Bunch of Turkeys

A bunch of turkeys have hijacked our monetary system and all they know is how to print money. Rather than let the market clear itself out, central banks continue to use taxpayers’ money to bail out insolvent institutions. This brilliant strategy has NEVER worked in the past and it will not work this time around. Instead of robbing innocent people of their savings, the establishment must allow the weak banks to go bust. For example, if Citibank is on the verge of collapse, then the US Treasury must let it go bust! All Mr. Geithner needs to do is to protect the customers of Citibank, allow Citibank’s investors (shareholders and bondholders) to suffer and sell the bank’s book to another institution. This is all that needs to happen. This way, depositors will not lose anything and only investors in Citibank will suffer – and they should! Why should the public share the losses with these investors? When Citibank did well in the past, did its shareholders and bondholders distribute the profits to the public? Of course not! So, why should the reverse occur now?!

Just throwing good money after bad money only makes the good money worse and more worthless. There seems to be no bottom to the money pit into which we are shoveling the cash which the bankers can't lend because consumers are refusing to borrow it.

Honk

Want to razz the the ignoranmuses who are paying their mortgages on time and yours too? Flaunt this bumper sticker on your governmentally stimulized luxury vehicle.

Obama Puts the Economic Cart Before the Horse

The central tenets of Obamanomics appear to be that access to credit will enable people to borrow money to buy stuff, the spending will spur production and employment, and thus the economy will grow. It’s a neat and simple picture, but it has nothing whatsoever to do with how an economy works. The President does not understand that consumption is made possible by production and that credit is made possible by savings. The size and complexity of modern economies has obscured these simple concepts, but reducing the picture to a small scale can help clear away the fog.

Suppose there is a very small barter-based economy consisting of only three individuals, a butcher, a baker, and a candlestick maker.

Economics simplified by Peter Schiff.

How to Achieve Socialism

Everywhere you look today here in the United States, there is a crisis: Social Security, the drug war, Medicare, Medicaid, the monetary system, the banking system, the financial system, FDIC, welfare, terrorism, immigration. There is obviously a common denominator in all this: the federal government, and specifically its socialist and interventionist (and imperialist) programs.

But we're not supposed to say that. Instead, we're expected to repeat the official mantras that everyone is taught in public school and in state-supported universities: The reasons for all these crises and failures is deregulation, insufficient regulation, the wrong people in office, speculators, greed, OPEC, terrorists, Muslims, illegal aliens, or whatever. We're simply not supposed to even suggest that it's the system itself that is the problem.

The government is micro-managing every aspect of society and it's hard to see that changing as we gaze into our hazy crystal ball. The public is grumpy and muttering under their collective breath but still looks to the new administration to deliver them out of this quagmire and does not seem to realize who put them there in the first place. Are we headed towards Socialism or are we already there?

Obama Budget Has Contingency for More Aid to Banks

President Barack Obama’s first budget request includes a contingency for as much as $750 billion in new aid to the financial industry this year while laying plans for a health-care system overhaul and higher taxes on the wealthy.

The spending blueprint, sent to Congress today, forecasts record outlays for the current fiscal year of $3.94 trillion, up 32 percent from a year ago. That would yield a record deficit of $1.75 trillion in the year ending Sept. 30, equal to about 12 percent of the nation’s gross domestic product, the highest since World War II.

The 111th Congress makes the spendthrift 51st Congress (see previous post) - the first to take the National Debt to $1 billion - look like parsimonious penny pinchers.

51st United States Congress

The Congress was dominated by the Republican Party. It was responsible for a number of pieces of landmark legislation, many of which asserted the authority of the federal government.

Emboldened by their success in the elections of 1888, the Republicans enacted virtually their entire platform during their first 303-day session, including a measure that provided American Civil War veterans with generous pensions and expanded the list of eligible recipients to include noncombatants and the children of veterans. Grover Cleveland had vetoed a similar bill in 1887. It was criticized as the "Billion Dollar Congress'" for its lavish spending and, for this reason it incited drastic reversals in public support that led to Cleveland's reelection in 1892.

Just to provide some perspective, I'd like to point out that this has been going on for a very long time. The 51st United States Congress was the first to incur a billion dollar national debt. The Republicans were spending lavishly and it seems that this was seen as irresponsible by the Amercan people. Quite a change from today when Americans don't care how much Congress spends as long as some of the loot is directed at them.

Stop Intervening in the Economy

Now that the Fed has increased the monetary base, it finds itself under pressure to withdraw these funds at some point. The question, however, is when? If it withdraws too soon, banks' balance sheets collapse, if too late, massive inflation will ensue. As in previous crises, the Fed's inflationary actions leave it compelled to take action that will severely harm the economy through either deflation or hyperinflation. Had the Fed not begun interfering 18 months ago, we might have already seen a recovery in the economy by now. Bad debts would have been liquidated, inefficient firms sold off and their resources put to better use elsewhere. As it is, I believe any temporary uptick in economic indicators nowadays will likely be misinterpreted as economic recovery rather than the result of Federal Reserve credit creation. Until we learn the lesson that government intervention cannot heal the economy, and can only do harm, we will never stabilize the economy or get on the road to true recovery.

The Fed and the Obama administration are unlikely to follow Ron Paul's advice to "do nothing." Many suggest that the best way to deal with hyperinflation, should it arise, is to buy gold now. Some tips on how to buy gold are here.

Further Adventures in the Quantum Wrongness Field, Economic Crisis Edition

But somewhere, in a dark and anxious corner of our minds, we know the truth: hard work and savings are needed to create and sustain prosperity. Constantly going into debt to spend more money than you actually have while closing down productive industries and shipping the work overseas – living like parasites on the savings and labor of other nations – is a sure-fire way to turn a prosperous nation into a poor one. Printing mountains of money from thin air doesn't work either, since each new dollar-from-nothing reduces the value of every existing dollar – exactly why counterfeiting is illegal. For proof, Americans need only look at their own currency, which used to be gold and silver (as the Constitution still requires*), with a fixed rate of roughly $20 per ounce of gold. As this is written, it takes 50 times more dollars to buy an ounce of gold, at $1,000 per ounce. Imagine how much new money was created (and spent or given away by the government – instead of being used by the people for what they might have wanted) to debase the dollar to such an extent, rendering each dollar now almost worthless.

It is worth saying again: Print more dollars, and each dollar loses value.

Glen Allport is concerned about the Fed's lack of respect for the dollar ($) and explains why you should be also.

How the Economy was Lost

US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and America’s ability to finance its trade deficit.

As the American economy eroded away bit by bit, “free market” ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these “old economy” jobs, Americans were lulled with promises of riches.

An excellent recap of the decline of American manufacturing by Paul Craig Roberts.

AmEx paying card holders to close their accounts

American Express Co (NYSE:AXP - News), battered by mounting credit card losses, is offering $300 to a limited number of U.S. card holders who pay off their balances and close their accounts, the company said on Monday.

