications were highly contested, federal agencies held public hearings to allow public comment on the bank’s lending record. In addition, this policy “seek(s) to promote fair lending” and “seeks to prevent lending discrimination and redlining by requiring public disclosure of certain information about mortgage loan applications.” In essence, the federal government established a grading program to evaluate how these programs lent to the poor. Due to these changes in lending practices and activism, homeownership would soar as shown below.
According to the Chicago Daily Observer, Barrack Obama represented 186 African-Americans in a 1995 discrimination lawsuit against Citibank. These individuals were not approved loans but Citibank settled in 1997. Since then, roughly half of those represented have gone into bankruptcy or received foreclosure notices. Today, only 19 of the 186 still own their homes with a clean credit record. This demonstrates how community organizations can pressure banks into giving subprime loans.
In 1999, President Clinton and a Republican majority Congress repealed the Glass-Steagill Act. This allowed banks, lenders and investments firms to practice across different environments, reintroducing “Too Big Too Fail.” The bill passed the house (362-57) and Senate (90-8). At the same time, the Clinton Administration put pressure on Fannie Mae to expand mortgage loans among low and moderate income people. HUD increased Fannie/Freddie’s subprime lending goals to over 40 percent for low- and moderate-income families.
Bill Clinton in an interview describes how much CRA loans were given out during his time as President.
In 1999, Franklin D. Raines, Fannie Mae’s Chairman and CEO stated ”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements.” “Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.”
According to Milkeninstitute, “The rate of foreclosures on subprime loans originated increased each year from 1999 to 2007 and accounted for approximately half of all foreclosures over the same period.” When the collapse occurred in the third quarter of 2007, subprime ARMs made up only 6.8 percent of US mortgages outstanding but accounted for 43 percent of the foreclosures that began in that quarter.
In November 2000, Fannie Mae announced HUD would increase the dedicated amounts to 50%. According to CSR Press Release, to expand the secondary market, Fannie Mae committed to purchase $2 billion through a suite of flexible mortgage options purchasing one-to-four unit homes. Fannie Mae injected a process where previous loans would be negotiated on an individual basis. Dan Mudd, from Fannie Mae stated “By teaming with lenders, Fannie Mae can not only help increase lending to minorities and other underserved market segments, but we also can assist depository institutions in meeting their own community investment goals and objectives. We look forward to working with our customers to create increased liquidity for Community Reinvestment Act (CRA) -eligible loans.”
In 2001, the US Department of Treasury warned, “Subprime borrowers typically have weakened credit histories that include payment delinquencies and possibly more severe problems such as charge-offs, judgments and bankruptcies. They may also display a reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories.”
Although most home loans were not subprime mortgages, their numbers rapidly grew in the early part of the 21st Century. Subprime loans accounted for 9 percent in 1996 and 20 percent in 2007, one-fifth of US home loan market. Throughout the 2000s, there were calls to reform Fannie and Freddie because they were “systemic risks”. In 2003, Barney Frank stated that Fannie and Freddie are “not in a crisis” and Republicans were crying wolf in calling Fannie and Freddie not financially sound. Democrats blocked Republican-sponsored legislation. From a servicing standpoint, these loans have a statistically higher rate of default and are more likely to experience repossessions and charge offs. Lenders use the higher interest rate and fees to offset these anticipated higher costs.
In April 2005, there was rumble of fixing the housing debacle but some lawmakers said that it undercut the ability of the CRA to “meet the needs of low and moderate-income persons and communities.” Senator Shelby introduced legislation to deal with Fannie Mae and Freddie Mac that was causing a “systemic risk for our financial system.” The carrot was subprime loans that would be purchased and backed by federal GSEs Fannie Mae and Freddie Mac. Community Organizations felt this legislation would only weaken CRA. Even Federal Reserve Chairman Alan Greenspan warned of Fannie and Freddie’s debt. “We are placing the total financial system of the future at a substantial risk,” he said. Senator Charles Schumer (D) says, “I think Fannie and Freddie over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world.” No legislation would be passed to address the looming bubble.
On August 15, 2007, concerns about subprime mortgages caused a sharp drop in stocks across Nasdaq and Dow Jones. Record lows were observed in stock market prices across the the world. The US market recovered all those losses within 2 days. Concern in late 2007 increased as the August market recovery was lost, in spite of the Fed cutting interest rates by half a point (0.5%) on September 18 and by a quarter point (0.25%) on October 31. Stocks are testing their lows of August now.
On December 6, 2007, President Bush announced a plan to voluntarily and temporarily freeze the mortgages of a limited number of mortgage debtors holding ARMs by the Hope Now Alliance. He also asked Congress to: 1. Pass legislation to modernize the FHA. 2. Temporarily reform the tax code to help homeowners refinance during this time of housing market stress. 3. Pass funding to support mortgage counseling. 4. Pass legislation to reform GSEs like Freddie Mac and Fannie Mae.
In 2008, Troubled Asset Relief Program was enacted in response to the subprime mortgage crisis. Citizens do not have access to Fannie and Freddie’s records because they are considered a GSE, so the Freedom of Information Act does not apply. Currently, Fannie Mae and Freddie Mac still have an open checkbook in buying loans.
So, what changed to cause the subprime mortgage crisis? Was it a conspiracy contrived by the Fannie, Freddie, bankers, lawyers or community organizations? NO! Legislation and courts were used to position third parties such as federal agencies, community organizations, GSEs and lawyers who determined the validity of banks’ lending practices based off a banks’ CRA rating rather than the practice for each individual. These players used the law to force banks to lend money to people who could not afford it. The housing collapse was caused by third party intervention intervening into the free market…not capitalism!
According to Maxine Waters (5:08), “Under the outstanding leadership of Frank Raines, everything in the 1992 Act has worked just fine. In fact, the GSEs has exceeded their housing goals. What we need to do today is focus on the regulator and this must be done in a manner so as not to impede their affordable housing mission. A mission that has seen innovation flourishes from desktop underwriting to 100 percent loans.”
