3/31/2009: from the Daily Reckoning www.DailyReckoning.com

We were trying to imagine the car that General Motors/US Federal Government would come up with. Surely, it would have to be safe...and wheel chair accessible...and fuel-efficient. It would probably have to have warning lights telling you where to exit in case of emergency...and maybe some kind of GPS system for blind drivers.

The new government-run industry would probably have to abandon the assembly line; the idea would be to create as many jobs as possible. So workers would put the new cars together with old-fashioned screwdrivers and adjustable wrenches, stopping frequently for 'get out the vote' rallies and other consciousness-raising events. So, it would take months to produce a car...and you'd have to wait for a new one, just as they did in the old Soviet Union.

New cars could be designed by Congress like any other important piece of legislation. Onto a hefty chassis could be bolted hundreds of riders, amendments, exceptions and earmarks. Maybe a solar collector on the roof - made by a large campaign contributor in Atlanta? Maybe an extra steering wheel in case the driver has a sudden heart attack (helpfully suggested by a supplier of steering wheels...and put forward by his Senator). Maybe a smoke detector that automatically shuts down the engine if it senses the driver is having a cigarette, as earnestly proposed by the anti-smoking lobby.

And let's not talk about paint color. Color is a sensitive topic in America. Probably all the cars would have to be either desert beige...or even camouflage pattern so as to be useful for military transport in case the country is invaded.

"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." -- P. J. O'Rourke

End the Drug War: Mexico exports drugs; US imports drugs. Make drugs legal; no more outsized profits. Game over.

Lies and statistics: "[I]n this budget, we have made the tough choices necessary to cut our deficit in half by the end of my first term -- even under the most pessimistic estimates." --President Barack Obama, who doubled the budget deficit before he could halve it

"Here comes the orator! With his flood of words, and his drop of reason." --Benjamin Franklin

3/25/2009: Hey, Guys, What's the Exit Strategy? by David Harsanyi

"Most men die of their remedies, not of their diseases," a smart-alecky Frenchman once observed. At this point, many Americans might be pondering a similar thought: What's worse, the recession or the prescription?

It began with the federal government rescuing financial institutions because they were, allegedly, too big to fail. Somewhere along the line, treating this ailment included cajoling perfectly healthy financial institutions into accepting taxpayer medicine (some of those have returned the TARP funds) for the common good.

Inevitably, a few institutions abused their new funding in supposed "reckless" corporate extravagance. Congress dealt with the ensuing populist fury by passing a bill that retroactively and punitively taxes nearly all of executive bonus pay -- undercutting both the spirit of the Constitution and the sanctity of contractual agreements.

If you accept government money, you should be prepared to have your salary regulated, right?

OK, well then why, according to The New York Times, is the Obama administration considering oversight of all executive pay of banks, Wall Street firms and "possibly other companies," whether they accepted government funds or not?

What is the justification for capping a private citizen's salary? Actually, don't say a word. I can already hear the president's moralistic splendor (maybe on David Letterman?) about sacrifice and greed in times of crisis.

This week, the crisis means doing away with pesky financial regulation and independent oversight (in place to try to mitigate political interference). Instead, the Treasury wants to give itself new power -- "in consultation with the White House, the Federal Reserve and other regulators" -- to sweep in and take over any financial institution that poses a threat to the broader economy.

And seeing as how Tim Geithner's done such a bang-up job with the banking crisis so far, why not?

Obama has said he hopes "it doesn't take too long" to pass this legislation. By which, of course, he means he hopes there's no debate. Don't worry, Mr. President.

(I suppose it would be a waste of time to point out to Democrats that they won't be eternally in charge and that this kind of executive power grab will only make complaints about the next Republican president's abuse of power even more impotent.)

But moreover, if we really believe that the state can save a company from inflicting broader damage to the economy, why not have government unilaterally take over other failing institutions? Why not run the steel industry? The auto industry? Why stop?

Think big.

In any event, one doesn't have to dig hard to understand the kinds of conflicts of interest and the thousands of unintended consequences we inject into the market with flailing remedies.

