Friday, November 30, 2012

Is Fedzilla About to Pull Off a $3.5 Trillion Private Pension Heist?

The alternate media and blogosphere are buzzing with very disturbing stories about how the government intends to steal/seize  private retirement accounts.

Government Sets Its Sights on Private Retirement Accounts: “Giant Effort to Redistribute the Wealth of America’s Older Citizens”
A new effort by the Obama administration, Congress, the Treasury Department and labor unions aims to fundamentally alter how Americans plan and save for retirement.

Warnings have been popping up over the last several years about the possibility of re-appropriating the $3.5 Trillion sitting in private retirement and spreading those funds around to Americans who are deemed less fortunate.

This couldn’t possibly happen in America, right? At one time, most Americans also believed heath care mandates that force Americans at the barrel of a gun to surrender portions of their earnings into a universal system for all would never happen. Well, it did.

And now, those who would control and regulate every aspect of our lives are making a new push; one whose efforts will ultimately end in the seizure and redistribution the personal retirement savings of every American who has ever put money into a 401(k) or IRA.

This is no longer in the realm of conspiracy, but rather, public record.
The articles goes on to document what is currently happening, including "A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.".  If this is true, it's an outright expropriation and theft of all private pensions.

Another view of the situation involves the government erasing the tax deductability of private retirement savings.

Keep Retirement Savings Accounts off the fiscal cliff discussions 
Currently, taxpayers can set aside up to $17,000 in a retirement account without paying taxes on it until it is withdrawn during retirement.

This provision allows workers and small business owners to defer taxes on money they save for retirement until they are older, and more likely to be in a lower tax bracket. It also is becoming an important leg of future generation’s retirement planning as defined benefit pensions become more and more rare.

However, with more than nine trillion dollars invested in tax deferred retirement accounts, these retirement savings have become to some in Congress an almost irresistible pot of money with proposals floated in the past couple of years to replace the savings with government annuities among other things.
Alarming and disturbing as these facts are, there is a whole lot more to the story. Public pensions are massively underfunded and private pensions are also underfunded and becoming the liabilities of the federal government.

State Pensions Underfunded by $4 Trillion
Public pension funds across the country are severely underfunded, threatening the retirement security of government workers and the wallets of taxpayers.

State Budget Solutions, a non-partisan fiscal watchdog, says the underfunding is more than $4 trillion.
Don’t Stick Taxpayers With Underfunded Corporate Pensions

Pension Benefit Guaranty Corp. running $34 billion deficit
The federal agency that insures pensions for 43 million Americans saw its deficit swell to $34 billion in the past year, the largest in its 38-year history.

In its annual report released Friday, the Pension Benefit Guaranty Corp. blamed the growing shortfall on its inability to charge private employers adequate premiums for insuring pensions.
Companies are notorious for shortchanging pension contributions and even dumping pension liabilities on the taxpayers. This is a very problematic trend that will vastly accelerate.

Record $355B Pension Underfunding for S&P 500 Companies
Defined-benefit pensions at S&P 500 companies reached a record underfunding level of $354.7 billion at the end of 2011, an increase of more than $100 billion from 2010 and surpassing the $308.4 billion prior record underfunding level set in 2008, according to a new study by S&P Dow Jones Indices. Underfunding for other post-employment benefits, or OPEBs, increased to $223.4 billion in 2011 from $210.1 billion in 2010.

“Companies are continuing the trend of moving away from pension obligations and into 401 types of investments as they shift the responsibility of retirement away from the corporation and over to the individual,” says Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Combined, the amount of assets that S&P 500 companies set aside to fund pensions and OPEB amounted to $1.38 trillion, covering $1.96 trillion in obligations with the resulting underfunding equating to $578 billion, or a 70.5% overall funding rate.
The rush to seize private pensions is also driven by the fact that Social Security is no longer the cash cow for the government that it once was and its ability to continue to pay benefits now require dipping into general revenues.  In other words, the Social Security taxes collected no longer cover the benefits paid.


The Social Security nightmare is substantially the result of the government plundering the Social Security Trust Fund and leaving a worthless pile of IOU's that total at least $2.5 trillion.

Yes My Fellow Americans, Congress Really Did Steal Your Social Security
Fast forward to 2012 and the outright theft of the Social Security Trust Fund is now estimated at $2.5 trillion.

And that's the bitter truth folks. The Social Security Trust Fund has been nothing but a slush fund for Congress Critters since its inception. Congress stole the money, left a big pile of worthless IOU's and spent the money on wars, pork, corporate welfare and other slop. It was a relatively easy heist to accomplish because for decades the SS tax far exceeded the cash outlays to SS recipients. Now, Congress is in an absolute panic because the SS Trust Fund is fully plundered and the SS taxes collected are not sufficient to pay the benefits. In recent years the government has been using general revenues to cover annual shortfalls in the $30-70 billion range and that number will only explode as the Baby Boomers retire.
The idea of the government seizing private retirement accounts is nothing new and Congress held formal meetings on the issue back in 2010.

Democrats in the Senate on Thursday held a recess hearing covering a taxpayer bailout of union pensions and a plan to seize private 401(k) plans to more “fairly” distribute taxpayer-funded pensions to everyone.
Initially, the scheme to seize private pensions was based on a wealth transfer to bailout public sector pensions.  But now that the public sector pension mess ($4 trillion shortfall in funding) has mushroomed into an even bigger financial catastrophe and a plundered SS Trust Fund combined with a bankrupt federal Pension Benefit Guaranty Corp that insures private pensions have entered the picture, I predict that the government will accelerate its scheme to plunder private sector pensions.

Thursday, November 29, 2012

Spielberg’s Upside-Down History: The Myth of Lincoln and the Thirteenth Amendment by Thomas DiLorenzo

Spielberg’s Upside-Down History: The Myth of Lincoln and the Thirteenth Amendment by Thomas DiLorenzo

Twinkling Bonuses for Twinkie Executives but Nothing for Retirees and Pensions?

Looks like the Hostess with the 'mostest' might end up being Hostess executives who are submitting claims to the bankruptcy court for payment of $1.8 million in bonuses.

Bankruptcies are always legally messy but liquidation is supposed to go like this:

Secured creditors get paid first, they are typically the bondholders.

If there is any money left, the unsecured creditors then get paid.

After secured and unsecured creditors are paid, what is left goes to the stockholders.

Hostess Executive Bonuses: Twinkie-Maker To Seek Approval For $1.8 Million In Bonuses During Liquidation  Huffington Post
Hostess Brands Inc. said Thursday that it's in talks with 110 potential buyers for its iconic brands, which also include CupCakes, Ding Dongs and Ho Hos. The suitors now include at least five national retailers such as supermarkets, a financial adviser for the company said in bankruptcy court. The process has been "so fast and furious" Hostess hasn't been able to make the calls seeking buyers it previously intended, said Joshua Scherer of Perella Weinberg Partners.

"Not only are these buyers serious, but they are expecting to spend substantial sums," he said.

The update on the sale of the company's brands comes as Hostess seeks approval in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. to give its top executives bonuses totaling up to $1.8 million as part of its wind-down plans. The company says the incentive pay is needed to retain the 19 corporate officers and "high-level managers" during the liquidation process, which could take about a year.

Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The bonuses would be in addition to their regular pay.....

In court Thursday, an attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.
This is a very interesting legal issue.  It makes no sense to me that executive bonuses should have a higher claim priority on financial resources than pension obligations in a bankruptcy proceeding.

For more on Twinkie and Hostess, see:

A Twinkie Autopsy

Somebody is robbing the Twinkie grave, even before it's cold dead body is covered with dirt.  

Saturday, November 24, 2012

Why is Europe Such a Freaking Disaster?

The European Union is one of the worst economic disasters ever concocted by modern government. In fact, it’s nothing but a failed experiment in socialism, income redistribution and the concentration of power in Brussels, frequently dubbed The Throne in Brussels, where un-elected and overpaid bureaucrats tax and plunder the crap out of member nations and people while deciding who gets the plunder.

The original EU included 6 nations – Belgium, France, Italy, Luxembourg, Netherlands, West Germany but grew to 15 with the addition of the United Kingdom, Denmark, Ireland, Greece, Spain, Portugal, Austria, Finland, Sweden.

Interestingly, the voters in Norway voted not to join the EU and the fiercely independent Swiss, who actually kept their republic, never joined the EU. Iceland never joined either and is now recovering nicely from its financial meltdown.

What nations have the top performing economies on the planet? The Legatum Institute did an analysis on the issue. The report includes overall rankings and rankings on individual issues including economy, entrepreneurship/opportunity, governance, education, health, safety % security, personal freedom and social capital.


Overall rankings have Norway as #1 and Switzerland as #9. However, on the economy and governance, Switzerland ranked #1 and #1. Norway ranked #2 on the economy and 13th in governance.

The moral of the story is that nations who maintain their economic independence, sovereignty and refuse to submit to a higher centralized taxing and economic authority are clearly the most prosperous. Denmark is ranked #3 overall but Denmark did not join the common Euro currency so it's not embroiled in the euro currency crisis.

The great tragedy of the EU is that the union consists of giver nations and taker nations in accordance with the Marxist principle ‘from each according to his means and to each according to his needs’. It’s also called the Tragedy of the Commons. Some nations have literally been feeding off of the production and wealth of prosperous nations.

Take Greece. Greece has contributed 1.7 billion euros to the EU but got back a whopping 6.5 billion euros, an astounding 270% return according to The Guardian that did a detailed report on the EU relative to who pays and who receives.

EU budget: how much does each country pay and where does it get spent?

When the EU expanded the union from 15 nations to 27 nations, the newly added EU nations were: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Malta, Cyprus, Bulgaria and Romania.  These nations have received HUGE subsidies and handouts from the EU.

Czech Republic paid 1.4 billion euros but got back 3 billion euros, 107% more than it paid

Estonia paid 135 million euros but got back 504 million euros, 269% more than it paid

Hungary paid 836 million euros but got back 5.3 billion euros, 537% more than it paid

Latvia paid 160 million euros but got back 911 euros, 470% more than it paid

Lithuania paid 257 million euros but got back 1.7 billion euros, 542% more than it paid

Poland paid 3.2 billion euros but got back 14.4 euros, 347% more than it paid

Slovakia paid 576 million euros but got back 1.8 billion euros, 209% more than it paid

Slovenia paid 327 euros but got back 847 million euros, 159% more than it paid

Malta paid 56 million euros but got back 135 million euros, 140% more than it paid

Cyprus paid 160 euros and got back 184 million euros, 14% more than it paid

Bulgaria paid 346 million euros but got back 1.1 billion euros, 219% more than it paid

Rumania paid 1.1 billion euros but got back 2.7 billion euros, 138% more than it paid

Even Croatia, who won’t officially become a EU member until July, 2013, has gotten 113 million euros and it has not paid a dime in EU dues/taxes.

And it’s not just Greece and the recently added EU members that are cleaning up, even older EU members are getting back way more than they paid.

Portugal paid 1.6 billion euros but got back 4.7 billion euros, 194% more than it paid

Spain paid 9.9 billion euros but got back 14 billion euros, 37% more than it paid.

What nations are getting royally shafted?

