Friday, November 5, 2010

Bernanke: Fed Will Not Monetize Debt

QE 2, quantitative easing, is monetization of the federal debt (h/t Glenda McGee).  Keynesian economics is founded on lyng.  The liars, i.e., the Fed, the economics profession, the federal government and the media, have bamboozled the public for nearly 80 years.  Keynesian economics is based on wage reduction and transfer of wealth to asset holders at the expense of wage earners.  This is accomplished using welfare as a smoke screen.  Transfer the lion's share to asset holders, a small percentage to welfare recipients, then claim that the wealth is being transferred to welfare recipients.  This trick was first devised by Augustus Caesar and it has worked beautifully in the United States.  Part of the plan is an education system that numbs minds and teaches that the Keynesian plan is all that works. Keynesian economics is based on lying because saying openly that the economics establishment, Wall Street, the federal government and the media plan to make you poorer to subsidize the stock market will not fly in a democracy.  You voted the Keynesians in and they have been ruling over you for 80 years.  Enjoy the results.

Thursday, November 4, 2010

Viva Glenn Beck!

My good friend Glenda Rose McGee suggested that I watch the indomitable Glenn Beck on Fox.  All Tea Partiers are abuzz about Beck but I am a latecomer to his show.  My neighbor had been after me to watch Beck for months and I turned him on almost a year ago, November 5, 2009. That happened to be the night of the Fort Hood shooting but Beck wasn't on.  A day short of a year has passed and I turned him on again. I was working out in the Emerson Hotel's gym.  The Emerson is a swanky local joint and the people who belong to its health club tend to be affluent left wingers from the neighboring Town of Woodstock who can afford the $85/month fee. A few of us are Republicans and we tread cautiously. I hesitated putting Fox on because there were long haired Woodstock women on either side of me dressed in workout serapes and Birkenstock sneakers. Several years ago a woman tried to have me thrown out of the health club because I was watching Fox.  But I went for the remote when one of the Serape-and-Birkenstock clad women walked away.  When she saw I had turned the channel to Fox she glared at me with hatred, forgetting her commitment to left wing "love." Although Subaru is the "love" car one is always cutting me off, often with hostility.  Which, of course, will not stop me from buying a used Outback as a second car.  But Glenda Rose McGee would need to drive me to Colonial Subaru in Kingston, and she may refuse to set foot on enemy territory, the Subaru dealer.

Glenn Beck is great.  He was talking about agricultural prices shooting up and as you know if you read my blog I have been discussing the Deutsche Bank Agricultural Index exchange traded fund (DBA) for some time.  Beck is bringing concerns about the Fed and its policies to conservatives, and that is a gift to them. He did not get all the details as right as I would have liked, so I'll give him a B+ instead of an A, but bless him.  Also, I think his rhetoric was a bit too protectionist. Protectionism would be a serious error.  Tariffs would cause prices to rise, curtailing consumption. Some firms might move back here but the average American would be worse off. As well, retaliation would follow.  I don't see the logic of protectionism.  If Beck is opposed to higher consumer and food prices, he ought to oppose protectionism. Protectionism caused the Irish potato famine and the starvation of the Ukrainian kulaks.  It leads to poverty except in the early stages of economic development IF there is vital emerging industry. There is no vital emerging industry here.  The problem here is excessive government, and protectionism won't reduce government. Barack Obama and George Bush have ground small business under government's bureaucratic heel. That heel needs to be cut off.

Overall, though, Beck is performing a major service by bringing the tone of Jacksonian democracy to the average conservative. Viva Glenn Beck!

Wednesday, November 3, 2010

Americans for Limited Government on QE2

I just received this message from Americans for Limited Government's Robert Romano.

ALG Statement on Fed Purchase of $600 Billion of Treasuries

November 3rd, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson today issued the following statement condemning the Federal Reserve's planned purchase of $600 billion of treasuries over the next eight months:

"The Federal Reserve's reckless program to purchase $600 billion of treasuries over the next eight months is taking the U.S. into uncharted waters, where the nation's central bank will be the largest holder of the national debt in the entire world next year. The Fed already holds $834 billion of treasuries, and was already on pace to have over $1 trillion in treasuries by August, 2011, more than China, Japan, or any other foreign creditor.