Let's mention just one. Most of those AIG execs have returned their bonuses -- immediately making them far less contemptible than most of Congress.

According to Newsweek, the Federal Election Commission shows that some institutions that received TARP money, such as Bank of America (which got $15 billion) and Citigroup ($25 billion), have been doling out campaign cash to many of the same elected officials intimately involved in bailing them out.

Yet one of the most concerning aspects of all of this meddling is that every sweeping action of government has necessitated another more intrusive, more far-reaching action -- with no end in sight.

When does the prescription run out? Or does it ever run out?

Copyright © 2009 Salem Web Network. All Rights Reserved.

3/22/2009: Thank God America Isn't Like Europe -- Yet By Charles Murray

The European model has worked in many ways. I am delighted whenever I get a chance to go to Stockholm or Amsterdam, not to mention Rome or Paris. There's a lot to like -- a lot to love -- about day-to-day life in Europe. But I argue that the answer to this question is "no." Not for economic reasons. I want to focus on another problem with the European model: namely, that it drains too much of the life from life.

The stuff of life -- the elemental events surrounding birth, death, raising children, fulfilling one's personal potential, dealing with adversity, intimate relationships -- occurs within just four institutions: family, community, vocation and faith. Seen in this light, the goal of social policy is to ensure that those institutions are robust and vital. The European model doesn't do that. It enfeebles every single one of them.

Drive through rural Sweden, as I did a few years ago. In every town was a beautiful Lutheran church, freshly painted, on meticulously tended grounds, all subsidized by the Swedish government. And the churches are empty. Including on Sundays. The nations of Scandinavia and Western Europe pride themselves on their "child-friendly" policies, providing generous child allowances, free day-care centers and long maternity leaves. Those same countries have fertility rates far below replacement and plunging marriage rates. They are countries where jobs are most carefully protected by government regulation and mandated benefits are most lavish. And with only a few exceptions, they are countries where work is most often seen as a necessary evil, and where the proportions of people who say they love their jobs are the lowest.

Call it the Europe Syndrome. Last April I had occasion to speak in Zurich, where I made some of these same points. Afterward, a few of the 20-something members of the audience came up and said plainly that the phrase "a life well-lived" did not have meaning for them. They were having a great time with their current sex partner and new BMW and the vacation home in Majorca, and they saw no voids in their lives that needed filling.

It was fascinating to hear it said to my face, but not surprising. It conformed to both journalistic and scholarly accounts of a spreading European mentality that goes something like this: Human beings are a collection of chemicals that activate and, after a period of time, deactivate. The purpose of life is to while away the intervening time as pleasantly as possible.

If that's the purpose of life, then work is not a vocation, but something that interferes with the higher good of leisure. If that's the purpose of life, why have a child, when children are so much trouble? If that's the purpose of life, why spend it worrying about neighbors? If that's the purpose of life, what could possibly be the attraction of a religion that says otherwise?

I stand in awe of Europe's past. Which makes Europe's present all the more dispiriting. And should make it something that concentrates our minds wonderfully, for every element of the Europe Syndrome is infiltrating American life as well. The European model provides the intellectual framework for the social policies of the Democratic Party, and it faces no credible opposition from Republican politicians.

Yet not only is the European model inimical to human flourishing, I predict that 21st-century science is going to explain why. A tidal change in our scientific understanding of what makes humans tick is coming, and it will spill over into every crevice of political and cultural life. As Harvard's Edward O. Wilson argues in his book "Consilience," the social sciences are increasingly going to be shaped by the findings of science. It's already happening. Whether it's psychologists discovering how fetal testosterone affects sex differences in children's behavior or geneticists using haplotypes to differentiate the Dutch from the Italians, the hard sciences are encroaching on questions of race, class and gender that have been at the center of modern social science. And the tendency of the findings lets us predict with some confidence the broad outlines of what the future will bring.

Two premises about human beings are at the heart of the social democratic agenda: what I label "the equality premise" and "the New Man premise." The equality premise says that, in a fair society, different groups of people -- men and women, blacks and whites, straights and gays -- will naturally have the same distributions of outcomes in life -- the same mean income, the same mean educational attainment, the same proportions who become janitors and who become CEOs. When that doesn't happen, it is because of bad human behavior and an unfair society. Much of the Democratic Party's proposed domestic legislation assumes that this is true.