"We sent the offer out to a select number of card members," said Molly Faust, a company spokeswoman. "We are looking at different ways that we can manage credit risk based on the costumers overall credit profile."

The company did not say how many card holders would receive the offer and did not disclose the total of their card balances.

AMEX is losing interest [bad pun intended] in responsible card holders who do not maintain a balance and thus pay no interest each month.

A Nation of Cowards

The bottom line is that the civil rights struggle is over and it is won. At one time black Americans didn't share the constitutional guarantees shared by whites; today we do. That does not mean that there are not major problems that confront a large segment of the black community, but they are not civil rights problems nor can they be solved through a "conversation on race." Black illegitimacy stands at 70 percent; nearly 50 percent of black students drop out of high school; and only 30 percent of black youngsters reside in two-parent families. In 2005, while 13 percent of the population, blacks committed over 52 percent of the nation's homicides and were 46 percent of the homicide victims. Ninety-four percent of black homicide victims had a black person as their murderer. Such pathology, I think much of it precipitated by family breakdown, is entirely new among blacks.

If Attorney General Eric Holder wants a conversation on race, he needs to begin it by conversing with Dr. Walter Williams.

Dogbert at the Bailout Hearings

How the Detroit Three CEO's should have responded at their bailout hearings.

Gold in the Art of Bread Consumption

Well, this is supposed to be the reason for all of this massive, new, unprecedented, astonishing, astounding economic stimulus spending; it supposedly bails out debtors through the brain-dead expediency of inflation in prices, thus aiding debtors at the expense of everybody else!

Whether or not this theory is true, I don’t know, but I don’t think so, as I have never read anything like, “From the moment that the government started creating and spending large amounts of money, everything got better and better, and the more money that was created for the government to spend, the better things got, until they reached Utopia and everybody lived happily ever after.”

The irascible Mogambo Guru offers investment advice with a distinctive flair.

On Transparency of the Fed

The Federal Reserve controls the flow of money and credit in our economy because Congress has abdicated its responsibility over the nation’s currency. This process therefore occurs centrally, and almost completely outside the system of checks and balances. Because of legal tender laws, people are left with no real choice, except to build their lives and futures around this monopoly currency, vulnerable to powerful central bankers. The Founding Fathers intended only gold and silver to be used as currency, however, inch by inch over the decades, this country has backed away from this important restraint. Our money today has no link whatsoever to gold or silver. For many reasons, this is extremely dangerous, and has a lot to do with the boom and bust cycles that have resulted in the crisis in which we find ourselves today.

What is going on at the Fed? No one knows, not even Congress.

Michael Phelps and Heath Ledger

Question of the day: Why is that Heath Ledger, who died from abuse of toxic prescription medications, is being lauded as an artist and a legend while Michael Phelps, who took a hit of marijuana from a bong with no apparent physical detriment, is being portrayed as a loser?

Theft By Government

In the US, the common enemy chosen to deflect blame and attention from failed policies and economic collapse is capitalism.

Question: How does con man Bernie Madoff differ from the state of California?

Answer: Bernie's victims surrendered their life savings voluntarily. In California, the victims' money was taken under threat of force by the IRS.

As pundits, politicians and the media focus America's wrath on Bernie Madoff for conning willing dupes out of over $50 million bucks, the same scam carried out by elected government officials in both Kansas and California goes virtually unnoticed.

Key quote:

If an individual fails to return investor's cash, it's called fraud. If a private business defaults on its obligations, it is forced into bankruptcy. If a government entity runs out of cash, it's called business as usual.

Business as usual also requires quick action to find and/or manufacture a scapegoat to deflect blame and focus attention away from the problem.

The American Tradesmen: Weary Cogs in the Engine of the American Empire

"What goes on in the gilded halls of our government has nothing to do with my own life," many no doubt thought to themselves in the smug years of the past two decades. This sentiment led many to the false idea that every individual American was the sole master of his own destiny – that each man could "do anything" with his life if he simply worked hard enough, got a college degree, or started a small business. It also led to the equally false idea that government spending for war and welfare is irrelevant to the enterprising individual American, and that he need never worry that his life’s work could be wrecked in an instant by inflation by the Federal Reserve.

These ideas have now been exposed as mere fantasies engendered by years and years of artificial prosperity financed through government debt and money creation. The veil of artificial prosperity has finally been lifted, allowing many to see for the first time the awful costs of our imperial government. [Emphasis added]

The government is imposing a policy of inflation to disguise the ruinous disaster they have created in the economy. The dollar, already inflated to only 3% of the value it had when the Fed was created in 1913, will suffer an ignominious decline when the flood of newly created money begins circulating.

Ron Paul's Weekly Report - February 20, 2009

Trying to weather the crisis by saving a little, living within your means and paying your mortgage on time? Uncle Sam wants you - or rather, your money to help your profligate neighbors who took on more debt than they could afford and bought homes they can't pay for. You do want to sacrifice don't you?

What You Must Read About the Great Depression

In the present recession, advocates of government intervention often evoke the specter of the Great Depression. Unless the government intervenes massively, we are told, we risk an economic collapse comparable to that of the 1930s. To see the fallacy of this claim, it is imperative to understand that government intervention both led to the Depression and prevented recovery from it. The following books, I hope, will assist those interested in grasping what happened in this vital historical era...

Some recommended reading for the economist in you.

"Something Must Be Done"

[A]lthough most Americans are skeptical the "stimulus" will work, there is still a widely held fear that doing nothing is a greater danger. And in the mainstream media, with few exceptions, discussion of how government might have helped bring on the problem in the first place is pushed aside as irrelevant.

Does this sound familiar? It is in many ways similar to the political atmosphere following 9/11.

The Bush administration used the terrorist threat to America as a pretext to expand government at home and abroad at a staggering pace. Within a couple months of 9/11, the U.S. had begun an open-ended war and occupation in Afghanistan. The Patriot Act was passed by Congress and the Fourth Amendment gutted with no time for real debate. Immigrants and citizens were arrested without due process, prisoners of war began arriving at Guantánamo, the White House adopted frightening doctrines on executive power and the stampede to war with Iraq was underway.

The current economic mess was caused by the Fed with the compliance of Congress. They have, with the supplicant mainstream media, successfully shifted the blame to Wall Street, bankers, CEO's, capitalism, free markets, the rich, the greedy and the parsimonious, penny-pinching shoppers who won't buy all those pretty geegaws in the store windows.

Taxpayers Revolt Against Gimme-Mania

The new Boston Tea Party is here, baby, and it's doused in barbecue sauce.

The first revolt took place on Presidents Day in Smurf-blue Seattle, where mom-blogger Keli Carender hastily organized a downtown demonstration to oppose what they called the "stimulus rip-off." A motley band of nearly 100 protesters -- moms and their kids, college students, libertarians, taxpayer groups, GOP activists -- raised their voices and dined on pulled pork (donated by yours truly). They assailed both the substance of the overstuffed stimulus package and the short-circuited, nontransparent process by which it was passed.

