Socialism and the End of the American Dream

Chris Horner was in the room when BP, Enron, Al Gore and Clinton met to discuss by-passing the Constitutional advise and consent role role of the Senate and signing the Kyoto Treaty with "Cap and Trade" mandates.  Enron and BP invented "Cap and Trade".  And now Obama promises to punish BP by passing a USA "Cap and Trade" energy tax on US citizens.  Right.  Figure that one out!  Excellent article. Tim Carney has a column at the Washington Examiner detailing BP's lobbying influence, which begs the following history lesson and first-hand account for voters, generally unaccustomed to such sleaze, to fully appreciate the game presently being played out in Washington. President Obama announced in Pittsburgh last week that BP's Gulf oil spill demands his wrath in the form of the Kerry-Lieberman "cap-and-trade" energy tax. Hearing this, your reaction may have been to wonder just how making energy more expensive for everyone-seniors, the poor, it's all good-is a proper response. And the truth is that our young ideological president's effort to make sure this crisis doesn't go to waste is actually much worse than it seems on its face. BP, joined by Enron, invented carbon cap-and-trade in the mid-1990s. Yeah. That cap-and-trade. I know, because I was in the room. And BP has been lobbying for it aggressively and at great expense ever since, some eight figures of which has gone to green pressure groups. Specifically, in May 1997 I met with senior officials from BP, Niagara Mohawk Power, and others… "others" like the Union of Concerned Scientists and their ilk… in the Washington offices of a white-shoe New York law firm, putting our collective heads together strategizing on how to get the U.S. roped into a global warming treaty, and get "cap-and-trade" imposed domestically, too.

Wow.  Maybe the best analysis of the growing awareness of the vast differential between the patriot citizens of America and the Obammunist now in charge of our country. excerpt:  The deepening notes of disenchantment with Barack Obama now issuing from commentators across the political spectrum were predictable. So, too, were the charges from some of the president's earliest enthusiasts about his failure to reflect a powerful sense of urgency about the oil spill. There should have been nothing puzzling about his response to anyone who has paid even modest critical attention to Mr. Obama's pronouncements. For it was clear from the first that this president-single-minded, ever-visible, confident in his program for a reformed America saved from darkness by his arrival-was wanting in certain qualities citizens have until now taken for granted in their presidents. Namely, a tone and presence that said: This is the Americans' leader, a man of them, for them, the nation's voice and champion. Mr. Obama wasn't lacking in concern about the oil spill. What he lacked was that voice-and for good reason. Those qualities to be expected in a president were never about rhetoric; Mr. Obama had proved himself a dab hand at that on the campaign trail. They were a matter of identification with the nation and to all that binds its people together in pride and allegiance. These are feelings held deep in American hearts, unvoiced mostly, but unmistakably there and not only on the Fourth of July. A great part of America now understands that this president's sense of identification lies elsewhere, and is in profound ways unlike theirs. He is hard put to sound convincingly like the leader of the nation, because he is, at heart and by instinct, the voice mainly of his ideological class. He is the alien in the White House, a matter having nothing to do with delusions about his birthplace cherished by the demented fringe.

Despite constant urging by Washington for banks to increase their lending, credit conditions remain tight. Small-business lending continues to lag, and credit card issuers have slashed credit lines and canceled thousands of accounts. Just before Memorial Day, the Obama administration unveiled its latest effort to jump-start lending, a new Small Business Lending Fund (SBLF), which will make available $30 billion to community banks to promote small-business lending. The proposal already has cleared the House Financial Services Committee. But is there any reason to believe that this modest investment will do what the hundreds of billions of Troubled Asset Relief Program (TARP) dollars failed to do - namely, encourage banks to start lending? Not likely. As with previous efforts, the new fund fails to address the most important reason banks aren't lending: Washington bureaucrats and politicians are making it impossible for them do so. Every loan bears some risk that it will not be repaid. In making a loan, a lender has two considerations: First, it must be able to price the risk of the loan accurately or, second, it must reduce its risk exposure by reducing the number of loans it makes, the amount it lends or the risk profile of those to whom it lends. Regulations that interfere with the ability to price risk accurately thus inevitably produce efforts to reduce risk exposure by curtailing lending.

