Tuesday, December 30, 2008

19th Century Land Policy and the Fed

The Land Act of 1796 allowed purchasers of public land a minimum of 640 acres, one square mile at $2 per acre with one half of the purchase price being able to be deferred for a year. The large size of the plots prohibited most Americans from purchasing public land. These minimums were reduced over the ensuing 66 years, resulting in an increase in agricultural output.

Under federal land policy, the minimum was reduced to 320 acres payable over four years in 1800. In 1820 80 acres could be purchased at $1.25 per acre, and in 1832 parcels of 40 acres could be sold. Especially after 1830 squatters were granted rights and in 1841 the "Log Cabin Bill" allowed squatters preemption rights of up to 160 acres. The Graduation Act put up land unsold for 30 years for sale at 12.5 cents an acre. During the Civil War, in 1862, the Homestead Act granted 160 acres and 320 per married couple as long as they lived on the land or cultivated it for five years. Thus, the population of the western states grew from about one million in 1810to about 14.8 million in 1869, or from 15% of the US population to 47.1%.*

From 1870 to 1890, corn output increased from 1.125 billion bushels to 1.650 billion bushels, an increase of 46.7%. Land used for corn increased from 38.4 million acres to 74.8 million acres, an increase of 94.8%. Because the newly granted land was less fertile than the land that settlers purchased first (since settlers chose the best land first) productivity fell from 29.3 bushels per acre to 22.1 bushels per acre. A slightly different pattern applied to wheat, whose output increased 76.8% between 1870 and 1890 and whose land increased by 75.5%. Because of expanding output, real farm income per capita rose by only .8% from 1869 to 1879 and .7% from 1879 to 1889.**

According to Walton and Rockoff***, "it is alleged that the rapid distribution of the public domain laid the groundwork for modern agricultural problems by inducing too much capital and labor into agriculture, thereby impeding the process of industrialization."

"...Partially as a result of this rapid addition of resources, the new West produced crops at such a rate that consumers of foodstuffs and raw materials enjoyed 30 years of falling prices. Furthermore, according to Robert Fogel and Jack Rutner, average rates of return on investments in land improvements, livestock, farm buildings and machinery equaled or exceeded returns on other contemporary investments, and real incomes in the new agricultural areas outside the South grew at rates comparable with those in manufacturing."

Nevertheless, despite the Fogel and Rutner findings, it would seem that Populism was related to falling agricultural prices. Moreover, the culture of farming was likely one that included an element of speculation. As Richard Hofstadter points out in Age of Reform****

"Frequent and sensational rises in land values bred a boom psychology in the American farmer and caused him to rely for his margin of profit more on the process of appreciation than on the sale of crops. It took a strong man to resist the temptation to ride skyward on lands that might easily triple or quadruple their value in one decade and then double again in the next...The penchant for speculation and the lure of new and different lands bred in the American farmer a tremendous passion for moving--and not merely, as one common view would have it, on the part of those who had failed, but also on the part of those who had succeeded...Mobility among farmers had serious effects upon an agricultural tradition never noted for careful cultivation: in a nation whose soil is notoriously heterogeneous, farmers too often had little chance to get to know the quality of their land; they failed to plan and manure and replenish; they neglected diversification for the one-crop system and ready cash...In a very real and profound sense, then, the United States failed to develop (except in some localities, chiefly in the east) a distinctively rural culture...What differentiated the agricultural life of these regions...was that it was so speculative, so mobile, so mechanized, so 'progressive', so thoroughly imbued with the commercial spirit."

Moreover, increasing agricultural productivity put additional pressure on commodity prices. Walton and Rockoff point out that+

"Thanks to the research of Olmstead and Rhode we have a greater appreciation of changes in plant varieties, irrigation systems, fertilizers and other biological inventions that greatly impacted the use of land for planting. These changes worked along two lines: (1) the discovery of new wheat varieties (and hybrids) that allowed the North American wheat belt to push hundreds of miles northward and westward and (2) researchers and farmers who found new methods of combating insects and diseases, some of which came from experimentation with new varieties (seeds) from Europe and elsewhere..labor productivity grew dramatically in wheat and corn over these decades. According to Robert Gallman, labor productivity in these two crops grew at a rate of 2.6 percent annually between 1850 and 1900."

As well, point out Walton and Rockoff, mechanization due to McCormick's reaper as well as thresher, mowers, horse rakes, seed planters, grain cleaners, portable grist mills, corn-shellers and similar devices enhanced labor productivity on farm.

The result was of course increasing competition and economic stress on farmers, who had to adapt, "to run faster just to hold ground". Such rapid change creates anxiety, which in turn leads to the demand for political fixes. For farmers, this was Populism. Of course the alternative, retaining primitive agricultural methods, would have prohibited industrialization. "In 1870 Americans spent one third of their current per capita income on farm products. By 1890, they were spending a much smaller fraction, just over one-fifth...Thus, although the real incomes of the American population rose during the period, and although Americans did not spend less on food absolutely, the proportion of those incomes earned by farmers declined." On the other hand "the value of agricultural exports rose from $297 million in 1870 to more than $840 million in 1900.++

Added to this mix was the "rapid increase in the supply of agricultural products. All over the world, new areas were entering the competitive fray. In Canada, Australia, New Zealand and Argentina as well as in the United states, fertile new lands were becoming agriculturally productive."+++

The Fed was not established purely because of Populism, but Populism was certainly a contributing factor. Fed apologists like William Greider in his Secrets of the Temple emphasize agitation among farmers because of falling commodity prices. Greider neglects to mention that falling commodity prices were great for workers. But they were bad for farmers, including moderate-to-poor income ones, who were landholders or speculators. In his book, Greider does not mention the relationship of federal land policy to falling agricultural prices. He merely paints falling agricultural prices as a monetary issue--in other words he takes the Populists' economic reasoning at face value. Nor does he raise the question as to whether farmers-as-speculators or farmers-as-workers dominated the Populist movement.

As Walton and Rockoff point out:

"Farmers were not inclined to see their difficulties as the result of impersonal market forces. Instead, they traced their problems to monopolies and conspiracies: bankers (some thought that Jewish bankers were particularly to blame) who raised interest rates, manipulated the currency, and then foreclosed on farm mortgages; grain elevator operators who charged rates farmers could not afford; industrialists who charged high prices for farm machinery and consumer goods; railroads that charged monopoly rates on freight; and so on."++++

Greider's book provides an excellent example of the inability of the public to debate questions concerning money dispassionately. A good example is his discussion of the Populist movement.

*Gary M. Walton and Hugh Rockoff, History of the American Economy Tenth Edition. South-Western-Cengage Learning, 2005, pp. 145-148
**Ibid, p. 288
****Richard Hofstadter, Age of Reform: From Bryan to FDR. New York: Vintage Books, 1955
+Op. cit., pp. 290-1
++Op. cit., p. 294
+++Op. cit., p. 293
++++Op. cit., p. 294

Monday, December 29, 2008

An Examination of the Employment Patterns of CNN Announcers

I was just at the gym and CNN was on. I was wondering how America's news announcers get their jobs. I did some research on the Internet and this video comes closest to explaining how people like Jack Cafferty, Wolf Blitzer and Lou Dobbs found work. Note: Dobbs= Moe, Cafferty = Larry, Blitzer = Curly. Only they're not as smart as the three in the video.

Sunday, December 28, 2008

The '49rs Didn't Need Gun Control

Among my favorite westerns are the ones about the gold miners in California, the '49ers. There was no law in California in 1848-50 and the small number of US army there found a large percentage deserting to pan for gold. The strike came at a propitious time. The Irish potato famine, the Taiping Rebellion and the European Revolutions in Sicily, France and the rest of Europe all occurred then. Moreover, the Mexican War had just ended and more than a few rowdy young veteran types headed for California. "from a population of about 107,000 near the end of 1849, California grew to more than 260,000 within three years."

There are a number of interesting issues about the emergence of property rights in this lawless bonanza land of ambition, greed and dreams. The absence of property rights and law would seem to have been likely to have encouraged conflict, as would the nature of the miners. Moreover, the number of men was far greater than the number of women, likely adding to the potential for explosive violence.

In their History of the American Economy Gary M. Walton and Hugh Rockoff quote John Umbeck's California Gold Rush: A Study of Emerging Property Rights :

"During 1848,...nearly 10,000 people rushed to mine gold on property to which no one had exclusive rights. Furthermore, although every miner carried a gun, little violence was reported. In July, when Governor Mason visited the mines, he reported that the miners were respecting Sutter's property rights and that 'crime of any kind was very infrequent, and that no thefts or robberies had been committed in the gold district...and it was a matter of surprise, that so peaceful and quiet a state of things should continue to exist."

I guess they didn't need gun control!

Andrew Jackson on the Second Bank of the United States

"Money is power."