According to a 2010 House Oversight Committee Report, top banks such as Countrywide, Bank of America, Chase, Washington Mutual and Wells Fargo established relationships with community organizations such as ACORN. The report also stated “ACORN used provisions in the Community Reinvestment Act (CRA) of 1977 to challenge bank mergers and acquisitions. These challenges successfully forced banks to make lending agreements with ACORN Housing.” ACORN became a HUD approved housing counselor. According to the report, ACORN has “waged savage public campaigns and delivered subtle private threats to large banking institutions for its own financial gain, defeated former political allies…and formed powerful alliances with the SEIU, Rod Blagojevich and Barack Obama.”
With federal legislation pushed banks to make high risk loans and provided upward pressure from community organizations that ensure the subprime. The problem cannot be entirely blamed on the CRA but it laid the foundation. CRA reports enabled community organizations and lawyers to force banks into making subprime loans, and this extortion probably extended elsewhere…and to some degree partnerships. Fannie & Freddie was able to guarantee and provide cheap subprime money.
Ron Paul provided some insight that the very people who was instrumental in creating the legislation are there to fix it.
The next financial bubble will be “Student Loans” while the housing bubble’s intrinsic issues were not addressed.
Well, we lost. Mitt Romney didn’t win comfortably. BUT, Republicans maintained control of the House of Representatives. In one of the most ignominious highlights of the night, the GOP lost two senate seats – increasing the Democratic majority by two. The current makeup is 55 Democrats to 45 Republicans. In a milestone for the ladies, 20% of the U.S. Senate will be represented by women. However, the night ended a bit like 2004 in reverse.
While the notions of GOP turnout seemed assured, it was rarely monitored, and turnout for the youth (and voter turnout in general) was unexpectedly high. To no one’s surprise, young voters broke for the president (60-36), but represented a larger share of the electorate than four years ago. Romney’s lead amongst independents wasn’t enough to overcome the Latino vote, which he lost to Obama miserably 72%-23%. Lastly, Romney wasn’t able to cut into the gender gap quite as effectively as he wanted to, with the president winning women, overall, by eleven points. However, it’s with unmarried women that Romney had a fatal disadvantage with, as they broke for Obama 67% to 31%.
On states, betting on Pennsylvania proved to another catastrophic play. We haven’t won the Keystone State in almost a quarter century, and it may be time to part company completely. Concerning Wisconsin, the state may have swung right on recent elections, but perhaps the ‘fairness voters’ – voters who may not agree with Walker’s policies, but are appalled that unions would want to revoke an election result – turned out to vote for the president this time. In Ohio and Virginia, Romney’s failure to execute the war on coal narrative sooner, and formulating a response to the Bain ads, contributed to his defeat.
Without a doubt, the Bain ads – the Obama campaign’s first official salvo in their ‘Kill Romney’ strategy – released right after Mitt unofficially clinched the Republican nomination resonated with Buckeye residents, and shame on the Governor’s communications team, who were on the defensive for most of the election cycle. In short, like with Goldwater in ’64, the Obama campaign was able to define Romney – before Romney could define himself. It’s another costly misfire.
However, I truly feel that Mitt Romney ran a good campaign, and did the best he could’ve with what he had regarding resources. It’s hard to be successful when you don’t have a Karl Rove, James Carville, or David Plouffe on your side. It also hurt that he couldn’t run on health care, since Romneycare served as the blue print for one of the most egregious affronts to the constitution since the Alien and Sedition Acts of the Adams administration.
Yet, if you looked at the field from the beginning, It was either going to be Mitt Romney or Rick Perry fighting for the nomination. Newt and Cain treated this serious event in American politics with the maturity of eight year olds at a lemonade stand – with the lemonade being books. For many Americans, Michele Bachmann failed the threshold question of any presidential candidate, which is do I trust this person with nuclear weapons? Disgraced former Pennsylvanian Senator Rick Santorum failed the conservative test, in my opinion, by voting for Medicare Part D, which added $ 7 trillion to the unfunded liability of the program. That’s 20% of the entire unfunded liability, which we now have to deal with before the fiscal cliff. He voted for Sonia Sotomayor for circuit judge. Santo voted against National Right to Work, Food Stamp reform, a flat tax, and Medicaid reform. He voted for internet taxes, the unionization of FedEx (twice), and No Child Left Behind. He took that one for the team.
Rick Perry, my choice for president, flamed out in one of the most epic derailments we’ve probably seen in a long time. Jon Huntsman was too moderate. Ron Paul was well, Ron Paul. So, we were left with Mitt Romney. Sometimes the pickings of the field aren’t too stellar, and we have to deal with that.
Again, I don’t blame Romney for the loss. Yes, Obama’s record of economic pain, which he has inflicted without mercy on the American people, is long, but his political team, along with the media, were able to spin it just enough to trivialize the fallout. As Ralph Reed, Founder and former Executive Director for the Faith and Freedom Coalition, said at CPAC 2012 last February – we’re about to face “the meanest, toughest, most vicious political team we’ve ever faced.” He was right, and we paid dearly for it.
Given Obama’s record, and Republicans’ inability to defeat him, it begs the question if the GOP should have any business being in American politics. Yes, they still do, but renovations need to be made. We need to do better with women – cough nix the rape talk cough cough – hispanics, and younger voters. The hispanic vote ruined the California GOP back in 1994 when Prop. 187 established a citizenship screening process and barred illegals from using state services was construed as ‘anti-immigrant.’ It was really protecting the territorial integrity of the United States, a core function of a nation in the international system, but that’s a different debate. Regardless, it was the straw that broke the camel’s back, and California Republicans have been in the bunker ever since.
We need to find ways to protect our sovereign soil, but in a way that doesn’t come off as nativist. Hispanics are hard-workers, religious, and pro-traditional marriage. Or, at least, that’s what was the conventional wisdom at the time. Heather MacDonald posted on National Review yesterday that:
a March 2011 poll by Moore Information found that Republican economic policies were a stronger turn-off for Hispanic voters in California than Republican positions on illegal immigration. Twenty-nine percent of Hispanic voters were suspicious of the Republican party on class-warfare grounds — “it favors only the rich”; “Republicans are selfish and out for themselves”; “Republicans don’t represent the average person”– compared with 7 percent who objected to Republican immigration stances.