Netherlands got back 47% less than it contributed
United Kingdom got back 41% less than it contributed
Sweden got back 38% less than it contributed
German got back 38% less than it contributed
Italy got back 33% less than it contributed
Denmark got back 30% less than it contributed
Finland got back 28% less than it contributed
France got back 27% less than it contributed

These are astounding percentages given that many of the nations that are heavily subsidizing other nations are now experiencing severe fiscal and economic problems themselves. France is in bad economic condition yet it gave the EU 18 billion euros while only getting back 13 billion euros.

Meanwhile, the EU Nazis just finished a contentious 2 day meeting on the EU budget and it ended badly because they could not agree on anything.

EU summit ends without budget deal
A European Union summit wound up Friday with "no agreement" sealed for the bloc's next long-term budget, officials from several EU delegations said.

"There is no agreement," one official said.

With the 27 heads of state and government bitterly divided over spending policy, there had been little hope of a deal on a trillion-euro budget for 2014-20 during the two-day summit.

British Prime Minister David Cameron headed a group of austerity-driven nations demanding huge cuts in the next seven-year budget to match belt-tightening measures at home.

Divisions between have and have-not nations on how to spend the EU's billions caused further disagreements.

Talks to settle the bitter disputes that surfaced at the two-day summit will resume in January, Belgium's Foreign Minister Didier Reynders said on his Twitter account.

An EU diplomat said the main obstacle at the summit was Cameron's demand for reductions in the planned [budget,] adding that "the most virulent" countries by his side were Sweden and the Netherlands.
Yes, the fight has definitely started over the European fiscal mess and the fight will only grow more intense and fierce.  I suspect that many European nation, especially the solvent and economically viable nations, will continue to oppose the Eurocrats, their insane spending and their absolute power.

Where does all this EU money go? Apparently it serves no useful or productive purpose whatsoever except to grow the hugely expensive and un-affordable EU bureaucracy that is directly responsible for squashing the economic and civil liberties of Europeans. According to the Guardian article, here's how the money is spent:
• Administration Running the EU in each country
• The EU as a global partner International aid, activities outside the EU
• Citizenship, freedom, security and justice Asylum, education and culture
• Preservation and management of natural resources Common agricultural policy, environment, fishing
• Cohesion for growth and employment Helping poorer regions of Europe
• Competitiveness for growth and employment Economic growth grants to small business, science and research
The EU is nothing more than a crime syndicate styled jobs protection racket for the parasitic public sector and its thieving bureaucrats. However, I will give Europe credit for one thing. At least the facade of fiscal solvency has finally melted away and now a real fight and a real debate has begun. That's more than you can say about bind, deaf and dumb America where denial runs deep and our bureaucratic class consistently fails to heed the warnings about going over the fiscal cliff. As far as clueless American politicians are concerned, everything is just perfect and they will continue to attempt to spend their way to prosperity even if it means nuking and laying waste the entire US economy.

Thursday, November 22, 2012

Social Conservatives and Libertarian Party Candidates Are Killing the GOP

In 2010, the GOP lost 2 senate seats, Colorado and Nevada, that it should have won. The Republicans lost those crucial races because both candidates, Ken Buck and Sharon Angle, were radical pro-lifers who campaigned on 'human life begins at the precise moment of conception' and all abortion should be outlawed under any circumstances.

In 2012, the Republicans lost senate seats in Missouri and Indiana because of idiotic rape comments made by social conservatives Todd Akin and Richard Mourdock.

It's fair to say that the social conservatives are killing the GOP but it also validates the premise that social conservative GOP power is rapidly dissipating because they keep costing the GOP election after election. From the viewpoint of a constitutional liberty activist, the social conservatives are dubbed theocratic Nazis because they are the biggest cheerleaders for social intolerance, big government, endless wars, the Patriot Act and NDAA. The Patriot Act and NDAA are HUGELY important issues for liberty activists, as is our insane foreign policy.

Besides the social conservatives, there is another block of voters who are killing the GOP. The Libertarian Party vote is raking in enough votes to split conservatives and swing an election to a Democrat.

The clueless GOP elites, meanwhile, opine that it's getting its butt kicked in general elections because conservatives refuse to hold their noses and vote for Romney styled big spending Republicans moderates. The GOP refuses to face the bitter truth that its losing its base because the Republican Party really isn't any different than the big spending Democrats they claim to oppose. Republicans are very much 'the borrow and spend' big government, big spending party.

Let's examine how the Libertarian Party vote smacked the GOP.

A Ron Paul endorsed Montana senate candidate, Denny Rehberg,lost to the Democratic incumbent Jon Tester 48.7% to 44.8% but the Libertarian Party candidate, Dan Cox, got 6.5%, here.  Rehberg's defeat was painful for liberty activists.

In the Indiana senate race where social conservative Richard Mourdock lost to Democrat Joe Donnelly 49.9% to 44.4%, the Libertarian candidate Andy Horning got 5.8%, here.

In Missouri where the now infamous Todd Akin of the 'legitimate rape' fame got walloped by incumbent Claire McCaskill 54.7% to 39.2%, it's important to note that Akin was running about even with McCaskill before his EPIC blunder.  Given that it was going to be a tight race under the best of circumstances, it instructive to note that the Libertarian candidate Jonathan Dine pulled in a very significant 6.1%, here. It's entirely possible that McCaskill would have squeaked by anyway if Akin hadn't blundered and once again the Libertarian vote would have cost the GOP another victory.

The uber liberal Daily Kos literally gloated over how the Libertarian vote delivered 9 victories to the Democrats in tight races that included 2 senate seats, a governorship and 6 house seats.  The Daily Kos was reporting only on its early preliminary calculations and indicated that the Libertarian vote may have been even more decisive.

Libertarians provided the margin for Democrats in at least nine elections

While it's definitely a fact that the Libertarian Party is playing a devastating spoiler role in general elections that result in Republican defeats, I don't necessarily endorse this policy.  In fact, I do believe that it's wrong of the Libertarian Party to run a candidate just to defeat any Republican, as it did in the Montana senate race that resulted in the defeat of a Ron Paul endorsed liberty candidate.  I believe that liberty activists and the Libertarian Party need to work together to elect the most electable liberty candidates and that the Libertarian Party, as a matter of policy, should gracefully bow out of any election where the only possible result is the defeat of a decent liberty candidate and a Democrat victory.

However, I have no problem whatsoever with the Libertarian Party smacking the GOP hard when it runs horrid liberty slashing crazies which, quite frankly, is mostly the norm in the GOP.

Meanwhile, the war for the soul of the GOP continues and liberty activists will continue to indeed wage an epic battle to takeover the GOP from the warmongering, big spending, deficit loving and socially intolerant socialist statists in elephant suits.

If the Libertarian Party truly stands for liberty, sometimes the best option is to just get out of the way and allow liberty to prevail.  I can't think of anything more devastating to liberty than Republican liberty candidates and Libertarian candidates locking horns in mortal combat to deliver perpetual Democrat ballot box victories.


Wednesday, November 21, 2012

Israel, Hamas, Zionism and the Jew Hating Anti-Semites

There are few issues that incite raw passions as much as Israel. Hamas fires over 800 rockets into Israel from Gaza in one week, Israel responds with defensive measures to neutralize Hamas, knock out the rocket launchers and the world goes on another anti-Semitic rant as folks cheer Hamas and opine for the extermination of the Israeli Jews and the state of Israel.

The situation got highly contentious on Facebook where folks were constantly posting anti-Jewish and anti-Israel propaganda, some of which landed on my wall.   I responded with a Facebook post:

Please don't post any anti-Israel Jew hating, anti-Semite garbage on my wall. It will be deleted. I am not taking sides in the conflict and consider all parties to be guilty of atrocities. The middle east is an extremely complex place with hideous problems and it's where Judaism, Christianity and Islam have always collided in a fight over the world's most fought over patch of dirt.

That said, I totally 100% oppose any US intervention in the conflict. It's not our problem.

If you hate me for my views, just defriend me.
Not surprisingly, all hell broke loose and I was accused of being a murderous Zionist neocon because I refused to become a cheerleader for Hamas, a violent psychopathic Islamist group, and advocate for the outright extermination of all Israeli Jews and the nation of Israel.  The Facebook exchange got so intensely heated that I got:
Fuck you, Judy....I'm a true libertarian who ran for US House three times. Piss off with your thinly-veiled Zionist, neocon, warmonger stance. Fuck you and your small-time Facebook "celebrity". You're precisely the kind of phony fuck this movement needs to avoid.
Another Facebook post:
You enjoy your place in hell. You are the biggest fraud I've met yet that claims to love liberty. And God has a special place reserved for people who blatantly lie, and gag the free speech of others. You are evil, pretending to be good. I wasn't even talking about the conflict you stupid ass. I was telling the truth about the history of Israel. Enjoy your stupidity. And watch your friends drop like flies as they realize what a liar and manipulator you are. Goodbye, and good luck pulling your head out of your ass before you meet your maker. Because God is not going to pat you on the back for defending Israel when they're using phosphorous on children. You're beyond sick lady. Enjoy your KARMA."
Unfortunately and even tragically, most folks latch on to an issue from a purely emotional perspective and are incapable of viewing a situation through the enormously complex prism of history and religion. Israel is an extraordinarily complicated place steeped in 4,000 years of Jewish history, 2,000 years of Christian history and 1,400 years of Islamic history. To further complicate the issue, Christianity and Islam have their own extremely complicated histories as the Christians and Muslims constantly fought each other for control of real estate.  Islam sought to Islamize the planet and Christianity sought to Christianize the planet.

It's an understatement to say that Israel is the most contentious patch of dirt in human history.  Israel is   where Judaism, Christianity and Islam have always collided and fought for control of the Jewish-Christian Holy Land. The history of Israel, Islam and the modern middle east is long, complicated and extensive.

With Charity Toward None, A History of Israel

The Making of the Modern Middle East

A Cruise Through History: Islam, the West and the Rest of the World

Although getting beat up for my advocacy for natural rights for all human beings, including the right of self-defense, is something that I've become accustomed to over the years, what is puzzling is the gargantuan width and breath of all the anti-Israel conspiracy theories and tirades.  The short list goes like this:  it's the Zionists, it's the Jews, it's Israel,  it's the Rothchilds and on and on.  Just about everything that is wrong with the world is mostly the fault of the Jews or Israel according to the folks who see a Jewish conspiracy in everything that happens.  However, the word 'Zionist' seems to be a favorite when it comes to cheerleading for Hamas and its rocket firing deeds.  The word 'Zionist' also appears to be a favorite catch all word for the Jew haters, the Israel bashers and the anti-Semites.

The word Zionism means different things to different folks depending on their religious views, political views and conspiracy views. Zionism is derived from the word Zion.

Zion, according to Wikipedia, is derived from the Biblical words Sion, Tzion or Tsion and is mentioned in the Hebrew Bible at least 108 times.  Generally, Zion is believed to denote a place, either Biblical Israel or Jerusalem.  Some even view Zion as encompassing more than a place on earth and extending into the spiritual realm of the Kingdom of God.

The more modern derivative of Zion, Zionism, has been around since the 1800's and was spawned by a movement of persecuted Jews in other nations, mostly European Christian nations, to repatriate back to their Biblical homeland of Israel.  It was a rather benign movement until the British Mandate resulted in the British militarily invading the area in a post WW I power play to seize control of land from the defunct Ottoman Empire.  The United Nations created the modern nation state of Israel in 1948.  That's when all hell really broke loose, a situation that continues to this day.