-President Andrew Jackson
Quoted in Richard McCormick, "The Discovery that Business Corrupts Politics".

Saturday, December 27, 2008

Glenda Elizabeth Gilmore's "Who Were the Progressives"

Glenda Elizabeth Gilmore, editor, "Who Were the Progressives?" Boston: Bedford/St. Martin's, 2002. 265 pages. Available on Amazon.com used and new for $3.50.

Glenda Elizabeth Gilmore does a great job in this introductory book about the Progressives. This is a book of selections from eminent historians who have written about Progressivism, to include Richard Hofstadter (Age of Reform), Elizabeth Sanders ("Roots of Reform: Farmers, Workers and the American State, 1877-1917"), Robert H. Wiebe (The Search for Order), Richard L. McCormick ("The Discovery that Business Corrupts Politics"), Shelton Stormquist ("The Crucible of Class: Cleveland Politics and the Origins of Municipal Reform in the Progressive Era") and James J. Connolly ("Dimensions of Progressivism").

The book is targeted at college history students but it is a great book for the general reader. I like Gilmore's approach of excerpting sections of classic books. Moreover, she does a great job of illuminating how the different historians disagree.

The point of the book is that there is no consistent interpretation of the origins of Progressivism. Hofstadter argues that the Progressives were well off small town leaders of the "Mugwump type" who had been surpassed by tycoons of big business like Jay Gould and John D. Rockefeller:

"The newly rich, the grandiosely or corruptly rich, the masters of great corporations, were bypassing the men of the Mugwump type--the old gentry, the merchants of long standing, the small manufacturers the established professional men, the civic leaders of an earlier era...In their professional careers as in their community activities, they found themselves checked, hampered and overridden by the agents of the new corporations, the corrupters of legislatures, the buyers of franchises, the allies of political bosses."

"The Mugwump had broadened his base."

In contrast, Elizabeth Sanders in a riveting article "Agrarian Politics and Parties after 1896" that was taken from her 1999 book Roots of Reform: Farmers, Workers and the American State, 1877-1917 argues that Progressivism was rooted in Populism. The Farmer's Union, for example, was an early co-op. "The FU devoted most of its energies to cooperatives, collective control of marketing and campaigns to withhold crops for a better price...It is important to remember that the Farmers' Union was hardly 'new'. Many of its organizers and members had been active alliance members and/or Populists and its goals and methods as well as its image of farmers as a proud but oppressed class suffering great injustice were clear links to the old (Farmers Alliance)."

The FU's legislative agenda "centered on facilitation of cooperation, antitrust investigations, railroad regulation, public control of banking and currency, government-supplied credit for farmers, lower tariffs, aid for agricultural and industrial education and public schools generally, direct election of the president and the Supreme Court, and the outlawing of commodity speculation. Like the Alliance, the FU frequently attempted to make common cause with labor unions...The Texas FU passed resolutions opposing convict labor in competition with free labor and advocating the reform administration of a Democratic governor..."

Sanders emphasizes the role of William Jennings Bryan in fashioning the reform ideology that later became the New Freedom and the New Deal (p. 54):

"It was the pull of Bryan's leadership, his de facto control of the party's nomination, and he desire to tap into his mass following that transformed the prim, conservative governor of New Jersey (who had been a Cleveland gold Democrat) into the candidate of progressive Democrats in 1912. Bryan played a major role in securing the nomination for Woodrow Wilson, wrote the 1912 platform that charted the path of reform for the 'New Freedom' years and coached the candidate through the campaign. And it was Bryan who inspired the congressional Democrats to push the president on antitrust, labor, banking, currency, farm credit and Phillipine independence. Writing of Bryan's lifelong devotion to political reform, Claude Bowers observed in the early 1950s, "Almost everything we've got today in the way of reforms originated with Bryan."

"The farmers were the most numerous constituents for expanded public power in the southern and Midwestern states where the reform movements were strongest. 'Under the growing pressure of monopoly,' wrote C. Vann Woodward, 'the small businessmen and urban middle class overcame their fear of reform and joined hands with the discontented farmers. They envisaged as a common enemy of plutocracy of the northeast, together with its agents, banks insurance companies, public utilities, oil companies, pipelines and railroads."

When the Populist Party disappeared the former Populists rejoined the major parties and sensitive the Democratic and Republican leaderships.

"In view of these regional tendencies, it seems appropriate to recognize the major reform legislation of the Progressive Era--the tariff, banking,income tax, railroad, shipping and commodity exchange regulation and the antitrust, farm credit, highway and education measures--as an agrarian agenda..."

Progressive reform started with the states (p. 64). "By 1910 the progressive movement in the states--particularly the states of the Midwest, South and West--had secured electoral reforms, regulatory restraints on railroads and insurance companies, taxes on powerful corporations and mitigation of some of the most reprehensible employment practices. However, the effectiveness of state laws was limited. Corporations harassed by state regulators could threaten to move their operations elsewhere, and federal court decisions made it impossible for states to have much influence on corporations heavily engaged in interstate commerce..."

Wiebe's argument differs from both Hofstadter and Sanders. Wiebe argues that progressivism amounted to a "search for order", what McCormick calls the "organizational" theory. Wiebe argues that:

"a patchwork government could no longer manage the range of urban problems with the expertise and economy that articulate citizens now believed they must have."

Reformers aimed to rationalize government, reorder it to suit modern corporations (pp. 82-3). "The experts in turn devised rudimentary government budgets, introduced central, audited purchasing and partially rationalized the structure of offices. Bureaus of research provided endless data on all of these matters as well as the skill fro drafting some of the more complex ordinances....Whatever the reformer's specialty, his program relied ultimately upon administration. 'For two generations,' Frederic Howe wrote in 1905, we have wrought out the most admirable laws and then left the government to run itself. This has been our greatest fault.' Now laws established an outline for management, a flexible authority to meet and follow the major issues of urban living. In fact, the fewer laws the better if those few properly empowered the experts, for administration was expected to replace the tedious, haphazard process of legislative compromise...Because the reformers viewed organization quite simply as anti-chaos, they conceived their administrative solutions in terms of broad executive mandates, with a mayor holding full general authority and subordinates enjoying virtual autonomy in their limited areas of expertise. The model government formed a simple pyramid free from all the cross checks and intersecting lines of divided responsibility.

"Scientific government, the urban reformers believed, would bring opportunity, progress order and community. Once emancipated from fear and exploitation all men would enjoy a fair chance for success. the coarseness, the jagged violence, of city life that so deeply disturbed them would dissolve into a new urban unity, the progressive version of the old community ideal...Early in the twentieth century this goal rapidly lost ground to a very different one predicated upon the assumption that every man, properly educated, would desire a functional, efficient society. The new bureaucratic vision accepted the impersonal flux of the city and anticipated its perfect systematization.

"Although many topics of late-nineteenth century reform appeared after 1900, most of the old issues had changed beyond recognition. Civil service, for instance, had once been a negative, absolute goal...Now the panacea of the patrician had given way to the administrative tool of the expert, with efficiency rather than moral purity its objective...

"It was the expert who benefited most directly from the new framework of politics. the more intricate such fields as the law and the sciences became, the greater the need for men with highly developed skills...Only the professional administrator, the doctor, the social worker, the architect, the economist could show the way.

"By 1905 urban progressives were already separating along two paths. While one group used the language of the budget, boosterism and social control, the other talked of economic justice, human opportunities and rehabilitated democracy.

"In the twentieth century the commission became the master instead of the servant. Once empowered, it operated apart from the legislature, administering rather than enforcing. Business-minded progressives, in other words, expected the commission to act as their agent in an endless series of maneuvers with the railroads. ..In the end these commissions accomplished relatively little. Irrelevant to the natural flow of people and goods, the states simply could not manage the major problems of a national economy..."

"In fact the major corporations tended to move somewhat ahead of the reformers in attempts to extend the range and continuity of their power through bureaucratic means...(With respect to corporations) around 1900 the rush to reorganize commenced with one giant firm after another adopting some variant of administrative centralization. An age that assumed an automatic connection between accurate data and rational action naturally emphasized a few leaders linked by simple lines to the staff below. Information would flow upward through the corporate structure, decisions downward...As their interests grew more refined and their need for technical services increased, big businessmen also leaned more and more upon expert assistants."

(p. 93) "The more extensive the magnate's political concern, the more important it was to condition countless, unknown officials in all parts of government to respond appropriately whenever his interests cam under consideration...Lobbying underwent comparable changes around 1900. The major corporations were the earliest experimenters...Perpetual ferment in dozens of states demanded the corporate leader's constant attention, so he assigned full-time agents to the important posts...Varieties of competing organizations, often with diversified programs, left the legislative leader without the basis for decisions. Nor could he depend upon partisan loyalties to mellow their spirits."