I spoke last year with John Echeveste, founder of the oldest Latino marketing firm in southern California, about Hispanic politics. “What Republicans mean by ‘family values’ and what Hispanics mean are two completely different things,” he said. “We are a very compassionate people, we care about other people and understand that government has a role to play in helping people.”
So, despite Mitt’s shaky conservative credentials, without a doubt, he’s the most hard-lined presidential candidate on immigration we’ve had in the past ten years – and that didn’t hurt him with these voters. Bain, on the other hand, probably didn’t help.
Nevertheless, I’m not saying we should be for amnesty. We shouldn’t be. Amnesty is unfair and unethical – as is the president’s Dream Act light, which requires illegals to bribe the government $465 from doing it’s job enforcing federal law. However, what 2012 should show all conservatives is that our coalition, which to Paul Krugman’s chagrin truly represents the ‘Real America,’ is static. It’s more rural, blue collar, and white. That’s not enough to win elections. We need to improve outreach with minorities and venture back into the cities, or places where the people are, to make these contests competitive again. George W. Bush won 44% of the Latino vote in 2004, with increased majorities in the House and Senate. It’s not impossible. But it’ll be very difficult trying to chip away at the government’s “role in helping people,” which in Democrat speak for getting these people so dependent on us as possible, so they’re a lock when Election Day arrives.
Concerning the ladies, we need to exert a little more discretion when we talk about rape. While the Democratic National Convention could’ve been Abortion Fest 2012,the senate races in this cycle should have been more appropriately called Rape Fest. It’s odd that we even have to mention this, and some blame the Tea Party for these mishaps. I don’t. The Tea Party is the heart and soul of the Republican Party. As George Will once noted, they’re the best thing to happen in American politics since the Goldwater insurgency. Republicans would not be where they are now without the Tea Party, but that does not mean we should accept every one of their primary victors as serious candidates.
As Tucker Carlson and Neil Patel wrote in The Daily Caller yesterday:
The tea party believes the GOP establishment is ideologically corrupt. They’re right. But replacing the current leadership with obviously unqualified buffoons is no remedy. Republicans have lost at least five winnable Senate races in the last two cycles because they fielded candidates whose only real qualification was being anti-establishment. Many will argue the GOP can only win going forward with more liberal candidates. That’s not true. But the genuine conservatives they find will have to come with political skills, policy smarts and impressive resumes in order to get elected.
The sad truth is that even if the Republican Party did all this — sent its current leaders home and stopped nominating losers — it still wouldn’t be enough. The country is changing too fast. Most people have the sense that America is different demographically from what it was 20 years ago. But unless they’ve been reading the latest census data, they have no real idea. The changes are that profound. They’re also permanent and likely to accelerate. In order to remain competitive outside Utah, the GOP will have to win new voters, and soon.
That’s the Republican reformation plan, Stage B. They may get there. First they’ll have to tackle the basics, like finding fresh leadership and candidates who aren’t embarrassing.
That will take some serious vetting. Furthermore, we’re Republicans. We’re pro-life, and the American people know that about our movement. In elections centered on the economy, you can easily pivot away from such issues. Sadly, some of our fellow party members couldn’t help themselves, they shot their mouths off, and got trounced. There is much intra-party work to do – and it starts now.
Meanwhile, a divided America exists and the government we elected is representative of that partisanship. Michael Barone wrote also wrote in National Review that Americans on the right, and the others of the left, are no longer becoming culturally cohesive.
Ronald Reagan, speaking the language of the old, universal popular culture, could appeal to both Americas. His successors, not so much. Barack Obama, after an auspicious start, has failed to do so.
As a result, there are going to be many Americans profoundly unhappy with the result of this election, whichever way it goes. Those on the losing side will be especially angry with those whose candidate won.
Americans have faced this before. This has been a culturally diverse land from its colonial beginnings. The mid-20th-century cultural cohesiveness was the exception, not the rule.
We used to get along by leaving each other alone. The Founders established a limited government, neutral on religion, allowing states, localities, and voluntary associations to do much of society’s work. Even that didn’t always work: We had a Civil War.
An enlarged federal government didn’t divide mid-20th-century Americans, except on civil-rights issues. Otherwise, there was general agreement about the values government should foster.
Now the two Americas disagree, sharply. Government decisions enthuse one and enrage the other. The election may be over, but the two Americas are still not on speaking terms.
It’s sort of like this exchange between President Bartlet and Governor Ritchie.
Right now, Obama is in a good position to increases taxes, which will happen when Obamacare’s fully implemented in 2014, nominate SCOTUS appointments, which threaten to curtail our constitutional rights, and to continue this destructive surge in government spending that only shackles people to the will of the state through dependency. It’s up to House Republicans to obstruct Democratic plans, and put forward a deluge of alternatives of their own. Granted, we won’t be able to filibuster Supreme Court appointments, but this president’s agenda, and that of the Democrats, is inherently dangerous to the socioeconomic fabric of the country and we must fight them all the way. Concerning the fiscal cliff, maybe compromise can be reached. Yet, we should also remember that compromise is how we got Medicare Part D, No Child Left Behind, and the first round of federal stimulus under the Bush administration. Policies that attributed to the near collapse of the conservative movement in this country.
I’m pessimistic that a deal will be reached. This president’s ego would bust the marble in the Capitol dome – and he exuded poor presidential leadership as described in Bob Woodward’s new book The Price of Politics. Yet, Mr. Will again reminds us that throughout the course of American history there is not a single thing that the American people wanted intensely and protractedly that they did not eventually get from the federal government.
Lately, the phrase “Chose your neighbors wisely.” has become increasingly important. For years, the significance as to what the government was doing, or how the government was growing, was a distant thought in my mind because my life itself was so busy and all consuming. Like many people I guess I had the mindset that our government was meant to protect us, and deal with all the cumbersome issues pertaining to our country. I mean, honestly, how many of us sit there and read the bills and amendments and so on? How many of us even truly understand the Constitution and the Republic we live in dispite the fact we take it for granite daily?