Some wore pig noses. Others waved Old Glory and "Don't Tread on Me" flags. Their handmade signs read: "Say No to Generational Theft"; "Obama'$ Porkulu$ Wear$ Lip$tick"; and "I don't want to pay for the SwindleUs! I'm only 10 years old!"

A glimmer of rebellion? Let's hope so but we're not convinced that it wasn't more about the barbeque than revolution. This wasn't a big deal on the mainstream news or maybe I just wasn't paying attention during the Obamathon coverage and the breaking news on A Rod's 'roids.

Ready for the Shovels

All we can do is marvel, and guffaw, at things so absurd they take our breath away.

In the bubble era people spent too much money they didn’t have on too many things they really didn’t need. Then came the credit crunch. Now, they hallucinate that if they spend even more money they don’t have, on things they hardly even want, they will get what they really need - jobs, growth and inflation. Even respected economists say they believe in miracles. Resources have been made “idle” by the depression, they claim, like strong backs in an unemployment line. Government spending is just putting them to work. By this reasoning, things that were too expensive even in the boom years miraculously become cheap at any price. And things that weren’t worth spending money on in the fat years become miraculously indispensable in the lean ones. It is like a man who didn’t care for caviar when he had a good job; now that he is unemployed, he must have it every night.

They say the stimulus hasn't kicked in yet. Just wait till all that money gets spent they say. In the meantime, Bill Bonner says "duck and cover."

Predatory Legislators

Had lenders exercised better judgment and had borrowers avoided overly burdensome debt loads, both parties would clearly be in better financial positions today. Instead, as borrowers were demanding the credit to fuel their dreams of instant real estate riches, lenders were being ordered to accommodate them.

In past generations, homebuyers were required to save for down payments and postpone their purchases until they could actually afford conventional 30-year fixed mortgages. But in recent years, as home ownership became a matter of public policy, the government accused lenders of discrimination and urged lower standards and easier terms. With government guarantees in place, the mortgage industry was happy to both expand their revenues and promote a better society.

Politicians, in their zeal to "put a chicken in every pot" and thus acquire votes they might not otherwise procure, legislated lenders into providing loans to poor credit risks ( we call them subprime loans now). Now that the chicken has come home to roost, these same politicians are castigating these same lenders for getting us into this mess and, at the same time, providing them with loot and demanding they do it again - i.e.; make more loans available to people who can't afford to borrow it. Trouble is, lenders, having learned their lesson, are looking for responsible borrowers now and most responsible people - unwilling to take on more debt - are busy paying off debt and saving what little excess income they can muster. Thus politicians, intent on encouraging irresponsible spending, are finding themselves confronted with a wiser, less gullible and more responsible populace. Never fear though because, if the people won't borrow and spend, the Fed and the Obama administration will.

Look Behind the Curtain

Glenn Beck uses humor - you gotta laugh to keep from crying - to explain the metamorphosis of the banking system from the simpler times of It's a Wonderful Life to the convoluted chicanery which has been engineered by the Fed with the willing collusion of Congress.

A Practical Foreign Policy Agenda for Obama

The Obama administration is debating what to do in Afghanistan. Washington and Iran are moving towards some form of dialogue. Withdrawal plans from Iraq are being prepared. In today's challenging world, what should the Obama administration do?

Withdraw. Not into isolation, since the U.S. always has been a trading nation, with Americans involved around the world in humanitarian, cultural, and economic activities. But withdraw from controversies of no great concern to Americans, withdraw from conflicts better handled by other states, withdraw from alliances where Washington's friends can defend themselves.

The Obama administration should start with Europe.

The U.S. empire cannot be sustained. If we will not voluntarily relinquish our footholds on foreign soils now, we will find ourselves unable to afford them later. Kyrgyzstan is giving us the bum's rush out of their country - we should be grateful for the assistance.

Remembering the Dawn of the Age of Abundance

All of this hunkering down has stopped the great churning, the buying, selling and buying that was at the heart of our prosperity. In private equity firms, the churning was life. They bought a company, removed the fat, sold it at a profit, and bought another one. They kept moving. That's over. No one is buying now, and no one can sell.

Perhaps the biggest factor behind the new pessimism is the knowledge that the crisis is not only economic but political, that we'll have to change both cultures, economic and political, to turn the mess around. That's a tall order, and won't happen quickly. One thing for sure: Our political leaders for at least a decade, really more, have by and large been men and women who had fortunate lives, who always seemed to expect nice things to happen and happiness to occur. And so they could overspend, overcommit and overextend the military, and it would all turn out fine.

I think most people know that it's time to hunker down - except our political leaders. They're still spending and deploying troops and buying up toxic assets. The hole is getting deeper but they're still digging.

The Great Obama Lie: “Where’s the Shared Sacrifice?”

If it isn’t all about politics, how do you explain that Obama has not asked teachers to sacrifice a thing? Or college professors. Or federal government employees. Or state and local government employees. Or union members. As the old lady in the Burger King commercials might have said, “Obama, where’s the shared sacrifice?” Because I don’t see any sacrifice coming from Obama’s side of the table. While 50 states are in recession, guess whose economy is still booming? The District of Columbia. The hiring and spending of government goes on unabated during this unprecedented economic crisis. So where’s the sacrifice in D.C?

Wayne Allyn Root dares to confront the "third rail" of politics - government spending on vote producing blocs.

Guns and the Constitution: A legislator finally 'gets it'

New Hampshire state House Representative Daniel Itse has stirred the political pot with his bill, House Concurrent Resolution 6: “A RESOLUTION affirming States’ rights based on Jeffersonian principles”, under which New Hampshire would secede from the United States if the federal government attempts additional usurpation of power under five specific circumstances, including “Further infringements on the right to keep and bear arms including prohibitions of type or quantity of arms or ammunition…”

Secession is proposed by a New Hampshire politician. States' rights is an issue which has been ignored by most. The federal government taxes the states then redistributes some of the money to other states as long as they meet the standards imposed on them by the federal government. Thus, Floridians are paying for highways and schools in say, South Dakota. Floridians may cry "foul!" but South Dakotans are silent. When Floridians get too testy, the government takes some funds from Delaware to placate them and keep them in line. It goes on and on.

Bad Advice?

Through the years we've been told to have faith in the stock market. "Buy good stocks and hold them for the long term," said the experts. "There may be dips from time to time, but you'll come out ahead in the long haul."

The experts also advised us to stay away from gold. "Terrible investment. Doesn't pay interest or dividends. There's the expense of storing it....yada, yada, yada."

Adjusting for inflation over a 9 year period, we discover this: The Dow Jones Industrial Average is down 50.9 percent from its high of January 11, 2000. The price of gold is UP 161 percent from the same day. Perhaps there's something to be said for holding gold for the long term?

(NOTE: We think it's a mistake to think of gold and silver as investments. . But for more than 5,000 years these precious metals have done a good job of preserving purchasing power over long periods of time. An ounce of gold today buys approximately the same number of loaves of bread as it did 80 years ago.)