(p. 95) "by far the most important part of that political revolution transformed the national government. Because most progressives chose to concentrate initially upon a government close at hand and because few of them had easy access to national power, the pressure for change mounted more slowly in Washington than it did in the city halls and state capitols. Nevertheless, a rudimentary national progressivism was already taking shape around 1900. Some reformers were turning to Washington because they needed truly national solutions to their problems. Even more looked there because the scope of their operations, though far less than nationwide, had still entangled them in too many conflicting jurisdictions. Others simply sought national weapons to use in their local wars...By 1900 a small but growing number of militants, largely new-middle class businessmen who shipped to an from the major cities of the Midwest, had already lost faith in the value of piecemeal controls through state government and were demanding an expansion of the Interstate Commerce Commission's powers."

In Richard L. McCormick's article "The Discovery that Business Corrupt Politics: A Reappraisal of the Origins of Progressivism" which originally appeared in the American Historical Review (86:2, April 1981, 247-74)

"historians have increasingly recognized the Progressive Era as the age when Americans accommodated, rather than tried to escape, large-scale business organizations and their methods."

Progressivism involved"the emergence of a 'government broadly and continuously involved in society's operations.'" (quoting Wiebe)

"From the English opposition of Walpole's day, colonists in America had absorbed the theory that commercial development threatened republican government in two ways: (1) by spreading greed, extravagance and luxury among the people; and (2) by encouraging a designing ministry to conspire with monied interests for the purpose of overwhelming the independence of the legislature"

Quoting Fred Somkin: "Over and over again Americans called attention to the danger which prosperity posed for the safety of free institutions and the maintenance of republicanism...Using language similar to that of Walpole's and Hamilton's critics, Andrew Jackson decried special privileges from government as dangerous to liberty and demanded their abolition. Much of his wrath was directed against the Second Bank of the United states. That 'monster,' he said, was 'a vast electioneering engine'; it has 'already attempted to subject the government to its will."

"By the 1890s, large-scale industrialization was creating the felt need for new government policies in two distinct but related ways. The first process, which Hays and Wiebe have described so well, was the increasing organization of diverse producer groups, conscious of their own identities and special needs. Each demanded specific public protections for its own endeavors and questioned the allocation of benefits to others. The second development was less tangible: the unorganized public's dawning sense of vulnerability, unease and anger in the face of economic changes wrought by big corporations. Sometimes, the people's inchoate feelings focused on the ill-understood "trusts"; at other times their negative emotions found more specific, local targets in street-railway or electric power companies."

"The period 1904-1908 comprised the muckraking years."

"Many of the details of politico-business corruption had never been publicly revealed before...Large-scale corporation campaign contributions, for instance, were a product of the 1880s and 1890s. Highly organized legislative lobbying operations by competing interest groups represented an even more recent development. In his systematic study of American legislative practices, Paul S. Reinsch devoted a lengthy chapter to describing how business interests had developed a new and far more efficient system of dealing with legislatures than the old methods of [haphazard corruption].

"By 1905 a political explosion of some sort was likely, due to the accumulated frustrations people felt about the government's failure to deal with the problems of industrialization. So combustible were the elements present that another spark besides the discovery of politico-business corruption might well have ignited them. But the recognition of such corruption was an especially effective torch."

But "The organizational results that followed, however, seem less inevitable. There were, after all, several other known ways of curtailing corruption besides expert regulation and administration. For one, there was the continued reliance on direct legislative action against the corruption of politics by businessmen...A second approach, favored by Edward Alsworth Ross and later by Woodrow Wilson, was to hold business leaders personally responsible for their 'sins' and to punish them accordingly. Finally, there were proposals for large structural solutions changing the political and economic environment so that the old corrupt practices became impossible."

Groups that stood to gain from regulation of utility and transportation had previously proposed regulation. The explosive news about corruption made the public support these proposals, even if they were irrelevant to the corruption. "Where their proposals met the particular political needs of 1905-08 they succeeded most quickly." The muckrakers themselves were devoid of proposals of how to reform government and business.

p. 128 "The circumstances in which the discovery of corruption became a political force also assist in explaining its conservatism. The passions of 1905-06 were primarily expressed in state, rather than local or national politics...Usually the policy consequences were more favorable to large business interests.

The last four articles in this book are also very good. In particular, Shelton Stormquist discusses how a streetcar strike in Cleveland pushed the subsequent Cleveland mayor, Tom Johnson, to push for progressive reform. James J. Connolly argues that ethnic politics in Boston also played a role, and that Italians, Jews and Irish used progressive rhetoric for their own ends.

Thus, there are quite a few competing explanations of Progressivism, even if they overlap: agriculture, the Mugwump type, big businessmen in search of order, a public outraged by corruption, class politics and ethnic politics.

Future Taxation and Paper Money Expansion in the Revolutionary War

Benjamin Franklin advocated paper money and monetary expansion in his essay "A Modest Inquiry into the Nature and Necessity of a Paper Currency." John H. Wood in the Chicago Fed's Economic Perspectives tells that Franklin advocated inflation but that:

"Afterwards, however, in that most candid of autobiographies, Franklin suggested that his motives might not have been altogether altruistic.

"'My Friends [in the Assembly], who conceiv'd I had been of some service, thought fit to reward me by employing me in printing the money; a very profitable jobb and a great help to me.'

"This monopoly, which Franklin retained until 1764, must certainly have been 'a great help'to the struggling young printer. He was also heavily in debt, another reason to favor a monetary expansion. Forty years later, however, Franklin, grown prosperous and now a creditor, observed that, "I now think there are limits beyond which the quantity [of currency] may be hurtful."

In an article that appeared in The Journal of Economic History (Vol. 48, No. 1 (Mar., 1988), pp. 47-68) Charles W. Calomiris notes that not only Franklin but also a number of the Federalists, to include Madison, Hamilton, John Adams, Gouverneur Morris and Robert Morris also supported paper money expansion in the mid 18th century. In fact, although paper money was invented in China, its modern application was invented in America. The British discouraged acquisition of gold specie in America, and many contemporary observers believed that there was a shortage of money.

Calomiris notes that in 1729, at the age of twenty-three, Franklin wrote "A Modest Inquiry into the Nature and Necessity of a Paper Currency,":

"a polemic supporting the creation of land banks in Pennsylvania. Franklin argued that the expansion of properly backed paper currency could have a lasting real effect on the aggregate stock of money and the extent of trade. Franklin focused on the favorable developmental consequences for a capital-poor, land-rich economy of being able to substitute paper for exportable specie. Franklin expounded on the virtues of multiple deposit expansion in Europe and the great saving enjoyed through fractional reserve banking and consequent reductions in specie hold-ings. The mortgage-backed currency issued by land banks, he reasoned, would be even more efficient because it would not direct any real resources to production

"Franklin argues that abundant money leads to lower interest rates, greater production, immigration, and special- ization by enhancing the rapid settlement of debts and by insuring that traders will always be able to purchase the bundle of goods they desire. Furthermore, in a currency-scarce economy, merchants who deal in foreign goods often are forced to pay wages and debts in kind from inventories, and thereby promote the consumption of foreign goods to the detriment of local commerce. In this context, land-backed paper money has a developmental "bootstrapping" role in moving the economy beyond a critical initial threshold which allows exchange and specialization to thrive...

"Franklin addressed opponents of land banks who claimed that an increase in money always led to inflation. He maintained that credible land-backed money would not be inflationary, in part because its creation corresponded to the earmarking of a set of real assets which backed it. The importance of backing in determining the value of money was extended by analogy to the government's use of its assets (future taxes) as a means of redeeming and giving value to its debts, including currency."

However, "Adam Smith argued that the demand for money-like debt depended not only on the backing of money, but on the sufficiency of the supply of competing liquid claims in the economy as a whole. He allowed money demand, as well as land or tax backing, to influence the value of money-like claims through the liquidity premium money enjoys." Smith did not look favorably upon paper money expansion.

Calomiris notes (pp. 47-8):

“Whether the colonies suffered a scarcity of money has been a topic of debate among economic historians. Throughout eighteenth-century America there were a wide variety of circulating media- foreign coins and bills, a trivial number of domestic coins, and private, colonial, state and continental notes. Specie import cost was inflated before the Revolutionary War by mercantilistic prohibitions and duties intended to encourage the flow of specie from the colonies to Britain... Colonial bills were restricted in supply by prohibitions and limitations originating in Britain, as well as by local government prohibitions of private paper issues and local limits on emissions of legal-tender currency. Parliament enacted its prohibitions at the behest of British and colonial creditors who saw in paper money a means to reduce the value of hard-currency debt. Some colonials complained that government regulations and government unwillingness to supply sufficient paper bills caused unnec- essary monetary scarcity” (pp. 47-8).

Like Pennsylvania, New York experimented with paper money inflation. Calomiris quotes New York's Governor Hunter (p. 48):

"I do affirm that since the circulation of these bills, the trade of this place has increased at least above a half of what it was."

