Thursday, November 8, 2007

Judge Judy's Producer Sends out Feelers Re O'Malley v. Karkhanis

An open letter to Sue O'Malley and Barbara Bowen (along with Sharad Karkhanis)regarding the Judge Judy show's producer's invitation for the case of O'Malley v. Karkhanis to appear on Judge Judy.

Dear Barbara and Sue-- I just received an invitation from Monica Rodman, Judge Judy's producer to contact her about Barbara Bowen for the PSC (faculty union of the City Univesity of New York) and Sue O'Malley appearing as co-complainants and Sharad Karkhanis appearing as defendant in an episode of Judge Judy. I believe that this would be a useful experience for you and that your case will get a fair hearing as well as deserved public exposure. Rather than my contacting Monica, I suggest that you contact her directly. Her e-mail message and contact information are below.

----- Original Message -----
From: Rodman, Monica
To: Rodman, Monica
Sent: Thursday, November 08, 2007 3:27 PM
Subject: Judge Judy Email Response


My name is Monica Rodman, and I am a Producer at "Judge Judy." I received your e-mail and would like to speak with you as soon as possible about your case.

You can reach me by any one of the following methods:
By Telephone:
1-800-888-XXXX, ext. XXXX
By fax:
By E-mail:

I look forward to speaking with you soon.

Monica Rodman
Producer, "Judge Judy"

Wednesday, November 7, 2007

Abolish the Fed and Go on a Diet

The media continue to avoid the biggest story of the coming decade, the decline of the dollar. The economy is important to everyone, even more so than the Iraqi War. Unfortunately, the progressive movement of the early twentieth century, followed by the Roosevelt liberals of the 1930s and the postwar Keynesian consensus, have enfeebled public conversation about the money supply and about the economy. The macroeconomics taught in most universities is nonsensical but the public has been told that an understanding of it is necessary to participate in public conversation about the Federal Reserve Bank. This is not true. Fed policy is a political variable. But the result of all the obfuscation and pretension is enervated public participation and the facilitation of the financial community's excessive influence on monetary policy.

The result of the twentieth century's institutionalization of progressive propaganda is that banking, Wall Street and corporate lobbies have dominant influence over the country's monetary policy. The major news media are largely in synch with the financial lobby and echo the academic Keynesian propaganda which purposes to legitimize the Fed. The result is the absence of debate about a policy that grievously harms the public in the interest of "well ordered" credit markets and stock market price increases. Although comments that the stock market will almost always go up are common, no major observer has asked why (my friend Howard S. Katz is the sole exception, as far as I know). The reason is that monetary expansion or inflation reduces interest rates and so increases the value that investors place on future income streams (accountants and actuaries call this the present value of future earnings). This distortion of valuations of the future is a government subsidy similar to a welfare benefit. Few Americans believe in welfare but most have been duped into believing in this subsidy.

The absence of debate has crippled the nation's ability to formulate a coherent economic policy. Instead, backroom deals have been made with the public's money supply, and we are learning about them now, when it is too late. Sadly, the interests that are represented, such as Wall Street, are not overly ethical and have learned little from their experiences with Worldcom and Enron earlier in the decade. The Fed will hurt many Americans, much as it did in the 1970s. But the difference between a diet and inflation is that in a diet, the person who suffers pays for self-indulgence. In inflation, the investors, debtors and corporate interests who benefited from the monetary expansion are not the ones who will pay.

The policy that the financial lobby has devised is curious. Foreign investors have been convinced to hold dollars, keeping the value of the dollar much higher than it would be in a market that is not politically driven. In turn, there has been more consumption of gasoline, manufactured goods and other imports. No one knows the extent to which consumption has exceeded the nation's true market power, but it might be by a considerable amount. The result is that suburbs have been developed, large cars driven, obesity increased and jobs disappeared. Jobs have disappeared, contrary to the fundamental claim of Keynesian economics about the effects of inflation and monetary expansion, because the dollar is stronger than it should be so costs look higher here than in other countries. Americans, who were once a muscular, dynamic nation, have become a nation of fat slobs who do not work but rather stay at home watching television and weighing 400 pounds. (I include myself and have recently lost twenty pounds and have been working out four times per week. But that's only the beginning.)

A report that Lenny Rann sent me today that was written by a bearish financial analyst suggests that Wall Street and the commercial banks have acted dishonestly toward the foreign investors who have been bankrolling them and the general public. The last 25 years' increases in the stock market are largely due to these subsidies, so when news came out today that the Chinese are fed up with us and are intending to invest elsewhere, the Dow fell 360 points, better than two percent. Much like Americans' waist lines, the stock markets have flourished because of the something-for-nothing mindset that Wall Street capitalism has created.