I'm confident that within a decade, the weight of the new scientific findings will force the left to abandon the equality premise. But if social policy cannot be built on the premise that group differences must be eliminated, what can it be built upon? It can be built upon the premise that used to be part of the warp and woof of American idealism: People must be treated as individuals. The success of social policy is to be measured not by equality of outcomes for groups, but by the freedom of individuals, acting upon their personal abilities, aspirations and values, to seek the kind of life that best suits them.

The second tendency of the new findings of biology will be to show that the New Man premise -- which says that human beings are malleable through the right government interventions -- is nonsense. Human nature tightly constrains what is politically or culturally possible. More than that, the new findings will confirm that human beings are pretty much the way that wise observers have thought for thousands of years.

The effects on the policy debate will be sweeping. Let me give you a specific example. For many years, I have been among those who argue that the growth in births to unmarried women has been a social catastrophe -- the single most important force behind the growth of the underclass. But while other scholars and I have been able to prove that other family structures have not worked as well as the traditional family, I cannot prove that alternatives could not work as well, and so the social democrats keep coming up with the next new program that will compensate for the absence of fathers.

Over the next few decades, advances in evolutionary psychology are going to be conjoined with advances in genetic understanding, and I predict that they will lead to a scientific consensus that goes something like this: There are genetic reasons why boys who grow up in neighborhoods without married fathers tend to reach adolescence unsocialized to norms of behavior that they will need to stay out of prison and hold jobs. We will still be able to acknowledge that many single women do a wonderful job of raising their children. But social democrats will have to acknowledge that the traditional family plays a special, indispensable role in human flourishing and that social policy must be based on that truth.

For some years a metaphor has been stuck in my mind: The 20th century was the adolescence of Homo sapiens. Nineteenth-century science, from Darwin to Freud, offered a series of body blows to ways of thinking about human life that had prevailed since the dawn of civilization. Humans, just like adolescents, were deprived of some of the comforting simplicities of childhood and exposed to more complex knowledge about the world. And 20th-century intellectuals reacted precisely the way adolescents react when they think they have discovered that Mom and Dad are hopelessly out of date. It was as if they thought that if Darwin was right about evolution, then Aquinas was no longer worth reading; that if Freud was right about the unconscious mind, then the Nicomachean Ethics had nothing to teach us.

The nice thing about adolescence is that it is temporary, and when it passes, people discover that their parents were smarter than they thought. I think that may be happening with the advent of the new century. All of us who deal in social policy will be thinking less like adolescents, entranced with the most titillating new idea, and more like grown-ups. But that will not stop America's slide toward the European model. For that, there must be a kind of political Great Awakening among America's elites. They will have to ask themselves how much they value what has made America exceptional, and what they are willing to do to preserve it.

The trouble is that American elites of all political stripes have increasingly withdrawn to gated communities -- literally or figuratively -- where they never interact at an intimate level with people not of their own socioeconomic class. Over the last half-century, the new generation of elites have increasingly spent their entire lives in the upper-middle-class bubble, never having seen a factory floor, let alone worked on one, never having gone to a grocery store and bought the cheap ketchup instead of the expensive ketchup to meet a budget, and never having had a close friend who hadn't gotten at least 600 on her verbal SAT.

America's elites must once again fall in love with what makes America different. The drift toward the European model can be stopped only when we are all talking again about why America is exceptional, and why it is so important that America remain exceptional. That requires once again seeing the American project for what it is: a different way for people to live together, unique among the nations of the earth, and immeasurably precious.

Charles Murray is the W. H. Brady Scholar at the American Enterprise Institute. This essay is adapted from his 2009 Irving Kristol Lecture.

3/21/2009: Now Is No Time to Give Up on Markets By Mary Anastasia O'Grady

"What can we do that would be beneficial? [One thing] is lower corporate taxes and businesses taxes and maybe taxes in general. Particularly, you want to lower the tax on capital so you raise the after-tax return to investing and get more investing going on."