"The currency stock valued in real terms at roughly 8 million Spanish milled dollars was viewed as a severe shortage in 1775, and the trebling of real balances from 1775 to 1776 due to state and continental note issues confirms the earlier potential for growth in real money balances" (p. 48)

"Pelatiah Webster's estimate of total specie and bills in America at the beginning of 1775 is $10 million (specie equivalent)." From May 1775 to November 1776 the states, acting individually, issued $18 million in currency to help finance the Revolutionary War but:

"The greatest source of increase in liquidity during the early war years, however, was the bills first authorized by the Continental Congress in May 1775. By the end of 1776, Congress had issued $25 million in continentals for which it received $21 million in specie value."

"The value of the promise to redeem continentals depended crucially on the ability and willingness of Congress to tax. Under the Articles of Confederation, however, only states had taxation authority, while both Congress and states could issue money and other debt. The redemption of continentals required the completion of the following chain of events: the war had to be won, Congress had to want to redeem its currency, the states had to be willing to transfer resources to Congress or to vest it with the power to tax, and the public had to be sufficiently wealthy and willing to be taxed" (p. 60)

"To contemporaries it was clear that the difference between the state and continental bills was the expected value of each for extinguishing taxes" (p. 61)

Ultimately "It's not worth a continental" became a popular expression as the federal Continental was redeemed at 2 cents on the dollar. Calomiris argues that where taxation was used to repay notes that served as paper money, extending the money supply was not inflationary. But where there was no backing of the paper money with increased taxation it was.

He goes on to quote Benjamin Franklin (p. 63):

“The general effect of the depreciation among the inhabitants of the States has been this, that it has operated as a gradual tax upon them, and every man has paid his share of the tax according to the time he retained any of the money in his hands, and to the depreciation within that time. Thus it has proved a tax on money, a kind of property very difficult to be taxed in any other mode; and it has fallen more equally than many other taxes, as those people paid most, who, being richest, had most money passing through their hands.”

In effect, Franklin is arguing for holding hard assets (land, gold, inventory, Lexuses) rather than cash.

Calomiris offers an interesting concluding observation:

"The financial legacy of the American Revolution was distrust of government money which, when combined with the struggle over private bank chartering privileges, contributed to the prolonged inadequacy of financial institutions in the United States. Critics of government monetary control cited the revolutionary experience as proof that governments could not be trusted to repay their monetary obligations. Such bitter opposition to government bill issues led to the prohibition of state bill issues by the Constitution. Federal powers regarding paper money creation were left deliberately vague by the framers as a compromise between those who advocated absolute prohibition and those who saw the advantage of occasional issues. While a small amount of government currency was issued during the War of 1812, only the financial exigencies produced by the Civil War led the government once again to create a substantial supply of paper money. The somewhat credible commitment to resume specie backing of greenbacks limited their depreciation, and the achievement of resumption in 1879 set the stage for a permanent government role in supplying paper money. Thus the displacement of the post-Revolution for a discussion of the constitutional debate over federal monetary powers."

Caroline Kennedy and the Progressive Hoax

"Progressivism" is the idea that government can "solve problems" that politicians, academic "experts" and "the media" identify. But what if these sources lack the ability to identify problems much less solve them? One would expect that those who claim that government can identify and solve "problems" would insist on political leaders who are competent to do so. Problem solving is hard work. If they do not require competence among their political leadership, why might they believe that government can solve problems?

Recently, "Progressives" claimed that Sarah Palin "lacks experience" and therefore is incapable of solving problems or representing the nation in the manner that "Progressives" require. At the same time, Barack Obama revealed ignorance of the most elementary aspects of foreign affairs. For instance, he was unaware that returning Jerusalem to Israel would cause resentment among the Arabs. This kind of whimsical picking and choosing, i.e., the people we don't like must have experience but the people we like need not, suggests that there no serious problems that "Progressives" have any ability to solve, and there is no problem solving. "Progressivism" is a hoax.

New York is one of the most "Progressive" states, a failed state that demonstrates the cruelty and viciousness of big government. New York's economy has been dismal for decades. Led by "Progressives" like Michael Bloomberg, Mario Cuomo, Nelson Rockefeller and George Pataki, New York City and State have failed to prepare for a Wall Street slowdown. Now that it is occurring, college-trained professionals are seeking work at the Bread Alone Bakery in Boiceville, NY. Mayor Bloomberg, himself an experienced trader, has served nearly two terms yet was not willing to take the most modest political risks necessary to attract alternative industries to the state and city. Doing so would have involved cutting massive waste in City Hall, cutting taxes, and reducing regulation.

Tonight Yahoo! features Larry Neumeister's AP release that quotes Kennedy:

"She said two events shaped her decision to ask Gov. David Paterson 11 days ago to consider her for the position if Sen. Hillary Rodham Clinton is confirmed as secretary of state: the Sept. 11 terrorist attacks and her work for Barack Obama's presidential campaign."

If Kennedy were interested in public service and "Progressives" were interested in solving problems, they would have Kennedy serve as a staff analyst in the Senate or the State Assembly, and let her run for state senate office thereafter. After five or six years at the state or congressional level, she might be ready for a senate run.

But since "Progressives" don't solve problems and cannot identify them, the singularly inexperienced and unprepared Kennedy is hailed by the "Progressive" left.

Friday, December 26, 2008

Why Does Tony Rezko's Lawyer Own Barack Obama's House? And Why The Media Silence?

Bob Robbins and Jim Crum forwarded documentation of the property title of Barack Obama's house on 5046 S Greenwood, Washington, DC that appeared on News and Commentary for Thinking People (NCFTP). NCFTP posts the records here. If you were a senator or a presidential candidate, would you ask your former boss to hold the title to your house? Especially if your boss was a lawyer representing your friend who had been an indicted and now convicted felon? And if you were the news editor of anything that conceivably calls itself a news outlet, would you cover this story about a presidential candidate and now president-elect?

A few days ago Bob Robbins forwarded 48 pages of property records, the first page of which is copied from the PDF file below and appears in NCFTP's link.

Here is the article that appears today in Worldnet Daily:

>An attorney for convicted fundraiser Tony Rezko is listed as the owner and taxpayer for Barack Obama's Chicago mansion, according to records obtained by WND.
William Miceli is a lawyer at the Chicago law firm Miner, Barnhill & Galland, which also formerly employed Obama...

>Miner, Barnhill & Galland was Obama's employer when he did extensive legal work for Rezko, who awaits sentencing after he was convicted in June of fraud, money laundering and bribery-related counts.

>Miceli, as a senior attorney at the firm, supervised Obama when the future president wrote letters on behalf of Rezko urging public authorities to award him new public properties...

>Following the Jan. 21 Democratic Party primary debate, Miceli told the Washington Post that he was Obama's supervisor at the law firm, in response to Sen. Hillary Clinton's charges Obama had worked for a Chicago slumlord, Rezko...

WND confirmed the tax bill for the Obama home is mailed to Miceli, not to Obama or the Northern Trust account through which Obama has claimed the home was purchased.

>Records from the Cook County Treasurer's Office give the PIN number for the Obama property as 20-11-115-037-0000 and list Miceli as the person who receives Obama's property tax invoice by mail.

>Eric Herman, a spokesman for the Cook County assessor, confirmed to WND that the Treasurer's Office records were correct and that Miceli did receive the Obama property tax invoice by mail.

>Rosslyn Whitlock, an Internet support specialist at the Cook County Recorder of Deeds, confirmed to WND that the office has no information listed for the Obama home under the PIN number 20-11-115-037-0000, the number used by the Cook County Assessor's office for property tax purposes.

>WND was able to locate warranty information at the Cook County Recorder of Deeds , which Herman at the County Assessor's office told WND was the "old PIN number" assigned to the Obama home at 5046 S. Greenwood Avenue, before the home was sold to Obama.

>Neither spokesman could explain to WND the discrepancy in PIN numbers, nor why the Cook County Recorder of Deeds has no information filed under the new PIN number assigned to the property after the Obama purchase...

>Meanwhile, WND has reported that since arresting Illinois Gov. Rod Blagojevich, U.S. Attorney Patrick Fitzgerald has taken new interest in Rezko's involvement in the Obama mansion purchase.

>WND also reported real estate credit analyst Kenneth Conner has filed a civil suit alleging he was wrongfully dismissed by Mutual Bank of Harvey for objecting to what he considered a fraudulent appraisal of the vacant lot. The appraisal was submitted by the Rezkos at an intentionally high figure, he claims, permitting them to borrow an additional $125,000 that amounted to a "political payoff" to Obama.

