America a Slave Society

Gus Murphy had written a letter to our local newspaper, the Olive Press, about my prior letter and here is my response.

 

Dear Editor:

 

Gus Murphy claims that the Wicks Law and similar kinds of governmental failures are accidents and that government can work.  But Murphy does not illustrate his claim with facts.  Murphy is right that some government is essential, and he is also right that Henry David Thoreau wrote in Civil Disobedience that the government is best which governs not at all. When I assign that short and passionate essay to my senior seminar students  they are often surprised that the inventor of civil disobedience, an abolitionist and opponent of the Mexican War, disagreed with big government. 

 

Mr. Murphy offers foreign affairs and road building as examples of the essential services that government provides.  But both of these functions were with us long before the explosion in government spending in the past fifty years.  In 1950 government spending was 15% of the economy and today it is 45%.  But the US isn't any safer  and doesn't have better paved roads.  Berndt Leifeld and Barack Obama have gotten plenty of votes through handing out jobs, though, even if the roads are worse.

 

I agree with Murphy on his proposals to cut drug enforcement and military spending. Prohibition didn't work and neither does criminalization of drugs.  Likewise, the use of large scale, second generation warfare (see Thomas Hammes, the Sling and the Stone) has been incompetent and wasteful, much like everything else in government.

 

But I respectfully disagree with Murphy that once it starts spending government can avoid persistent failures like the Wicks Law and a long list of government boondoggles. The Wicks Law has been with us for nearly a century, yet it remains law.  There are four reasons why government does not work.  First, the brokerage of special interests arises from economic incentives that government creates.   Mancur Olson in Rise and Decline of Nations shows that lobbying and political manipulation result from a straightforward cost-benefit calculus that that favors wealthy special interests like Paul and Nancy Pelosi's Star Kist Tuna at the expense of the average American. In the 2009 Bush-Obama bailout of Wall Street even the mass media was coopted. There was hardly an opponent of the bailout permitted on any media outlet.

 

Second, in the 1920s to 1940s Ludwig von Mises and Friedrich von Hayek showed the impossibility of socialist calculation. That is, the only way to efficiently allocate resources is through markets. Government interferes with markets and so makes us poorer.

 

Third, government lacks feedback about whether its tactics succeed over time.  Government budgets are for one year, so decisions that dump costs into the future are encouraged.  There is no stock price to inform decision makers whether they are failing. 

 

Fourth the complexity of government means that neither legislators nor the public can monitor it.  Few Americans are familiar with the intricacies of the tax code or pollution law.  Recently, we heard Nancy Pelosi say that the health care law should be passed so that we can find out what it says.  Pension law (the Employee Retirement Income Security Act) is a joke, yet few Americans question it. 

 

Thus, government cannot work, has not worked and never will work.  As government has expanded from 15% of the economy in 1950 to nearly half today, real wages have stagnated.  In the nineteenth century and into the 1960s real hourly wages increased two percent per year.  Since the 1960s explosion in government and the abolition of the gold standard in 1971 the real hourly wage has not grown at all.  The explosion led to the freezing of standards of living at the 1970 level.  The frauds in the banker owned "liberal" media claim that the stagnant real wages were due to Reagan, but the freezing of the real hourly wage started in the 1970s.   In turn Americans became two income families, then three income and now we see both spouses working two or three jobs just to make ends meet. In my day my dear mother could stay at home while my father worked in a factory.  Reason: there was less government. 

 

But the public and Mr. Murphy have not figured out that if you pay half your income in taxes and get little or nothing in return, you will be forced to work like a slave in order to pay for government's greedy incompetence.  Henry David Thoreau would turn in his grave if he saw how America has become a slave society.

Sincerely,

 

 

Mitchell Langbert

Malpass for Senate

Raquel Okyay made several damning accusations in her blog yesterday.  Okyay writes that the New York State GOP has nominated a loser, Bruce Blakeman, for US Senate because Alfonse D'Amato is friends with the Democratic candidate, Kirsten Gillibrand and backed Blakeman so Gillibrand could win. "Why is D'Amato standing next to Gillibrand while she announces her candidacy in the above photograph?" Okyay asks.

 Okyay notes that two good candidates, Joe Diaguardi for Senate and Steve Levy for governor, have been "kicked to the curb."  Ed Cox, the colorless state chair, claimed to back Levy, but his motive may have been to give the appearance that he is not part of New York's loser-GOP machine. Levy only won 43% of the vote in a second ballot at the convention but needed 50% to force a primary.  Cox lacked the courage and/or the integrity to  insist that Levy be able to challenge Rick Lazio in a primary. Cox either is incompetent or never backed Levy in the first place, Okyay concludes.  As well, Cox has gone along with   D'Amato's demand for Blakeman for Senate.