The creation of the United Nations was the successful implementation of a global totalitarian governance scheme hatched by the Rockefellers, other uber wealthy families, banksters, defense contractors, fascists and corporatists, all big money interests with the goal of  massively concentrating all wealth and power. The goal is to strip humanity of all its liberty and natural rights and militarily compel every occupant on earth to genuflect before tyranny, enslavement and oppression.

I oppose the United Nations and endorse getting the US out of the UN and the UN out of the US.

In any event, the anti-Zionist movement has morphed into a full fledged anti-Israel and anti-Semite movement that vilifies the Jews, especially the Jews in Israel, while glorifying the violence of radical Islamist groups like Hamas and the Muslim Brotherhood.  The anti-Zionists claim they are not anti-Semites and that they just want Israel to disappear because the Israeli Jews stole the land from the Palestinians.  Personally, I have a difficult time accepting that the anti-Zionists are not anti-Semites because most of them tend to blame the Jews for everything because such folks see a Jewish conspiracy in everything.

There are only about 15 million or so Jews on the entire planet and roughly less than half of them live in Israel (Israel has 6 million Jews).  Conversely, there are about 2 billion Christians and 1.3 billion Muslims on the planet.  Yet, the anti-Zionists frequently claim that those evil Jews rule the world.  It's not only ludicrous but it's categorically impossible.  The Jews are one of the smallest minorities on the planet and while many Jews are successful, well educated and smart, they are disbursed throughout the world and mostly live as ordinary people.

Here's what Martin Luther King said about Zionism when he was confronted with the issue by an anti-Zionist crusader:

“When people criticize Zionists, they mean Jews. You're talking anti-Semitism.”

Does Israel Have a Right to Exist?

As folks line up to either love Israel or hate Israel, it's important to understand who created Israel. The modern nation state of Israel was created by the United Nation in 1947.

The UN officially came into existence on October 24, 1945. It was the brainchild of the Rockefellers and other very rich ruling families, the banksters and advocates for fiat central banks, and corporate fascists who only had one goal: concentrate all wealth and power into the hands of the ruling elites and create a globalized economy based on socialist principles. The socialist principles, among other things, negated free markets and were based on the premise of a global industrial feudalism wherein all serfs on the plantations of the elites had subsistence level economic parity. Socialist union power was the guiding principle behind the creation of the United Nations, according to its own website, here.
The name "United Nations", coined by United States President Franklin D. Roosevelt was first used in the Declaration by United Nations of 1 January 1942, during the Second World War, when representatives of 26 nations pledged their Governments to continue fighting together against the Axis Powers.

States first established international organizations to cooperate on specific matters. The International Telecommunication Union was founded in 1865 as the International Telegraph Union, and the Universal Postal Union was established in 1874. Both are now United Nations specialized agencies.
Interestingly, many liberals and progressives view the UN as a shinning star of justice that will militarily impose by force the deliverance of humanity from hunger, want and misery. Little do these folks know or understand that the forces and institutions they claim to despise as totalitarian, predatory and unjust, namely Wall Street, international banksters and multi-national corporations, are the exact same forces that created the UN.

Among other things, the UN also proclaimed dominion over the earth's real estate, regardless of who owned it, lived on it and who occupied it. The UN was committed to creating a New World Order that served the exclusive financial interests of the wealthy at the expense of human liberty.  To achieve their goal, they needed a partner to promote their absolute power and war against human liberty and, accordingly, their natural ally was the socialists who dominated labor union power. Together they forged a blueprint for impoverishment and constant conflict under the banner of UN tyranny.

The motivations of the UN and others to create the modern nation state of Israel are complex but definitely include post WW II guilt over the western extermination of 6 million Jews, extract control of the Jewish Christian Holy Land from a nearly 1,400 year uninterrupted Muslim domination and to flex its global governance muscle.

The nightmare created by the UN continues to this day.  Forcibly taking land away from some folks, giving it to other folks and forcing everybody to become neighbors with folks that they utterly despise is not a formula for peaceful co-existence but rather a recipe for constant war.  That's precisely what happened.

In 2010, foreign policy analyst Jeremy Hammond wrote a piece that obviously spawned some sparks when he questioned the authority of the UN to create Israel. But Hammond went even further and asserted that the UN never really created Israel based on his interpretation of UN Resolution 181.

The Myth of the U.N. Creation of Israel
There is a widely accepted belief that United Nations General Assembly Resolution 181 “created” Israel, based upon an understanding that this resolution partitioned Palestine or otherwise conferred legal authority or legitimacy to the declaration of the existence of the state of Israel....

the General Assembly passed Resolution 181 on November 29, with 33 votes in favor to 13 votes against, and 10 abstentions.[15] The relevant text of the resolution stated:

The General Assembly….

Recommends to the United Kingdom, as the mandatory Power for Palestine, and to all other Members of the United Nations the adoption and implementation, with regard to the future government of Palestine, of the Plan of Partition with Economic Union set out below; Requests that

(a) The Security Council take the necessary measure as provided for in the plan for its implementation;

(b) The Security Council consider, if circumstances during the transitional period require such consideration, whether the situation in Palestine constitutes a threat to the peace. If it decides that such a threat exists, and in order to maintain international peace and security, the Security Council should supplement the authorization of the General Assembly by taking measure, under Articles 39 and 41 of the Charter, to empower the United Nations Commission, as provided in this resolution, to exercise in Palestine the functions which are assigned to it by this resolution; (c) The Security Council determine as a threat to the peace, breach of the peace or act of aggression, in accordance with Article 39 of the Charter, any attempt to alter by force the settlement envisaged by this resolution;

(d) The Trusteeship Council be informed of the responsibilities envisaged for it in this plan;

Calls upon the inhabitants of Palestine to take such steps as may be necessary on their part to put this plan into effect;

Appeals to all Governments and all peoples to refrain from taking action which might hamper or delay the carrying out of these recommendations….[16]

A simple reading of the text is enough to show that the resolution did not partition Palestine or offer any legal basis for doing so. It merely recommended that the partition plan be implemented and requested the Security Council to take up the matter from there. It called upon the inhabitants of Palestine to accept the plan, but they were certainly under no obligation to do so.
Of course, Israel really does exist and has existed since May 14, 1948 when the UN partition became effective. Israel has a functioning government, a legislature, a judicial system, a military, a constitution and 8 million citizens of which 6 million are Jewish, here.

Quite naturally, Hammond's assertion that Israel doesn't or shouldn't legally exist created considerable blowback. fired back.

Is UN Creation of Israel a Myth?
The October 26 edition of the Foreign Policy Journal features an article by its founder and editor, Jeremy R. Hammond, in which he claims that:

1. The UN General Assembly had no right to propose the partition plan for Israel and the Arabs (which the Arabs rejected, starting the 1948 Israeli War of Independence, ed.)

2. The Arab population was not given the right to self determination because the UN wanted to create the Jewish State

Hebrew University’s Middle East Studies noted lecturer, Dr. Mordecai Nisan, was asked by INN to respond to the article. Here is his response:

It is conventional to accept, at least theoretically, the authority of international law and its institutions as the definitive mechanisms for defining political situations and offering solutions to political conflicts. The alternative is force and violence as the benchmark of history. Certainly that has been a mighty and decisive benchmark considering that the map of the world and the delineation of borders predominantly were decided by war and its results.

In his essay on “The Myth of the U.N. creation of Israel,” Jeremy R. Hammond has offered a sophist-style scholarly refutation of the international foundation for Israel’s establishment in 1948. Basing himself on the intrinsic right of the Arabs of Palestine to the Land, any other claim criterion is nullified: the League of Nations, the United Nations, and Great Britain as the mandatory power of Palestine, are all excluded from legitimately determining the fate of Palestine in the political turmoil of 1947.

As a result of Arab refusal to partition Palestine, and the Jewish determination to secure a state in at least part of Palestine, war was the inevitable reality. At a certain point in early 1948, while fearing war with the Arabs within the country and Arabs from the surrounding Arab countries, Ben-Gurion understood that war was the only scenario on the horizon.

Of course it is a myth to assert or believe that the U.N. created Israel, because it was the Zionist military victory buoyed by an iron-will national tenacity which created a Jewish state in the teeth of Arab hostility and belligerency. It could not have been otherwise. Once Hammond denies authority to law and legally sanctioned international institutions to decide, he – like the Arabs - has pointed to force as the only alternative. The Arabs vitiated the view of the U.N., but to their great loss.

The idea that a minority population, as was the Jewish population in Palestine in 1948, has a right to affirm its national claim is not unknown in the thorny instances of intra-state conflicts. A minority like a majority may also have a rigorous claim to self-determination. It was after all this kind of demographic and ethnic situation which gave birth to Pakistan as a Muslim state in 1947, separate from Hindu-majority India; or, if you like, to Catholic Ireland seceding from the United Kingdom in 1922. Perhaps African Christian/animist southern Sudan will take this momentous step in 2011. In such instances, pluralistic countries dissolve into their distinctive parts, for better or worse.

In Eretz Israel in 1948 and even before, the irreconcilable Jewish-Arab confrontation led to the breakdown of political order and the founding of an independent Jewish state, with Arab–populated areas of Palestine coming under the rule of Jordan and Egypt. Wanting all, in breach of the international decision for partition, the majority Arabs of Palestine ended up with nothing.

Hammond’s line of argument leads to the dissolution of the conflict-management or resolution-capacity of the U.N. And that is probably for the better, considering its endless meddling and globalist interventions in futile ways (read Lebanon), and its contrasting negligence to effectively intervene when the situation demands it (read Rwanda and Darfur).

Obviating its right to deny the Arabs all of Palestine means that the U.N. Partition Resolution 181 is, for Hammond, invalid. That being the case, there is no reason to accept the authority of U.N. Resolution 194 that calls for Palestinian refugee return. An emasculated U.N. cannot be manipulated to be only good for the Arabs and bad for the Jews when that is politically convenient. Hammond argues that the U.N. did not have a right to create Israel, so then it does not have a right to dissolve its existence under the guise of sanctifying resolution 194 from 62 years ago.

It is transparently true that Israel’s founding came through the sword, but one exercised on behalf of the transcending right of an ancient and integral people, the likes of whose special claim to the Land of Israel no other human collectivity can equal whatsoever. To continually hound Israel by raising the question of its legitimacy will only assure, may I suggest, future wars whose results will likely approximate in bold colors the results of 1948.
Israel is no different than any other nation. It affirms international law and its organizations when it benefits Israel but rejects it when things don't go their way.

The UN would never have been created had it not been for WW II which was really just a continuation of WW I. WW I would never have happened had it not been for the creation of the Federal Reserve. It's no accident that the Federal Reserve was created in 1913 and that WW I broke out in 1914. Without the Federal Reserve, there would have been no US intervention in Europe's chronic wars and feuding empires, and the escalation of violence would have been restricted to financial resources that were extremely weak in Europe. The Federal Reserve and its fiat money printing machine facilitated the US funding of WW I and WW II and it also spawned the monster known as the military industrial complex (MIC) that now rules with absolute power in the District of Crime (DC).  The MIC is a voracious monster that is consuming American liberty and prosperity.

When we think about Israel, how it came to be and the insidious and evil forces that created the Federal Reserve, WW I, WW II, the United Nations and Israel, it becomes clearly evident that big government, central banks and supra-national bodies like the UN are directly responsible for untold human misery, violence and carnage.