Quoting Democracy Rules of News and Commentary for Thinking People:

>"The price was too high for Obama, so he went to Rezko for help. Rezko’s plan was to buy the adjacent property on the same day Obama bought the house. Obama would still have to overpay, even for just the house. But once the whole deal was finished, the package would become a reasonably good deal.

>"Obama (or William Miceli) bought the house, and Rezko’s wife bought the adjoining lot. Then Obama got a strip of the lot from Rezko’s wife for about $100,000. This did two things. It expanded the house lot, which increased the house value. The picture shows a new fence that Obama had built along the new property line. It also made the adjacent lot so narrow, it’s unlikely anyone who bought it could make money building something on it. They might not even be able to get a building permit. So essentially the deal gave Obama a house and the use of two lots...

>"But wait, there’s more! The mortgaged amount is very high. It’s so high it violates the ordinary lending rules for Fannie Mae/Freddie Mac, which carries the mortgage. This is probably legal, because the owners set up a complicated land trust arrangement to bypass those rules. But why? And who pays this mortgage? Why would Obama pay a mortgage on a house he doesn’t own? Does he just pay rent, while Rezko’s lawyer pays the mortgage?

>"But wait, there’s even more! It’s now clear the adjacent lot was overvalued by Rezko’s bank. At the time, an appraiser said it was worth $500,000. But Rezko’s bank unilaterally upped the value to about $650,000. This enabled Rezko’s wife to get a bigger mortgage on the lot. Bank employee Kenneth J. Conner found out, and complained this was mortgage fraud. Overvaluing a property to get a bigger mortgage is against the law. Conner blew the whistle, but he was fired. Now he’s suing the bank.

>"Conner filed a civil complaint in October with the Illinois Circuit Court in Cook County alleging he was fired by Mutual Bank of Harvey, Ill., because he objected to land appraisals submitted on behalf of the Rezkos and the Obamas, with the complicity of the bank.

>After he was fired, Conner told World Net Daily that the bank and the Rezkos were engaged in "fraud, bribes or kickbacks, use whatever term you want," to benefit the Obamas...


Assessment Record For COOK County
Owner Information
Standardized Name: MICELI, WILLIAM

Original Address: 14 W ERIE ST
CHICAGO, IL 60610-5397
Standardized Address: 14 W ERIE ST
CHICAGO, IL 60654-5397
Property Information
Original Property Address: 5046 S GREENWOOD

Standardized Property Address: 5046 S GREENWOOD AVE
CHICAGO, IL 60615-2806
Legal Information
Assessor's Parcel Number: 20-11-115-034
Recording Date: 06/21/2005
SEC 11 TWN 38N RNG 14E; MAP 20-11-NW (C&D)
Sale Information
Recording Date: 06/21/2005
Sale Price: $1,650,000 - FULL AMOUNT
Document Number: 517233010
Assessment Information
Assessment Year: 2006
Assessed Land Value: $14,700
Assessed Improvement Value: $139,681
Total Assessed Value: $154,381
Tax Information
Tax Rate Code: 70001
Tax Amount: $22,162.47
Tax Year: 2006
Property Characteristics
Baths: 6
Partial Baths: 1
Fireplace: 3
Garage Type: DETACHED
Garage Size: 4 Car(s)
Building Area: 6,199 T TOTAL
Air Conditioning: CENTRAL
Construction: MASONRY
Page 1
Square Footage: 10500 SF
Important: The Public Records and commercially available data sources used on reports have errors. Data is sometimes entered
poorly, processed incorrectly and is generally not free from defect. This system should not be relied upon as definitively
accurate. Before relying on any data this system supplies, it should be independently verified. For Secretary of State
documents, the following data is for information purposes only and is not an official record. Certified copies may be obtained
from that individual state's Department of State.
Copyright© 2008 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.

The First Failure of Socialism in America Circa 1609

"The early Jamestown settlers were brought over by the company* and given 'planter shares,' with profits to be divided five years later. Meanwhile, they were to live at the company's expense and work wholly for the company. In effect, the colony originally operated as a collective unit, in which both production methods and consumption were shared. But collectivity encouraged individuals to work less and resulted in much discontent. Unmarried men complained of working without recompense for other men's wives and children. Stronger, more able workers were embittered when they did not receive larger amounts of food and supplies than others who could or would not work as hard. In addition, common ownership stifled incentives to care for and improve lands and to make innovations in production.

"In addition, absentee direction from Engalnd created problems, because successful production required local managerial direction. Futile insistent demands from England for quick profits sidetracked productive efforts and added to the settlers' discouragement.

"Jamestown residents gained greater control over local matters in 1609 when small garden plots of land were given to individuals and again in 1612 when various institutional reforms were undertaken. To generate more flexible leadership and local autonomy in that hostile environment, a deputy governor was stationed in Vriginia. Steadily thereafter, centralized direction from England became less and less frequent.

"As private landholdings replaced common ownership** work incentives improved; the full return for individual effort became a reality, superseding output-sharing arrangments. In 1614 private landholdings of 3 acres were allowed. A second and more significant step toward private property came in 1618 with the establishment of the headright system. Under this system any settler who paid his own way to Virginia was given 50 acres and another 50 acres for anyone else whose transportation he paid. In 1623, only 16 years after the first Jamestown settlers had arrived--all landholdings were converted to private ownership."

---Gary M. Walton and Hugh Rockoff, History of the American Economy, Tenth Edition. South-Western, Cengage Learning, 2005, p. 33.

Part of the mythology of the left-wing ideologues who dominate the American academy and the education system is that "progressivism" involves the instutition of socialism or communism and equity as well as increased rationality or "planning" from a distant center. Rather, socialism or communism was medieval. The common field and collectivized output resulted in low living standards throughout the feudal period and gradually ended with the enclosures in England from the 13th to 17th centuries. The enclosures are usually depicted in high school as harmful because they dispossessed peasants from the common fields. But the enclosures vastly increased agricultural productivity, rapidly expanding the availability of food and resulting in a 50% increase in life expectancy in England by the 17th century. While this evolution away from backward medieval communism to the more modern and flexible system of private ownership and capitalism was culminating, the settlement of Virginia began.

The claim that socialism or communism are progressive rather than reactionary is duplicitous and ideologically motivated. The country with the most backward feudalism, Russia, was the chief European country to adopt communism only decades after it abolished serfdom. The Russians managed to replace medieval serfdom with a twentieth century replica garbed in the duplicitous claim that it was "progressive".

The adoption of communism in America preceded the adoption of private property and capitalism. Americans rejected communism because their lives depended on productivity. The hostile, unsettled terrain caused 6,000 of the first 8,000 settlers in Virginia to die, on average within two years of landing. Higher productivity meant survival. Hence, capitalism in America was forged on the basis of a desperate need to enhance productivity.

*The London Company, founded at the same time as the New Plymouth Company and Massachusetts Bay Company>

**Common ownership is another term for communism. Common fields or communism were common in England prior to the enclosures and existed throughout Europe. They were closely associated with the communism of the Russian mir, which ended only four decades before the re-establishment of communism under the reactionary(medievalist) Marxist ideology.

Thursday, December 25, 2008

My West Shokan Home, Christmas Day

Old Car, New Car--Who Says That There's an Economic Crisis?

Earlier this month I bought a new Lexus ES 350 at Prestige Lexus in Ramsey, NJ, the country's third larges Lexus dealer. Who says there's an economic crisis?

Old Car

New Car

An XMas Message From Jim Crum

First, Merry Christmas.

Second, the fine G-Rod left the jail after posting bail.

He is now calling Rahm Emmanuel, Jessie Jackson Jr (aka 3J), and Valerie Jarrett as witnesses. This will get interesting, really quick.

FYI Rahn took G-Rod's 5th congressional seat once he went to Springfield as Governor. He was also involved in getitng him eletected. Jarret was candidate #3 (I think) and is head of the law for Barack & Michelle worked for and was Mayor Richard Daley's chief of staff.

Small world, ain't it?


Wednesday, December 24, 2008

A Christmas Eve Bailout

Jim Crum forwarded this video. Apparently Santa needs a $25 billion bailout too. It's a Christmas crisis!

Tuesday, December 23, 2008

Assassination of Barack Obama Feared by Bible Coder Experts, Hillary Clinton

A few years ago I bought the Torah Code program and checked out my name. The idea of the Torah Code program is that the Hebrew letters in the Torah phonetically or literally spell out various peoples' names and make predictions. Sure enough, my last name "langbert" is spelled out in there near my home town, West Shokan on a diagonal. It warranted a couple of shots of Dalwhinnie scotch to celebrate, but I wasn't sure what else to do with the program. Now I know. You can predict assassinations with it. Nancy Razik forwarded me a Youtube video by a guy who says that Obama's assassination by the Bush family is predicted for January '09 using the Bible Code:

In the following video, a left winger also thinks that Obama is going to be assassinated:

The statist website Huffington Post discusses the arrest of two skinheads last October who allegedly conspired to assassinate then-Senator Obama:

>"Two white supremacists allegedly plotted to go on a national killing spree, shooting and decapitating black people and ultimately targeting Democratic presidential candidate Barack Obama, federal authorities said Monday.