"With another $600 billion on top of the Fed's expected trillion-dollar stake in the debt, the signal we are sending to the world is that to pay for our obligations is to print a ton of new money. In the next three years alone, $5.2 trillion of debt will be coming due. In addition, the Obama Administration plans on increasing the debt another $3.6 trillion over that same period. That means that the Treasury has to sell $8.8 trillion of debt over three years, or $2.93 trillion every year.

"$2.93 trillion a year is more than the Treasury has ever had to sell. Approximately $630 billion more than it has ever sold. So it is little surprise that now the Fed is coming out saying it is buying another $600 billion of treasuries. This action by the Fed has nothing to do with 'a stronger pace of economic recovery,' as the central bank claims. It has everything to do with the fact that we are broke, and we're printing money to pay the bills.

"It is up to the newly elected Congress to rein in Washington's unsustainable fiscal trajectory so that the possibility is eliminated of further Fed purchases of the debt. Otherwise, they will be signing up to have the U.S. triple-A credit rating downgraded, and will preside over the decline of the nation as an economic superpower. Spending must be cut, and the Fed has to be reined in and audited. The very solvency of the Treasury is in danger, and only Congress can reverse course and begin to pay down the debt, before it is too late."

What Are the Effects of QE 2 and the Fed's Loose Monetary Policy?

Jim's Question Re QE2:  How much of our GDP growth is a reflection of the Fed pumping money? In other words, is the growth not really growth in output/resources/capital, but growth brought on by infusion of money (liquidity)? In other words. not growth at all.  I bet a whole big bunch, but I am unsure.--JJC

Answer: Jim, the American economy is entirely distorted by the printing of money. This is something that the Keynesian economists either do not get or pretend does not exist. Most of the real estate development in the past decade would not have occurred in a non-managed economy and it does not reflect underlying consumer demand. The economy is as a result extremely unstable and in order to function requires massive and increasing injections of counterfeit money. This results in ongoing reallocation of wealth to those receiving the new money, mainly commercial banks, Wall Street and other financial institutions (hedge funds) as well as other borrowers. Thus, the government, specifically the Obama and Bush administrations and Congress, is directly causing income inequality. This has been going on since the establishment of the Fed but it has intensified since 2000. Obama is intensifying Bush's intensification. In other words, to correct the misallocation of wealth in our society will require a cataclysm because virtually all assets are over-valued. Hopefully this won't occur in our lifetimes, but it could happen any time. There is no reason why Manhattan real estate should have gone up in value 20 to 40 fold since 1975.  The demand is a function of counterfeit money.

Both parties support the intoxicating Keynesian drug of counterfeit money because it benefits those who finance them--Wall Street, commercial banks, real estate interests, corporate interests and insurance companies. Those holding real estate have benefited at the expense of those not holding real estate. That is not because of the economic function of speculation but because of subsidies from the Fed. The Fed steals from the poor and productive and aids the rich and unproductive. Since no assets are valued at their true market value in our economy there is massive distortion of investment. This has caused jobs to leave, firms to invest overseas, excessive development of farmland, etc., etc.

No one knows what the specific effects are, but they are vast. We are not in a market economy. Rather, we are in a fantasy economy dreamed by Wall Street, the rich and politically powerful. Naturally, the ones doing the dreaming are the ones who benefit. The ones who do not play ball with them, blue collar males, are the ones who have been hurt. There will be a return to reality because economic actors do not want the products of Fed and banking policy--the McMansions and subprime real estate; the overvalued stocks and bonds.

The response of the Fed will be continued printing of money because it cannot withstand the political pressure from its Whig constituents.  This is not partisan because the United States is dominated by a single Whig Party that reflects financial interests.  The end result will be a collapse of the dollar.  The alternative, a stock market crash, is unacceptable to the people capable of grasping what I just wrote. In other words, the majority of Americans have lost the ability to think about this question, an ability that they had until World War I when they were not subjected to education.

Government by Simpleton

The United States government is now in the hands of corrupt simpletons.  Mr. Obama, a community organizer who believes that the health care plan that he devised might actually work, is the political incarnation of Jack Madoff.  His partisan colleague in the Senate, Harry Reid, believes that the only problem with the United States government is that Democrats and Republicans are not nice to each other.  It is frightening to me that the simpletons have incurred debts of nearly $14 trillion.  I had always thought that the mentally incompetent are not permitted to incur debts.