America is no longer the nation of innovation; of Edison; of manufacturing; of new ideas; of hard work; of entrepreneurship. Rather, it is the country of investment banks; Jim Cramer's whining for lower interest rates; and selfish indifference to the effects of dishonest money.

America is going to have to go on a diet. Americans have been deceived by the Republicans as well as the Democrats. In past economic declines, the tendency has been to resort to interventionism. That is the likely result now. The problem is that the decline has been caused by intervention. The only way out is to become more athletic, to return to the kind of policies that made the US a leader. Those are policies that foster innovation, entrepreneurship and self-reliance. Regulation will kill American leadership, as will the Fed. This day is no longer far off. It is near. The Fed ought to be abolished and ought to be viewed as the source of all the pain that Americans will feel in the coming decades.

Free Speech For Sharad

Phil Orenstein has written an excellent blog about the O'Malley v. Karkhanis case. Phil argues that the PSC aims to silence Sharad and so has encouraged Sue O'Malley to sue. Indeed, the PSC has refused my repeated efforts to arrange for a Judge Judy hearing of the case.

The PSC's attempt to suppress speech and academic freedom is met with indifference by the American Association of University Professors, whom I have contacted about the case (they haven't responded). Phil notes:

(Sharad's newsletter The Patriot Returns) has carefully documented the PSC leadership’s pursuit of revolution instead of their jobs, elaborating on their campaigns to devote more time and resources to future global crusades. This includes such activities as mobilizing the membership to protest the Republican Party at the Republican National Convention in New York. Additionally, the PSC has passed a resolution sympathizing with Hugo Chavez, sponsored a conference called Educators to Stop the War, calling for teachers to develop an anti-war curriculum. The PSC leadership has organized and funded New York City Labor Against the War and Labor for Palestine, donated $5000 to support the legal defense of Lori Berenson, in prison for helping Peruvian Marxist terrorists, and donated...(on behalf of) Sami Al-Arian convicted of conspiracy to aid terrorist group Palestinian Islamic Jihad. According to TPR, the PSC even hosts an “International Committee” replete with a foreign policy spokesperson, who has issued public statements against economic and military aid to Israel and a statement condemning the war in Afghanistan, “joining in solidarity with the victims of U.S. military power,” namely the Taliban. The New York Sun, reported that while the leaders of the PSC have been running amok in politics, their union failed to deliver a new contract and in the past five years the member’s health and welfare fund reserves fell by 97% “with only a trickle of money remaining for faculty members' prescription drug, dental, and medical insurance plans.”

As Phil outlines, the leadership of the Professional Staff Congress are left wing extremists who oppose academic freedom and aim to suppress all who disagree with their reactionary and incompetent left wing views. I have heard that although O'Malley has publicly described her case as silly or frivolous in a New York Sun article, the courts will be willing to waste the taxpayers' money in this transparent attempt at suppression of a union member by a union leadership.

Needed: Across the Board Deregulation--And Fast!

My old friend Lenny Rann just forwarded a report that analyzes the proximate sources of the current dollar decline. The report argues that the investment banks had packaged sub prime loans with AAA loans when they sold mortgage backed securities to foreign investors. In turn, the foreign investors realized that they had been duped and this in turn eroded confidence in the ethics of the American dollar. They are now withdrawing money from dollar investments and turning elsewhere because of the erosion in confidence in the good faith of the American investment community and declining confidence in the dollar. I had put 1% of my portfolio in Powershares's dollar bearish fund, but it may be smart to put more as the dollar is declining daily. This is a massive phenomenon and will disrupt many of our expectations. A breakfast in Dublin runs close to $100 now. Your bank account is being turned into monopoly money by the Fed and the Bush administration.

The last 30 years has been a disappointment. I had hoped that the early gains in deregulation in areas like transportation would continue and that a trend toward greater freedom in economics would be matched with enhanced emphasis on the rule of law and markets. Instead, America has opted for a different course. Enhanced emphasis on whimsical regulation; the nanny state of Mayor Michael Bloomberg in New York; continued regulation and protection of big business; refusal to repeal tariffs in fields like sugar; continued incompetence in education and refusal to introduce curriculum reforms advocated by Diane Ravitch and others to improve primary education; continued emphasis on credentialism and college degrees as opposed to results and productivity in the marketplace; and a perverse Wall Street Capitalism facilitated by the Fed and high income tax rates that inhibit imagination and new business formation. The result is that more and more Americans work in stores and in pointless economic activity.