Moreover, Biblical Israel is and always has been the most explosive patch of dirt in human history because it's where Judaism, Christianity and Islam have always collided. The religious factor will not go away and the Jews in Israel are not going away.

Israel is here. It can't be undone. Well, it can be undone but only if Israel is militarily defeated and the Jewish people are annihilated.

Should the Arab Muslims just give up the fight over Israel? Israel only occupies about 1/2 of 1% of the Arab land mass. It's got no oil or natural resources worth warring over.

Unfortunately, there is just something about Israel that will propel folks to fight over it for all eternity as the Jews, Christians and Muslims all claim title to Biblical Israel.  

Monday, November 19, 2012

This is Truly EPIC, the NYT Admits that the Government Built and Subsidized Nursing Homes and Public Housing in Sandy Ravaged Rockaway Beach

The ravages of Hurricane Sandy are extensive as is the human misery. I've blogged about how the federal government is directly responsible for the nightmare because it subsidized massive growth in areas highly susceptible to devastating storm and hurricanes.

 Hurricanes, Sandy, Federal Flood Insurance and the Environment

Along comes, lo and behold, the New York Times with an article documenting that the Federal government and local government officials encouraged and subsidized the development of nursing homes and public housing projects for the poor in Rockaway Beach, NY.  The Rockaways were especially hard hit by Hurricane Sandy, here.

Why So Many Nursing Homes in the Rockaways?
The recent devastation wrought on the Rockaway Beach peninsula in Queens by Hurricane Sandy made me wonder: Why is there such a huge concentration of nursing homes in the Rockaways?

The urban renewal programs of the 1950s and 1960s are a big part of the story.

“Blessed with the Atlantic Ocean to the south and Jamaica Bay to the north, the Rockaways became a popular resort area of elegant hotels and fine houses in the 1830s,” Julia Vitullo-Martin, a senior fellow at the Manhattan Institute, wrote in 2008. “The coming of the railroad in the 1880s encouraged more intensive development, including playlands, amusement parks and a few apartment buildings. Attractive beachfront communities were developed, such as Belle Harbor, Neponsit and Arverne. The opening of the Cross Bay Bridge in 1925 and the Marine Parkway Bridge in 1937 made the Rockaways convenient for middle- and working-class households, who bought the bungalows.”

After World War II, more highways and air travel changed vacation habits, and property values declined. The urban renewal program of slum clearance, a federal program begun in 1949 and locally controlled by Robert Moses, used eminent domain to acquire and destroy thousands of the remaining bungalows. “Many had already been converted into substandard welfare housing,” Jack Eichenbaum, the Queens borough historian, said. In their place went swaths of public housing projects.

Ms. Vitullo-Martin wrote, “The city also used federal and state financing to support the development of dozens of nursing homes.”

One reason for building housing projects in the Rockaways was that their residents were thought not to need easy access to the city’s job centers. The same reasoning made the peninsula a logical choice for nursing homes. As with much of urban renewal, it seemed like a good idea at the time.
Welcome to government central planning! It's deadly and dangerous. Putting the poor, the old and the sick on a beach and in the path of storms and hurricanes is so liberal, so statist, so totalitarian and undoubtedly very profitable for the politically connected real estate developers who made fortunes off of these taxpayer funded projects.



A Drudge Headline with the above Paul Krugman photo.


The headline links to a New York Times article written by Paul Krugman titled:

Astoundingly, Krugman argues for the restoration of the 91% tax rate. It's epic! Apparently, Krugman is trying to 'out Hollande Hollande the French socialist' who is praised for raising taxes on the wealthy to 70%. Forget that money and businesses are fleeing France as the French economy continues to sink into the dark abyss of statism and socialism. Krugman writes:
Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, that’s right, 91 percent, while taxes on corporate profits were twice as large, relative to national income, as in recent years. The best estimates suggest that circa 1960 the top 0.01 percent of Americans paid an effective federal tax rate of more than 70 percent, twice what they pay today.
Krugman the diehard Keynesian statist economist conveniently leaves out highly relevant issues and facts including:

1.  The US did not have a giant welfare-warfare state in the 1950's and 1960's,
2.  Tax rates were lowered because WW II debts were being paid off.
3.  The dollar was still tethered to gold and the purchasing power of the dollar was strong.
4.  Free markets, relatively speaking, and an absence of the draconian regulatory state were delivering middle class prosperity and economic growth.

Nowhere in Krugman's incomprehensible and infantile rant does he even address the wars, foreign policy, the militarized police state, corporatism, rent seeking cronyism or the fact that entitlements now exceed tax receipts, here.

The era of middle class prosperity that Krugman so longs for had nothing whatsoever to do with high tax rates because America didn't have an economy killing re-distributionist state in the 1950's and 1960's.  The middle class was prosperous because of low taxes, a stable gold backed dollar with strong purchasing power, post WW II peace, a massive winding down of military spending and a high level of economic freedom.

The nation that Krugman opines for never existed and is pure 100% fiction.  So the only thing that Krugman's pathetically weak mind can latch onto is the raw emotion of the tired old class warfare drama.
Today, of course, the mansions, armies of servants and yachts are back, bigger than ever — and any hint of policies that might crimp plutocrats’ style is met with cries of “socialism.”

For starters, building mansions creates jobs, servants are voluntarily and gainfully employed and it takes a lot of knowledgeable high tech engineering and labor talent to build a modern yacht!  Shall we outlaw mansions, servants and yachts because Mr. Krugman clearly finds these things offensive? 

Sunday, November 18, 2012

A Twinkie Autopsy

Image Credit:

Twinkie-gate is getting a ton of media and blogger attention because of its bankruptcy and the loss of over 18,000 jobs. However, there is a whole lot more to the story besides the emotional aspect, and like everything else it's a whole lot more complicated than soundbites and rants from the left and right.

The right wing Twinkie meme:  A fine capitalist company like Hostess was forced out of business by the evil labor unions.

The left wing Twinkie meme:  The evil and greedy capitalists treat their labor like expendable garbage and only care about profits.

The Libertarian free market meme: Let the markets sort it out.

Some even believe that changes in consumer tastes and demand killed Twinkie and dubbed it creative destruction.

The Free Market Killed Hostess, And That’s A Good Thing
It’s unfortunate to see this company go away, of course. Not just for the history, but for the tens of thousands of people who are now unemployed....

Herein lies the paradox of progress. A society cannot reap the rewards of creative destruction without accepting that some individuals might be worse off, not just in the short term, but perhaps forever. At the same time, attempts to soften the harsher aspects of creative destruction by trying to preserve jobs or protect industries will lead to stagnation and decline, short-circuiting the march of progress. Schumpeter’s enduring term reminds us that capitalism’s pain and gain are inextricably linked. The process of creating new industries does not go forward without sweeping away the preexisting order.

Over the past two centuries, the Western nations that embraced capitalism have achieved tremendous economic progress as new industries supplanted old ones. Even with the higher living standards, however, the constant flux of free enterprise is not always welcome. The disruption of lost jobs and shuttered businesses is immediate, while the payoff from creative destruction comes mainly in the long term. As a result, societies will always be tempted to block the process of creative destruction, implementing policies to resist economic change.

Attempts to save jobs almost always backfire. Instead of going out of business, inefficient producers hang on, at a high cost to consumers or taxpayers. The tinkering short circuits market signals that shift resources to emerging industries.
It's unclear whether or not the company, Hostess Brands, and its well known and popular brands that included Hostess®, Drakes® and Dolly Madison®, which make iconic cake products such as Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes® and also includes bread brands that include Wonder®, Nature’s Pride ®, Merita®, Home Pride®, Butternut®, and Beefsteak® and others just arrived at a natural free market death or if other considerations were involved

The website of Hostess Brands says:
Hostess Brands is Closed....

We are sorry to announce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets. For more information, go to Thank you for all of your loyalty and support over the years


The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company’s ability to produce and deliver products at multiple facilities.
Jonathan Turley's liberal leaning website reported on the Hostess bankruptcy, here:
The company is in its second bankruptcy in a decade. Hostess sold about $2.5 billion worth of snack products last year with Twinkies leading the pack. However, the company has nearly $1 billion in debt and has $2 billion in unfunded pension obligations..

While Hostess CEO Gregory Rayburn was planning to ask his employees for wage and benefit concessions, he was awarded a 300 percent raise (from approximately $750,000 to $2,550,000). Nine other top executives of the company received massive pay raises.

Over the eight years since the first bankruptcy, Hostess employees have watched as:

money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.
Is the Hostess bankruptcy an engineered bankruptcy, a chapter straight out of the famous Wall Street movie staring Michael Douglas, a legal maneuver to avoid pension liability, a scheme to wiggle out of paying its debts, a strategy to kill the unions or is it something even more sinister?

Synergy is defined as the belief that the whole is greater than the individual parts.  In Wall Street speak, the individual parts are worth vastly more than the whole.  All those Hostess Registered Trademarks have value, probably considerable value, and there is no doubt that they will be sold for the highest possible price.

Creatures like Hostess, who are wallowing in mountains of debt, are all products of the leveraged buyout (LBO) fever that was born in the 1980's after the dollar was de-tethered from gold and easy fiat money became as prevalent as grains of sand in the Sahara Desert.

Understanding the LBO game requires understanding the concept of leverage.  Simply put, leverage is very little equity (no skin in the game) and a big pile of debt to play the takeover game and frequently the hostile takeover game.  The LBO players are typically Wall Streeters, Hedge fund operators, private equity firms and just about any financial high roller seeking to make a big play with borrowed money.  Many of these takeovers absolutely included plans to bust up companies and sell them off piece by piece.

There are many famous LBO's including an LBO involving former Treasury Secretary William Simon, here.
It may be argued that LBO fever first set in through a demonstration of its potential in a wildly successful deal by former Treasury Secretary William Simon in 1983. He had participated in an LBO takeover of Gibson Greeting Cards which was financed by $1M in equity and $79M in debt (total purchase value $80M); 1.5 years later Gibson was refloated on the market for $300M. Simon's original investment of $330K (1/3 of the total equity stake) turned into a fortune of $66M (ie. 1/3 of the total market capitalisation), thanks to the power of 80:1 leverage.
Having started my Libertarian education back in the early 1970's that included reading and learning about free market capitalism, the LBO craze left be scratching my head in bewilderment.  The debt fueled LBO craze wasn't creating new plants, new companies, new products, new jobs or even R & D for the future.  The LBO craze was strictly predicated on raiding and plundering corporations, their assets and renouncing unions and pension obligations.

What Republicans dub plain old fashion venture capitalism is perceived by Democrats and the left as vulture capitalism.  Mitt Romney earned his mega fortune doing LBO deals.  A lot of these deals came packaged with government loans and subsidies (corporate welfare).

Let's get back to Hostess Brands because the company is possibly just another victim of the LBO as told by Firedog Lake.

Death By Twinkie: What the Hostess Liquidation Says About Labor and the Economy
Hostess has apparently not kept up with market share – with such good products like Twinkies and Wonder Bread, imagine! – but as you see above, the real trigger for this liquidation was the strike. This is the second Hostess bankruptcy since 2004. The BCTGM union took multiple concessions in the first bankruptcy, and offered multiple concessions (I’d tell you exactly what they are but apparently they’re having bandwidth issues at their site today) on wages and benefits this time around. But the contract the company tried to unilaterally impose was so bad, with a 27-32% wage cut and benefit slashes and the elimination of the eight-hour workday, that 92% of workers rejected it. And after the strike initiated, Hostess moved right to shutting down the company rather than working with the union on a resolution.