The US government cannot manage health care. It cannot manage a post office. It cannot manage a court system.  It seems to me that excessive concern with the opinions of America's political leaders is absurd, akin to excessive concern with the beliefs of mental patients.  As I was growing up in the 1950s and 1960s America's government had serious problems such as McCarthyism, but it was still the best government in the world. Today, America's government has failed and ought to be dissolved.

Republicans Gain, a Nation Enchained

I attended an Ulster County Republican Party party at Fred's Place, a restaurant in Lake Katrine, New York.  Fred's Place wasn't serving dinner so Mike and Mark Marnell and I had dinner at a nearby Italian restaurant, Reginato's, also in Lake Katrine. The food and service at Reginato's were good.

The same cannot be said for Ulster County's election results.  My candidates all lost, starting with Carl on down. George Phillips, the 22nd New York congressional district candidate has lost by 53% to 47%, according to  The only exception was incumbent State Senator John Bonacic. There is little to be said about New Yorkers' choices beyond that I am a stranger in a strange land and have been for many years.  In my early twenties I joined the Libertarian Party.  When Reagan was elected in 1980 I was 26 and thought that although Reagan was not enough, the country had gone on the right course.  Reagan failed to overcome the Democrats sufficiently to actually cut government.  When he retired in 1988 we were saddled with George H. Bush.

At the national level, the public did not realize that Bush was a major step away from Reagan's limited government philosophy.  H. Bush served only one term, recall, and then Clinton found that he could survive only by adopting the Reagan approach.  To my mind that had settled the debate more profoundly than Reagan's election.  Unfortunately, the Clinton years' limited monetary expansion (especially from the mid 1990s to 2000) did not reflect a step away from Federal Reserve Bank socialism. Alan Greenspan, Ben Bernanke, the W. Bush and the Obama administrations renewed and then accelerated the monetary growth trend from 1975 to 1995. In effect, the Clinton administration had only offered a breather from the long term inflationary policies of both parties.

Unfortunately, I was wrong. Clinton's adoption of more conservative economic policies did not reflect a Reagan victory. Rather, it facilitated the Republicans' rejection of economic conservatism by cloaking their rejection in complaints about Clinton's sexual perversions. Nothing should have made social democrats happier than the Republicans' moronic Clinton impeachment.  Rather than attempt to shore up the monetary conservatism of the Clinton years, the Republicans preferred to repudiate economic conservatism under W. Bush.

A similar phenomenon occurred in New York. George Elmer Pataki was elected as an economic conservative in reaction to Mario Cuomo's profligate policies.  He found it politically and probably economically advantageous (to himself and Alfonse D'Amato) to repudiate his own economic conservatism in favor of cooperation with New York's destructive public sector labor unions.  By the time Pataki left office New York's government had grown to unprecedented proportions.

There has been a major exodus from the state since 2000.  Many of those leaving have been retirees; most of the rest have been entrepreneurs, private sector workers who cannot find jobs, and those with energy who have sought opportunity elsewhere.  New York has largely become a state of those on three doles:  the welfare dole; the government employment dole; and the Federal Reserve Bank dole.  Productive work is scarcely known in New York.  Even our Tea Party-style gubernatorial candidate, Carl Paladino, made his fortune in real estate and law, not in the kind of productive activity that made the nation great. Not that real estate and stock speculation as well as law don't go back to the days of George Washington, but rather the 19th century saw the growth of an alternative to Whig-style asset manipulation, the development of technology in manufacturing, new methods, and new approaches to business that were only made possible by laissez-faire capitalism.  The return to Whig economics reflected in "Progressivism" meant a discarding of laissez-faire in favor of the state-dominated system of asset manipulation favored by Hamilton. Progressivism's end result is now evident: the stagnation of wages and technological innovation, especially in manufacturing, in favor of a two-tiered economy based on privilege and access to the money that the Fed prints.