We often look to JW for insight when the economy is in turmoil. He has been uncannily accurate over the years. He describes himself as a curmudgeonly, albeit friendly, libertarian with a small "l". You can tune in at wrisley.com.

Tooth Fairy Economics

Consider a circus that comes to town for a few weeks. A restaurant owner may expand his seating capacity in the false expectation that the circus and the related demand for his food that it brings in its wake will last forever. But when the circus leaves town, he'll find he has "idle resources" on his hands. We should not want to put these idle resources to work. Doing so would only draw labor and other resources away from other sectors of the economy, where they are employed in the satisfaction of real consumer demand. The expansion of the restaurant should not have occurred in the first place. We should want this bubble activity to shrink back down to size, in order that other, non-bubble activities in the economy can be correspondingly strengthened.

The analogy of a circus is apt. The irony is that the real circus is in Washington, D.C. and, so far, it refuses to leave town.

Mexicans Dying in Our Drug War

What if I mentioned that thousands of people have been killed – 7,337 at last count – since 2007 in open warfare just a short drive from here? Or that the grisly violence has reached close to areas within the readership of this newspaper? What if I noted that the violence has altered the lives of many of our neighbors, friends and co-workers, who have family members who dwell in the heart of the war zone? What if I added that, because of this war, we place our lives in jeopardy by simply visiting some of our favorite vacation spots? Would that cause you to think twice about your foreign-policy priorities?

I am referring, of course, to Mexico...

There is not much coverage on the news outlets about this issue. The problem is, of course, our second attempt at Prohibition - the War on Drugs. The attempt to impose restrictions on the personal choice to use or not use drugs has been expensive and violent. And it is spreading.

Jindal Signals Louisiana May Not Take Stimulus Money

Louisiana Governor Bobby Jindal, a potential 2012 GOP presidential candidate, has suggested his state may not be interested in all of the roughly $4 billion allotted to it in the economic stimulus package to be signed by President Obama today.

"We'll have to review each program, each new dollar to make sure that we understand what are the conditions, what are the strings and see whether it's beneficial for Louisiana to use those dollars," Jindal said.

Hmmm. Mark Sanford in SC and now Bobby Jindal in LA. Are they crazy or are they the only two rational governors?

The Left in Power

The Left has been lying in wait for its chance. As the Obama people entered the White House, it was as if they found a closet labeled "failed ideas of the past." They opened it and the contents spilled everywhere. They started grabbing things and putting them in the regulatory books and in legislation.

What an amazing pile of junky, worn-out, bogus policy ideas! Equal pay for equal work. Infrastructure spending. More money to the public schools. Socialized medicine. Rock-bottom interest rates. Welfare! Every wish granted by government. Down with business. Down with business failures. Curbs on fat-cat pay. Down with Wall Street. Turn on the money spigots. Expropriate the expropriators. Subsidies for every lifestyle that flies in the face of bourgeois prejudice.

The hodge-podge of cures being proposed by the Obama administration is examined by Lew Rockwell.

Economic Miracle

But what is the driving force that explains how millions of people manage to cooperate to get 60,000 different items to your supermarket? Most of them don't give a hoot about you and me, some of them might hate Americans, but they serve us well and they do so voluntarily. The bottom line motivation for the cooperation is people are in it for themselves; they want more profits, wages, interest and rent, or to use today's silly talk -- people are greedy.

Dr. Williams appoints you as 'tuna czar' to illustrate the complexity of the marketplace. He explains why greed, the vice politicians love to villainize, is actually the driving force of most human endeavors and a necessary component of our economy.

Government: A Successful Failure

The tragedy is that so many people believe government will be successful. This false hope that economic problems can be remedied by more "emergency" government edicts will prove futile. Such naïve beliefs deny the fundamental economic axiom of cause and effect. To believe that government’s bailing out of failing firms today, vastly expanding its accumulated public debt, consuming unprecedented quantities of taxpayer wealth with boondoggle projects, and debasing our currency by monetizing debt will lead to a prosperous economic future is a chimera of the first order.

Is there any solution to today’s economic problems? Of course, but it won’t happen.

So, what is the answer? I think most people know what needs to be done but they don't want to accept it. Instead, they are hoping the governmental solution will save the day. It won't but we're going to try it anyway. You know the answer, don't you? Hint: It's not bailing out failure and spending money we don't have.

Metrics of National Decline

Since 1982, the United States has run $5.7 trillion in trade deficits in manufactured goods, and $2.1 trillion in trade deficits in auto parts, trucks and automobiles. In the Bush years alone, the United States ran more than $1 trillion in trade deficits in auto parts, trucks and cars.

These statistics, these realities -- factories closing in the United States, manufacturing jobs being outsourced in the millions to China and Asia, enormous, endless trade deficits in goods -- testify to a painful truth: America is a receding and declining world power.

And in dealing with this systemic crisis, Obama's stimulus package is as irrelevant as were the Bush tax cuts.

Any suggestions for returning America to a productive nation? Maybe we should quit stimulating and, instead, remove taxes and harmful regulations on American businesses, both small and large. Maybe we should incentivize American companies instead of foreign companies. Maybe we should let Americans keep more of what they earn. And maybe we should drastically reduce government spending at home and overseas.

On Reinstating the Draft

Much has been made by the new administration of the idea of national service and volunteerism. While service to one’s community is certainly admirable, it is not the federal government’s place to “encourage” or promote volunteerism. Moreover, there are troubling signs that national service could transition from voluntary to mandatory, or de facto mandatory, such as the requirement of service in order to be granted a diploma, or something along those lines.

Involuntary servitude was supposed to be abolished by the 13^th Amendment, but things like Selective Service and the income tax make me wonder how serious we really are in defending just basic freedom. The income tax enslaves workers for nearly 4 months out of a year by garnishing what amounts to all their wages in that period of time. A military draft could demand your very life, without your consent. This should be unthinkable in a free society.

Just as we should have seen what was coming when George W. Bush said he believed in "compassionate conservatism", we should be very suspicious when Barack H. Obama says he wants us to "volunteer" to help advance his ideas. Here's an idea: the government should work for us and not the other way around.

Cut Taxes for the Right Reasons

Let me be clear: I wholeheartedly agree that it makes much more sense for the government to cut taxes, rather than spend money, in order to improve the economy. But what I have been arguing is that the reason for this superiority is not, "Let taxpayers spend money and create jobs rather than the politicians." But if job creation from spending is a bad argument, what are the valid reasons for supporting tax cuts?

First is the simple moral argument. That money was earned by the taxpayers, and so prima facie it is always a good idea to take (i.e., steal) less from them.

Second there is an incentive argument. Especially if the tax reduction comes in the form of lower marginal rates (rather than lump-sum rebates), then individuals have the incentive to produce more. Notice that this is the exact opposite of the standard Keynesian analysis. In other words, the pragmatic argument for tax cuts isn't to give consumers more money to go buy stuff, but rather it's to give producers the incentive to go make stuff.