The New York Sun blog seems to have been resurrected (Yay!) and they are endorsing David Malpass for Senate. Blakeman edged him out in the convention, but if the state's Republican voters back Blakeman and the ineffectual and corrupt GOP insiders whom he represents then the party is not worth saving.  The Sun writes that the Republican Party "has been waiting for a long time for such a candidate as Mr. Malpass."

Democrats, Progressive Republicans Take Sledge Hammer to Economy

Bloomberg reports that the economy is in a tailspin.  The unemployment rate is now 9.7%, 0.2% lower than last month, but that statistic deceives.  Last month, there were 431,000 new jobs with 411,000 census workers hired. Only 41,000 private sector workers were hired.  Manufacturing jobs increased by 29,000  while service jobs, mostly temporary, increased by 27,000. The retail job number fell.

The labor force fell by over 200,000.  A statistical characteristic of the unemployment rate is that people not in the labor force are not counted in the unemployment rate. So if you give up looking for a job you are not counted.  200,000 left in response to the policies of Obama and the Democrats. They are so great at helping the average American. 

Now if you subtract the 200,000 who left the labor force and the 411,000 temporary census jobs from the 431,000 new jobs, do you really find an improvement in unemployment?

The truth is that the unemployment rate is too low.  The reason is that the government has subsidized badly run businesses that should be terminated and much of government is pure waste.  Rather than subsidize and stimulate waste as the Democrats have, the incompetently run businesses need to close.

Money should have been spent on welfare subsidies to the unemployed, whose lives have been upended by the incompetence of the Progressive/Keynesian economic system. Instead, the economy has been put on life support and the misallocation of investment will cause continued decline until the Democrats and Progressive Republicans are booted out of office.

I feel sorry for my students, who look forward to suffering economically because of the moron whom they voted into office, Barack Obama.

Great Video on the Flotilla

Saul Alinsky pioneered the use of the media to make one's opponent look bad. The flotilla was a classic Alinsky tactic, and the psychopathic left (including the  Times) and its serial killing allies are eager to capitalize on it. Unfortunately the Isralis fell for the bait. But let us not confuse Alinsky tactics with facts.  The Israelis had boarded the boat and were attacked with one thrown overboard first. 

As far as the announcer's comments on the Times's biased coverage, it has long been obvious that the once-great newspaper can be taken less seriously than the Star or the Enquirer.  The Star doesn't have ideological baggage or the economic interests of the Ochs Sulzbergers to color its articles and has been disciplined through law suits so that its coverage is truthful.  The Times has no such discipline because no one will sue them for telling whoppers on behalf of the bailout and the Obama administration.

Hat-tip Merle Levine:

Laughing as You Sink--How Europe Will Not Solve Its Problem

H/t Campaign for Liberty.

Is the Ride to $3,000 Gold Going to Hit Air Pockets?

The graphs above are of the Power Shares DB Commodity Index (DBC) which tracks sweet crude oil, heating oil, RBOB Gasoline, natural gas, brent crude, gold, silver, aluminum, zinc, copper grade A, corn, wheat, soybeans, and sugar; the Power Shares DB Agricultural Index, (DBA) which tracks corn, wheat, soy beans and sugar; and GLD, the SPDR gold trust, which tracks gold.  On May 28 Smart Trend.com reported that the agricultural index is in a bearish trend.  

As you can see in the charts above, the DBC and DBA peaked in 2008 and have stayed off their peaks, while GLD, the third graph, has risen consistently.

Personally, I have no more faith in the word of the US Congress than I do in the word of a three card Monty dealer on 42nd Street.  Given the massive increases in deficits under President Obama and the even more massive increase in the monetary base in 2008 (and consistent increases in the US money supply ) there is no reason to think that gold and commodities will do anything but increase over many years. Ultimately, speculation and replacement of the dollar with gold by frenzied Americans trying to escape the government's legal tender law will push up the gold price further. 


But gold has increased almost five-fold since 2001, while other commodities have not kept place and have significantly fallen since 2008.  A general rule is to buy low and sell high.  It is possible that the gold market is more rational than other commodities because industrial demand is greater for oil, food and other metals than for gold. But it is just as possible that it is less rational because gold is subject to romance and speculation. The other commodities tell a story different from gold.

Gold is going up because of speculation in anticipation of inflation, and if there is inflation then the other commodities will go up as well.  Also, hyper-inflation might mean a two-fold increase in prices, but gold has already gone up five-fold.