Gary Becker, the winner of the 1992 Nobel Prize in Economic Sciences, is in New York to speak to a special meeting of the Mont Pelerin Society on the global meltdown. He has agreed to sit down to chat with me on the subject of his lecture.

Slumped in a soft chair in a noisy hotel coffee lounge, the 78-year-old University of Chicago professor is relaxed and remarkably humble for a guy who has achieved so much. As I pepper him with the economic and financial riddles of our time, I am impressed by how many times his answers, delivered in a pronounced Brooklyn accent, include an "I think" and sometimes even an "I don't know the answer to that." It is a reminder of why he is so highly valued. In contrast to a number of other big-name practitioners of the dismal science, he is a solid empiricist genuinely in search of answers -- not the job as the next chairman of the Federal Reserve. What he sees is what you get.

What Mr. Becker has seen over a career spanning more than five decades is that free markets are good for human progress. And at a time when increasing government intervention in the economy is all the rage, he insists that economic liberals must not withdraw from the debate simply because their cause, for now, appears quixotic.

As a young academic in 1956, Mr. Becker wrote an important paper against conscription. He was discouraged from publishing it because, at the time, the popular view was that the military draft could never be abolished. Of course it was, and looking back, he says, "that taught me a lesson." Today as Washington appears unstoppable in its quest for more power and lovers of liberty are accused of tilting at windmills, he says it is no time to concede.

Mr. Becker sees the finger prints of big government all over today's economic woes. When I ask him about the sources of the mania in housing prices, the first culprit he names is the Fed. Low interest rates, he says, were "partly, maybe mainly, due to the Fed's policy of keeping [its] interest rates very low during 2002-2004." A second reason rates were low was the "high savings rates primarily from Asia and also from the rest of the world."

"People debate the relative importance of the two and I don't think we know exactly," Mr. Becker admits. But what is clear is that "when you have low interest rates, any long-lived assets tend to go up in price because they are based upon returns accruing over many years. When interest rates are low you don't discount these returns very much and you get high asset prices."

On top of that, Mr. Becker says, there were government policies aimed at "extending the scope of homeownership in the United States to low-credit, low-income families." This was done through "the Community Reinvestment Act in the '70s and then Fannie Mae and Freddie Mac later on" and it put many unqualified borrowers into the mix.

The third effect, Mr. Becker says, was the "bubble mentality." By this "I mean that much of the additional lending and borrowing was based on expectations that prices would continue to rise at rates we now recognize, and should have recognized then, were unsustainable."

Could this behavior be considered rational? "There is a lot of debate in economics about whether we can understand bubbles within a rational framework. There are models where you can do it, but it's not easy," he says. What he does seem sure about is that "the lending would not have continued unless there was this expectation that prices would continue to rise and therefore one could refinance these assets through the higher prices." That mentality was at least partly related to Fed action, he says, because the low interest rates "generated an increase in prices and I think that helped generate some of this excess of optimism."

Mr. Becker says that the market-clearing process, so important to recovery, is well underway. "Construction in new residential housing is way down and prices are way down. Maybe 25% down. Lower prices stimulate demand, reduced construction reduces supply."

That's the good news. But he complains about "counterproductive" government policies "designed to lower mortgage rates to stimulate demand." He says he was against the Bush Treasury's idea of capping mortgage rates (which was only floated) and he has "opposed the mortgage plan of President Obama." "It goes against both these adjustments . . . it would hold up prices and increase construction. I think that's a bad idea at this time."

Yet the professor is no laissez-faire ideologue. He says we have to think about what the government can do to "moderate the hit to the real economy," and he says it should start with "the first law of medicine: Do no harm." Instead it has done harmful things, and chief among them has been the "inconsistent policies with the large institutions . . . We let some big banks fail, like Lehman Brothers. We let less-good banks, big [ones] like Bear Stearns, sort of get bailed out and now we bailed out AIG, an insurance company."