I realize now, that most of us unknowingly sat idle, unaware, or preoccupied with our daily lives while the movement toward big government, economic downfall, and total government control grew out of proportion. Its members blind-sighted us as they began to dismantle our Constitution from right underneath our feet. Most recently, with the issue of gun control I have heard many people say, “I don’t like guns and I don’t own one anyway, so who cares?” Clearly, the lack of knowledge pertaining to our Constitution would lead to that mindset. It make sense to me why the liberal government controlled media, here in the U.S., chooses to portray people like Ron Paul as to far to the right, when in fact, he is one of a limited few who have a clear understanding of what is actually happening today in this United States of America. Now realize this is not an endorsement for any one person or party, but rather an a wake-up call which will hopefully spark something in all American’s so they do some research, question, and find answers, as opposed to being “told” what they want to hear from either side. It is truly a time in America to take the blinders off, and see for yourself what is going on with this government and our government in general for decades. Go out on a limb and see the movie 2016: Obama’s America. Learn about the author, read the Constitution, find out what all the talk is truly about, get involved in some way, most importantly teach your children.
I think for most American’s everything is black and white. Rarely to they visit the shades of gray that make the mind ponder and question, for if they did, it would lead them to research, learn about the issues, the Constitution and the Bill of Rights as set forth by our forefathers. Rather, living in the black and white allows people to be led, misinformed, and it keeps them from visiting the elusive areas where the grays would eventually take them. That is precisely how we got where we are today, and why so many people are preoccupied with a sanctity they don’t even realize is disappearing before their very eyes.
The idea behind, “chose your neighbor wisely” was in an article I read recently. While reading and doing further research I suddenly felt the sense of urgency behind that statement, and I knew precisely what it meant. As our country proceeds in a direction of lost ideals and shattered fundamental beliefs, I have come to realized my own importance not just as a writer or journalist, but as Oath Keeper sworn to protect the country and our Constitution and all it stands for. We are all Watchmen in our right, but how many of you are seeing and truly understanding what the truth is, and are able to visulize the direction this Republic is moving? How many even realize we, the United States of America, is not a Democracy it is a REPUBLIC ? How many people believe the fears that exist are just Republican’s using scare tactics? How many Americans’ truly understand and see that the freedom they love, cherish, and take for granite is gradually disappearing while government grows and its power becomes all inclusive? The intrusiveness of our government, in our daily lives, represents the complete opposite of the Constitution of the United States of American as well as the freedoms you think you have.
Don’t you feel as though you owe it it your kids and your grand-kids to seek out and find the facts on your own? Isn’t it time to stop dismissing everything as some right wing radical ranting and raving, for lack of anything better to do? Ask yourself if you sincerely believe government should control what you think, what you eat, learn, and speak? Should they really be taking away rights set forth in the Constitution, but more importantly why are so actively pursuing these things in the first place? Keep in mind these people running our country were put there by us, they are the same as us, so why are they getting richer, more controlling, and invading the lives of American’s? Why is so important to them to create division in this country? Why? What would motivate them to do this? Why is government in education, banking, auto industry, or business anyway? What is the motivation of this administration to destroy our economy, but more importantly what happens when they succeed? Just trying to find answers to these questions, independent from the media, right, left, whom-ever will be an eye-opening experience — I guarantee it.
I am a card-carrying member of the GOP, primarily because I reside in the Commonwealth of Pennsylvania. As a fiscal conservative, I find myself agreeing more with the Libertarian platform, but it is not in my best interests to register as one. The Keystone State is not known for being groundbreaking in anything political, as in we are largely behind the curve. We’re one of a handful of “control” states, where the Commonwealth enjoys a virtual monopoly on the sales of the wines and spirits. The computerized polling stations are still only partially implemented state-wide, and we still rely on paper tallies to certain extent in most counties. We’re followers, not leaders, for the most part. But, there is one thing that some here complain about that we actually do right. We have closed primaries – we can only vote for candidates running in the party we are actually registered to vote.
That is how it should be everywhere. It is the entire point of a primary. The election is held so that the members of a given party can choose their candidates for the general election. And we rarely have even one candidate for many offices that is registered as Libertarian. There are rarely any candidates for any of the “third parties” recognized here, including Independent, Green, and Socialist. And now there is talk of former Gov. Gary Johnson fighting to be on the ballot here, presumably to “send a message”. My question is, who does Johnson want to send that message to? Obama? Romney?
“A former George Bush campaign insider told us, ‘Your Libertarian Presidential candidate Gov. Gary Johnson may determine who wins this Presidential campaign,’” Howell wrote. “You and I and our fellow Libertarians can seize this huge opportunity – IF we’re ready for the last 6 weeks before Election Day.”
That’s from Carla Howell, the Libertarian Party executive. Now, either Howell is extremely stupid, or she sincerely wants to hand the White House to Obama for a second term. If that is what the Libertarian party leadership stands for, I wonder what the rank and file Libertarian voters really think about that. Maybe she drank the same Kool-Aid Rand Paul has, and views the political landscape with the same lens. As Ramesh Ponnoru already observed, it is facile to assume that Libertarian views on social issues would virtually guarantee more moderate Democrat and Independent votes in traditionally blue states. For one thing, it ignores what I refer to as “brainless voting” – the ability of voters to simply choose “straight ticket” instead of actively choosing in each race. It is a depressing fact, but there is still at least a plurality of voters in many precincts that know nearly nothing about the candidates and issues they are voting on in a given election – they simply cast a ballot on party lines. That alone makes a case for the resurrection of poll tests, not to exclude a given race, but to exclude individuals that don’t bother learning anything about the people or offices they are choosing.
