Wednesday, December 9, 2009

James Rainey and Glenn Beck

I just wrote this e-mail to Jim Rainey of the LA Times.

>Dear Mr. Rainey: I am curious if there has been a single conservative of whom you have had much that is positive to say? If so, please do tell who that person is. I will search your writing on him and post the history on my blog. Thanks, Mitchell Langbert.

Rainey accuses Glenn Beck of unethical conduct in advocating gold. This accusation misconstrues the reasoning behind prohibition of insider trading. Insider trading can exist only where there is a fiduciary duty to shareholders. It emanates from the duty insiders have to protect them. If insiders divulge information that artificially inflates the stock price temporarily, this can hurt the shareholders. Thus, insider trading is illegal.

But to say that an announcer should be prohibited from advocating an asset class, especially where he divulges publicly that he holds that asset, is ridiculous. This is what Mr. Rainey incompetently claims. There is no such thing as insider trading with respect to gold. There is no fiduciary duty to a metal.

The history of media attitudes toward gold has largely been one of lying and deception, in particular pandering to Wall Street, and Mr. Rainey appears to be no exception.

Wall Street dislikes gold for several reasons. First, Wall Street profits handily from the Federal Reserve paper money system. This is because the present value of expected dividends is increased by reductions in interest rates (increases in the money supply), a policy that the Fed has relentlessly pursued since the 1930s. Second, increases in the money supply are handed first to Wall Street via the money center banks. The subsequent circulation of money around the economy then increases prices. This transfers wealth from consumers to Wall Street, a policy that the New York Times has long advocated. Thus, academic and media sources, to include William Greider in his book Secrets of the Temple, advocate the central bank. But they do so by insisting that the paper money system helps the poor. As Karl Popper pointed out in Open Society and Its Enemies, lying about altruism has long been a tactic of collectivists. Thus, pro-Wall Street feudalistic "progressives" pretend to object to increases in income inequality and stagnant real wages, both of which are direct products of the monetary system that they advocate, including Mr. Rainey's LA Times.

Thus, in 1999 and 2000 Mr. Rainey's LA Times, the New York Times, Bloomberg Television and other Wall Street/Democratic Party inflationists were touting Internet and technology stocks, right before they fell by 80%. Do you want to take Mr. Rainey's advice given that his employer has been wrong almost every time?

Now, Mr. Rainey and his socialist-for-the-rich comrades attack gold. Rainey's article is rife with the kind of lying and double talk that has always characterized the Wall Street/Democratic Party media: the claim that there is such a thing as an "expert" in investing, for instance. Did this expert tell Mr. Rainey to invest in gold in 2001 and make him rich? Or did Mr. Rainey follow the LA Times's own repeatedly incompetent advice and invest in stocks in 1999 and 2008?

Rainey writes:

"When first confronted with the suggestion he might have a conflict of interest last week, Beck responded in characteristic fashion."

I am curious what that conflict of interest would be. Mr. Beck appears to say that he favors buying gold, and he has bought gold. He has announced this to the public. There is no conflict. He is doing what he says. If he were selling gold and telling people to buy it I would have questions. But is every single announcer on television who says that they think the stock market will go up and holds stocks unethical? Or is Mr. Rainey a biased, incompetent clown?

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