Tax cuts return stolen loot to the rightful owners. Government, an honest government (I know, I know), would have to cut spending accordingly in order to keep the budget balanced.

Reality Intrudes on the Drug War

The War on Drugs is a Failure.

Mexico is in the throes of a virtual civil war. Last year, some 6,000 people died in drug-related violence, and already this year, another 2,000 have perished.

Illegal workers are not the only migrants across our southern border. "U.S. authorities are reporting a spike in killings, kidnappings, and home invasions connected to Mexico's murderous cartels," the Associated Press reports. "And to some policymakers' surprise, much of the violence is happening not in towns along the border, where it was assumed the bloodshed would spread, but a considerable distance away, in places such as Phoenix and Atlanta."

Politicians measure the success of their drug prohibition laws by the increase in the prison population, not by the costs in money, lives, and liberty. If they are judged by this standard, the War on Drugs, having imprisoned thousands for victimless transgressions, would be a rousing success.

Gov. Mark Sanford vs. 'The State'

In one corner we have S.C. Governor Mark Sanford who is opposed to accepting "stimulus" money. In the other are the editorialists at the State Newspaper who are angry with Sanford for not conducting the affairs of the governor's office the way they wish.

S.C. Governor Mark Sanford: "Historically, simply throwing government money at a struggling economy hasn’t created growth. It certainly didn’t in Japan during the 1990s, when the Japanese government initiated no fewer than 10 stimulus packages over eight years. Instead of fortifying the economy, government intervention led to what is often referred to as 'the lost decade,' a time when Japan’s unemployment rate more than doubled. "Supporters of the current plan like to point to the New Deal as a model, declaring that FDR’s massive government expenditures dragged this country out of the Great Depression. But the data points just don’t back that up. The Depression kicked off with the stock market crash of 1929. Ten years and billions of taxpayer dollars later, unemployment was stuck at 20 percent."

(Columbia, SC) STATE Newspaper "Nobody welcomes the idea of more federal borrowing. There's nothing attractive about having to balance the state budget with federal money - particularly one-time federal money. And frankly, Congress made a lot of bad decisions in the stimulus package, but it's the only game in town. "The federal law allows the legislature to request the money even if the governor won't, but the blood is so bad that some lawmakers worry Mr. Sanford will trump this provision by requesting the money but refusing to let it be spent. We cannot believe the governor would act so irresponsibly. He [should] request the money so the legislature can include it in next year's state budget." The State newspaper vs. Sanford debate is a continuing feature at www.thestate.com

The editorialists at the local newspaper are Keynesian in their view of economics, while Governor Sanford appears to have read von Mises, Hayek, Hazlitt and the others of the Austrian school. Sanford claims that piling up unpayable debt led us to the present crisis and going more deeply into debt is not the solution. The editors agree we're in a peck of trouble but want the temporary fix that may come from heaping trillions of dollars of debt on future taxpayers. Our personal opinion is South Carolina's governor has a far better view of the danger of excessive debt than the editors.

Another observation on the passing parade from JW at Wrisley.com

Grant No Man the Authority to Make You His Slave

When a government is installed by the voting majority it imposes a tribute upon all, known as taxation. Confiscations of property and imprisonment await those who refuse to pay voluntarily. Taxation, administered in this manner, is clearly theft. Morally, you have no right to be a co-conspirator in the aggressing and extorting of monies, or properties, or in the forced conscription of your own or your neighbor’s children being compulsorily sent to “school.” If you vote to sanction the unsanctionable, to legitimize the illegitimate, you criminalize yourself. And does your vote really matter (except as evidence that you accept the governmental system)? You only exchange one candidate for another, while the tyrant (the institution of government) remains the same!

Some antiquated thoughts on the meaning of liberty and freedom. It's quite impossible for many of us to understand why people once had such rebellious and revolutionary ideas.

The Nanny State

The war on drugs is another of the government’s bogus wars that we are all too familiar with. It, more than anything else, is responsible for the rise of a police state in America. It has also resulted in a prison state. The United States, with less than 5 percent of the world’s population, has almost a quarter of the world’s prisoners. The United States has one of the highest per-capita prison populations in the world. One in 32 American adults is in prison, on probation, or on parole. Yet more than half of all U.S. prisoners are incarcerated for low-level drug offenses.

The nanny state is at its prime when it comes to monitoring consensual behavior that some people find objectionable, e.g., gambling, pornography, and prostitution. Since I live in Pensacola, Florida, I will give some examples from incidents that happened here within the last year.

Our reliance on the government is evident in all walks of life. We have transferred our responsibilities and freedoms from ourselves to the state. Laurence M. Vance provides some examples.

Missing the Point and Asking the Wrong Questions

The principles of small government and fiscal conservatism have been abandoned to such an extent by America's de facto conservative party that it is no longer the default position of the party to reject on its face legislation that is hostile to the concepts of economic liberty and fiscal responsibility.

Watching news coverage of the euphemistically-titled "stimulus" bill being rushed through Congress, I was struck by something perhaps even scarier than the atrocity of the legislation itself. It was the utter and complete lack of ideological opposition to the bill in concept and principle. The Republican party, ostensibly the party of small government fiscal conservatism, failed as a collective body to question the fundamental assumptions and spirit of the bill on ideological grounds. Republican leadership is both missing the point and asking the wrong questions.

Patrick Mulligan gets it. Key quote: Republican opposition was confined to levels of degree while fundamental assumptions and ideologies were not questioned, and in fact taken for granted. The Republican party (notable exceptions being Ron Paul and S.C. Governor Mark Sanford) has essentially abandoned the concepts of liberty, freedom and small government and accepted Keynesian policies as their economic platform.

To Alter or Abolish

Note: The following letter was found left behind at a local drinking establishment; the authors' identity is unknown. It is passed along without comment.

"That whenever any form of government becomes destructive of [life, liberty, and the pursuit of happiness], it is the right of the people to alter or abolish it…" ~ Declaration of Independence of the American Colonies, 1776

Dear Federal Government,

Drop dead.

Excuse us. Some may consider such bluntness to be indecorous, but why beat around the bush? In any case, we've been around this bush (Bush?) too many times to count already. It's time to let you know what we really think of you, what we say behind your back, what we whisper to each other when you leave the room.

Read the rest, if you dare...

Into the belly of the beast

It's no wonder lovers of limited government and fetishists for free markets are moping like dogs whose food bowls have been moved. Alan Greenspan has repudiated capitalism. George Bush paid for Barack Obama's expansion of government with the proceeds from a fire sale on his last remaining free-market principles. Not only are we nationalizing the banks, but the legislators overseeing the banking industry regulate about as well as I play the left-handed harpsichord. Christopher Dodd, chairman of the Senate Banking Committee, who got a sweetheart mortgage from Countrywide and carried water for Fannie Mae like Gunga Din, should be testifying before his own committee in an orange jumpsuit in exchange for early release. Instead, he's spewing righteous indignation about the malfeasance of the people who used to buy him lunch.