And there lies one of the major reasons why we still have a two-party system. History tells us where the current Libertarian movement is during this election season. Johnson could go down in history as the GOP’s Ralph Nader. Eye Desert made the observation that Republicans need to start listening to Libertarians, and most importantly, he has pointed out two possible outcomes if Romney does not win. If the GOP blames Libertarians, it could spell the end of the party. If not, it could mean a stronger, big-tent conservative party. It’s a solid thesis, and is nothing new. Barry Goldwater predicted the potential demise of the Republican Party years ago. He was there for the beginning of the takeover of the party by religious leaders, and the rise of social conservatism as we know it now. And Goldwater knew that would cause rifts within the conservative movement. Add in the big government spending that has been adopted by the GOP over the years, and that is a toxic mixture that has given rise to this latest growth in popularity for the Libertarian Party, and the Tea Party.
But, we’re not there, yet. The Libertarian message is growing in popularity, but it is not enough. Until it makes sense for voters in states like Pennsylvania to switch their parties to the Libertarian side, we’re not there yet. And, sad but true, until the Libertarian Party sheds its fringe image due to people like Ron and Rand Paul, we won’t see multiple candidates up for election in closed primaries, like we do for the Democratic and Republican parties. While I would greatly enjoy seeing the GOP forced to address its problem with overspending and overly invasive legislative objectives in the name of saving everyone’s souls, we can’t afford four more years of Obama, period. It boils down to this – right idea, but absolutely the wrong time. Sure, it might feel nice to buck the system, and vote for Johnson this November. However, if supporters of Johnson end up handing Obama a second term, then what? I don’t agree with Eye Desert on this one. If the Libertarian Party ends up getting blamed for a Romney loss this fall, the GOP will destroy the Libertarians, rightfully so. It’s what the Democratic Party should have done to Nader and the Green Party, but unlike that party, losing the Libertarian Party would be a real loss. Since it’s becoming fairly clear that the Republican establishment can’t seem to play well with the Tea Party, it seems that is where the work needs to be done. Imagine the political landscape in 2016 if the Libertarians and Tea Party join forces. Now, that is how you build a relevant third party in this country!
“If you analyze it I believe the very heart and soul of conservatism is libertarianism” – Ronald Reagan to Reason Magazine, July 1975
Both Rush Limbaugh and Laura Ingraham made salient points this week by telling Republicans they needed to “shut down” if President Barack Obama is re-elected. The comments show a problem Republicans have had in convincing the Tea Party to support Mitt Romney.
It also shows the Republican Party has failed to listen to what has long been considered their conscience: libertarians.
What people have forgotten is the rise of the Tea Party wasn’t just a rebellion against the increased spending in late 2008, early 2009. The origins of the Tea Party can be traced all the way back to several of President George W. Bush’s decisions, including the Patriot Act, the Department of Homeland Security and the government’s response to Hurricane Katrina.
This series of responses started shaking people, waking them up from their long slumber. They realized the U.S. was running into major problems, the government was expanding too quickly and things needed to be cut. The Tea Party rallies, and the candidates which followed, were proof people were starting to pay attention and getting active. Libertarians were starting to be heard.
But what’s happened since then?
Certainly, the libertarian caucus in US Senate has grown from South Carolina Senator Jim DeMint. It now includes Rand Paul, Pat Toomey, Mike Lee and Ron Johnson. Hopefully, reinforcements are coming with the possible election of Ted Cruz, Connie Mack IV, Richard Mourdock and Jeff Flake. But that’s only nine out of 100 senators.
The House looks no better, with Michigan Congressman Justin Amash replacing Ron Paul as probably the most libertarian member. South Carolina Republican Trey Gowdy should also get praise for fighting for reigned in spending and cutting the government. Arizona Congressman Trent Franks has been considered libertarian at times, but that’s only three out of 435. Plenty of Republicans pay lip service to libertarian ideals (see: House Speaker John Boehner and, to a lesser extent, Wisconsin Congressman Paul Ryan) but don’t follow through.
The fact is Republicans need to listen to libertarians, especially in terms of government growth and the budget. The party which claims to be for “limited government,” allowed massive expanses during the Bush Administration. The original stimulus package may have been avoided if Congress had waited.
To be fair, libertarians have to take blame as well. The rise of social conservatism may have been held back a bit if libertarians did a better job at pointing out why some social policies are best left to states. There’s a reason why the Libertarian Party is known more for wanting to end the War on Drugs, instead of reduced spending, smaller government and more freedom. Organization and activism have also been major problems the Libertarian Party has failed to solve. This could be the reason why there are libertarians considering a vote for Mitt Romney, instead of Gary Johnson.
Ultimately, it may not be in the best interests of libertarians to leave the GOP. It’s possible libertarians will have to suck it up and keep trying to convince party leaders, elected officials and local activists why they’re right. Certainly the Koch brothers believe this and Rand Paul as well. For this to work, conservatives will have to be willing to listen and both sides will have to reach a consensus. It does nothing for Republicans to simply brush off libertarian concerns as a fringe element, or “hobbits,” but to ultimately sit down, look at what’s being said and move forward. There really are libertarians out there who want Republicans to succeed.
The solutions may be slightly different, but it should be a lot easier for conservatives and libertarians to come to an agreement. Certainly a lot easier than conservatives and liberals.
But if Republicans lose in November, what then? Will the party start listening to libertarians or blame them for their own failure? If it’s the former, things may turn out okay. If it’s the latter…the Republican Party may be doomed.
Republican Tyranny in Tampa: What Happened and Why?
I just read on one of the social network sites I belong to that Ron Paul is planning a 3rd party run for President. People have their panties in a bunch saying he will be the reason Obama gets re-elected. I have a few thoughts to share and several questions to ask on this matter. The questions I have need some answers from people who will take an objective look at what I write and respond with thought rather than emotion. Put your partisan hat aside and read on.
For any who are not aware of the situation I will give a short “cliff notes” version of what happened at the RNC convention in Tampa. The establishment was so afraid of Ron Paul that they threw the rules out the window for the benefit of Mitt Romney. The Republican Party establishment, along with the Romney campaign advisors, managed to change the rules to allow Romney to “select” the delegates he desired and to disqualify those elected at the state level if he didn’t like who they were committed to vote for at the convention. Essentially the “presumptive nominee” now chooses who the delegates are despite what the state conventions might have done to elect their own choices. So, if I run for president and am the “presumptive nominee” I get to disqualify anyone I think might vote for a candidate who garnered enough votes in a state to have a few delegate votes at the convention? How nice for me!!! No more floor fights, EVER!! This is the short version, not the epic story.