I do not doubt that gold will continue to go up.  But if there were shortages in gold due to insufficient production in the 1990s, there ought to have been shortages in other commodities as well.  Hence, in the long run I wager that there will be continued speculation in gold and that when inflation takes off there will be a gold bubble. But I would think that other commodities where there is less speculation, romance and publicity are more reliable investments at this time.  When inflation starts, many will flock to gold, but the ride can be bumpy because there is speculation in the gold market. 

Let's say the Fed decides to increase interest rates.  There will likely be declines in the stock market, but gold could be even harder hit.  Over time the price will come back, but I find it hard to believe that without a concomitant increase in other commodities' prices the gold price will continue a secular increase. The reasoning for buying gold is that gold is a hedge against inflation, but so are the DBC and the DBA, and they haven't increased for two years. So if I were buying commodities now I would buy those and hold off on the gold.

According to Thoughts.com the dollar ought to be worth .7734 ounces of silver.  Today silver sells for $17.95 and gold sells for $1,207 per ounce.  Thus, the dollar is worth .0557 ounces of silver, 0.3% of the level at which the Coinage Act of 1792 defined it. If you think the decline in value was directed into the hands of the middle class, which William Greider claims in his book Secrets of the Temple, you're on drugs.  The money is created by banks who collect interest and they lend it to speculators, hedge funds, corporations and most of all, Wall Street. As well, it boosts stock prices because low interest rates increase the present value of future earnings.  Left wingers like Greider, who advocate Keynsianism, like to avoid discussing how their ideas support Wall Street and the banking lobby.

The additional money causes inflation, raising prices for everyone. Hence, it harms those who do not own stocks and real estate and are not bankers and helps those whose entire livelihood comes from stocks and real estate.  The middle class gets something back through increasing house prices, but those who save and work hard are penalized in favor of those who borrow.  Hence, it makes everyone poorer as the public learns that invention, innovation, hard work and creativity are for suckers, and borrowing to buy a condo is how to make a living.

The inflationary economy and the triumph of the left in terms of three card Monty government means that America's prospects are much worse than they've been.  A collapse of the financial and monetary system would seem to be a possibility. Hence, gold and silver are good bets. But I'm going to buy when they fall.

Will Obama Be the Least Popular President in History?

In October 2008 George W. Bush's approval rating according to the Gallup Poll sank to 25%.  Yesterday, according to the Rasmussen Daily Presidential Tracking Poll only 27% of Americans "strongly approve" of Obama's performance but 46% say that they at least somewhat approve.  Thus, the majority is now against Obama.

Obama can break Bush's low.  I can taste it.

America Now Has a Gangster Government

H/t Tom Barton. Quoting Michael Barone, Representative Michelle Bachmann shows how Congressional looters are using the Obama takeover to benefit their favored clients and to destroy competitive enterprise, the source of what's left of our standard of living.  Criminal morons like Barney Frank should move to Cuba, where they belong.  GM is demanding that an enterprising dealer hand over her customer list to help government-supported incompetent competitors.  The dealer should tell GM to stuff it and move to another car company.

America Awakens: Obama's Support in Decline

The Rasmussen presidential tracking poll reports that 27% of Americans strongly approve of Obama's presidency while 40% strongly disapprove. Moreover, 60% favor repeal of the new health law. Now that Obama has authorized the bailouts, he is no longer of much use to the banker-controlled Democratic Party media. Rasmussen reports that only 41% of media coverage of America's first Kenyan-born president was positive on May 31 while 58% was negative.

I wonder whether Obama will hold on to the Jewish vote after his repeated attacks on Israel.  I thought this concluding paragraph in the Rasmussen article captures my sentiment.  The only things I can't figure out is why the public thought Obama could do a good job and why they keep voting for the two party system:

"Most Americans have 'come to believe that the political system is broken, that most politicians are corrupt, and that neither major political party has the answers,' observes Rasmussen. Just 27% believe Congress knows what it’s doing when it comes to the economy and 41% say that a group of people randomly selected from the phone book would do a better job than the current Congress. In his new book, Scott adds, 'Some of us are ready to give up and some of us are ready to scream a little louder. But all of us believe we can do better.'

Obama's War on Israel

My father just sent me this video, which Youtube attempted to censor. It shows that the passengers on the ship that Israel attacked had repeatedly assaulted Israeli soldiers, and threw one overboard.



The incident follows the Obama administration's support for the UN's recent attack on Israel's nuclear capability. Mark Meed of Frontpagemag notes that  "what is remarkable is the United States supported this resolution."  In other words, under Obama the US now votes with the Third World tyrannies that hate Israel.