In fact, Wall Street hedge funds and private equity firms own Hostess brands, and they took massive bonuses and payouts over the past eight years or so. They dumped the company pensions, unilaterally stopped making pension payments that would have totaled $160 million, and plan to pay themselves with the sale of the liquidated assets of the company. Their current CEO’s main credential for the job is his “expertise in corporate liquidations,” according to the union (he’s also seen his pay triple).

This is an object lesson in how management looks at labor relations these days. Workers are expected to take their lumps, and if they protest, management will just blow up the company. And the owners will still make a profit. This is Romneyism and Bainism writ large. AFL-CIO President Rich Trumka reacted today:

What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price. These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America.
It's definitely refreshing to hear the AFL-CIO president invoke crony capitalism as a cause of America's economic decline.

Also, there is something inherently repugnant and unjust about an economic system that makes the rich richer and the poor poorer.  America was once a nation with the strongest middle class in human history.  Now the once proud and prosperous American middle class is vanishing as we increasingly morph into a society of the rich and the poor.

Not only is this a very bad situation that will continue to explode into class warfare, it's also a situation that was substantially advanced when Nixon de-tethered the dollar from gold in 1971.  The unleashing of "Banksters Gone Wild" has resulted in all kinds of horrors from birthing the LBO in the 1980's to massive $15 trillion bankster bailouts to a busted economy.

The real tragedy, however, is that capitalism always get blamed. The truth of the matter is that America doesn't have free market capitalism.  We've got this insidious hybrid command and control corporatist and bankster run economy that maintains its absolute control through the buying of Congress Critters and the ownership of the DNC and RNC money laundering machines.

When we think of companies like Hostess that are saddled with incredible debt stemming from LBO shenanigans we also have to think about "how did all this happen, why did it happen and who is really benefitting?".  The workers, consumers and free marketd are not among the beneficiaries.

Saturday, November 17, 2012

The GOP Panics and Shows a Spine that Resembles Cooked Spaghetti

OKAY, I'm not going to scream one more time "Just Cut the Damn Spending!". Disturbingly, Politico is reporting that the GOP is ready to give in on Obamacare and higher taxes.

 How red-state governors are opening the doors to Obamacare
Bobby Jindal’s got a funny way of showing how much he hates Obamacare and Washington bureaucracy: The Louisiana governor’s about to invite the feds to set up a health insurance exchange right in his backyard. So is Rick Perry in Texas. Ditto for John Kasich in Ohio. And Scott Walker in Wisconsin. These Republican governors, and more than a dozen others in red states around the country, have decided it’s better to have Obamacare forced on them than to legitimize it by setting up their own exchanges, even if that means empowering the federal government at the expense of the states.
Whatever happened to all the Republican talk about nullifying Obamacare and refusing to comply with the implementation of the healthcare exchanges? On the tax front, the situation is equally bad.

 Some Republican governors soften on taxes
Some Republican governors are softening on the party’s hard-line toward tax increases for the wealthy, suggesting that GOP congressmen at least be open to rate hikes in exchange for a comprehensive fiscal agreement on taxes and entitlements. “The people have spoken, I think we’re going to have to be [flexible] now,” said Virginia Gov. Bob McDonnell, when asked if his party would now have to be open to taxes on the highest earners. “Elections do have consequences. The president campaigned on that.”
McDonnell, the outgoing head of the Republican Governors Association, made clear that raising taxes isn’t his first choice. But he said that the political reality of a Democratic president and Democratic Senate makes it unlikely that a grand bargain can be struck without some compromise on raising revenues.
Such spineless statist rhetoric isn't going to win over the conservative voters who have been opining for less government, less spending and lower taxes for years. Quite frankly, the Republicans are admitting that they are scared of the Democrats and even more scared of raising the issue of spending cuts.

Friday, November 16, 2012

America Really Doesn't Have Health Insurance

America really doesn't have health insurance. The definition of insurance is as follows (here):
Insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a financial (personal) loss. The insured receives a contract, called the insurance policy, which details the conditions and circumstances under which the insured will be financially compensated.
By definition, insurance is a voluntary contract and coercion should never a factor, otherwise it's not insurance but government force and taxation. Folks voluntarily choose to purchase insurance for various purposes to mitigate against unforseeable catastrophic events like an automobile accident or the house burning down. Decades ago before government intervened in the healthcare business, America had a low cost world class medical system because folks only bought medical insurance for catastrophic medical events such as a major illness requiring large but unexpected medical expenses. All other routine medical expenses, such as doctor visits and perscriptions, were paid for out of pocket.

But along comes government to destroy a perfectly functional and cost effective and voluntary  healthcare system.  Courtesy of the government, America now has a taxpayer subsidized healthcare system that costs over $1 trillion dollars a year and that's  just for those on government healthcare.

The Old, The Poor, and U.S. Health Care Explained
Medicare and Medicaid combined cost over $1 trillion last year, and health care costs are spiraling....

In 1969, government plus private health spending per capita in America was just 8.2 percent of median income, but that has now risen to over 30 percent, according to a National Institute for Health Care Management analysis of government data.
According to USA Today, 2011 Medicare and Medicaid spending was $554 billion and $438 billion, respectively, here.  Total US healthcare costs are staggering.  A healthcare think tank,, reported that America spent $2.6 trillion on healthcare in 2010, here.  Bloomberg reported that US healthcare spending will top $3 trillion in 2014 and that government funded healthcare accounts for 46% of all healthcare spending, here.

Forbes reported in June 2012 that Medicare premiums collected in the form of payroll tax deductions to fund the Medicare program only covers about a third of the actual cost of Medicare.

The Truth About Medicare Costs: Payroll Taxes Cover Just About a Third

Medicaid recipients don't pay a cent for their benefits.  So here we sit with these 2 monster trillion dollar government healthcare programs and the taxes collected to fund them only total about $185 billion (a third of Medicare spending).  That's a whopper of a gap as well as a cash shortfall of over $800 billion annually.

As Americans are about to learn, nothing is free.  Obamacare was designed accomplish 3 things.

1.  Force folks to pay for mandated healthcare services that they wouldn't voluntarily choose to pay for in a free market if they actually had the option to buy  REAL insurance at free market prices.

2. Create a healthcare system so expensive that more folks will be forced into government run healthcare programs.  It's nothing more a backdoor single payer government run healthcare system.

3. Mandate a slew of new taxes, here, to fund the programs.

Obamacare will hit the poor and middle class the hardest.  The middle class who can afford healthcare will be paying higher healthcare costs in the way of taxes and government mandated insurance costs to subsidize the socialized healthcare system and the poor will be paying taxes to cover at least a portion of all their free healthcare.

More Middle-Class Americans Hit by Obamacare Tax
Of the 30 million Americans whom Obamacare leaves uninsured and without affordable insurance options, 6 million will have to pay the penalty, an increased estimate from 2010.....

Despite claims made by Obamacare’s advocates that the law will help middle- and low-income Americans, CBO’s table reveals that the distribution of the tax falls heavily on those making less than 400 percent of the federal poverty level (FPL)—meaning the majority of this new tax falls on the very people the law was supposed to help. For instance, a family of four making about $24,600 per year, the projected FPL in 2016, could be subject to this egregious tax penalty.

Regardless of whether or not these 6 million Americans want health coverage, they are going to pay a hefty tax and still won’t have it. Moreover, the individual mandate tax is only one of Obamacare’s 18 new or increased taxes and penalties that will cost Americans $836 billion over the next 10 years.
According to website of the White House, here, federal revenues and expenditures are as follows but the government doesn't even seem to know how much it collects and spends as evidenced by the figures being estimates.

Year      Receipts     Spending
2011     $2,174        $3,819   Estimated
2012     $2,626          3,729   Estimated
2013     $3,033          3,771   Estimated
2014     $3,333          3,977   Estimated

It's clearly evident that the government government is anticipating a windfall in Obamacare tax receipts and collections.  Meanwhile, the IRS is beefing up its staff to collect all these new taxes.

How many, exactly? Numbers range from 2,700 to 16,500:
The IRS says it is well on its way to gearing up for the new law but has offered little information about its long-term budget and staffing needs, generating complaints from Republican lawmakers and concern from government watchdogs.
The IRS is expected to spend $881 million on the law from 2010 through 2013, hiring more than 2,700 new workers and upgrading its computer systems. But the IRS has not made public information about its spending plans in the following years, when the bulk of the health care law takes effect.
Not surprisingly, the US has the most expensive healthcare system in the world and by a wide margin. Moreover, the US healthcare system ranks 37th in performance and quality.

U.S. health care: Highest in the world in cost, 37th in performance. This system has already been declared guilty.
The health care system in the U.S. is 40% more expensive per capita than the next most expensive OECD developed countries

As a country, approximately 18.2% of our GDP is devoted to healthcare spending. Switzerland and France (#2 and #3) spend respectively 12.3% of 12.0% of their GDP for health care. The U.S. spends the second greatest amount of GDP for health care among all members of the United Nations, topped only by East Timor.

For its money, the U.S. obtains health outcomes that are near the bottom of the OECD rankings, and, in fact, rival some of the outcomes of Third World countries.
Americans seem to overpay for everything because our entire economic system is based on corporatism, oligarchy, fascism, statism, socialism, political corruption and rent seeking cronyism.   Meanwhile, Americans will happily cling to their delusion that healthcare is free.


What the hell are we paying for?  God only knows but whatever it is, it's hugely expensive and there is definitely no bang for the buck.  The health of the American people are the first victims.

Thursday, November 15, 2012

Ron Paul is BETTER than the Founders

We know about Ron Paul, the humble doctor and family man who turned statesman and advocated for peace, liberty and prosperity for 30 years.  Many compare Ron Paul with the founding fathers but the more I learn about our founders the more I am convinced that Ron Paul stands above them.

Take George Washington.  What churned Washington into a revolutionary wasn't a quest for liberty for the American people but his own bruised and colossal ego.  Early in his life, he was furious and humiliated that as a member of Virginia's slave owning aristocratic plantation class, he was denied a commission in the British army.  Washington also lobbied hard for a land grant from George III to expand his already gargantuan land holdings and slave plantations.  Washington deemed himself a high ranking and noble member of the privileged ruling aristocracy.  His anger with the British stems from the fact that America's ruling aristocracy was denied equal recognition and power that was conferred upon Britain's own ruling aristocracy.  The real George Washington vs. the fictional Washington legend that we find in our history books is a story of conflict that includes the good, the bad and the ugly.

Thomas Jefferson, another aristocratic member of the Virginia slave holding plantation class, is difficult and perplexing because of his extraordinary mind, prose, philosophical views and writings.  Jefferson may have believed what he wrote, but he didn't live it.  In fact, Jefferson was a compulsive spender who lived way beyond his means and was always in debt to fund his lavish lifestyle.  While Jefferson did call slavery a "moral and political depravity", he never freed his slaves except for 5 slaves who were members of the Hemmings family and possibly the children he fathered with his slave Sally Hemming.   Jefferson was so in debt at the time of his death that his slaves were auctioned off on the front lawn of Monticello and Monticello itself was auctioned off for a pittance.  In reality, Jefferson lived his entire life as a reckless slave holding aristocrat.  Jefferson's private life in no way comports with his incredible public life.  Despite his flaws, Jefferson was an extraordinary man.