I thought the idea of the convention was to get together, and to work within the rules of the party to nominate a candidate for the presidential election; that it is the method to settle disputes and come out the other side in agreement. Apparently I am under a misconception. The result of this convention is an extremely fractured party with the Ron Paul delegation already being blamed for what could very well be the re-election of Barack Obama in November. I have some questions that I hope readers will ponder objectively before they answer.
First of all, when Romney had a majority of the delegates sent by the states, why inflame passions by starting a big fight over changing the rules to silence what was obviously a minority of delegates? Were they really trying to avoid a fight on the floor for the nomination or were they deliberately alienating people? What about those whose delegates were aligned with Santorum or Gingrich? Hasn’t the Romney camp and their establishment elitist allies just disenfranchised them as well? Isn’t a party convention the place where these nominee fights are supposed to take place, in a fair, honest, and democratic way? When the whole purpose of the convention was “unity”, with a strong and cohesive voice, why did they go to all of this trouble to keep passions enflamed and drive the fight to the general election in November? I saw this same thing happen at the state convention in Oklahoma. I was a Santorum supporter which left me without a dog in the fight. The established rules of the party and parliamentary procedure were violated repeatedly in what I saw as a deliberate tactic by the party establishment to divide the party. I was appalled at the way party officials behaved in Norman, Oklahoma. And then I see what happened in Tampa!!! Why was a war that didn’t need to be fought started?
If the Romney camp and the establishment who runs the party wanted a unified voice why did they not just allow the process to proceed and come to the end with everyone feeling like they had a fair chance, to “have their day in court” so to speak? Why disenfranchise a huge block of party delegates, and the voters they represented in Tampa? Could it be that the Republican Party would rather lose as they did in 2008 and then sit back and snipe from the bushes like they have been doing since the last presidential election? Republicans took the House of Representatives in 2010, and by that election control the finances of the government; yet they blame Harry Reid for their own failure to stop Obama when they have the power to do so.
In 2008 John McCain was a very weak, very liberal, candidate who picked Sarah Palin, a fiery conservative, as his running mate. The McCain handlers repeatedly silenced Palin while McCain made a mess of everything he did. He irritated and alienated every group he was supposed to reel in with the “charm” that was to overcome his liberal leanings. When he got his head handed to him on a platter by Obama the McCain team came out the very next day blaming Palin in a smear campaign that makes the Obama “blame Bush” tactic look like child’s play. It was all too plain to me. McCain ran a pathetic campaign and used Palin as the patsy to “save face”.
Now, in 2012, Mitt Romney has the same campaign handlers used by McCain in what was a huge disaster four years ago. I wonder WHY???? Why is Romney using the same people who couldn’t get McCain elected over a nobody with less experience in politics than Sarah Palin? Why does he take a bunch of losers and employ them in what I have been told is the most critical election in our lifetime? Does this seem odd to anyone else or is it just me?
I also find it odd that what could have been a very positive and unifying convention was handled in a manner that caused more fractures than an earthquake. Are the people who run the party really so stupid they can’t figure out how to handle something as simple as a vote of delegates? Aren’t these people the “professional political experts” who know everything us “rubes” don’t know about politics? If they are as smart as they are supposed to be, and would like for us to believe they are, why did the convention erupt in the chaos it did? Are we looking at incompetence here or it is something more sinister?
I am having a difficult time wrapping my brain around the developments I saw at the convention. All of this contentious atmosphere could have been avoided by simply following the rules and being fair about how the convention was handled. Instead of fighting and blaming each other why are Republican Party voters not asking these questions of those who caused the problems in the first place, the party “elites”? Are Romney supporters Romneybots who fear a fair hearing for others or are they “useful idiots” being used by establishment insiders with an agenda that has yet to be seen?
Who does this bickering between Romney supporters and Paul supporters benefit? The obvious answer is Barack Obama and Democrats but does it go deeper than that? What happens if all of us get together and support Mitt Romney, and he is elected? Will Romney and Republicans make good on their campaign promises or are those promises more empty hot air to garner votes from desperate citizens scared of a 2nd Obama term? Has John Boehner fulfilled any of the promises he made so we would vote for Republicans in record numbers in 2010?
If you will take a real close and objective look at the promises made by Boehner prior to November 2010 you will find he has done nothing but posture and bleat without really accomplishing anything. We the People have seen repeated votes to raise the debt ceiling; and one continuing resolution after another to keep government funded at the levels established by the Democrats while Republicans blame Harry Reid for not passing a budget. That is like complaining about a drug addict not getting clean while handing him the drugs he uses to stay wasted. Boehner and the Republican Party sit in the shadows, doing nothing, and snipe at Democrats. Obama does nothing to improve our nation yet spends all of his effort blaming George Bush. So, Democrats blame Bush; Republicans blame Democrats; and now the Romney camp will blame Ron Paul if he loses in November. And while all this “blame game” is happening nothing gets done as our nation goes ever faster towards the cliff that leads to the abyss of financial ruin, ending in poverty and slavery for all of us.
Am I the only one who has figured out that neither political party has any intention of fixing what ails our nation? Am I the only one who cares where we are headed as a people? The politicians go right along living the high life off of the taxes we pay to fund their lavish lifestyles, while blaming each other for the problems. Most of the tax money collected goes to government overhead, at the clip of about 72%. They use some of the money, about 28%, to buy the loyalty of illegal aliens, poor people, the elderly, and anyone else they can buy; knowing full well that the goose that lays the golden egg is almost out of eggs. They know we will collapse like Greece in a very short time but neither party is really doing anything to stop it are they? They do nothing to solve the problems, but instead spend their time pointing fingers at each other.
