Saturday, July 31, 2010

Hinchey's Land Grab


Paul Smart, editor of the Olive Press, our local penny saver, printed my letter this month attacking Progressivism.  I have had a multi-month debate in the letters section with Gus Murphy of Brooklyn (why a guy from Brooklyn reads the Olive Press I'm still trying to grasp) but this month I wrote on a different topic, Congressman Hinchey's insane federal parks proposal. Have the people of Ulster County lost their minds to elect someone like Hinchey?

Dear Mr. Smart:

Congressman Maurice Hinchey has proposed to turn the Hudson Valley into a federal park. Mr. Hinchey has a long history of advocating extremist environmental policies that bestow dictatorial powers on government administrators. Repeatedly, he has painted such proposals as moderate. He did this with respect to a 1990s bill that he proposed when he was chair of the State Assembly's Environmental Conservation Committee. The bill that would have set up Soviet-style planning boards that would have limited if not ended construction. He managed to convince the previously skeptical Adirondack Daily Enterprise that this idea was moderate.
Around the same time Hinchey said that he would like to restrain economic growth in the Hudson Valley. His plan involved setting up environmental regulations known as the "greenway". He and his fellow Democrats succeeded in their goal of deliberately restricting economic growth. Employment in Ulster County has grown at one fifth the national rate since 1992 when Mr. Hinchey assumed his Congressional seat (and by under two percent since 1990, less than one ninth the national rate of employment growth). Now, Mr. Hinchey aims to further destroy Ulster County's economy by eliminating the rule of law through a federal park that would serve as a Trojan Horse to introduce federal control of the region.

The notion of the rule of law is apparently unfamiliar to Mr. Hinchey's supporters in the Democratic media, which serves as a Hinchey-for-Congress publicity service. To refresh your memory, please allow me to explain how a federal park will eliminate the rule of law.

The concept of the rule of law is that law must be predictable and subject to change only through the gradual process of judicial decision making called stare decisis (judges' use of precedents to maintain a stable set of legal rules) or legislation. In America, the founders established a Constitution to establish but limit federal power. The Bill of Rights was ratified in 1791 to clarify the limits. This was also done through the separation of powers across the branches of the federal government and federalism, the division of power between the states and the federal government.  Under the Tenth Amendment, rights not delegated to the federal government are retained by the states and the people.

Establishing a federal park would hand dictatorial powers to a park adminsitrator and abolish the division of power between federal and local control. It might also eliminate the separation of powers between the legislative and the executive branch in the sense that a parks administrator potentially would have unlimited power to make rules. Although the law might initially restrain such arbitrary power, the US Congress, in which Ulster County residents have scant voice, could change the law at will.  

More importantly, a park would eliminate state level rule of law, handing all decisions to a federal bureaucracy, in crucial areas like construction, land ownership, well digging, septic construction, fishing, hunting, wood burning, driving, smoking, eating, agriculture, establishing a business, building a camp, and virtually any other activity with any imaginable environmental impact. The park administrator could arbitrarily change the law. Even if that is not true in the beginning, Congress could endow the park administrator with new powers  over residents' protests.   That is precisely what Congressman Hinchey has repeatedly tried to do with respect to the hapless residents of the Adirondacks and Utah (he has repeatedly proposed a bill that would end development in 20% of the state of Utah) . Now he aims to do it to Ulster County.  Take a drive up to the Adirondacks and notice the poverty of the local residents there, courtesy of Congressman Hinchey, the Democratic Party and Mr. Hinchey's boosters in the Democratic Party media. 

Given Mr. Hinchey's recidivism in advocating radical environmental restrictions elsewhere there is no reason to believe that he has become an enviornmental moderate now. Moreover, there is every reason to believe that the parks proposal is a Trojan Horse.  During Mr. Hinchey's 18 years in Congress employment in Ulster County has grown at one fifth the national rate. You might ask yourself whether your economic welfare is of concern to him or to the radical environmentalists who motivate the parks proposal. 

But even if Mr. Hinchey is sincere that the legal effects would be minimal (which seems to be a contradiction in terms, for why else would he go through the trouble of establishing a park? To make up for the 15% of employment that he has destroyed since 1992?), the bill would effectively abolish the Constitution, federalism, stare decisis and local control of the land. Should Mr. Hinchey retire and environmental radicals lobby for strict restrictions on parks, the Hudson Valley Park could become a footnote to a major national environmental debate. Park regulations, laws, rules and dictatorial authority could be imposed without regard for Constitutional protections to which most Olive residents are so used that they cannot imagine life without them.

I have students who grew up in the Soviet Union and Communist China. If you want to learn about life where there is no rule of law, you can ask them. Or ask Mr. Hinchey's radical supporters in the environmental movement who likely have quite a few ideas about how to wreck your property's economic value and turn you into a serf. Just ask the long time residents in the Adirondacks (as opposed to the environmental radicals who have moved there in recent decades) about how wonderful Mr. Hinchey's parks proposals are.