Alexander Hamilton was a most unusual character.  He rose up from the lower middle class and was born and raised on a Caribbean slave plantation island.  Hamilton revered and worshiped all things British including its empire and aristocratic merchantilism.  Hamilton was catapulted to power and fame when he got noticed by Washington early in the Revolutionary War.  Hamilton was smart, brave, dashing, loyal and hardworking. However, Hamilton also had an obsession with himself who he perceived as a rising Napoleon Bonaparte.  After the Revolutionary War Hamilton ferociously fought for a new army and a war with France.  Fellow Federalist John Adams, who was president at the time, squashed his war and military ambitions.  Hamilton was so incensed with Adams that he successfully waged a campaign to guarantee that Adams would be a one term president for the crime of refusing to pursue a military US empire and costly wars.

Benjamin Franklin was an extraordinary and noble man by any measurement.  He may have been America's first voluntarist because he was always organizing voluntary groups like fire fighters and he also lobbied the rich to donate books and money for libraries and public schools.  Franklin belonged to many groups that voluntarily sought to solve problems without government and public money.  Ben Franklin was 100% self-made and rose from humble beginning as the son of a Boston candle maker.  He was also an incredibly astute diplomat who knew how to play the French against the British and vice versa. Without Franklin's superb diplomacy skills, it's doubtful that the French would have ever intervened on behalf of the American Revolution.  But even Franklin, who truly believed that a deal could be cut with the British to keep America a sovereign nation but a loyal component of the British Empire, lobbied the British for a land grant for himself.

John Adams was, in my humble opinion, the founder closest to Ron Paul in ideology, morality and principles, even if Ron Paul and John Adams are temperamentally quite different. Adams was the son of a farmer who lived a simple life but throughout his life he never flinched or waivered on his principle, even though Adams had a few missteps and errors in judgment, particularly with the Alien and Sedition Acts. The enduring legacy of John Adams is that he fought Hamilton and other Federalist warmongers, the neocons of the day, and even sacrificed a second term as president to save the nation from war with France.  For more on John and Abigail Adams, see:

John and Abigail, the Original Adams Family

At the end of the day, our founders are still extraordinary men and like all men they have their own flaws, limitations and motivations.  Still, they were willing to sacrifice everything in pursuit of their Revolution.  Jefferson narrowly escaped capture by the British when they literally showed up at Monticello to arrest him.  Washington was well aware that he gambled the house and everything he owned on the Revolution.  It's also fair to say that our founders were products of the times and despite their flaws they successfully forged a new version of human liberty that for the most part recognized natural rights as a guiding principle.

I think our founders would all be very proud of Ron Paul for ideologically perfecting and clarifying their dream in a context that is far more moral and relevant.  Ron Paul never asked for anything and he never got anything.  Ron Paul never sought glory or power or land or privilege.  It's hard to find a human being alive or dead whose motivations are purer than that of Ron Paul.

Ron Paul will always dwell the the hearts and minds of folks who view peace and liberty as natural rights.  The Revolution continues.

Wednesday, November 14, 2012


The text of Ron Paul's incredible farewell speech from The Burning Platform.


Farewell Dear Doctor. You were the last remaining patriot. I salute you for your wisdom, courage, and honesty. You alone were the shining light during this dark time. You are no longer alone in your fight for freedom, liberty, and truth. 

By Ron Paul | Delivered on the House Floor, November 14, 2012 

 Farewell to Congress

This may well be the last time I speak on the House Floor. At the end of the year I’ll leave Congress after 23 years in office over a 36 year period. My goals in 1976 were the same as they are today: promote peace and prosperity by a strict adherence to the principles of individual liberty.

It was my opinion, that the course the U.S. embarked on in the latter part of the 20th Century would bring us a major financial crisis and engulf us in a foreign policy that would overextend us and undermine our national security.

To achieve the goals I sought, government would have had to shrink in size and scope, reduce spending, change the monetary system, and reject the unsustainable costs of policing the world and expanding the American Empire.

The problems seemed to be overwhelming and impossible to solve, yet from my view point, just following the constraints placed on the federal government by the Constitution would have been a good place to start.

How Much Did I Accomplish?

In many ways, according to conventional wisdom, my off-and-on career in Congress, from 1976 to 2012, accomplished very little. No named legislation, no named federal buildings or highways—thank goodness. In spite of my efforts, the government has grown exponentially, taxes remain excessive, and the prolific increase of incomprehensible regulations continues. Wars are constant and pursued without Congressional declaration, deficits rise to the sky, poverty is rampant and dependency on the federal government is now worse than any time in our history.

All this with minimal concerns for the deficits and unfunded liabilities that common sense tells us cannot go on much longer. A grand, but never mentioned, bipartisan agreement allows for the well-kept secret that keeps the spending going. One side doesn’t give up one penny on military spending, the other side doesn’t give up one penny on welfare spending, while both sides support the bailouts and subsidies for the banking and corporate elite. And the spending continues as the economy weakens and the downward spiral continues. As the government continues fiddling around, our liberties and our wealth burn in the flames of a foreign policy that makes us less safe.

The major stumbling block to real change in Washington is the total resistance to admitting that the country is broke. This has made compromising, just to agree to increase spending, inevitable since neither side has any intention of cutting spending.

The country and the Congress will remain divisive since there’s no “loot left to divvy up.”

Without this recognition the spenders in Washington will continue the march toward a fiscal cliff much bigger than the one anticipated this coming January.

I have thought a lot about why those of us who believe in liberty, as a solution, have done so poorly in convincing others of its benefits. If liberty is what we claim it is- the principle that protects all personal, social and economic decisions necessary for maximum prosperity and the best chance for peace- it should be an easy sell. Yet, history has shown that the masses have been quite receptive to the promises of authoritarians which are rarely if ever fulfilled.

Authoritarianism vs. Liberty

If authoritarianism leads to poverty and war and less freedom for all individuals and is controlled by rich special interests, the people should be begging for liberty. There certainly was a strong enough sentiment for more freedom at the time of our founding that motivated those who were willing to fight in the revolution against the powerful British government.

During my time in Congress the appetite for liberty has been quite weak; the understanding of its significance negligible. Yet the good news is that compared to 1976 when I first came to Congress, the desire for more freedom and less government in 2012 is much greater and growing, especially in grassroots America. Tens of thousands of teenagers and college age students are, with great enthusiasm, welcoming the message of liberty.

I have a few thoughts as to why the people of a country like ours, once the freest and most prosperous, allowed the conditions to deteriorate to the degree that they have.

Freedom, private property, and enforceable voluntary contracts, generate wealth. In our early history we were very much aware of this. But in the early part of the 20th century our politicians promoted the notion that the tax and monetary systems had to change if we were to involve ourselves in excessive domestic and military spending. That is why Congress gave us the Federal Reserve and the income tax. The majority of Americans and many government officials agreed that sacrificing some liberty was necessary to carry out what some claimed to be “progressive” ideas. Pure democracy became acceptable.

They failed to recognized that what they were doing was exactly opposite of what the colonists were seeking when they broke away from the British.

Some complain that my arguments makes no sense, since great wealth and the standard of living improved for many Americans over the last 100 years, even with these new policies.

But the damage to the market economy, and the currency, has been insidious and steady. It took a long time to consume our wealth, destroy the currency and undermine productivity and get our financial obligations to a point of no return. Confidence sometimes lasts longer than deserved. Most of our wealth today depends on debt.

The wealth that we enjoyed and seemed to be endless, allowed concern for the principle of a free society to be neglected. As long as most people believed the material abundance would last forever, worrying about protecting a competitive productive economy and individual liberty seemed unnecessary.

The Age of Redistribution

This neglect ushered in an age of redistribution of wealth by government kowtowing to any and all special interests, except for those who just wanted to left alone. That is why today money in politics far surpasses money currently going into research and development and productive entrepreneurial efforts.

The material benefits became more important than the understanding and promoting the principles of liberty and a free market. It is good that material abundance is a result of liberty but if materialism is all that we care about, problems are guaranteed.

The crisis arrived because the illusion that wealth and prosperity would last forever has ended. Since it was based on debt and a pretense that debt can be papered over by an out-of-control fiat monetary system, it was doomed to fail. We have ended up with a system that doesn’t produce enough even to finance the debt and no fundamental understanding of why a free society is crucial to reversing these trends.

If this is not recognized, the recovery will linger for a long time. Bigger government, more spending, more debt, more poverty for the middle class, and a more intense scramble by the elite special interests will continue.

We Need an Intellectual Awakening

Without an intellectual awakening, the turning point will be driven by economic law. A dollar crisis will bring the current out-of-control system to its knees.

If it’s not accepted that big government, fiat money, ignoring liberty, central economic planning, welfarism, and warfarism caused our crisis we can expect a continuous and dangerous march toward corporatism and even fascism with even more loss of our liberties. Prosperity for a large middle class though will become an abstract dream.

This continuous move is no different than what we have seen in how our financial crisis of 2008 was handled. Congress first directed, with bipartisan support, bailouts for the wealthy. Then it was the Federal Reserve with its endless quantitative easing. If at first it doesn’t succeed try again; QE1, QE2, and QE3 and with no results we try QE indefinitely—that is until it too fails. There’s a cost to all of this and let me assure you delaying the payment is no longer an option. The rules of the market will extract its pound of flesh and it won’t be pretty.

The current crisis elicits a lot of pessimism. And the pessimism adds to less confidence in the future. The two feed on themselves, making our situation worse.

If the underlying cause of the crisis is not understood we cannot solve our problems. The issues of warfare, welfare, deficits, inflationism, corporatism, bailouts and authoritarianism cannot be ignored. By only expanding these policies we cannot expect good results.

Everyone claims support for freedom. But too often it’s for one’s own freedom and not for others. Too many believe that there must be limits on freedom. They argue that freedom must be directed and managed to achieve fairness and equality thus making it acceptable to curtail, through force, certain liberties.

Some decide what and whose freedoms are to be limited. These are the politicians whose goal in life is power. Their success depends on gaining support from special interests.

No More ‘isms’

The great news is the answer is not to be found in more “isms.” The answers are to be found in more liberty which cost so much less. Under these circumstances spending goes down, wealth production goes up, and the quality of life improves.

Just this recognition—especially if we move in this direction—increases optimism which in itself is beneficial. The follow through with sound policies are required which must be understood and supported by the people.

But there is good evidence that the generation coming of age at the present time is supportive of moving in the direction of more liberty and self-reliance. The more this change in direction and the solutions become known, the quicker will be the return of optimism.

Our job, for those of us who believe that a different system than the one that we have had for the last 100 years, has driven us to this unsustainable crisis, is to be more convincing that there is a wonderful, uncomplicated, and moral system that provides the answers. We had a taste of it in our early history. We need not give up on the notion of advancing this cause.

It worked, but we allowed our leaders to concentrate on the material abundance that freedom generates, while ignoring freedom itself. Now we have neither, but the door is open, out of necessity, for an answer. The answer available is based on the Constitution, individual liberty and prohibiting the use of government force to provide privileges and benefits to all special interests.

After over 100 years we face a society quite different from the one that was intended by the Founders. In many ways their efforts to protect future generations with the Constitution from this danger has failed. Skeptics, at the time the Constitution was written in 1787, warned us of today’s possible outcome. The insidious nature of the erosion of our liberties and the reassurance our great abundance gave us, allowed the process to evolve into the dangerous period in which we now live.