So while we sit and snipe at each other and try to fix blame on Ron Paul, Gary Johnson, John Dummett (www.johndummett.us ), or any one of a dozen others who have a plan to restore liberty and financial stability both political parties and their high dollar financiers go on living life in style and laughing at us peasants fighting over crumbs. What a sight we must be to those who are in control. We the People fight each other while our enemies (Republican and Democrat elitists) sit back, laughing and waiting for the right time to drop the hammer of tyranny on all of us.
When We People should be looking to God for salvation from the evil foisted upon us by political parties most are looking to those same political parties for answers. Way too many people are looking to Mitt Romney to save this nation just as many looked to Obama four years ago. Obama wasn’t the answer then, and Romney isn’t the answer now. Prayer and only prayer will save our nation from the ravages of tyranny that is being brought by the Republican and Democrat Parties.
I hope those who read this will read it several times and get the true meaning of what I write. I would really like some thoughtful answers rather than sniping and name calling. I have posed questions about some serious issues that need thought put into them if we are to find reasonable answers that can be used to correct the situation. Partisanship is not the answer here. I don’t care if you support Ron Paul, Mitt Romney, or someone else, that isn’t the point. We the People are on the Titanic but the politicians aren’t on here with us. They have set themselves above us and have insulated themselves and their friends from the effects of the disaster that we are facing in a very short time if we don’t find some solutions.
I submit this in the name of the Most Holy Trinity, in faith, with the responsibility given to me by Almighty God to honor His work and not let it die from neglect.
In 2007 while he was campaigning for President, Barack Obama called George W. Bush irresponsible and un-patriotic for adding $4,000,000,000,000.00 to the US debt during his eight years in office.
President Obama was correct in his estimation. That has not prevented him, however, from increasing the debt by $5,000,000,000,000.00 in less than half the time it took George W. Bush.
Why does it matter? Why all the gloom and doom about ever increasing debt and deficits? The government can just print more money, so why does it matter?
The problem goes to the definition of the word inflation.
1. Economics . a persistent, substantial rise in the general level of prices related to an increase in the volume of money and resulting in the loss of value of currency ( opposed to deflation).
By definition, increasing the money supply (printing money, now called quantitative easing) is inflation. It is inflating the money supply. Anytime the money supply is increased, the value of each dollar is lessened, causing prices to increase.
Suppose instead of dollars, we traded in slices of pizza. You get paid at the end of the week in slices, and when you go to buy gas at the service station, you pay with slices of pizza.
Now consider the term value. Suppose the value of a whole pizza cut into six slices is what a tank of gasoline costs for your car.
= One tank of gas
All of the sudden, suppose the government decides that pizzas will be now cut into eight slices instead of six. You get paid in slices, remember, not pizzas. The value of things has not changed, however. A tank of gas still costs a whole pie, meaning you now have to earn two more slices to fill up your tank.
= One tank of gas
Each slice is smaller now, and buys less. This also means that if you have loaned the government pizza slices, by buying treasury bonds, the slices you get back when you cash in your bonds are worth less than the ones you lent them. With interest rates kept artificially low, as they are now, it may even mean that the slices you get back including interest will buy less than the slices you lent them.
Since the dollar is no longer tied to anything of physical value, like gold, its value is purely arbitrary. It depends only on the total number of dollars in circulation. As our government continues to spend money it doesn’t have, it has to borrow the difference, either by selling treasury bonds to it’s citizens, to other countries or to the federal reserve. In order for the federal reserve to purchase enough debt to keep the country going without interest rates going up and greatly increasing taxes on everyone, it has to print more money. At some point, price inflation will start to increase rapidly, what is known as hyperinflation. Prices will skyrocket as in the case of Brazil in the early 1990’s. At its peak, Brazil’s inflation rate was somewhere around 4,000%.
In America, we are already seeing prices on food and energy rise rapidly. There is no question that a fair portion of the rise in energy prices is due to the decreasing value of the dollar. As energy prices rise so does the cost of everything else, especially food.
This relation to quantitative easing (printing money) and price inflation can be illustrated quite easily by comparing the value of silver to the value of gasoline. In 1907 an ounce of silver would buy about 3 gallons of gasoline. In 1984 gasoline was about $1.20 per gallon and silver sold for about $8.14 per ounce meaning that 1 ounce of silver would buy about 6.8 gallons of gas. Today gasoline sells for about $3.83 per gallon and silver for $30.27 per ounce meaning that 1 ounce of silver today will buy 7.9 gallons of gas.
By the gasoline example we see that if silver were used as money, the cost of a gallon of gas today would actually be less than HALF of what it cost in 1907!
“Chronic high inflation does not necessarily degenerate into hyperinflation. But, in the five countries reviewed here, hyperinflation did ensue, triggered by an uncontrolled expansion in the money supply that was fueled by endemic fiscal imbalances.”
One of the reasons for Ron Paul’s insistence on a return to sound money is to avoid a hyperinflation cycle brought about by an ever expanding money supply. If we continue to spend money that we do not have at the federal level, we are headed for exactly the kind of hyperinflation which is devastating to the poor and middle class. Simply taxing the rich will not fix our debt and deficit problem. The rich only have enough money to keep our government spending at its voracious rate for several months at best, even if we confiscate ALL their money.
Currently all revenue the federal government receives is spent on mandatory programs, social security, medicare, medicaid, food stamps, welfare and debt service. All discretionary spending including defense, is borrowed money. If we do not deal with the entitlement programs we are doomed to an inflationary spiral that will quickly spin out of control.
The IMF report leaves us with seven lessons to remember about hyperinflation.
Policymakers would do well to bear in mind the seven lessons that emerge from this overview of modern hyperinflations.
1. Hyperinflations seldom materialize overnight and are usually preceded by a protracted period of high and variable inflation.
2. Stabilization may take years if fiscal policies are not adjusted appropriately. Even when fiscal adjustment is implemented, it takes time to achieve low inflation, especially when money is used as the nominal anchor.
3. Sharp reductions in fiscal deficits are always a critical element of a stabilization program, regardless of the choice of monetary anchor.