>"In all, the two men whom officials described as neo-Nazi skinheads planned to kill 88 people _ 14 by beheading, according to documents unsealed in U.S. District Court in Jackson, Tenn. The numbers 88 and 14 are symbolic in the white supremacist community."

Back in February '08 Doris Lessing, a Nobel Prize winning British novelist, predicted that Obama would be assassinated, according to the Daily Mail:

"British Nobel Prize winner Doris Lessing caused uproar last night by predicting the assassination of Barack Obama if he becomes the first black U.S. president...The 88-year-old novelist's remarks came as the Democratic candidate toasted the most successful day in his White House campaign...Mr Obama, the 46-year-old son of a black Kenyan man and a white American, dismissed Mrs Lessing's comments...Miss Lessing said: "He would probably not last long, a black man in the position of president. They would kill him."

On September 12, the Southern Poverty Law Center reported that:

"Neo-Nazi boss Bill White, long given to swaggering threats and proposals for violence, this week went even further than normal — announcing plans for a magazine cover headlined “Kill This N*****?” with a photo of Barack Obama and, two days later, publishing the home address of a juror who helped convict another neo-Nazi leader in a federal conspiracy case."

The British seem to take a special interest in this. They may see America as a "wild west". The Telegraph's David Hughes writes in the Telegraph:

"So the America-haters are now mining a rich new seam of paranoia. They say it's only a question of time before the assassin's bullet gets him. I must have had a dozen conversations with people over the past week in which the issue was raised."

Hughes argues that:

"there's no more reason to expect President-Elect Obama to be assassinated than the leader of any other country. So why don't people stop obsessing about it?"

I wasn't aware that people were obsessing about it. But when I Google +obama and +assassination I get 2.75 million hits, even more than I get when I Google "Mitchell Langbert's Blog"!

On May 25, Jeffrey Feldman wrote on the Huffington Post blog:

>"During a live interview, FOX Contributor Liz Trotta jokingly wished for the assassination of Sen. Barack Obama...This latest incident from FOX News continues the trend in violent rhetoric about Sen. Obama from pundits, politicians, and entertainers...Grinning While Joking About Killing A Candidate...The incident happen in an exchange with the FOX News anchor."

This is not unlike the leftists who called George W. Bush a Nazi (I don't like him but do not think he's a Nazi. I don't like Obama, but do not think anyone should be assassinated).

My favorite Navy Seal, Jesse Ventura, also warned of the possibility of an Obama assassination, according to Prison Planet:

"Former Minnesota Governor Jesse Ventura caused shockwaves during a national radio interview today when he warned Barack Obama to be wary of a potential assassination attempt, saying that the government would target any independent politician who got close to the White House."

On November 6, 2008, "Monash University's Greg Barton said: 'Obama is such an iconic figure that in the perverse logic of political assassination or terror he is an immensely attractive target.'"

The New York Post wrote on May 23, 2008 that Hillary Clinton said that she should not drop out of the race before June because:

"My husband did not wrap up the nomination in 1992 until he won the California primary somewhere in the middle of June, right? We all remember Bobby Kennedy was assassinated in June in California. I don't understand it," she said, dismissing calls to drop out."

The ability to disagree peaceably is the hallmark of a functioning democracy.

Left Unhappy with PEBO

Pamela Hall and Sharad Karkhanis forwarded links that tell of the left's frustration with President-elect Barack Obama (PEBO). Hall links to her Silent Majority blog and focuses on anti-Iraqi-war activist Cindy Sheehan's article about PEBO and Hillary Clinton. Sheehan writes:

>"After the official appointments were confirmed, I told two of my closest friends that Obama has killed the US anti-war movement that has been on life support while it worked feverishly to elect him. But, in reality, Obama didn’t kill the movement, the movement committed suicide in (again) supporting a non-anti-war candidate solely because he is not George Bush and he knows how to say the words “hope and change” with a straight face and no hint of irony in his voice...

>"I would like to swallow the empty rhetoric of Obama and believe that everything’s going to be fine; but I know better. Even before he takes the oath of office, Obama has already sold us out to the US Military Industrial Complex. He has also sold out the people of Iraq, Palestine (the forgotten oppressed people), Pakistan, and certainly the innocent civilians of Afghanistan...

>"Obviously, Barack Obama does not want to solve any problems or stop, or even retard, the 'institutional momentum' towards disaster because his cabinet picks, advisers and staff (AIPAC hack, Rahm Emanuel) are all deeply mired (quagmire?) in the corrupt institutions and are directly responsible for the profound crap we are in today...If Obama really desired change, then he would appoint people who have been trying to fix the horrible problems that only worsened during the Bush years.

>"Well, I am starting a new group called: 'CWCBIMA' (Quick-be-ma)

>"'Change We Can Believe in, My Ass.'"

On December 8, the esteemed Sharad Karkhanis forwarded a link to a related politico.com article entitled "Liberals Voice Concerns About Obama":

"Now some are shedding a reluctance to puncture the liberal euphoria at being rid of President George W. Bush to say, in effect, that the new boss looks like the old boss.

"'He has confirmed what our suspicions were by surrounding himself with a centrist to right cabinet. But we do hope that before it's all over we can get at least one authentic progressive appointment,' said Tim Carpenter, national director of the Progressive Democrats of America.

"OpenLeft blogger Chris Bowers went so far as to issue this plaintive plea: “Isn't there ever a point when we can get an actual Democratic administration?

"Juan Cole, who runs a prominent anti-war blog called Informed Comment, said he worries Obama will get bad advice from Clinton on the Middle East, calling her too pro-Israel and 'belligerent' toward Iran. 'But overall, my estimation is that he has chosen competence over ideology, and I'm willing to cut him some slack,' Cole said.

"Other voices of the left don’t like what they’re seeing so far and aren’t waiting for more before they speak up.

"New York Times columnist Frank Rich warned that Obama’s economic team of Summers and Geithner reminded him of John F. Kennedy’s 'best and the brightest' team, who blundered in Vietnam despite their blue-chip pedigrees."

The "liberal" antidote to the last problem is to attack Sarah Palin as unqualified because she didn't go to Harvard, and appoint Caroline Kennedy to the Senate because she was on the board of directors of the American Ballet Theater but did go to Harvard and therefore is qualified in the view of pissant propagandists and their brainwashed, soon-to-be-impoverished-by-the-Fed minions. "Liberals" are true geniuses.

I'm sitting here drinking some hot chocolate and thinking--I disagree with Sheehan about the Iraqi War and Israel, but I agree with her in the abstract. I called the change that Obama represents "chump change" in a blog on December 2.

On June 16 I wrote:

"Mr. Obama claims to favor change, yet he is allied with specific economic interests, specifically Wall Street. In 2008, Goldman Sachs so far has given $2.7 million to Democrats and less than $1 million to Republicans. Goldman Sachs's contributions to Democrats has exceeded those to Republicans every year since 1990. To assuage public concern about excessive Wall Street influence on Obama, America's off-the-charts-insipid media provide testimonies from 'principled' Wall Street tycoons like George Soros and Warren Buffett that Obama is for 'change'. Of course, Messrs. Soros and Buffett do not discuss how Obama's 'change' will influence their own economic interests."

The kind of change that we can expect from PEBO was discussed yesterday in a New York Times editorial that I bloggedhere that admitted that the steps that Chair Ben Bernanke, Secretary Henry Paulson and President George W. Bush are taking will be inflationary, but the Times supports them anyway. In this context of saying that inflation is a necessary medicine the Times writes:

"For Barack Obama, the challenge is one of leadership. As president, Mr. Obama will have to convey optimism without over promising. He will have to inspire confidence, even in the absence of a dramatic turnaround — which is simply not in the cards. To his credit, Mr. Obama has already warned the American people that conditions will get worse before they get better."

Perhaps what then-Senator Obama meant by "change" during his campaign was inflation. That was going to happen with or without him, so he wasn't wrong. "Change you can believe in" means "Wall Street, the Fed and I are going to scr*w you, you can believe it".

Ms. Sheehan is right to be angry. When he appointed President Bush's Defense Secretary, Robert Gates, as his own secretary, PEBO confirmed that (a)my assertion back in June that his issues are domestic, economic, and linked to Wall Street was correct, (b) international issues and Iraq are of little consequence to him, (c) corruption will be the hallmark of his administration and (d) his followers are chumps.

Is The Future of The Republican Party A New World Order?

I received the following e-mail from "Ms. J. Kulig".

