Friday, July 15, 2011

Learning from Jefferson

In 1791 there was a debate as to whether Congress should establish a central bank.  As Treasury Secretary, Alexander Hamilton conceived of it, wrote a report on the bank supporting it, and proposed the legislation. The bank was approved by Congress, but the vote was entirely regional. The Southern delegation opposed it while the larger Northern delegation supported it. Governor Henry Lee of Virginia proposed that Virginia start a competing bank.  Referring to the US Congress as a "foreign legislature" Secretary of State Jefferson wrote the following to Governor Lee, quoted on page 352 of Ron Chernow's biography of Alexander Hamilton:

The power of erecting banks and corporations was not given to the general government; it remains then with the state itself.  For any person to recognize a foreign legislature in a case belonging to the state itself is an act of treason against the state.  And whosoever shall do any act under color of authority of a foreign legislature--whether by signing notes, issuing or passing them, acting as director, cashier or in any other office relating to it, shall be adjudged guilty of high treason and suffer death accordingly by the judgment of the state courts.  This is the only opposition worthy or our state and the only kind which can be effectual...I really wish that this or nothing should be done. 

In other words, Jefferson would have had the governor of Virginia execute Ben Bernanke.  Am I missing something, or wasn't Jefferson the greatest of the Founding Fathers?

Thursday, July 14, 2011

Mickey Mouse Presents Better News than Jack Cafferty

I was in the gym the other day and someone had turned on CNN.  Announcer Jack Cafferty droned about how terrible Michele Bachmann is, how the Republicans are in trouble, and how all candidates ought to be Progressives. It occurred to me that CNN is not a news channel.   My wife replied that it is more informative than an entertainment show. She was wrong. CNN is less informative than Mickey Mouse.  Listening to six stories about gay rights in a row when the nation is in the clutches of rent extracting special interests and a financial system that is sucking Americans dry financially is not news.  The story about the woman who allegedly killed her baby and then got off is not news either. CNN distracts you. You get more news from books. The chatter of the hour is nonsense.

Country versus City: The Wall Street Journal Is Confused

My wife Freda stands outside our rehabbed cottage

A 1950s Levittown Family

The Ashokan Reservoir Is Two Minutes Away
The Wall Street Journal recently ran an article that claims that life expectancy in cities is slightly longer than in the country and that the suburbs are still better for your health.  My wife and I spent about eight years rehabbing a cottage in a rural community, West Shokan, NY, in the Town of Olive, NY. About two years ago we moved here full time from New York City.  Besides the stream that runs through our back yard, we are two minutes from the Ashokan Reservoir.  The beauty in this region is remarkable. Many New Yorkers and New Jerseyites visit hotels in our neighborhood to escape for a few days or weeks and many more have weekend homes.  As an undergraduate I attended tiny Sarah Lawrence College in Bronxville, NY, formerly a women's college (I'm no fool), a college that caters to the rich.  At least three fellow alumni, one in my class, live in our tiny West Shokan hamlet. I wonder if their life expectancy is below the national average.

Nearby Woodstock, Rhinebeck, New Paltz and Kingston offer culture, from Dweezil Zappa's upcoming concert at Woodstock's Bearsville complex (which also houses The Bear, a restaurant that has been favorably reviewed in The Boston Globe and The New York Times)  to a Shakespeare summer stock theater about 3 minutes from our cottage to great restaurants like Le Canard Enchaine in Kingston.  Residents in West Shokan through the decades have included Mary Margaret MacBride, the first lady of radio (and friend of Eleanor Roosevelt, who used to visit her here), the left-wing lawyer William Kuntsler, and in neighboring towns billionaire Bruce Ratner, and the late William T. Golden,  financier and founder of the National Science Foundation.  My wife's Tai 'Chi instructor, who lives in nearby Saugerties, is a noted jazz musician with eight grammies.

We paid a huge price for our cottage: $77,000.  We spent a larger sum rehabbing it plus a lot of blood sweat and tears. But now we live mortgage free on a professor's salary.  

The problems that rural communities face, and the price they pay in mortality rates, are the direct result of big government progressivism. One of the few manufacturing firms left in our area has been under assault from the Department of Labor for years and may have to close because of pension liabilities that it is being forced to pay to employees of other firms under the Multiemployer Pension Plan Amendments Act.  High taxes and the dollar's use as a global reserve currency (in lieu of a gold standard) have induced poverty in rural America.  A dismal educational system that brainwashes youngsters in left-wing ideology rather than educating them has led to the absence of employers interested in the region.  The public response here in Olive has been to expand government further, creating silly make-work jobs that destroy rather than create value, the failed nostrum still advocated in The Wall Street Journal's pages by crackpot economists with Ivy League pedigrees and nothing of importance to say.

Progressivism has been great for affluent newcomers such as my wife and me, but has hammered people with roots in the region. Many retirees and their children have been forced to leave.  So much the better for millionaires who can buy houses on the cheap.  It is not surprising that forced sellers die young, victims of  economic quackery, the Federal Reserve Bank and the United States's depraved political and economic system.

I have lost some respect for The Wall Street Journal.  Throwing around statistics without grasp of particular circumstances is part and parcel of Progressivism's failure.

Wednesday, July 13, 2011

What Would Hamilton Say about Congress's Debt Limit Debate?