Mr. Becker says that he opposed the "implicit protection" that the government gave to Bear Stearns bondholders to the tune of "$30 billion or so." So I wonder if letting Lehman Brothers go belly up was a good idea. "I'm not sure it was a bad idea, aside from the inconsistency." He points out that "the good assets were bought by Nomura and a number of other banks," and he refers to a paper by Stanford economics professor John Taylor showing that the market initially digested the Lehman failure with calm. It was only days later, Mr. Taylor maintains, that the market panicked when it saw more uncertainty from the Treasury. Mr. Becker says Mr. Taylor's work is "not 100% persuasive but it sort of suggest[s] that maybe the Lehman collapse wasn't the cause of the eventual collapse" of the credit markets.

He returns to the perniciousness of Treasury's inconsistency. "I do believe that in a risky environment which is what we are in now, with the market pricing risk very high, to add additional risk is a big problem, and I think this is what we are doing when we don't have consistent policies. We add to the risk."

On the subject of recovery, Mr. Becker repeats his call for lower taxes, applauds the Fed's action to "raise reserves," (meaning money creation, though he said this before the Fed's action a few days ago), and he says "I do believe one has to try to do something more directly to help with the toxic assets of the banks."

How about getting rid of the mark-to-market pricing of bank assets [that is, pricing assets at the current market price] that some say has destroyed bank capital? Mr. Becker says he prefers mark-to-market over "pricing by cost because costs are often completely out of whack with what the real prices are." Then he adds this qualifier: "But when you have a very thin market, you have to be very careful about what it means to mark-to-market. . . . It's a big problem if you literally take mark-to-market in terms of prices continuously based on transactions when there are very few transactions in that market. I am a mark-to-market person but I think you have to do it in a sensible way."

However that issue is resolved in the short run, there will remain the problem of institutions growing so big that a collapse risks taking down the whole system. To deal with the "too big to fail" problem in the long run, Mr. Becker suggests increasing capital requirements for financial institutions, as the size of the institution increases, "so they can't have [so] much leverage." This, he says, "will discourage banks from getting so big" and "that's fine. That's what we want to do."

Mr. Becker is underwhelmed by the stimulus package: "Much of it doesn't have any short-term stimulus. If you raise research and development, I don't see how it's going to short-run stimulate the economy. You don't have excess unemployed labor in the scientific community, in the research community, or in the wind power creation community, or in the health sector. So I don't see that this will stimulate the economy, but it will raise the debt and lead to inefficient spending and a lot of problems."

There is also the more fundamental question of whether one dollar of government spending can produce one and a half dollars of economic output, as the administration claims. Mr. Becker is more than skeptical. "Keynesianism was out of fashion for so long that we stopped investigating variables the Keynesians would look at such as the multiplier, and there is almost no evidence on what the multiplier would be." He thinks that the paper by Christina Romer, chairman of the Council of Economic Advisors, "saying that the multiplier is about one and a half [is] based on very weak, even nonexistent evidence." His guess? "I think it is a lot less than one. It gets higher in recessions and depressions so it's above zero now but significantly below one. I don't have a number, I haven't estimated it, but I think it would be well below one, let me put it that way."

As the interview winds down, I'm thinking more about how people can make pretty crazy decisions with the right incentives from government. Does this explain what seems to be a decreasing amount of personal responsibility in our culture? "When you get a larger government, when you have the government taking over Social Security, government taking over health care and with further proposals now for the government to take over more activities, more entitlements, the rational response is to have less responsibility. You don't have to worry about things and plan on your own as much."

That suggests that there is a risk to the U.S. system with more people relying on entitlements. "Well, they become an interest group," Mr. Becker says. "The more you have dependence on the government, the stronger the interest group of people who want to maintain it. That's one reason why it is so hard to get any major reform in reducing government spending in Scandinavia and it is increasingly so in the United States. The government is spending -- at the federal, state and local level -- a third of GDP, and that share will go up now. The higher it is the more people who are directly or indirectly dependent on the government. I am worried about that. The basic theory of interest-group politics says that they will have more influence and their influence will be to try to maintain this, and it will be hard to go back."