The regulated economy will not function when the dollar loses global support. There will be widespread poverty if the left's nostrums, more regulation, more taxation, more power to incompetent elites and more credentialism are put into play. Instead, what is needed to respond to the failure of Wall Street capitalism is a return to fundamentals. It is only through deregulation; hard money; lowered income taxes; and an end to the wholesale waste and corruption of big government that America will be able to return to a leadership position and improve wages.

Tuesday, November 6, 2007

O'Malley v. Karkhanis in the New York Post

Dareh Gregorian has written an article in the New York Post about Susan O'Malley's lawsuit against Sharad Karkhanis (also see coverage here). While the article is a good one (see below), Gregorian fails to ask a few critical questions:

(1) Why haven't O'Malley and her attorney contacted the producers of Judge Judy, which is a more appropriate venue for a case that O'Malley herself describes as "silly" than is the New York State Supreme Court?

(2) Why are the people of the state of New York being asked to subsidize a case that the plaintiff describes as "silly"? Here are the synonyms of "frivolous" from :

barmy*, childish, dizzy*, empty-headed*, facetious, featherbrained*, flighty, flip, flippant, foolish, fribble, frothy, gay, giddy*, harebrained*, idiotic, idle, ill-considered, impractical, juvenile, light, light-minded, minor, niggling*, nonserious, not serious, paltry, peripheral, petty, playful, pointless, puerile, scatterbrained*, senseless, shallow, silly, sportive, superficial, tongue-in-cheek*, trivial, unimportant, unprofound, volatile, whimsical

(3) Why is the Professional Staff Congress unable to provide a dispute resolution mechanism that will spare the public the cost of resolving this "silly" dispute through the courts?

(4) One of the chief justifications of unionism is the provision of low-cost dispute resolution mechanisms. If unions like the Professional Staff Congress utilize the court system as a dispute resolution method of first resort, can such unions be justified from the standpoint of public policy?

(5) Has the Professional Staff Congress ever established guidelines for competent hiring?

November 5, 2007 -- A CUNY professor has filed a $2 million lawsuit against a fellow Ph.D. who's been lambasting her for allegedly trying to "recruit terrorists" to teach within the City University system.

In papers filed in Manhattan Supreme Court, Susan O'Malley charges that professor emeritus Sharad Karkhanis defamed her by accusing her of having an "obsession with finding jobs for terrorists" in recent issues of a newsletter he's been e-mailing to CUNY faculty members for 15 years.

Citing O'Malley's efforts to land jobs for convicted activist lawyer Lynne Stewart's co-defendant Mohammed Yousry and former Weather Underground member Susan Rosenberg, Karkhanis wrote:

"Has Queen O'Malley ever made a 'Job Wanted' announcement like this for a nonconvicted, nonviolent, peace-loving American educator for a job in CUNY? . . . Why does she prefer convicted terrorists bent on harming our people and our nation over peace-loving Americans?"

The retired Kingsborough Community College political-science professor said O'Malley, an English professor there, "is recruiting naive . . . faculty into her Qaeda-Camp to infiltrate . . . Personnel and Budget Committees in her mission - to recruit terrorists in CUNY. Given the opportunity, she will bring in all her indicted, convicted and freed-on-bail terrorist-friends."

O'Malley believes the terrorist-recruiter claim to be libelous. But an unapologetic Karkhanis, 73, told The Post: "Give me a break. I'm going to fight this vigorously."

He added that he considers what he wrote to be satire but that he was also "raising questions I believe are appropriate."

He said O'Malley crossed the line when she tried to land a job for Yousry, who's out on bail pending appeal of his conviction for helping Stewart disseminate messages from 1993 World Trade Center bomb plotter Omar Abdel-Rahman.

O'Malley, on leave from CUNY, could not be reached for comment.

Monday, November 5, 2007

Gold and Commodity Exposure in Your Portfolio

John Maynard Keynes quoted Lenin as saying that best way to destroy the capitalist system is to debauch the currency. There is debate whether Lenin said it or not. In any case much harm can be done from inflation. Since 1979, the compound inflation rate in the United States has been 3.7%. This has accompanied a lengthy stock market increase and a much larger production of dollars by the Federal Reserve Bank. The US money supply has increased several times, but there is a much larger amount of dollars in circulation around the globe, perhaps as much as 8 or 9 times the number of dollars in circulation in the US. The result of this is that the dollar is at all-time lows against a range of currencies, and has the prospect of depreciating further. The reduction in the buying power of the dollar is beneficial for exporters and may attract some factories back to the US. But it will harm those who hold dollars. In particular, those who hold savings accounts and long term bonds will be harmed as prices increase. Similarly, those on pensions and annuities will be harmed. The days when inflation was merely a domestic affair are over. The depreciating dollar means that many prices are increasing now. If Ben Bernanke continues to inflate the number of dollars (reduce the Fed Funds rate) then there could be a sell-off by foreign governments, who are holding trillions of dollars that are depreciating in value. In turn, this would cause inflation here.