Many Americans reject the two-tiered economy that Progressivism has created.  But not in New York.  As a result, this evening at Fred's Place was rather sad.  Except for incumbent Bonacic, all of our important candidates lost, to include George Phillips, Pete Rooney, Fawn Tantillo, George Goodwin and Carl Paladino.  This is perhaps not surprising since New York in general and Ulster County in particular are in decline and are places that depend once and for all on political theft and manipulation.  New York's chief industry, Wall Street, is not productive and cannot exist without taxpayer subsidy.  In this, Wall Street is very much equal to most of New York.  New York is a state of leeches, parasites and a few suckers who hold on against common sense.

The nation as a whole has sent air-headed millionairess Speaker of the House, Mrs. Paul Pelosi and her left-wing senatorial colleague Russ Feingold, packing. Although I wouldn't go so far to say that Mrs. Pelosi got her job through affirmative action as there have undoubtedly been previous mental deficients in the role of Speaker, it is hard to believe  that Mrs. Pelosi would have achieved her job without her millionaire husband or her gender.  Her ascendancy to Speaker marks a low point in American government and is part of a general decline of the competence and standards of American government.  Ms. Pelosi is a function of a federal government that has failed and needs to be downsized and reconstructed.

Although America has repudiated the Democratic majority by an unprecedented margin (the House Republicans gained about 65 seats including several important victories; although the Democrats retain control of the Senate, the margin is slim and there were many notable successes, especially Rand Paul and Marco Rubio), what is true of New York is true to a lesser degree of the United States. 

For a nation to subsidize Wall Street and New York it can no longer be a free nation. Rather, Americans are convinced that a Federal Reserve Bank system that transfers tens of billions of the public's dollars each year to Wall Street and the commercial banking system is somehow necessary to their economic health; and that a government that controls their lives to an unprecedented degree and that wastes incalculable amounts of money, subsidizes the wealthy at the expense of the average American and engages in tyranny and violence is somehow desirable.

I turned on Fox News for the first time since the last election. Suffice it to say that the stupidity of the announcers of Fox reflects the American standard.  A people gets the media it deserves.

Monday, November 1, 2010

Campaign for Liberty Protests QE2

November 1, 2010

Dear Friend of Liberty,

While everyone is focused on Election Day, the Federal Reserve will be meeting this Tuesday and Wednesday to decide if it will pursue another round of "quantitative easing."

Dubbed "QE2" by analysts, this means the Fed will once again pump money into the economy by buying government bonds.

The Fed thinks this will stimulate the economy by lowering interest rates (which are already near zero) – the same kind of interference that led to the housing bubble and this crisis.

And the same kind of interference that has only made this crisis worse.

Despite all of the talk about "change" in Washington, our leaders seem capable of only using plays from a tired, old, Big Government book.

As we’ve written before, this hasn’t been a very good year for the Fed.  Whether it’s watching the U.S. Senate reconfirm Ben Bernanke with the fewest votes of any Fed chairman, seeing 80% of the American people voice their support for Audit the Fed, or listening to increased criticism about its QE2 plans, it’s clear we’ve got the nation’s most secretive institution playing defense for the first time.

The massive groundswell of support we created for Audit the Fed made it almost impossible for the vast majority of the U.S. House to refuse to cosponsor Dr. Paul’s original legislation, H.R. 1207.

But talking a good game for the cameras and backing it up are two very different things, and when their support was required to keep a thorough audit in the House financial reform bill, many of those cosponsors turned their backs on you and voted against it.

Click here to see our "Hall of Shame" displaying who thought their Big Government agenda was more important than true transparency.


It’s long past time America threw out the federal government’s outdated playbook of ineffective interference. 

To strengthen our economy, we must drastically cut spending, cut taxes, and restore sound money.  Only then will we increase prosperity, promote growth, and end this economic crisis.

In Liberty,

John Tate


P.S. The liberty movement has an historic opportunity to hold big government politicians accountable.  Make your voice heard tomorrow by getting out there and voting for liberty.

P.P.S. Unlike the Fed, Campaign for Liberty cannot just print money out of thin air.  Click here to chip in a contribution of $10 to help C4L fight for sound money and to Audit the Fed.

Barbara Boxer: Call Me Senator

Ms. Barbara Boxer is an alum of Brooklyn College, where I teach.  I suppose you never know how an alum will turn out.  Boxer's original narcissistic outburst is followed by the Zucker skit. H/t Glenda McGee, Contrairimairi and First Things-Gateway Pundit.