Still, there remain many good reasons to continue the struggle against the current trend, Mr. Becker says. "When the market economy is compared to alternatives, nothing is better at raising productivity, reducing poverty, improving health and integrating the people of the world."

Ms. O'Grady writes the Journal's Americas column.

3/5/2009: Failed states and failed policies - How to stop the drug wars

Prohibition has failed; legalisation is the least bad solution

A HUNDRED years ago a group of foreign diplomats gathered in Shanghai for the first-ever international effort to ban trade in a narcotic drug. On February 26th 1909 they agreed to set up the International Opium Commission—just a few decades after Britain had fought a war with China to assert its right to peddle the stuff. Many other bans of mood-altering drugs have followed. In 1998 the UN General Assembly committed member countries to achieving a “drug-free world” and to “eliminating or significantly reducing” the production of opium, cocaine and cannabis by 2008.

That is the kind of promise politicians love to make. It assuages the sense of moral panic that has been the handmaiden of prohibition for a century. It is intended to reassure the parents of teenagers across the world. Yet it is a hugely irresponsible promise, because it cannot be fulfilled.

Next week ministers from around the world gather in Vienna to set international drug policy for the next decade. Like first-world-war generals, many will claim that all that is needed is more of the same. In fact the war on drugs has been a disaster, creating failed states in the developing world even as addiction has flourished in the rich world. By any sensible measure, this 100-year struggle has been illiberal, murderous and pointless. That is why The Economist continues to believe that the least bad policy is to legalise drugs.

“Least bad” does not mean good. Legalisation, though clearly better for producer countries, would bring (different) risks to consumer countries. As we outline below, many vulnerable drug-takers would suffer. But in our view, more would gain.

The evidence of failure

Nowadays the UN Office on Drugs and Crime no longer talks about a drug-free world. Its boast is that the drug market has “stabilised”, meaning that more than 200m people, or almost 5% of the world’s adult population, still take illegal drugs—roughly the same proportion as a decade ago. (Like most purported drug facts, this one is just an educated guess: evidential rigour is another casualty of illegality.) The production of cocaine and opium is probably about the same as it was a decade ago; that of cannabis is higher. Consumption of cocaine has declined gradually in the United States from its peak in the early 1980s, but the path is uneven (it remains higher than in the mid-1990s), and it is rising in many places, including Europe.

This is not for want of effort. The United States alone spends some $40 billion each year on trying to eliminate the supply of drugs. It arrests 1.5m of its citizens each year for drug offences, locking up half a million of them; tougher drug laws are the main reason why one in five black American men spend some time behind bars. In the developing world blood is being shed at an astonishing rate. In Mexico more than 800 policemen and soldiers have been killed since December 2006 (and the annual overall death toll is running at over 6,000). This week yet another leader of a troubled drug-ridden country—Guinea Bissau—was assassinated.

Yet prohibition itself vitiates the efforts of the drug warriors. The price of an illegal substance is determined more by the cost of distribution than of production. Take cocaine: the mark-up between coca field and consumer is more than a hundredfold. Even if dumping weedkiller on the crops of peasant farmers quadruples the local price of coca leaves, this tends to have little impact on the street price, which is set mainly by the risk of getting cocaine into Europe or the United States.

Nowadays the drug warriors claim to seize close to half of all the cocaine that is produced. The street price in the United States does seem to have risen, and the purity seems to have fallen, over the past year. But it is not clear that drug demand drops when prices rise. On the other hand, there is plenty of evidence that the drug business quickly adapts to market disruption. At best, effective repression merely forces it to shift production sites. Thus opium has moved from Turkey and Thailand to Myanmar and southern Afghanistan, where it undermines the West’s efforts to defeat the Taliban.

Al Capone, but on a global scale

Indeed, far from reducing crime, prohibition has fostered gangsterism on a scale that the world has never seen before. According to the UN’s perhaps inflated estimate, the illegal drug industry is worth some $320 billion a year. In the West it makes criminals of otherwise law-abiding citizens (the current American president could easily have ended up in prison for his youthful experiments with “blow”). It also makes drugs more dangerous: addicts buy heavily adulterated cocaine and heroin; many use dirty needles to inject themselves, spreading HIV; the wretches who succumb to “crack” or “meth” are outside the law, with only their pushers to “treat” them. But it is countries in the emerging world that pay most of the price. Even a relatively developed democracy such as Mexico now finds itself in a life-or-death struggle against gangsters. American officials, including a former drug tsar, have publicly worried about having a “narco state” as their neighbour.