Meanwhile, a bunch of banking CEOs appeared before the House Financial Services Committee this week. Don't get me wrong: These executives should be holding cardboard signs on the side of the road these days ("Will Float Derivatives for Food"), but they at least know what they're talking about. One congressman after another berated the CEOs for making bad loans and having shaky balance sheets. Fair enough. But they also berated them for not using bailout money to make more bad loans, which would keep their balance sheets shaking like Keith Richards at a detox spa.

Another rant about the stimulus package. We don't believe deficit spending during a depression bodes good tidings. The money will go mostly to dead end jobs and projects to nowhere. We fully expect Congress and the administration to lament that we didn't do enough and call for more spending. The money pump will run dry and all the king's men will not be able to prime it again.

Why the Stimulus Plan Won't Work

[T]he government can't inject money into the economy without first taking money out of the economy. Where does the government get that money? It can either borrow it or collect it from taxes. There is no aggregate increase in demand. Government borrowing and spending doesn't boost national income or standard of living; it merely redistributes it. The pie is sliced differently, but it's not any bigger.

Stimulus packages—and present or future tax increases that fund government spending—end up burdening the economy. Such was the case in the 1930s, during World War II, and in 1990s Japan. Thankfully, the 2001 and 2008 tax rebates, while ineffective as stimuli, didn't make things worse.

If politicians actually want to do something cost-effective to solve our economic woes, here's some advice: Stay away from spending increases and tax rebates. Instead, focus on real incentives to stimulate work and investment, such as cutting everyone's marginal tax rates, slashing payroll taxes for employees and employers, and ending the corporate income tax.

It is too late to offer alternative solutions for the spending spree bill since Congress has passed it and the President will sign it as soon as he gets back to Washington. It will then be the law of the land. Yikes!

What if the American People Learn the Truth?

UPDATE from Charles Burris:

This is one of the most powerful messages ever delivered by anyone on the floor of the United States House of Representatives.

Congressman Ron Paul's searing series of questions cuts through the lies, evasions, fabrications, and untruths at the heart of the regime.

This four minute statement is the courageous summation of all he seen and spoken of in his over thirty years as the conscience of America.

For how long and at what dire peril can the nation continue to ignore these long festering buried truths he exposes?

I have never been more proud to be a supporter of Dr. Paul than after hearing and seeing him today.

Thanks to Lew Rockwell for making us aware of this crucial moment in the history of the Republic.

Dr. Paul questions governmental policies. This is a "must" view video unless you believe Obama will save us all. If you believe that, just sit back and relax because everything is going according to plan.

Dollar Inferno

Roosevelt attacked the court itself. He argued that “nine old men” should not be allowed to stop progress. He tried to pack the court with more justices ready to do his bidding. This was too much for Congress to swallow; even his vice president was against it. The amendment to increase the number of Supreme Court justices failed.

But then, the old men themselves failed. They died. And as their mortal envelopes got packed in the dirt, new justices were appointed – such as Felix Frankfurter and William O. Douglas – who were willing to go along.

This time there is practically no resistance. President Obama enjoys support, both wide and deep. The public is behind him. Congress is on his side. And the courts have long since given up trying to limit the power of the federal government.

Everyone wants something for nothing. And everyone believes he can get it from the feds. As a result, we’re looking at trillion dollar deficits – as far as the eye can see.

Government is worried about deflation, especially housing, so it is propping up prices with inflationary spending and debt. Bill Bonner warns that the fiat dollar can not withstand the pressure of the massive tide of dollars about to be unleashed by the Fed and that inflation - massive inflation - will result. To misquote Bette Davis, "Fasten your seatbelts. We're in for a bumpy ride."

What the devil is "fiat money" anyway?

Some economists make a big deal about our fiat currency. What the devil is "fiat money" anyway? It means the Federal Reserve note in your wallet is money only by government decree. It's a piece of paper of no value itself. It can be swapped for something of value only because the government declares it "legal tender."

Until 1963 that note was "fiduciary money." It, in itself, had no value - but it could be redeemed in "lawful money" of intrinsic value at anytime.

"Commodity money" is the stuff that once backed up the paper. Richard Nixon removed the last connection to it on August 15th, 1971.

The Founders defined the U.S. dollar as 371.25 grains of silver. Today the dollar is only a computer blip or a piece of paper. (Circulating coins have some intrinsic value, but not much.)

A little nugget clipped from Wrisley.com

We Got Our Stimulus! Yes We Can!

The It's A Bumpy Road website has been getting a lot of attention lately and we're proud to announce, pending an almost certain passage, that we will receive $10,000,000,000 in the spending spree bill. Look here to see the program which is buried in Title III, Subtitle A. Look here if you want to be stimulated too.

Is 'Octomom' America's Future?

A moment last Monday, just after noon, in Manhattan. It's slightly overcast, not cold, a good day for walking. I'm in the 90s on Fifth heading south, enjoying the broad avenue, the trees, the wide cobblestone walkway that rings Central Park. Suddenly I realize: Something's odd here. Something's strange. It's quiet. I can hear each car go by. The traffic's not an indistinct roar. The sidewalks aren't full, as they normally are. It's like a holiday, but it's not, it's the middle of a business day in February. I thought back to two weeks before when a friend and I zoomed down Park Avenue at evening rush hour in what should have been bumper-to-bumper traffic.

This is New York five months into hard times.

Have you noticed? The signs of the depression are all around us. Stores are closing. People are staying home except for necessary excursions to the grocery store and to work if they still have jobs. Nowhere is this more obvious than Manhattan. Peggy Noonan reflects on the changing times.

How I Learned About Austrian Economics

No government money should be or needs to be spent on windmills or whatever passes for renewable energy these days. The government is so smart that it filled the strategic oil reserve with millions upon millions of barrels of high-priced oil that has now crashed in price. The government cannot pick winners in energy and it can’t keep up with changes in energy markets and technology. It is total foolishness to think it can. The stimulus bill contains several health provisions that will remake the face of American medicine by controlling what doctors prescribe and their medical treatments. There are no long-term benefits in that direction, only very high costs, when older patients begin to be denied treatments, even when they are willing to pay for them out of their own pockets. At that point, I expect we will need one or more Samuel Adamses to create Committees of Correspondence. I have read that the stimulus bill commits more funds to education than the sum of the past ten years. Whatever the figure is, it is too big by its total amount. The government cannot produce high-quality education any better than it can maintain levees or bring aid to the inhabitants of New Orleans.

Michael Rozeff is really miffed!

Goodbye! Fred

Fred Reed is one of our favorite scribblers on the web and now he is saying Goodbye! I hope he reconsiders and I'm not the only one. Fred has threatened to retire before but he couldn't keep his yap shut and returned to help us keep the silliness and craziness in perspective. Whatever he does in the future will be with our thanks and best wishes.

Capitalism Needs a Sound-Money Foundation

Let's give the Fed some competition. Abolish legal tender laws and see whose money people trust.

Let's go back to the gold standard.