Sincerely,

Mitchell Langbert

Wednesday, July 21, 2010

Unstoppable Force Versus Immovable Object: Road To $6500 Gold Paved with Failing Economic News

Kitco has some excellent commentaries.  Darryl R. Schoon discusses the likelihood of a meltdown in the dollar.  He argues that the 1971 devaluation of the dollar and removal of the international dollar from the gold standard led to a fiat currency.  He claims that traditionally fiat currencies last about 40 years, and we are now 40 years into the paper dollar regime.  The result has been trade imbalances, exodus of manufacturing from the US, and inflation. The paper dollar will become worthless in his view and the reverse will occur for hard assets. The collapsing dollar will lead to volatility and the markets will find a stable replacement for the dollar, likely gold or silver.  He predicts $3,000 to $10,000 gold.  He also argues that gold is no more volatile than tech stocks. Schoon claims that there are five stages of a gold bubble and we are in the fourth stage, where there is increased volatility.

Although I don't put much faith in the Fed or Chairman Bernanke, his message suggests volatility indeed.  Before I summarize his speech as depicted in Bloomberg, notice that silver has lagged gold and that commodities like agriculture and the general commodity index have not increased to the same degree.  One claim may be that current demand for gold is caused by its monetary qualities, that some investors are now viewing gold as money.  However, it is also true that the dollar has gone through a period, in my opinion a temporary period, of strengthening. The dollar has gotten stronger because of risk aversion directed toward the global credit and banking collapse (especially including Greece, Portugal and Spain) and because of the collapse in bubble credit here in the US.

Bernanke's talk today as reported in Bloomberg led to nearly a one percent fall in the Dow and the S&P 500. Bernanke indicates that the Fed is planning to raise interest rates, which will have a depressing effect on the stock market.  Bloomberg quotes Dean Maki, chief US economist at Barclay's Capital:

"'The Fed is not close to implementing additional stimulus.'  Expectations for additional steps were based on 'more hope than fact.'"


There is little doubt that the Fed will keep interest rates close to zero.  But continued weakness in the economy creates a logical problem.  If the Fed stimulates inflation increases.  Stimulus also fuels the short-run gold price.  Bernanke aims to begin reducing the amount of stimulus to avoid these risks.  But he risks further increasing unemployment.  The unstoppable monetary collapse meets the unmovable decline in the US economy.

Mr. Schoon is right that in the long term the current monetary regime will fail.  However, international risk and a weak economy suggest a short term strengthening of the dollar.  This could mean fluctuations of gold of 50% or more.  Ultimately, though, the Fed's "printing press" will cause the dollar to crash.  This will result in increasing commodity prices.

If you are worried about long term monetary instability, commodities other than gold might be better holdings right now.  For example, the DBC, Dunn & Bradstreet Commodity Index and the DBA, Dun & Bradstreet Agricultural Index, have hardly risen since 2008.  Moreover, silver, which can be purchased through SLV, the I-Shares silver trust, can be purchased to take advantage of silver's monetary characteristics.  The claim that gold's price increase is due to its monetary characteristics rather than short term speculation is contradicted by the relative lag in silver's price increase.  If you are hedging for a monetary skid or collapse, SLV might be a better bet than gold for now.

Over time gold will go up.  But if you can buy it at $950 why buy at $1180?

Obama's Hidden Arizona Agenda

H/t Contrairimairi.

Sunday, July 18, 2010

Poster Tells it Like It Is



Shailagh Murray published a story about Rand Paul's proposal for a tea party caucus in the Washington Post today. Murray reports that the extremist wing of the Republican Party fears the caucus because:

"Voters who don't want to privatize Social Security or withdraw from the United Nations could begin to see the tea party and the Republican Party as one and the same."

Hopefully the tea party caucus will begin to educate Americans as to the Lockean foundation on which the nation's success rests and why Social Security and the United Nations are impediments to further success. In the meantime, the extremists of both parties, the socialists, have grabbed ever more power with support of media, which they control.

When advocates of failed socialist ideas, such as the Democrats and Rockefeller Republicans, use the word "extremist", they utilize a propaganda tactic. The extremists are in the White House, Congress and the Supreme Court, not in the Tea Party. The extremists in power, the Democrats and Rockefeller Republicans, advocate the use of state violence to transfer wealth to Wall Street, government employees and commercial banks, and to steal private homes on behalf of corrupt developers.

RNC Opposes Tea Party

The article points out, then, that the extremists in the GOP, who control the Republican National Committee, fear the ascendency of the Tea Party moderates:

"Former Senate majority leaderTrent Lott (R-Miss.), now a D.C. lobbyist, warned that a robust bloc of rabble-rousers spells further Senate dysfunction. 'We don't need a lot of Jim DeMint disciples,' Lott said in an interview. 'As soon as they get here, we need to co-opt them."

It thus has become imperative to view the RNC as in league with the Democrats. It is also important to understand that the motives of the extremists in the GOP are not just to win elections but also to serve the special interests to which both parties have cater: Wall Street, commercial banking, large industrial concerns and government employees.

The most interesting part of the article concerns the above billboard.  I had posted a similar series of photos on April 18.  DNC Executive Director Jennifer O'Malley Dillon said "Republicans keep saying that they aren't extremists -- but they keep doing things like this." But it is Dillon who is the extremist.

The Democrats advocate an irresponsible and failed view, socialism.  Socialism was the philosophy of both Stalin and Hitler. There is nothing extreme about comparing people like Obama and Dillon to Hitler and Stalin. They advocate comparable policies.