Dependency on Government Largesse

Today we face a dependency on government largesse for almost every need. Our liberties are restricted and government operates outside the rule of law, protecting and rewarding those who buy or coerce government into satisfying their demands. Here are a few examples:

Undeclared wars are commonplace.
Welfare for the rich and poor is considered an entitlement.
The economy is overregulated, overtaxed and grossly distorted by a deeply flawed monetary system. Debt is growing exponentially.
The Patriot Act and FISA legislation passed without much debate have resulted in a steady erosion of our 4th Amendment rights.
Tragically our government engages in preemptive war, otherwise known as aggression, with no complaints from the American people.
The drone warfare we are pursuing worldwide is destined to end badly for us as the hatred builds for innocent lives lost and the international laws flaunted. Once we are financially weakened and militarily challenged, there will be a lot resentment thrown our way.
It’s now the law of the land that the military can arrest American citizens, hold them indefinitely, without charges or a trial.
Rampant hostility toward free trade is supported by a large number in Washington.
Supporters of sanctions, currency manipulation and WTO trade retaliation, call the true free traders “isolationists.”
Sanctions are used to punish countries that don’t follow our orders.
Bailouts and guarantees for all kinds of misbehavior are routine.
Central economic planning through monetary policy, regulations and legislative mandates has been an acceptable policy.


 Excessive government has created such a mess it prompts many questions:

Why are sick people who use medical marijuana put in prison?
Why does the federal government restrict the drinking of raw milk?
Why can’t Americans manufacturer rope and other products from hemp?
Why are Americans not allowed to use gold and silver as legal tender as mandated by the Constitution? Why is Germany concerned enough to consider repatriating their gold held by the FED for her in New York?
Is it that the trust in the U.S. and dollar supremacy beginning to wane?
Why do our political leaders believe it’s unnecessary to thoroughly audit our own gold?
Why can’t Americans decide which type of light bulbs they can buy?
Why is the TSA permitted to abuse the rights of any American traveling by air?
Why should there be mandatory sentences—even up to life for crimes without victims—as our drug laws require?
Why have we allowed the federal government to regulate commodes in our homes?
Why is it political suicide for anyone to criticize AIPAC ?
Why haven’t we given up on the drug war since it’s an obvious failure and violates the people’s rights? Has nobody noticed that the authorities can’t even keep drugs out of the prisons?
How can making our entire society a prison solve the problem?
Why do we sacrifice so much getting needlessly involved in border disputes and civil strife around the world and ignore the root cause of the most deadly border in the world-the one between Mexico and the US?
Why does Congress willingly give up its prerogatives to the Executive Branch? Why does changing the party in power never change policy?
Could it be that the views of both parties are essentially the same?
Why did the big banks, the large corporations, and foreign banks and foreign central banks get bailed out in 2008 and the middle class lost their jobs and their homes?
Why do so many in the government and the federal officials believe that creating money out of thin air creates wealth?
Why do so many accept the deeply flawed principle that government bureaucrats and politicians can protect us from ourselves without totally destroying the principle of liberty?
Why can’t people understand that war always destroys wealth and liberty?
Why is there so little concern for the Executive Order that gives the President authority to establish a “kill list,” including American citizens, of those targeted for assassination?
Why is patriotism thought to be blind loyalty to the government and the politicians who run it, rather than loyalty to the principles of liberty and support for the people?
Real patriotism is a willingness to challenge the government when it’s wrong. Why is it is claimed that if people won’t or can’t take care of their own needs, that people in government can do it for them? Why did we ever give the government a safe haven for initiating violence against the people? Why do some members defend free markets, but not civil liberties?
Why do some members defend civil liberties but not free markets?
Aren’t they the same? Why don’t more defend both economic liberty and personal liberty?
Why are there not more individuals who seek to intellectually influence others to bring about positive changes than those who seek power to force others to obey their commands?
Why does the use of religion to support a social gospel and preemptive wars, both of which requires authoritarians to use violence, or the threat of violence, go unchallenged?
Aggression and forced redistribution of wealth has nothing to do with the teachings of the world great religions.
Why do we allow the government and the Federal Reserve to disseminate false information dealing with both economic and foreign policy?
Why is democracy held in such high esteem when it’s the enemy of the minority and makes all rights relative to the dictates of the majority?
Why should anyone be surprised that Congress has no credibility, since there’s such a disconnect between what politicians say and what they do?
Is there any explanation for all the deception, the unhappiness, the fear of the future, the loss of confidence in our leaders, the distrust, the anger and frustration? Yes there is, and there’s a way to reverse these attitudes. The negative perceptions are logical and a consequence of bad policies bringing about our problems. Identification of the problems and recognizing the cause allow the proper changes to come easy.

Trust Yourself, Not the Government

Too many people have for too long placed too much confidence and trust in government and not enough in themselves. Fortunately, many are now becoming aware of the seriousness of the gross mistakes of the past several decades. The blame is shared by both political parties. Many Americans now are demanding to hear the plain truth of things and want the demagoguing to stop. Without this first step, solutions are impossible.

Seeking the truth and finding the answers in liberty and self-reliance promotes the optimism necessary for restoring prosperity. The task is not that difficult if politics doesn’t get in the way.

We have allowed ourselves to get into such a mess for various reasons.

Politicians deceive themselves as to how wealth is produced. Excessive confidence is placed in the judgment of politicians and bureaucrats. This replaces the confidence in a free society. Too many in high places of authority became convinced that only they, armed with arbitrary government power, can bring about fairness, while facilitating wealth production. This always proves to be a utopian dream and destroys wealth and liberty. It impoverishes the people and rewards the special interests who end up controlling both political parties.

It’s no surprise then that much of what goes on in Washington is driven by aggressive partisanship and power seeking, with philosophic differences being minor.

Economic Ignorance

Economic ignorance is commonplace. Keynesianism continues to thrive, although today it is facing healthy and enthusiastic rebuttals. Believers in military Keynesianism and domestic Keynesianism continue to desperately promote their failed policies, as the economy languishes in a deep slumber. 

Supporters of all government edicts use humanitarian arguments to justify them.

Humanitarian arguments are always used to justify government mandates related to the economy, monetary policy, foreign policy, and personal liberty. This is on purpose to make it more difficult to challenge. But, initiating violence for humanitarian reasons is still violence. Good intentions are no excuse and are just as harmful as when people use force with bad intentions. The results are always negative.

The immoral use of force is the source of man’s political problems. Sadly, many religious groups, secular organizations, and psychopathic authoritarians endorse government initiated force to change the world. Even when the desired goals are well-intentioned—or especially when well-intentioned—the results are dismal. The good results sought never materialize. The new problems created require even more government force as a solution. The net result is institutionalizing government initiated violence and morally justifying it on humanitarian grounds.

This is the same fundamental reason our government uses force for invading other countries at will, central economic planning at home, and the regulation of personal liberty and habits of our citizens.

It is rather strange, that unless one has a criminal mind and no respect for other people and their property, no one claims it’s permissible to go into one’s neighbor’s house and tell them how to behave, what they can eat, smoke and drink or how to spend their money.

Yet, rarely is it asked why it is morally acceptable that a stranger with a badge and a gun can do the same thing in the name of law and order. Any resistance is met with brute force, fines, taxes, arrests, and even imprisonment. This is done more frequently every day without a proper search warrant.

No Government Monopoly over Initiating Violence

Restraining aggressive behavior is one thing, but legalizing a government monopoly for initiating aggression can only lead to exhausting liberty associated with chaos, anger and the breakdown of civil society. Permitting such authority and expecting saintly behavior from the bureaucrats and the politicians is a pipe dream. We now have a standing army of armed bureaucrats in the TSA, CIA, FBI, Fish and Wildlife, FEMA, IRS, Corp of Engineers, etc. numbering over 100,000. Citizens are guilty until proven innocent in the unconstitutional administrative courts.

Government in a free society should have no authority to meddle in social activities or the economic transactions of individuals. Nor should government meddle in the affairs of other nations. All things peaceful, even when controversial, should be permitted.

We must reject the notion of prior restraint in economic activity just we do in the area of free speech and religious liberty. But even in these areas government is starting to use a backdoor approach of political correctness to regulate speech-a dangerous trend. Since 9/11 monitoring speech on the internet is now a problem since warrants are no longer required.

The Proliferation of Federal Crimes

The Constitution established four federal crimes. Today the experts can’t even agree on how many federal crimes are now on the books—they number into the thousands. No one person can comprehend the enormity of the legal system—especially the tax code. Due to the ill-advised drug war and the endless federal expansion of the criminal code we have over 6 million people under correctional suspension, more than the Soviets ever had, and more than any other nation today, including China. I don’t understand the complacency of the Congress and the willingness to continue their obsession with passing more Federal laws. Mandatory sentencing laws associated with drug laws have compounded our prison problems.

The federal register is now 75,000 pages long and the tax code has 72,000 pages, and expands every year. When will the people start shouting, “enough is enough,” and demand Congress cease and desist.

Achieving Liberty

Liberty can only be achieved when government is denied the aggressive use of force. If one seeks liberty, a precise type of government is needed. To achieve it, more than lip service is required.

Two choices are available.

1. A government designed to protect liberty—a natural right—as its sole objective. The people are expected to care for themselves and reject the use of any force for interfering with another person’s liberty. Government is given a strictly limited authority to enforce contracts, property ownership, settle disputes, and defend against foreign aggression.

2. A government that pretends to protect liberty but is granted power to arbitrarily use force over the people and foreign nations. Though the grant of power many times is meant to be small and limited, it inevitably metastasizes into an omnipotent political cancer. This is the problem for which the world has suffered throughout the ages. Though meant to be limited it nevertheless is a 100% sacrifice of a principle that would-be-tyrants find irresistible. It is used vigorously—though incrementally and insidiously. Granting power to government officials always proves the adage that: “power corrupts.”

Once government gets a limited concession for the use of force to mold people habits and plan the economy, it causes a steady move toward tyrannical government. Only a revolutionary spirit can reverse the process and deny to the government this arbitrary use of aggression. There’s no in-between. Sacrificing a little liberty for imaginary safety always ends badly.

Today’s mess is a result of Americans accepting option #2, even though the Founders attempted to give us Option #1.

The results are not good. As our liberties have been eroded our wealth has been consumed. The wealth we see today is based on debt and a foolish willingness on the part of foreigners to take our dollars for goods and services. They then loan them back to us to perpetuate our debt system. It’s amazing that it has worked for this long but the impasse in Washington, in solving our problems indicate that many are starting to understand the seriousness of the world -wide debt crisis and the dangers we face. The longer this process continues the harsher the outcome will be.

The Financial Crisis Is a Moral Crisis

Many are now acknowledging that a financial crisis looms but few understand it’s, in reality, a moral crisis. It’s the moral crisis that has allowed our liberties to be undermined and permits the exponential growth of illegal government power. Without a clear understanding of the nature of the crisis it will be difficult to prevent a steady march toward tyranny and the poverty that will accompany it.

Ultimately, the people have to decide which form of government they want; option #1 or option #2. There is no other choice. Claiming there is a choice of a “little” tyranny is like describing pregnancy as a “touch of pregnancy.” It is a myth to believe that a mixture of free markets and government central economic planning is a worthy compromise. What we see today is a result of that type of thinking. And the results speak for themselves.