They fought the correction; the correction won. We refer to Bernanke, Summers, Obama, Geithner, Krugman - the whole lot of them. They added three trillion dollars to US debt in the last two years. In two more years the debt will be at 100% of GDP. Add in the debts they've guaranteed - from Fannie Mae, for example, and state and local debt implicitly backed by the feds - and you're already at 150% of GDP. Worse than Greece, in other words.

People can change the volume, the location and the composition of their income, and they can do so in response to changes in government policies. It shouldn't surprise anyone that the nine states without an income tax are growing far faster and attracting more people than are the nine states with the highest income tax rates. People and businesses change the location of income based on incentives.

"Our examination of the future of public debt leads us to several important conclusions. First, fiscal problems confronting industrial economies are bigger than suggested by official debt figures that show the implications of the financial crisis and recession for fiscal balances. As frightening as it is to consider public debt increasing to more than 100% of GDP, an even greater danger arises from a rapidly ageing population. The related unfunded liabilities are large and growing, and should be a central part of today's long-term fiscal planning. "It is essential that governments not be lulled into complacency by the ease with which they have financed their deficits thus far. In the aftermath of the financial crisis, the path of future output is likely to be permanently below where we thought it would be just several years ago. As a result, government revenues will be lower and expenditures higher, making consolidation even more difficult. But, unless action is taken to place fiscal policy on a sustainable footing, these costs could easily rise sharply and suddenly. "Second, large public debts have significant financial and real consequences. The recent sharp rise in risk premia on long-term bonds issued by several industrial countries suggests that markets no longer consider sovereign debt low-risk. The limited evidence we have suggests default risk premia move up with debt levels and down with the revenue share of GDP as well as the availability of private saving. Countries with a relatively weak fiscal system and a high degree of dependence on foreign investors to finance their deficits generally face larger spreads on their debts. This market differentiation is a positive feature of the financial system, but it could force governments with weak fiscal systems to return to fiscal rectitude sooner than they might like or hope. "Third, we note the risk that persistently high levels of public debt will drive down capital accumulation, productivity growth and lon

Funny but a year ago we were hearing quite a bit of noise about the "End of Capitalism".  Today, the world is looking at the "End of Socialism".  How quickly things change. Six Impossible Things I have written several letters over the years about the basic economic equation GDP = C + I + G + (Net Exports) Which is to say, that Gross Domestic Product in a country is equal to total Consumption (personal and business) plus Investments plus Government Spending plus next exports. This equation is known as an identity equation. It is true for all countries and times. Now, gentle reader, I am going to spare you a few pages of algebra and cut to the chase. Let's divide a country's economy into three sections, private, government and exports. If you play with the variables a little bit you find that you get the following equation. Domestic Private Sector Financial Balance + Governmental Fiscal Balance - the Current Account Balance (or Trade Deficit/Surplus) = 0 This equation was introduced to you a few months ago in an Outside the Box written by Rob Parenteau. We are going to review this briefly, as it is VERY important. Paragraphs in quotes will be from that letter. As Rob noted, "...keep in mind this is an accounting identity, not a theory. If it is wrong, then five centuries of double entry book keeping must also be wrong." By Domestic Private Sector Financial Balance we mean the net balance of business and consumers. Are they borrowing money or paying down debt? Government Fiscal Balance is the same: is the government borrowing or paying down debt? And the Current Account Balance is the trade deficit or surplus. The implications are simple. The three items have to add up to zero. That means you cannot have both surpluses in the private and government sectors and run a trade deficit. You have to have a trade surplus.