>Please pass this on to your contact list. I have started a NEW FORUM on my web site www.wethepeopleusa.ning.com to elicit any information anyone has regarding a New World Order. Much research is available. Let's put it in one place so people can judge for themselves if my observations and the observations of others, more learned than myself, have any merit.

>Dear Readers,

>First, let me state that I am a registered Repulican who voted for John McCain in this past election. I voted Republican because my values and beliefs are consistent with the 2008 RNC platformand because Barack Obama with too many Anti-American ties and a platform, which I believed, supported a Socialist agenda.

>Months before the election, I was disturbed to find out that Barack Obama might not even meet the "natural born" eligibility requirements to be elected to POTUS. The more I read, the more research that I conducted, the more I became convinced that Obama's rise to superstardom was an orchestrated effort that would have to involve both parties, high ranking government officials and the media. Why wasn't anyone standing up to avoid the impending constitutional crisis?

>To follow the slew of lawsuits that were being originated surrounding both Obama's and McCain's eligibility issues, (but particularly Obama's because McCain's eligibility issue, I thought had been addressed) I started a social networking site called WeThePeopleUSA.

>My site grew almost overnight, at a rate of about 30-50 members a day and now totals around 500 members. Unfortunately, after lawsuit after lawsuit was dismissed regarding Obama's presidential eligibilty, I noticed a rapid decline in member participation and new members joining the site.

>Fortunately, I never stopped searching for the truth, not just about Obama, but about the Republican Party...My Party. I wanted to know why, with so many questions concerning Obama's eligibilty, hadn't ANY high profile Republicans stepped up to voice their concern? Why had the "so-called" conservative media, Sean Hannity, Rush Limbaugh, Bill O'Reilly, Ann Coulter, etc. failed to report on this issue?

>Today, I am pretty much an expert on the Obama eligibility question and I have many links on my site that link to other sites that are also reporting this issue. However, the silence of the Republican Party and historical support that John McCain has given on behalf of illegal immigrants, NAFTA and the Council on Foreign Policy has caused me to ask more questions that I wasn't sure that I really wanted the answer to.

>Could McCain's loss to Obama have been part of the "master plan?" If so, how was it orchestrated and who were the players. Surely, the Republican's, our small government, capitalism loving party could not be behind such a betrayal. There must be some other explaination. This could not happen in America. What about our Supreme Court and George Bush's appointee for Chief Justice, John Roberts, surely, he would uphold the Constitution?

>Unfortunately, I found out that it IS happening, and that It has been happening for a very long time. I have concluded that the Republican Party, as it stands today, is a party that secretly supports a New World Order.

>Everything that is associated with Obama, including John McCain, his presidential opponent, and our Current and Former Republican Presidents is connected to this New World Order.

>The New World Order is a borderless society ruled by a central banking system which uses one currency in which individual rights are no longer protected and one government has total control. Many of the "elites" have recognized that a New World Order is needed and necessary. click here for quotes.

>From a False Credit Crisis to the Wars that have been started to create the New World Order, chaos has been created and terrorism used as an imminent danger, like 9/11 to scare people into giving up their constitutional rights.

>I am not a conspiracy theorist, I do not wear a tin-foil hat. I am an average average American, who, for most of my life, like many other Americans has been too busy trying to work and make a living and raise a family to seek out the truth on my own.

>I don't claim to have found out the complete "truth" only a list of questions, that yet to have been unanswered. Until we can answer these questions and get to the real truth, we can not determine how to move forward as a Party or even what the party should look like.

>How many "elites" in the Republican party today are connected to the New World Order? We MUST determine this before we can Stand United and Rebuild the Party.

>Your thoughts and comments are encouraged. Please note: I have completed extensive research on both Obama and McCain's citizenship, as well as, the NWO, but I did not want to overload the reader here. A few links are provided for your reference, which link to more material you can read on your own to decide for yourself if ALL YOUR QUESTIONS AND CONCERNS have truly been addressed by your party.

>Thank you.

Holy Night

Jim Crum and Nancy Razik just sent me this beautiful Christmas hymn.

Monday, December 22, 2008

New York Times Aims to Destroy Your Pension

In a December 22 editorial the New York Times openly advocates inflation as a "cure" for unspecified "ailments" in the economy. Goldbug Howard S. Katz, who runs an investment newsletter, brought the article to my attention earlier today. Katz has been tracking the rapid expansion of Federal Reserve Bank Credit, monetary reserves and the money supply and argues that the safest way to secure your retirement is to take a pro-gold, anti-dollar position despite recent run-ups in the dollar. The stimulus the Fed is providing will lead to a bull market in stocks but a super-bull in commodities. Katz also argues that the current "crisis" has been a media phenomenon fabricated in response to bankers' demands for extra liquidity in order to extract additional wealth from America's declining economy (by declining I mean suffering from long-term, century-long misallocation of resources due to Federal Reserve and "Progressive" policies).

Allow me to quote the from the December 22 article entitled "The Printing Press Cure":

"The Federal Reserve as much as admitted last week that lowering the benchmark interest rate — even to zero — would not be powerful enough medicine to revive today’s ailing economy. And so it has opted for the printing-press cure, pledging for the foreseeable future to pump vast sums into banks, other financial firms, businesses and households.

"Economic history — of the Great Depression of the 1930s and Japan’s lost decade in the 1990s — suggests that the Fed is doing the right thing. Confronted then, as now, with the twin scourges of deepening recession and incipient deflation, governments did more damage with too little intervention than they would have done with too much.

"But that doesn’t make such intervention 'good.' It’s a big and unfortunate risk in itself."

One of the outcomes of inflationary Fed policy will be the destruction of retirement benefits based on wages earned prior to the inflation (that is, pensions of people who retired prior to the inflation during the coming 5-10 years). Many boomers will likely fall into this category. As boomers retire on annuities, traditional pensions or hold assets in Guaranteed Investment Contracts, savings accounts, safe bonds or other dollar-denominated assets, their well-being will be destroyed as the Times and Wall Street cheer on.

As well, wages do not typically keep pace with inflation. Thus, the already stretched worker will be stretched ever tighter in a Wall Street drawn noose. Employment relations, already weakened by past rounds of inflation, regulation, and globalization, will become weaker. Employers will find it in their interest to terminate post-retirement medical insurance and other benefits that keep pace with inflation. During the 1970s and 1980s employers resented indexing and escalator clauses that caused wages to keep pace with inflation. It is likely that they will be encouraged to reduce or terminate benefits just at the time that health care costs go under exponentially increasing pressure because of the retirement of the baby boomers. The problem cannot be solved by nationally sponsored health insurance because the cost pressures are demographic. All nationally sponsored insurance can do is ration care so that none of the fingers will be sewn back on, just as they wouldn't be in Cuba or France.

The Times does not say exactly why it thinks the economy is in so much trouble that inflation is necessary. Is there a law of economics that states that a few years of excessive mortgage lending necessitates inflation? Why was late nineteenth century America able to produce rising (instead of falling, as the Times advocates) wages, rising productivity, rising employment levels, absorption of massive amounts of immigration and the very deflation that the Times so dreads? Why was it possible to thrive before the Fed was founded, and why are we now in so much trouble after a century of the Fed's existence?

Two of the funnier sentences in the editorial are these:

"To jump-start the economy requires getting money to those who will spend it fast and in full. That includes unemployed workers, low- and middle-income families, and state and local governments."

Back in the 1940s and 1950s the Times supported urban renewal on the pretext that it would lead to better housing for the poor and middle class. Instead, the funding, which was huge in New York City, was given to developers, some of whom were friends of the Times's owners, the Ochs Sulzbergers. The developers used it to exercise extensive private-use eminent domain, banishing factory jobs from New York, destroying low-income neighborhoods and building expensive office buildings and co-ops for millionaires. The middle class was set up in dreary suburbs on Long Island like Levittown under the same programs (of Title I and Title II) and high-crime urban ghettos for minorities were established featuring dreadful public housing projects built with the Times's glowing support. Yes, the Times always has the interests of the poor and middle class in mind.

Now, the Times tells its readers that there is a "crisis" (what it is is never specified) and that Barack Obama's leadership in the interest of inflation is essential.

I do not normally pay attention to what the Times has to say, and this article sums up why. There are two categories of people who read the Times. The first is the people who take them seriously as an information and opinion source. Such people are lost souls at the fringes of society, and I feel sorry for them. The second is the people who read the Times in order to find out what the lost souls are thinking. But the lost souls are headed for the poor house, and the times when the Times's opinions mattered are passed. Let us bury the last copy of the Times in Adolph Ochs's grave.

As far as your own retirement goes, I would seriously consider gold, gold stocks, silver, agricultural commodities, the "DBC" and Swiss Francs. Keeping your money in US dollars is akin to flushing it down the drain.

Alles Muss Ander Sein

I received this e-mail from Jim Crum on December 8.

>Hard to argue the point being presented.