A Culture of Violence

American now suffers from a culture of violence. It’s easy to reject the initiation of violence against one’s neighbor but it’s ironic that the people arbitrarily and freely anoint government officials with monopoly power to initiate violence against the American people—practically at will.

Because it’s the government that initiates force, most people accept it as being legitimate. Those who exert the force have no sense of guilt. It is believed by too many that governments are morally justified in initiating force supposedly to “do good.” They incorrectly believe that this authority has come from the “consent of the people.” The minority, or victims of government violence never consented to suffer the abuse of government mandates, even when dictated by the majority. Victims of TSA excesses never consented to this abuse.

This attitude has given us a policy of initiating war to “do good,” as well. It is claimed that war, to prevent war for noble purposes, is justified. This is similar to what we were once told that: “destroying a village to save a village” was justified. It was said by a US Secretary of State that the loss of 500,000 Iraqis, mostly children, in the 1990s, as a result of American bombs and sanctions, was “worth it” to achieve the “good” we brought to the Iraqi people. And look at the mess that Iraq is in today.

Government use of force to mold social and economic behavior at home and abroad has justified individuals using force on their own terms. The fact that violence by government is seen as morally justified, is the reason why violence will increase when the big financial crisis hits and becomes a political crisis as well.

First, we recognize that individuals shouldn’t initiate violence, then we give the authority to government. Eventually, the immoral use of government violence, when things goes badly, will be used to justify an individual’s “right” to do the same thing. Neither the government nor individuals have the moral right to initiate violence against another yet we are moving toward the day when both will claim this authority. If this cycle is not reversed society will break down.

When needs are pressing, conditions deteriorate and rights become relative to the demands and the whims of the majority. It’s then not a great leap for individuals to take it upon themselves to use violence to get what they claim is theirs. As the economy deteriorates and the wealth discrepancies increase—as are already occurring— violence increases as those in need take it in their own hands to get what they believe is theirs. They will not wait for a government rescue program.

When government officials wield power over others to bail out the special interests, even with disastrous results to the average citizen, they feel no guilt for the harm they do. Those who take us into undeclared wars with many casualties resulting, never lose sleep over the death and destruction their bad decisions caused. They are convinced that what they do is morally justified, and the fact that many suffer just can’t be helped.

When the street criminals do the same thing, they too have no remorse, believing they are only taking what is rightfully theirs. All moral standards become relative. Whether it’s bailouts, privileges, government subsidies or benefits for some from inflating a currency, it’s all part of a process justified by a philosophy of forced redistribution of wealth. Violence, or a threat of such, is the instrument required and unfortunately is of little concern of most members of Congress.

Some argue it’s only a matter of “fairness” that those in need are cared for. There are two problems with this. First, the principle is used to provide a greater amount of benefits to the rich than the poor. Second, no one seems to be concerned about whether or not it’s fair to those who end up paying for the benefits. The costs are usually placed on the backs of the middle class and are hidden from the public eye. Too many people believe government handouts are free, like printing money out of thin air, and there is no cost. That deception is coming to an end. The bills are coming due and that’s what the economic slowdown is all about.

Sadly, we have become accustomed to living with the illegitimate use of force by government. It is the tool for telling the people how to live, what to eat and drink, what to read and how to spend their money.

To develop a truly free society, the issue of initiating force must be understood and rejected. Granting to government even a small amount of force is a dangerous concession.

Limiting Government Excesses vs. a Virtuous Moral People

Our Constitution, which was intended to limit government power and abuse, has failed. The Founders warned that a free society depends on a virtuous and moral people. The current crisis reflects that their concerns were justified.

Most politicians and pundits are aware of the problems we face but spend all their time in trying to reform government. The sad part is that the suggested reforms almost always lead to less freedom and the importance of a virtuous and moral people is either ignored, or not understood. The new reforms serve only to further undermine liberty. The compounding effect has given us this steady erosion of liberty and the massive expansion of debt. The real question is: if it is liberty we seek, should most of the emphasis be placed on government reform or trying to understand what “a virtuous and moral people” means and how to promote it. The Constitution has not prevented the people from demanding handouts for both rich and poor in their efforts to reform the government, while ignoring the principles of a free society. All branches of our government today are controlled by individuals who use their power to undermine liberty and enhance the welfare/warfare state-and frequently their own wealth and power.

If the people are unhappy with the government performance it must be recognized that government is merely a reflection of an immoral society that rejected a moral government of constitutional limitations of power and love of freedom.

If this is the problem all the tinkering with thousands of pages of new laws and regulations will do nothing to solve the problem.

It is self-evident that our freedoms have been severely limited and the apparent prosperity we still have, is nothing more than leftover wealth from a previous time. This fictitious wealth based on debt and benefits from a false trust in our currency and credit, will play havoc with our society when the bills come due. This means that the full consequence of our lost liberties is yet to be felt.

But that illusion is now ending. Reversing a downward spiral depends on accepting a new approach.

Expect the rapidly expanding homeschooling movement to play a significant role in the revolutionary reforms needed to build a free society with Constitutional protections. We cannot expect a Federal government controlled school system to provide the intellectual ammunition to combat the dangerous growth of government that threatens our liberties.

The internet will provide the alternative to the government/media complex that controls the news and most political propaganda. This is why it’s essential that the internet remains free of government regulation.

Many of our religious institutions and secular organizations support greater dependency on the state by supporting war, welfare and corporatism and ignore the need for a virtuous people.

I never believed that the world or our country could be made more free by politicians, if the people had no desire for freedom.

Under the current circumstances the most we can hope to achieve in the political process is to use it as a podium to reach the people to alert them of the nature of the crisis and the importance of their need to assume responsibility for themselves, if it is liberty that they truly seek. Without this, a constitutionally protected free society is impossible.

If this is true, our individual goal in life ought to be for us to seek virtue and excellence and recognize that self-esteem and happiness only comes from using one’s natural ability, in the most productive manner possible, according to one’s own talents.

Productivity and creativity are the true source of personal satisfaction. Freedom, and not dependency, provides the environment needed to achieve these goals. Government cannot do this for us; it only gets in the way. When the government gets involved, the goal becomes a bailout or a subsidy and these cannot provide a sense of personal achievement.

Achieving legislative power and political influence should not be our goal. Most of the change, if it is to come, will not come from the politicians, but rather from individuals, family, friends, intellectual leaders and our religious institutions. The solution can only come from rejecting the use of coercion, compulsion, government commands, and aggressive force, to mold social and economic behavior. Without accepting these restraints, inevitably the consensus will be to allow the government to mandate economic equality and obedience to the politicians who gain power and promote an environment that smothers the freedoms of everyone. It is then that the responsible individuals who seek excellence and self-esteem by being self-reliance and productive, become the true victims.


What are the greatest dangers that the American people face today and impede the goal of a free society? There are five.

1. The continuous attack on our civil liberties which threatens the rule of law and our ability to resist the onrush of tyranny.

2. Violent anti-Americanism that has engulfed the world. Because the phenomenon of “blow-back” is not understood or denied, our foreign policy is destined to keep us involved in many wars that we have no business being in. National bankruptcy and a greater threat to our national security will result.

3. The ease in which we go to war, without a declaration by Congress, but accepting international authority from the UN or NATO even for preemptive wars, otherwise known as aggression.

4. A financial political crisis as a consequence of excessive debt, unfunded liabilities, spending, bailouts, and gross discrepancy in wealth distribution going from the middle class to the rich. The danger of central economic planning, by the Federal Reserve must be understood. 

5. World government taking over local and US sovereignty by getting involved in the issues of war, welfare, trade, banking, a world currency, taxes, property ownership, and private ownership of guns.

Happily, there is an answer for these very dangerous trends.

What a wonderful world it would be if everyone accepted the simple moral premise of rejecting all acts of aggression. The retort to such a suggestion is always: it’s too simplistic, too idealistic, impractical, na├»ve, utopian, dangerous, and unrealistic to strive for such an ideal.

The answer to that is that for thousands of years the acceptance of government force, to rule over the people, at the sacrifice of liberty, was considered moral and the only available option for achieving peace and prosperity.

What could be more utopian than that myth—considering the results especially looking at the state sponsored killing, by nearly every government during the 20th Century, estimated to be in the hundreds of millions. It’s time to reconsider this grant of authority to the state.

No good has ever come from granting monopoly power to the state to use aggression against the people to arbitrarily mold human behavior. Such power, when left unchecked, becomes the seed of an ugly tyranny. This method of governance has been adequately tested, and the results are in: reality dictates we try liberty.

The idealism of non-aggression and rejecting all offensive use of force should be tried. The idealism of government sanctioned violence has been abused throughout history and is the primary source of poverty and war. The theory of a society being based on individual freedom has been around for a long time. It’s time to take a bold step and actually permit it by advancing this cause, rather than taking a step backwards as some would like us to do.

Today the principle of habeas corpus, established when King John signed the Magna Carta in 1215, is under attack. There’s every reason to believe that a renewed effort with the use of the internet that we can instead advance the cause of liberty by spreading an uncensored message that will serve to rein in government authority and challenge the obsession with war and welfare.

What I’m talking about is a system of government guided by the moral principles of peace and tolerance.

The Founders were convinced that a free society could not exist without a moral people. Just writing rules won’t work if the people choose to ignore them. Today the rule of law written in the Constitution has little meaning for most Americans, especially those who work in Washington DC.

Benjamin Franklin claimed “only a virtuous people are capable of freedom.” John Adams concurred: “Our Constitution was made for a moral and religious people. It is wholly inadequate to the government of any other.”

A moral people must reject all violence in an effort to mold people’s beliefs or habits.

A society that boos or ridicules the Golden Rule is not a moral society. All great religions endorse the Golden Rule. The same moral standards that individuals are required to follow should apply to all government officials. They cannot be exempt.

The ultimate solution is not in the hands of the government.

The solution falls on each and every individual, with guidance from family, friends and community.

The #1 responsibility for each of us is to change ourselves with hope that others will follow. This is of greater importance than working on changing the government; that is secondary to promoting a virtuous society. If we can achieve this, then the government will change.

It doesn’t mean that political action or holding office has no value. At times it does nudge policy in the right direction. But what is true is that when seeking office is done for personal aggrandizement, money or power, it becomes useless if not harmful. When political action is taken for the right reasons it’s easy to understand why compromise should be avoided. It also becomes clear why progress is best achieved by working with coalitions, which bring people together, without anyone sacrificing his principles.

Political action, to be truly beneficial, must be directed toward changing the hearts and minds of the people, recognizing that it’s the virtue and morality of the people that allow liberty to flourish.

The Constitution or more laws per se, have no value if the people’s attitudes aren’t changed.

To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is “envy” which leads to hate and class warfare. Number two is “intolerance” which leads to bigoted and judgemental policies. These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.

The problem we have faced over the years has been that economic interventionists are swayed by envy, whereas social interventionists are swayed by intolerance of habits and lifestyles. The misunderstanding that tolerance is an endorsement of certain activities, motivates many to legislate moral standards which should only be set by individuals making their own choices. Both sides use force to deal with these misplaced emotions. Both are authoritarians. Neither endorses voluntarism. Both views ought to be rejected.

I have come to one firm conviction after these many years of trying to figure out “the plain truth of things.” The best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of LIBERTY.

If you find this to be a worthwhile message, spread it throughout the land.

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