Halliburton Endangers Our Troops

H/t Contrairimairi:

Do or Die Election 2010: Toward Freedom or Secession?

I have not been blogging because I have been busy with electoral politics. Like many who have been activated this year in response to the suicidal policies of America's selfish elite,  I have not done so much on a practical level in many years.  Like many, I do not love the mechanics of elections such as sign placement, phone banking, petitioning and the like, but do it as a calling.  My friend Glenda McGee suggested that we are throwing pebbles in the large American lake, and causing ripples just as others are causing ripples that together will form waves and then a tsunami that will overwhelm the centralized power elite. Or so we hope.

The Republicans in Ulster County, New York have never been more visible. Signs are everywhere to the extent that one Republican in the Hudson Valley suggested that too many signs were placed. County Chair Robin Yess noted in response that the Democrats have vandalized numerous signs. Indeed, many of the Paladino signs I put up have been removed, undoubtedly by people who believe themselves to be more right and more intelligent than we are.  This indeed raises doubts in my mind about the universalizability of ethical belief, the foundation of Immanuel Kant's philosophy.  More murder has been committed by people who believe themselves to be the most right and to be the universal standard bearers of historical right than by psychopaths and sociopaths in the normal sense.  The difference between someone who believes himself to know the absolute historical and universal right and someone who does not know what right and wrong are may be nil.

Our congressional candidate's, George Phillips's, performance has been amazing.  Socialist extremist Democrat Maurice Hinchey has never had an opponent this visible.  I am told that our congressional district, the New York 22nd, was set up by Pataki as a kind of toxic waste dump of college campuses from Vassar to Cornell and inner city districts (Binghamton, Ithaca, Poughkeepsie, Liberty and Monticello) that are left wing. In response, Representative Hinchey painted himself as a progressive; aimed to turn the Hudson Valley into a socialist park, and repeatedly attacked Israel.  Even in a toxic waste district like New York's 22nd CD there are enough normal, decent people to resist.  This is despite the pro-bailout left's domination of the local media.

On Wednesday, Thursday and Friday I put up dozens of signs in the Town of Olive and distributed calling lists to four or five members of the Town of Olive Republican Party.  On Thursday McGee and I gave out handbills.  On Friday night McGee and I helped local entrepreneur Mike Marnell stuff his Lincoln Eagle newspaper into saran wrap-like sleeves so that they can be tossed into thousands of driveways in the Hudson Valley.  On Saturday we drove around the Towns of Olive and Marbletown distributing the Lincoln Eagle to two dozen diners, farm stands, supermarkets and other stores.  As well we distributed the hand bill to farm stands and health food stores, many of whose proprietors said that they would give the handbills to their friends.

The response to our handbill was varied.  On Friday several of us distributed them in Woodstock and the hard leftists there were often hostile, although many others were interested.  Then, we went to Adams Fairacre Farms, a specialty store, and distributed them for about an hour until the proprietor chased us away.  The reaction there was positive.  In other words, all but the hard, ideological left were open to the handbill. The handbill was targeted at the left concerned with food issues.

The big news for us in Ulster County was George Phillips's national support in his run against Representative Maurice Hinchey.  Phillips has received more than $500,000 from American Crossroads and television advertisements have been flooding the cable lines and air waves. In addition, Phillips was aided by Mayor Edward Koch, who endorsed him over Hinchey because of Hinchey's aggressively anti-Israel position.  Given the toxic nature of the 22nd district, a Phillips victory will be amazing.

My prayers are with all of the Republican candidates this year, even the RINOs, because we need to take back the government from the extreme left and the Democratic Party and repeal the socialist laws that have created growing income inequality, a declining economy and an increasingly dictatorial government.  My good friend Cortes de Russy is running as a GOP write-in candidate in New York's 18th CD against extremist socialist crank Nita Lowy. I blogged about their debate about two weeks ago. Lowy is ignorant about economics and about what America is.  Lowy and her supporters have increasingly made it clear that we need to begin to think about secession.  This is no longer a long term question, but one that we need to start planning for.  The current state of America is unacceptable and many do not share any commitment to the type of government that the social democrats have created and favor.  The Untied States government is stupid garbage, and unless we can free ourselves through the ballot box, more direct political action leading to greater instability will be necessary. In a sense then, this is a do or die election.

Logic Goes Postal

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