I am reading Ron Chernow's excellent biography Alexander Hamilton. On page 300 he discusses Hamilton's first Report on Public Credit which he wrote as the first Secretary of the Treasury:

In the report's final section, Hamilton reiterated that a well-funded debt would be a 'national blessing' that would protect American prosperity.  He feared this statement would be misconstrued as a call for a perpetual public debt--and that is exactly what happened.  For the rest of his life, he was to express dismay at what he saw as a deliberate distortion of his views.  His opponents, he claimed, neglected a critical passage of his report in which he wrote that he 'ardently wishes to see it incorporated as a fundamental maxim in the system of public credit of the United States that the creation of debt should always be accompanied with the means of extinguishment.' The secretary regarded this 'as the true secret for rendering public credit immortal.'  Three years later Hamilton testily reminded the public that he had advocated extinguishing the debt 'in the very first communication' which he 'ever made on the subject of the public debt, in that very report which contains the expressions [now] tortured into an advocation [sic] of the doctrine that public debts are public blessings.'  Indeed, in Hamilton's writings his warnings about oppressive debt vastly outnumber his pens to public debt as a source of liquid capital. Five years after his fist report, still fuming, he warned that progressive accumulation of debt 'is perhaps the NATURAL DISEASE of all Governments.  And it is not easy to conceive anything more likely than this to lead to great and convulsive revolutions of Empire.'

And, of course, Robert Rubin and Timothy Geithner are no Alexander Hamiltons.  They are more Madoff and Ponzi than Hamilton.

Monday, July 11, 2011

A Federal Reserve Bank Position is Bachmann's Acid Test

I spent a few minutes Googling +Michele Bachmann +"Federal Reserve Bank" and found little. Bachmann's website says that she is for cutting government and debt, but, like the fatuous debate about the Glass Steagall Act, saying you are for cutting taxes is beside the point. (The Glass Steagall Act is a matter of irrelevance to the bubbles that have riddled the American economy since the establishment of the Federal Reserve Bank.) Ronald Reagan said he was for cutting taxes, but through supply side cum Keynesian economics he created a thirty-year bubble whose bursting we now see. Bachmann says that she is for less debt, but Reagan said he was for less government; he did not really cut government (his increases in defense spending compensated for his cuts in domestic spending).

In short, the Republicans have lied for 30 years. They have repeatedly said that they favor small government and free markets, but there was no significant reduction in government or in regulation during any of the Republican administrations. George W. Bush expanded government, setting the stage for Obama's return to the pre-Reagan government expansion pattern.

The only way to limit government is to prevent money-printing.  This would have the side effect of forcing some manufacturing back to the United States as the treasury bonds that are currently used by foreign banks to prop up the dollar would not be issued with the current profligacy. In turn, stock markets and Wall Street as well as government would shrink.  The mess that a century of Progressivism has created would begin to be sorted out. It would not be pleasant, but if we do not do something now there will be worse hell to pay when the dollar finally collapses.

Bachmann is smart enough to have ideas about the Fed, but her Website seems to be silent, and she has not responded to my earlier letter. Unless she is willing to discuss a policy that would contain or eliminate the Fed, her small government credentials are bogus.  She is another Progressive masquerading as a friend of small government.

Sunday, July 10, 2011

Obama's Waning Popularity Suggests Legacy Media's Waning Influence

Rasmussen's daily presidential tracking poll indicates that President Obama is vulnerable to a Republican bid. According to Friday's poll, 46% of the public at least somewhat approve of Obama's performance while 53% at least somewhat disapprove.  A minority has consistently strongly opposed him.  The difference been those who strongly disapprove of Obama and those who strongly approve has been negative for some time and the difference is currently a whopping 19% (40% strongly disapprove and just over half, 21%, strongly approve).  But independent voters are the question.  If 51%  at least somewhat approve then Obama will likely win against a Republican.  In my own case, I am not certain that I would vote for a generic Republican like Mitt Romney or Michele Bachmann; rather, I would vote for the Libertarian candidate.

Obama's weak to modest poll results fly in the face of incredible residual pro-Obama bias in the legacy media. Obama's policies have completely failed. His money printing, the stimulus, and his preposterous health reform act have failed to restore economic growth and have failed to capture the public's support. A majority of the public continues to disapprove of the ill-conceived health reform act. Nevertheless, the legacy media continues to put a positive spin on his performance and continues to distort economic events surrounding the bailout, the activities of the Federal Reserve Bank, the refusal of Congress to expose the Fed to an audit, and the massive mal-investment that has characterized the American eoconomy for decades and that is slowly leading to an economic and political collapse.

Obama's mess is much bigger than Bush's, but the legacy media says otherwise. Common sense and the bare unemployment statistic expose the legacy media's lies to simple falsification.  Obama's numbers, then, suggest the legacy media's continuing but waning influence.  If Obama's policies, which have failed worse than Bush's, were exposed to the same media spin that Bush's were, Obama's strong approval rating would like be at 4%. That they are at 21% suggests that a good portion of the public is committed to the legacy media's pro-Wall Street and pro-big government ideology. That an additional 25% somewhat approves of Obama shows that, though waning, the pro-Wall Street media still influences many Americans.  But their numbers are getting thinner. In the 1940s, the  pro-Wall Street media was able to manipulate 60.8% to support Roosevelt's failed New Deal; today, the number taking the legacy media's side is significantly less, about 46%.