This kind of instability poses as serious a risk to your portfolio as the risk of a stock market decline. A stock market decline is a possibility if the Fed reacts to the sharp dollar declines appropriately, that is, by raising interest rates. If the Fed continues to cater to Wall Street and America's wealthy on food stamps (those who benefit from the stock market increases that unrealistically low interest rates have caused) then the stock market might continue to go up until the inflation gets so bad that nominal interest rates are forced up by inflation. Jim Cramer will literally be forcing senior citizens to eat dog food just so he can see his portfolio increase.

It is conceivable that given the irresponsibility that the Bernanke Fed has demonstrated so far there will be a major inflation. This will exacerbate the income inequality that liberal economists harp on but erroneously attribute to fiscal policy.

Gold stocks have been performing very well this year and I have been quite happy as a result. As well, the metal itself as well as other commodities such as oil and grain have been going up very nicely. If there is a massive dollar depreciation, which is not an unrealistic risk, having a good share of your money in commodities will protect you.

One way to invest in commodity stocks is through the Ivy Natural Resources Fund . The trailing 5 year returns are 34.05% versus 21% for the S&P 500. As well, the Powershares index fund family has a number of commodity and dollar bearish indexes. These include gold, silver, oil, energy, agricultural, commodity index, dollar bearish and a number of others.

The frightening thing about massive inflation is that the investment that you naturally think of as most safe, cash, gets trashed. A dollar held since 1979 is worth about 34 cents today. In a massive inflation, the depreciation would go much further much more quickly.

Friends, I urge you to cover yourselves. The "economic miracle" of the past 25 years has been a three-card-Monty game. The 25-year old bliss in the stock market results from currency depreciation that is inherently unethical (because it is based on stealing from the poor to give to the rich). It will have serious consequences for conservative investors, and possibly end with a major stock market decline. It could be much worse than what I am describing if there is a major sell off of the dollar.

Sunday, November 4, 2007

New York Times at New Lows

Joseph E. Stiglitz reviews Naomi Klein's Shock Doctrine in the September 30, 2007 New York Times Book Review. Klein's book is currently number 4 on the New York Times bestseller list. I have not read it, and do not intend to, so I will not comment on the book, but rather on Stiglitz's review on p. 12.

The most intriguing part of Stiglitz's review is Naomi Klein's photograph in the print edition. Klein peers from a heavy swath of expensive makeup, I suspect Estee Lauder, and her hairstyle and lipstick alone probably cost about as much as an African farm worker makes in a year. What better image for a phony liberal/left critic of capitalism?

Given that Ms. Klein's coiffure is magnificently appointed, we may expect her to rail against globalization and the provision of manufactures to low income consumers who, probably in her view, would be better off prancing about in grass skirts and of course chucking spears. We are not disappointed.

Professor Stiglitz's review illustrates why the Times has become increasingly irrelevant and dull. For instance, Ms. Klein associates Milton Friedman with Pinochet's crimes, which were indeed horrific. According to and Pinochet was responsible for 3,197 murders, roughly the same number as occurred on 9/11. Recently, though, the Times's Thomas L. Friedman has suggested that he hopes that "anyone who runs on a 9/11 platform gets trounced." Despite the 17-year gap since Pinochet held office, Klein's book pounces on Pinochet's 3,197 murders (horrific they be)while Thomas L. Friedman, also in the pages of the Times sneers at al Qaeda's 3,000 murders that occurred six years ago. In contrast to Pinochet, Fidel Castro, currently in office and rarely criticized in the Times, has murdered roughly 100,000 victims, 33 times the number that Pinochet murdered. The New York Times had supported Castro in his insurgency and yet Stiglitz does not qualify his remarks about Milton Friedman.

Stiglitz and Klein sociopathically ignore that the chief mass murders of the last century were committed by those who opposed globalization, many of whom found themselves in the good graces of the Times. These include Stalin, for whom Walter Duranty apologized in the 1930s, as well as Castro and Mao, whom John Kenneth Galbraith praised to the heavens in a 1972 New York Times Magazine article. Mao alone was responsible for 25 million murders 8,333 times the number that Pinochet killed. The sick, sociopathic history of the anti-globalization left, in which Stiglitz and Klein participate, is repugnant.

Klein and Stiglitz together with the anti-globalization movement have blood-soaked hands. That anyone takes what this crew has to say seriously is astonishing.