If the very idea seems at odds with what is currently happening in our country -- with Congress preparing to pass a massive economic stimulus bill that will push the fiscal deficit to triple the size of last year's record budget gap -- it's because a gold standard stands in the way of runaway government spending.

A call for honest money - from someone other than Ron Paul - in the Wall Street Journal.

CHUCK SCHUMER IS PROBABLY RIGHT

At first when I heard him say this windbag say that Americans really don't care about these "porky" amendments, I was irate. And for anyone who is reading this right now, or a regular talk radio listener, you are probably irate as well.

Then I stop to think for a bit. After all, Schumer is talking about the masses of government-educated people? Haven't I been saying some of the same things about these dumb masses for years? If you think that government is your savior, why worry about pork? Maybe the biggest thing the American people are worried about is that the pork will be spent somewhere else. Nobody seems to oppose a government spending program that puts someone else's money into their pocket.

Don't believe it? Look here - and here. Hard work is so (early) 20th century. Why work when government will give it to you?

Stop worrying and embrace the debt

January 8, 1835. Andrew Jackson had tamed the beast and done the impossible when the National Public Debt hit zero, at the stroke of midnight. Nothing. Nada. Zilch. Debt-free.
The next day it was off again, never to return.

Sixty five million dollars when Lincoln took office; one billion when Picket charged at Gettysburg; 2.7 billion at the last shot of the war in Ford's Theater; 26 billion when Gatsby gazed at that light across the bay; and 43 billion as the Panzers clawed across the Meuse.

When Wally and Beaver trotted off to school - 260 billion; John, Paul, George, and Ringo ... 300 billion USD. One small step for man, one giant leap to 400 billion. Ronald Reagan, uber conservative, one trillion dollars in National Public Debt. George Bush Jr, in - 5 trillion dollars; George Bush Jr, out - 13 trillion Dollars. Barack Obama, in ...

A brief history of the policy of perpetual debt employed by government.

The Stimulus of Abominations

It is that these people of the state, their rhetoric, and their policies, are not directed toward creating a sound and real foundation for growth in real incomes. Their policies are based on extracting resources by force from the productive and using them to build a flimsy straw house that will collapse with the next wind. They offer nothing to encourage saving. In fact, they burden the saver and the productive. Since saving is the source of investment, they offer no fuel for entrepreneurial activity. Since entrepreneurs are the source of employment, they offer no support for jobs that can raise real incomes. Their policies attempt to and may succeed in locking in the ill-made investments of the past while adding new ones. They burden the American economy with vast increases in debt while making the economy lose competitiveness. They ensure that economic activity fails to supply the real needs of the American people. Like vendors of snake oil, they offer fake palliatives and nostrums while the real illness lingers and runs the patient down. Their policies will run down the stock of capital goods in the economy and leave Americans the poorer. We will be less able to maintain our business hallmarks of innovation, drive, responsiveness, and flexibility.

Back to the dreary news of the day and the Spending Spree bill in committee in Congress. Mike Rozeff calls it the Stimulus of Abominations. Call it what you will but don't call it sound economics. This is a good article to print out and keep for future reference.

Success In Life (Uncredited)

The Internet Movie Data Base is one of the marvels of the Web. It would not have been possible without the Web. You can trace the film and TV careers of anyone. The data base usually lists the character's name in the movies. This amazes me. Look at the list for Foulger.

It's mind-boggling. It begins in 1932 and ends in 1970. He died in April 1970. The guy never stopped working.

Nice article to take you away from the dreary news of the day. Follow the links. You'll discover the names of familiar faces and, who knows, maybe get a little inspiration from their stories.

Ruin Your Health With the Obama Stimulus Plan

Republican Senators are questioning whether President Barack Obama’s stimulus bill contains the right mix of tax breaks and cash infusions to jump-start the economy.

Tragically, no one from either party is objecting to the health provisions slipped in without discussion. These provisions reflect the handiwork of Tom Daschle, until recently the nominee to head the Health and Human Services Department.

Senators should read these provisions and vote against them because they are dangerous to your health. (Page numbers refer to H.R. 1 EH, pdf version).

The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors.

But the bill goes further...

Hillarycare Daschlecare Obamacare is on the way...

'Bama Knows Best

This last week it was reported that Vlad Putin said he will not prop up failing institutions in Russia with bailout money. Furthermore he plans to slash government spending. Over here in the free world 'Bama (who knows best) is trying to bully his latest bailout package through congress with the threat of total meltdown if we do not dutifully fall into line behind his plan. No discussion is allowed (we don't have time) we are supposed to just trust him and pass the largest spending bill in the history of the world. (Until the next one in 2010.) Why? Just because 'Bama knows best.

I have always been told not to criticize a man without a better plan of your own. OK, then, here it is:

Declare 2009 a personal income tax holiday. Slash federal spending back to 1995 spending levels that can be supported without benefit of personal income taxes.

We do have other options but our leaders refuse to consider any of them. The Keynesians rule in this administration - and, to some extent, all administrations back to Herbert Hoover. If an Austrian economist were asked to propose a scenario in which the U.S. would destroy itself economically, he or she would say "Ask a Keynesian for advice."

Stimulis: Is It Good For You?

If the stimulus were a medication requiring approval by some federal agency, the advertisement would be something like this video.

Recipe for Disaster

Gov. Mark Sanford (SC) gets it - the CNN reporter in this video does not.

Ship of Fools

US policymakers have ignored the fact that consumer demand in the 21st century has been driven, not by increases in real income, but by increased consumer indebtedness. This fact makes it pointless to try to stimulate the economy by bailing out banks so that they can lend more to consumers. The American consumers have no more capacity to borrow.

With the decline in the values of their principal assets--their homes--with the destruction of half of their pension assets, and with joblessness facing them, Americans cannot and will not spend.

Why bail out GM and Citibank when the firms are moving as many operations offshore as they possibly can?

It is very difficult for Americans to compete in America. Foreign companies have distinct advantages over Americans in America. American companies are taxed and regulated by government and are forced to build factories in foreign lands to evade them. Foreign companies are lured to America with tax shelters and exemptions and lucrative incentives from state governments. Indeed, we are aboard a Ship of Fools.

Instead of stimulus, do nothing – seriously

Stimulus is unconstitutional. And history shows that the economy can recover strongly on its own, if politicians stay out of the way.

As we wait to see how the politicians in Washington will alter the stimulus package the Obama administration is pushing, many questions are being raised about the measure's contents and efficacy. Should it include money for the National Endowment for the Arts, Amtrak, and child care? Is it big enough to get the economy moving again? Does it spend money fast enough? Hardly anyone, however, is asking the most important question: Should the federal government be doing any of this?

In raising this question, one risks immediate dismissal as someone hopelessly out of touch with the modern realities of economics and government. Yet the United States managed to navigate the first century and a half of its past – a time of phenomenal growth – without any substantial federal intervention to moderate economic booms and busts. Indeed, when the government did intervene actively, under Herbert Hoover and Franklin D. Roosevelt, the result was the Great Depression.

The politicians are convinced this crisis will not ease until they do something, anything at all except get out of the way.