4. Unifying exchange markets and establishing currency convertibility are often essential ingredients of stabilization, irrespective of the choice of main nominal anchor.
5. Output collapses during, and sometimes in the run-up to, hyperinflation. Although stabilization measures cap the implosion in economic activity, there is little evidence to suggest that they kindle a robust rebound in economic activity.
6. Hyperinflations are accompanied by an abrupt reduction in financial intermediation.
7. Stopping a hyperinflation does not restore demand for domestic money and domestic currency assets to the levels that prevailed before the hyperinflation began. Capital returns to the country when high inflation stops, but dollarization and other forms of indexation dominate financial intermediation for many years.
For those who support the institutionalized “progressive” left’s or Ron Paul’s positions on foreign policy, consider these perspectives expressed in an article posted August 24, 2012 on pravda.ru:
“With the beginning of the Islamic awakening movement in the Middle East, the United States and its allies in the region, fearing the increasing waves of anti-American and anti-Zionist sentiments, tried to insinuate to the world a false interpretation of this movement…
The Zionist regime of Israel has the world’s largest network of state terrorism and has committed numerous crimes in the countries of the region, including the killing of the people of Gaza, the assassinations of resistance forces in different countries and assassinations of nuclear scientists of the Islamic Republic of Iran…
The West is forced to revise its policy of unilateral and unfair support to the Zionist regime. They are well aware that the popular uprisings in the Middle East and North Africa began thanks to Islamic awakening and they have an anti-Zionist character. This region will never reflect Zionist domination in the future…
Today, with the removal of the ruling dictators in some countries in the region that were in legion with the Zionist regime, the people of the region are screaming that the installation of the Zionist regime has no legitimacy on Palestinian territory, even if it is the size of the palm of the hand…
Now, an historic opportunity has arrived, the sovereigns in the world should take advantage and set history in the right direction, take away the invader of the scene and return the homeland to the Palestinians”
These proclamations made by an Iranian ambassador make crystal clear the intentions of the Islamist/Fascist Iranian regime and their allies towards Israel, the United States and Western Civilization. To knowingly and willfully ignore this clarion call to defend the Western/Judeo/Christian world approaches sedition, especially in light of the fact that this statement was published by Russia’s Pravda, almost certainly with the approval of President Vladimir Putin’s Russian government.
When Ron Paul believes that Mutual Assured Destruction will deter Iran from attacking Israel and its western allies, he displays naïveté to the differences between the Communist atheist belief that there is no afterlife and it is in their best interests to avoid the termination of their worldly existence in a nuclear exchange, and an Islamist/Fascist State that reverently believe in the Mahdi, the 12th Imam of Shi’ite lore, and therefore considers it preferable to die as martyrs than to share the planet with the Western/Judeo/Christian world.
It was disturbing enough when the current White House occupant stabbed former Soviet bloc countries turned American allies Poland and the Czech Republic in their backs when he unilaterally cancelled missile defense shield deals they had made with the previous administration. That occupy Oval Office was also so eager to abandon national security in favor of nuclear disarmament that he would voluntarily declassify the number of nuclear warheads the U.S. possesses demonstrates a dereliction of duty on his part as Commander in Chief of the United States of America.
Mitt Romney recently outlined plans that will make America energy independent through development of its own abundant natural resources and less susceptible to an increasingly aggressive Iran’s impact on Middle East petroleum delivered through the Straits of Hormuz.
Romney has consistently condemned Iran for developing a nuclear bomb-capability. When referring to Iranian President Ahmadinejad’s statements against Israel Romney has said “There is one place of course where I’d welcome Ahmadinejad with open arms, and that’s in a court where he would stand trial for incitement to genocide, under the terms of the Genocide Convention.”
Romney also correctly identifies the threat posed to the west by Islamist/Fascist jihad as “the defining challenge of our generation.”
Contrary to the opinion of Ali Mohaghegh, the future of the Middle East is not carved in stone, it is still being written. How the next chapter reads depends largely on who is elected as the next President of the United States.
Texas Congressman Ron Paul has won probably the biggest political victory of his three tenures in the House of Representatives with the passage of HR 459. The bill would allow the GAO to do a full audit of the Federal Reserve System, otherwise known as the Central Bank of the United States.
Paul believes the Fed should be audited because of how much cash it churns out and the fact interest rates have stayed low.
He’s long been pushing for this, but the calls grew louder after a 2010 New York Times article revealed the Fed had given out over a trillion dollars to a variety of sources during the 2008 crisis. Banks like Barclays and Citigroup, along with businesses like General Motors and Harley Davidson all received money. Even some foreign central banks, including Britain and Japan, received cash in hopes of keeping the market stable. Several businessmen, including an aide to Treasury Secretary Henry Paulson, all received loans as well.
Without the taxpayers, or Congress, knowing it had been done.
The banks and businesses who received cash were either able to “’take the money and run’ or realize they were being funded by the federal government, instead of their own cash. To quote, of all people, Senate Majority Leader Harry Reid in1995, “it is taxpayers’ money that is being used.” And the taxpayers had no idea this was being done.
This is extremely troubling and something everyone, not just conservatives and libertarians, should be concerned about.
This isn’t a private company, which can, within reason, do what it wants to with its own money. This is the federal government.
The big question is why people should care about this. For one, it’s your money being used. At a time where the U.S. deficit is 15-trillion dollars and showing no sign of stopping, an audit could show how the books are being kept.
Fed chairman Ben Bernanke, and House Minority Leader Nancy Pelosi, may complain this is “politicizing monetary policy,” but I don’t think so. This is the federal government, which should be held accountable by the people.
Peter Schweizert has already detailed how some Congressmen and Senators have used their power to make personal gains from legislation. An audit of the Fed would reveal whether the same thing is being done by either the reserve chair or members of the Federal Open Market Committee.
The solution now is to lobby the U.S. Senate to take action. Which means calling, emailing and writing them. Several times a day if necessary until it comes up for a vote. The legislature is supposed to represent its constituents. Lobbying Senators can show people actually care about an audit being done.
After all, it is your money. And we need to know what it’s being spent on.