I too, like yourselves, have great concern over what is going on. I would rather be wrong and labeled a fool, but for now the date points are lining up in an uncomfortable direction.

This is simply my opinion, other my not agree.

So far, it is still a free county.

-----Original Message-----


The following was passed to me by a friend. Sam Doughty, wh o is a college professor, writes for a newspaper and among other things ... a deacon to a Priest. He never sends anything until he has it checked out. It is an interesting read, a bit long but worth the time. He did not write it. The author appeared on Pat Dollard's radio show. I must say that I am in complete agreement. Dumpy

"I Am A Student Of History" - Author TPS To Appear On This Sunday's "Jihadi Killer Hour" Radio Show
November 14th, 2008 Posted By Pat Dollard.


Will you please take the time to read this, and if you think it worthwhile, pass it along to your email list, and ask them to read it? Even if they voted, with all good intentions, for Mr. Obama?

I am a student of history. Professionally. I have written 15 books in six languages, and have studied it all my life. I think there is something monumentally large afoot, and I do not believe it is just a banking crisis, or a mortgage crisis, or a credit crisis. Yes these exist, but they are merely single facets on a very large gemstone that is only now coming into a sharper focus.
Something of historic proportions is happening. I can sense it because I know how it feels, smells, what it looks like, and how people react to it. Yes, a perfect storm may be brewing, but there is something happening within our country that has been evolving for about ten - fifteen years. The pace has dramatically quickened in the past two.

We demand and then codify into law the requirement that our banks make massive loans to people we know they can never pay back? ...Why?
We learn just days ago that the Federal Reserve, which has little or no real oversight by anyone, has "loaned" two trillion dollars (that is $2,000,000,000,000) over the past few months, but will not tell us to whom or why or disclose the terms. That is our money. Yours and mine. And that is three times the 700B we all argued about so strenuously just this past September. Who has this money? Why do they have it? Why are the terms unavailable to us? Who asked for it? Who authorized it? I thought this was a government of "we the people," who loaned our powers to our elected leader s. Apparently not.

We have spent two or more decades intentionally de-industrializing our economy...


We have intentionally dumbed down our schools, ignored our history, and no longer teach our founding documents, why we are exceptional, and why we are worth preserving. Students by and large cannot write, think critically, read, or articulate. Parents are not revolting, teachers are not picketing, school boards continue to back mediocrity. .. Why?

We have now established the precedent of protesting every close election (now violently in California over a proposition that is so controversial that it wants marriage to remain between one man and one woman. Did you ever think such a thing possible just a decade ago?).20We have corrupted our sacred political process by allowing unelected judges to write laws that radically change our way of life, and then mainstream Marxist groups like ACORN and others to turn our voting system into a banana republic. To what purpose?
Now our mortgage industry is collapsing, housing prices are in free fall, major industries are failing, our banking system is on the verge of collapse, social security is nearly bankrupt, as is medicare and our entire government, our education system is worse than a joke (I teach college and know precisely what I am talking about)–the list is staggering in its length, breadth, and depth. It is potentially 1929 x ten. And we are at war with an enemy we cannot name for fear of offendin g people of the same religion, who cannot wait to slit the throats of your children if they have the opportunity to do so.

And now we have elected a man no one knows anything about, who has never run so much as a Dairy Queen, let alone a town as big as Wasilla, Alaska. All of his associations and alliances are with real radicals in their chosen fields of employment, and everything we learn about him, drip by drip, is unsettling if not downright scary (Surely you have heard him speak about his idea to create and fund a mandatory civilian defense force stronger than our military for use inside our borders? No? Oh of course. The media would never play that for you over and over and then demand he answer it. Sarah Palin's pregnant daughter and $15 0,000 wardrobe is more imporant.)

Mr. Obama's winning platform can be boiled down to one word: change.


I have never been so afraid for my country and for my children as I am now.
This man campaigned on bringing people together, something he has never, ever done in his professional life. In my assessment, Obama will divide us along philosophical lines, push us apart, and then try to realign the pieces into a new and different power structure. Change is indeed coming. And when it comes, you will never see the same nation again.

And that is only the beginning.

And I thought I would never be able to experience what the ordinary, moral German felt in the mid-1930s. In those times, the savior was a former smooth-talking rabble-rouser from the streets, about whom the average German knew next to nothing. What they did know was that he was associated with groups that shouted, shoved, and pushed around people with whom they disagreed; he edged his way onto the political stage through great oratory and promises. Economic times were tough, people were losing jobs, and he was a great speaker. And he smiled and waved a lot. And people, even newspapers, were afraid to speak out for fear that his "brown shirts" would bully them into submission. And then, he was duly elected to office, a full-throttled economic crisis at hand [the Great Depression]. Slowly but surely he seized the controls of government power, department by department, person by person, bureaucracy by bureaucracy. The kids joined a Youth Movement in his name, where they were taught what to think How did he get the people on his side? He did it promising jobs to the jobless, money to the moneyless, and goodies for the military-industrial complex. He did it by indoctrinating the children, advocating gun control, health care for all, better wages, better jobs, and promising to re-instill pride once again in the country, across Europe, and across the world.

He did it with a compliant media–did you know that? And he did this all in the name of justice and . . . change. And the people surely got what they voted for.

(Look it up if you think I am exaggerating.)

Read your history books. Many people objected in 1933 and were shouted down, called names, laughed at, and made fun of. When Winston Churchill pointed out the obvious in the late 1930s while seated in the House of Lords in England (he was not yet Prime Minister), he was booed into his seat and called a crazy troublemaker. He was right, though.

Don't forget that Germany was the most educated, cultured country in Europe. It was full of music, art, museums, hospitals, laboratories, and universities. And in less than six years–a shorter time span than just two terms of the U. S. presidency–it was rounding up its own citizens, killing others, abrogating its laws, turning children against parents, and neighbors against neighbors. All with the best of intentions, of course. The road to Hell is paved with them.

As a practical thinker, one not overly prone to emotional decisions, I have a choice: I can either believe what the objective pieces of evidence tell me (even if they make me cringe with disgust); I can believe what history is shouting to me from across the chasm of seven decades; or I can hope I am wrong by closing my eyes, having another latte, and ignoring what is transpiring around me.

Some people scoff at me, others laugh, or think I am foolish, naive, or both. Perhaps I am. But I have never been afraid to look people in the eye and tell them exactly what I believe–and why I believe it.

I pray I am wrong. I do not think I am.

Best regards

The Progressives and the Fed Are Out to Starve You

Howard S. Katz, author of the Paper Aristocracy and soon-to-be-published Wolf in Sheep's Clothing has just written an excellent blog on what the Fed is doing to you. If you aim to retire, you'd better consider putting most of your money into hard assets. With a tripling of the money supply tin foil will be worth a heck of a lot more than $100 bills.

To be fair, this is not a Democratic-Republican thing. The Democrats will starve you but the Republicans have beaten them to it. The Democrats have no intention of undoing the tripling of the money supply, of course.

The left continues to puzzle me. Sam Walton spent his life figuring out ways to cut prices. Lower prices help the poor and working class. In contrast, Wall Street has spent generations figuring out how to get the government to "print" money so that it can have low interest loans for which the rest of the country pays through high prices. But no one on the left seems to criticize Wall Street.

The policy of starving retirees to further the aims of Wall Street began with the Progressives and the establishment of the Fed. Franklin Roosevelt and the New Deal, in the cloak of establishing social programs, re enforced the Fed's power to steal from retirees and workers in order to further the aims of bankers and Wall Street via monetary expansion and inflation.

In the past, idiot leftists like William Greider were taken in by the fatuous claim that inflation helps the poor. Greider's book "Secrets of the Temple" is an encyclopedia of ignorance and self contradiction. It is unfortunate that a writer as talented as Greider lacks common sense. He contradicts himself so often that it seems hard to believe he wasn't aware of it, but never overestimate the common sense of a "progressive". On the one hand he says that inflation helps the poor. On the other, he repeatedly notes that the fresh money loans stimulate Wall Street speculation. I suppose he thinks that the poor speculate on Wall Street.

In any case, Greideresque stupidity has become much more difficult to defend with the bailout. Inflation helps Wall Street and bankers, not the poor. The bailout is being monetized. Inflation that ensues will be due to the monetization of the bailout. Eight decades of lying about the Fed and inflation are drawing to an end.

But our ruling elite, Barack Obama, George Bush, Henry Paulson and the people they represent have decided to inflate to the heavens. As one of my students said they other day, they have decided to suck the life blood out of this country.

But the left continues to puzzle me. They are so wedded to inflation-helps-the-poor that one must wonder: (a) are they stupid? (b) are they tools of the power structure? or (c) are they hoping for a collapse so a latter-day Lenin can step in and turn America into a Soviet Union?

In any case, if you want to retire you are going to need to think about commodities investing. Either that or Swiss Francs.