Show Trials with Capitalist Defendants in Shackles

It is very easy to interpret the kind of facts that have been described, as an indictment of the capitalist system, which is exactly how they are being interpreted. Millions of people have lost their jobs; millions more fear that they will lose theirs. These millions cannot avoid the further fear that they and their families will be utterly impoverished. And they are being led to blame their losses on capitalism, in large part by being led to blame it on the persons of individual businessmen or capitalists whom they perceive as hateful.

What is present and being inflamed is the psychology of an angry mob. Its sympathies are with innocent victims who have suffered a great wrong. It's sure it knows who is responsible and how. The next step will be for someone to yell, "Get a rope!"

Government has added a new war to the wars on drugs, poverty, terror, smoking, alcohol, obesity, et al. It's the War on Capitalism. Well, maybe it's not so new but it has definitely been ratcheted up. Congress and Obama are leading the charge with the full support of the MSM (mainstream media). Maureen Dowd's column evoked George Reisman's wrath and spurred him into writing this column.

The Myth of the Laissez-Faire Bush Years

One of the most pernicious misconceptions of our time is that the Bush administration represented an era of free-market capitalism. By wrongly blaming the financial crisis and economic woes associated with Bush on his alleged devotion to laissez-faire, many in the mainstream press, academia and political life are misdiagnosing the problem and prescribing the wrong solution: More government, which will in reality only make things worse.

Big-government Republicans like Bush have done more than their part to encourage the confusion. By branding themselves as friends of the free market, budget hawks, tax cutters, deregulators and champions of constitutionally limited government, all while pushing the opposite agenda, they have helped create the impression that the disasters resulting from their interventionist meddling are the consequence of free enterprise.

If more government will make things worse, it's going to get worse, much worse. Laissez-faire is free market capitalism. It's not laissez-faire when government regulates, taxes and interferes with market forces but that is what government has been doing. And the worse the crisis gets, the more control government exerts.

Why Are We In Afghanistan?

We want them to be like us. That is not going to happen.

They beat the Soviets, as they beat the British of Kipling's time, the time he wrote "A Soldier of the Queen," ending:

"When you're wounded and left on Afghanistan's plains,

"And the women come out to cut up what remains,

"Jest roll to your rifle and blow out your brains

"An' go to your Gawd like a soldier."

And they will defeat us. They have been there for centuries, and they will be there for centuries more. They have no place else to go. We do and we will.

Obama is sending more U.S. troops to Afghanistan. "Why?" asks Richard Reeves.

Dr. Ron Paul on the Senate Stimulus 'Compromise'

We have become dependent on government to take care of us. That's why Obama was elected by a majority. We call it democracy when more than 50%+ of us want a president who promises to pay our mortgages. The 49.9%- of us are just taken along for the ride. Note to Obama voters: your mortgage check is in the mail.

Economic Fascism and the Bailout Economy

The academic economists say that things will recover. They tell us that it will again be business as usual. They tell us that once we get through this crisis, the American economy will boom once again. They believe in the fascist economy. They believe that government regulation is better than the free market. They believe the government-run, bankruptcy-protected banks, which we now openly have, are better than private, profit-seeking institutions that are not protected by a government-created cartel called the Federal Reserve System. They believe in fascism, and they are going to tell you that everything is fine as the fascist State extends power over every aspect of our lives.

Government has been growing insidiously for many years, taking small baby steps to increase their dominion over you and hoping you may not notice what is happening. Today, with the nationalization of banks and corporations and a huge trillion dollar plus spending spree bill, they are taking giant leaps in broad daylight and, because they have invoked mass hysteria and fear, are unconcerned about the outcry from the squeamish few.

Here Come the Zeros

The pile-up on the global financial highway has yielded its toe tags and broken mirrors. More than $30 trillion has been lost. Of course, the world’s monetary cops have been on the scene for about a year and a half - trying to get the traffic moving again. But just read the paper. Instead of a recovery…every day brings more skid marks and fresh collisions. A little bit of the old juice from the central bank will cure a typical recession. It is nothing more than a pause in the inventory cycle, allowing businesses to clear their shelves before they are restocked. But this is not an inventory-driven recession; this is a balance-sheet depression. The problem is not really an absence of credit, but an excess of debt.

Another warning about inflation, this time from Bill Bonner.

Unemployment Figures, Right Between the Eyes

[I]n case you are just arriving here from Mars and are not up-to-speed on current events, the terrible mission of the despicable Fed and stupid Congress at this point is to create so much money, so damned much money, so staggeringly damned much money that they will, literally, be able to buy everybody out of bankruptcy, thus explaining the “Hahahaha!” because such massive amounts of money will drive lots of other prices to the moon, too, and the rioting and suffering of chaotic social unraveling because the prices of food, energy and necessities are so high will mean that nobody is going to care about some stupid stocks, bonds or houses! Hahahaha!

Is the Mogambo Guru losing it? His paranoidal concerns about inflation are the topic du jour.

Arrest Michael Phelps Now!

And then President Obama, and then George W. Bush, and then Bill Clinton . . .

In 2007, 872,721 Americans were arrested for marijuana violations, 775,138 of them for possession. Some number of the latter undoubtedly were caught growing or selling and were charged with lesser offenses, but, in any case, hundreds of thousands of Americans ended up in jail for doing precisely what Michael Phelps did: lighting up. Roughly three-quarters of those arrested for marijuana offenses were, like Phelps, under 30. With most of their lives ahead of them, they face the greatest harm from prosecution under the drug laws.

So why shouldn’t Phelps go to jail?

To ask the question is to answer it...

Key quote: Whether marijuana use is good or bad is not the issue. Short of engaging in behavior that directly threatens others, people should be left alone. That’s what a society grounded in individual liberty is—or at least should be—all about.

Why Did This Happen?

Let us briefly review some of the more notorious behavior of the federal government in recent years that has spawned the current economic crisis. First, every law and government agency having anything to do with housing policy, from HUD to the Fed, FDIC, Comptroller of the Currrency, Office of Thrift Supervision, enforcers of equal-lending laws, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Congress, and more, did everything possible to force or bribe mortgage lenders into making trillions of dollars of bad loans to unqualified "subprime" borrowers. Among the various rationales that were given for this monumentally stupid policy were "discrimination," which the Fed admitted there was no evidence of when confronted by Forbes journalists Peter Brimelow and Leslie Spencer in the 1990s. Banks and mortgage lenders made trillions of dollars of bad loans as the Fed assured them that the risk could be swept away when Fannie and Freddie "securitized" the loans and sold them. And there was always an implicit (wink, wink) promise of a bailout if worse came to worse (as it did).

Congress and the administration are bewildered. They don't understand where the money went. They spent our money for all the politically correct reasons and intended it to go to people who "cared" about us. But they know how to fix things. They don't have any money left but they can borrow it and print it and confiscate it and, this time, they'll make sure it goes to people who "really care" about us.

Here are 50 De-stimulating things in the spending spree bill.