"Pieces of Eight." It is a two-volume treatise on the monetary powers of the Constitution. Now out of print, it has become a kind of cult classic, selling on the Internet for hundreds of dollars a set. It addresses questions that, with the value of the dollar having collapsed to 1,200th of an ounce of gold, are suddenly timely. What is a dollar? How did it become our money of account? What powers in respect of money were given to the federal government in 1787? What disabilities, or prohibitions, are in the Constitution? How have we managed to get so far from the law as the Founders wrote it? And what can be done to bring us back from the brink? The title of the book comes from the nickname for the coin the Founding Fathers were referring to when, in the Constitution, they twice used the word "dollars." Its definition was codified in the Coinage Act of 1792, which provided for minting gold and silver coins and defined a dollar as having "the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver." Mr. Vieira speaks for a school of thought-it goes back to James Madison and Alexander Hamilton and comes together today in, among other places, the Foundation for the Advancement of Monetary Education-that reckons such dollars, and their free-market equivalent in gold, are the only constitutional money in America. Lately he has been arguing for the establishment by the states of separate monetary systems. The authority to do so is in Article 1, Section 10, of the Constitution, which prohibits the states from making "any Thing but gold and silver Coin a Tender in Payment of Debts."

The end of democratic socialism is at hand. The welfare states of the U.S. and Europe are financially out of control, spent and unsustainable. They have reached the point that Margaret Thatcher defined as the end of socialism: They have run out of other people's money. These areas of the world are about to change dramatically.

YouCut - a first-of-its-kind project - is designed to defeat the permissive culture of runaway spending in Congress. It allows you to vote, both online and on your cell phone, on spending cuts that you want to see the House enact. Vote on this page today for your priorities and together we can begin to change Washington's culture of spending into a culture of savings.

America deserves a Congress that respects the priorities of the people. Unfortunately, Washington hasn't been listening. Let's change that. America Speaking Out is your opportunity to change the way Congress works by proposing ideas for a new policy agenda. Republicans have offered solutions, and we have our principles, but this is a new venue for us to listen to you. So Speak Out.

The originals of most of Stroilov's documents remain in the Kremlin archives, where, like most of the Soviet Union's top-secret documents from the post-Stalin era, they remain classified. They include, Stroilov says, transcripts of nearly every conversation between Gorbachev and his foreign counterparts-hundreds of them, a near-complete diplomatic record of the era, available nowhere else. There are notes from the Politburo taken by Georgy Shakhnazarov, an aide of Gorbachev's, and by Politburo member Vadim Medvedev. There is the diary of Anatoly Chernyaev-Gorbachev's principal aide and deputy chief of the body formerly known as the Comintern-which dates from 1972 to the collapse of the regime. There are reports, dating from the 1960s, by Vadim Zagladin, deputy chief of the Central Committee's International Department until 1987 and then Gorbachev's advisor until 1991. Zagladin was both envoy and spy, charged with gathering secrets, spreading disinformation, and advancing Soviet influence. When Gorbachev and his aides were ousted from the Kremlin, they took unauthorized copies of these documents with them. The documents were scanned and stored in the archives of the Gorbachev Foundation, one of the first independent think tanks in modern Russia, where a handful of friendly and vetted researchers were given limited access to them. Then, in 1999, the foundation opened a small part of the archive to independent researchers, including Stroilov. The key parts of the collection remained restricted; documents could be copied only with the written permission of the author, and Gorbachev refused to authorize any copies whatsoever. But there was a flaw in the foundation's security, Stroilov explained to me. When things went wrong with the computers, as often they did, he was able to watch the network administrator typing the password that gave access to the foundation's network. Slowly and secretly, Stroilov copied the archive and sent it to secure locat

Empire of Debt was published in 2006. It stated bluntly that the housing market occupied the center of an inflated bubble. The authors asserted the bubble would pop, leaving a sticky residue everywhere. They were right. The authors stated that Alan Greenspan's policies were detrimental to the U.S. economy. They were right. Empire of Debt not only identified the problems, but it provided a solution. Invest in gold or the Japanese yen. It would appear that once again they were right. The yen is strong and gold has made a phenomenal run, selling for over $1000 per ounce.

the gold standard is the foundation of any economy desirous of being a Camelot.  In that sense, then, Gold is a plea for a return to sanity - the gold standard. The book is presented in three parts.  Part One takes a look at the history of money, what it is and how it works.  Part Two examines the history of America's money, from Colonial silver through the 1930s and into the Reagan administration and the Greenspan years.  The third part of Gold discusses recent currency crises around the world, including Japan, the Asian crisis of the 1990s, Russia, China, Mexico and Yugoslavia.

As Kiyosaki writes in his book:  "So has there been a conspiracy?  I believe so, in a way."  He goes on to explain why he believes so, citing the lack of financial education in the school systems, the Federal Reserve Act, and Nixon's 1971 dismissal of the gold standard.  And most interestingly, Kiyosaki believes that 401(k) retirement vehicles placed the retirement money of average people in the hands of Wall Street. The first chapter of the book is entitled 'Can Obama Save the World?'  Kiyosaki's answer is no.  And apparently, Obama doesn't want to even if he could.  For he appointed Summers and Geithner, both of who played a part in repealing the Glass Steagall Act.  In other words, it's the same old same old.  Nothing has changed.  Which means that the average person needs to understand how taxes, debt, inflation, and retirement affect them.  Kiyosaki sums up the chapter by stating that once one understands the new rules of money, then one can "opt out of the conspiracy of the rich." From there, Kiyosaki moves on to explain how we got where we are.  He points the finger at the Federal Reserve Bank, which inflates the money supply, which destroys the value of savings and retirement plans.  And he makes it very clear that the rules of money changed dramatically when the U.S. went off the gold standard in 1971.  For up until that time, "technically, prior to 1971, the U.S. dollar was a derivative of gold.  After 1971, the U.S. dollar became a derivative of debt." Kiyosaki proceeds to discuss what he calls 'The Invisible Bank Robbery.'  He says "since money is invisible, a derivative of debt, bank robberies by bankers have become invisible."  Two ways these invisible robberies occur are:  fractional reserve banking, which is nothing more than banks lending money they don't have; and deposit insurance, which "protects the bankers - not savers."  Then he asks a very pertinent question:  "why should an ins

Gold, Peace, and Prosperity is the title of Ron Paul's essay for a "modern" gold standard.  According to Paul, such a standard would end the relentless boom-bust cycle, and maintain the value of King Dollar.  However, King Dollar would have to be founded on a monetary standard that eschews government tampering. Paul begins his treatise by pointing out that "Congress alone is responsible for inflation, and Congress alone can stop it."  Which means that the old scapegoats - OPEC, greedy CEOs, labor unions - are not the real cause of inflation.  To support his contention, Paul relates a story told by Marco Polo in his travels through China.  As Paul states, "Abuse of paper money led to the expulsion of the Mongol dynasty from China." Bretton Woods - in 1944 - supposedly established a new gold exchange standard.  In Paul's opinion, Bretton Woods was "nothing more than an international Federal Reserve System."  And of course, it didn't do anything but cause more inflation.  Then on August 15, 1971, President Nixon "closed the 'gold window.'"  This was the beginning of "managed fiat currency." Paul states that since 1971, the price of gold has increased "more than twentyfold."  The trade deficit has increased by 1146%, and the Consumer Price Index has increased 79%.  Due to these imbalances, he concludes that the dollar is dead.    Rather than pronouncing the Last Rites over the dollar, followed by a mournful funeral and weeping and wailing, Paul views the death of the dollar as an opportunity.  "The time is ripe for the institution of a trustworthy monetary system."  And it's not all that difficult.  The way to stop inflation is to "stop inflating the money supply."  Paul then cites the three main reasons politicians, bankers, etc., desire inflation:  greed, power, and a way to pay the government's bills without raising taxes sky-high.  The answer - the only alternative - to inflation is

Contacts congress critters with direct eMail.  Latest issue is the effort to Audit the Federal Reserve.  Vermont Senator and uber Socialist Berny Sanders has proposed to include the Audit the Fed proposal in the Dodd Permanent Wall Street Bailout Bill also known as the Dodd Financial Reform Bill.

Conn puts the numbers into the context of events and issues.  Good read. Today President Barack Obama's National Commission on Fiscal Responsibility and Reform will convene for the first time at the White House. Tasked with making recommendations to Congress that would put the budget in primary balance by 2015 and "meaningfully improve" our nation's long-term fiscal outlook, the commission meets a little over a month after Congress approved a new $2.5 trillion health care entitlement that the Obama administration now confirms will increase our nation's total health care spending. This is a now familiar pattern for the White House: first enact record breaking levels of deficit spending, then turn right around and promise austerity sometime in the future.