The failure of the drug war has led a few of its braver generals, especially from Europe and Latin America, to suggest shifting the focus from locking up people to public health and “harm reduction” (such as encouraging addicts to use clean needles). This approach would put more emphasis on public education and the treatment of addicts, and less on the harassment of peasants who grow coca and the punishment of consumers of “soft” drugs for personal use. That would be a step in the right direction. But it is unlikely to be adequately funded, and it does nothing to take organised crime out of the picture.

Legalisation would not only drive away the gangsters; it would transform drugs from a law-and-order problem into a public-health problem, which is how they ought to be treated. Governments would tax and regulate the drug trade, and use the funds raised (and the billions saved on law-enforcement) to educate the public about the risks of drug-taking and to treat addiction. The sale of drugs to minors should remain banned. Different drugs would command different levels of taxation and regulation. This system would be fiddly and imperfect, requiring constant monitoring and hard-to-measure trade-offs. Post-tax prices should be set at a level that would strike a balance between damping down use on the one hand, and discouraging a black market and the desperate acts of theft and prostitution to which addicts now resort to feed their habits.

Selling even this flawed system to people in producer countries, where organised crime is the central political issue, is fairly easy. The tough part comes in the consumer countries, where addiction is the main political battle. Plenty of American parents might accept that legalisation would be the right answer for the people of Latin America, Asia and Africa; they might even see its usefulness in the fight against terrorism. But their immediate fear would be for their own children.

That fear is based in large part on the presumption that more people would take drugs under a legal regime. That presumption may be wrong. There is no correlation between the harshness of drug laws and the incidence of drug-taking: citizens living under tough regimes (notably America but also Britain) take more drugs, not fewer. Embarrassed drug warriors blame this on alleged cultural differences, but even in fairly similar countries tough rules make little difference to the number of addicts: harsh Sweden and more liberal Norway have precisely the same addiction rates. Legalisation might reduce both supply (pushers by definition push) and demand (part of that dangerous thrill would go). Nobody knows for certain. But it is hard to argue that sales of any product that is made cheaper, safer and more widely available would fall. Any honest proponent of legalisation would be wise to assume that drug-taking as a whole would rise.

There are two main reasons for arguing that prohibition should be scrapped all the same. The first is one of liberal principle. Although some illegal drugs are extremely dangerous to some people, most are not especially harmful. (Tobacco is more addictive than virtually all of them.) Most consumers of illegal drugs, including cocaine and even heroin, take them only occasionally. They do so because they derive enjoyment from them (as they do from whisky or a Marlboro Light). It is not the state’s job to stop them from doing so.

What about addiction? That is partly covered by this first argument, as the harm involved is primarily visited upon the user. But addiction can also inflict misery on the families and especially the children of any addict, and involves wider social costs. That is why discouraging and treating addiction should be the priority for drug policy. Hence the second argument: legalisation offers the opportunity to deal with addiction properly.

By providing honest information about the health risks of different drugs, and pricing them accordingly, governments could steer consumers towards the least harmful ones. Prohibition has failed to prevent the proliferation of designer drugs, dreamed up in laboratories. Legalisation might encourage legitimate drug companies to try to improve the stuff that people take. The resources gained from tax and saved on repression would allow governments to guarantee treatment to addicts—a way of making legalisation more politically palatable. The success of developed countries in stopping people smoking tobacco, which is similarly subject to tax and regulation, provides grounds for hope.

A calculated gamble, or another century of failure?

This newspaper first argued for legalisation 20 years ago. Reviewing the evidence again, prohibition seems even more harmful, especially for the poor and weak of the world. Legalisation would not drive gangsters completely out of drugs; as with alcohol and cigarettes, there would be taxes to avoid and rules to subvert. Nor would it automatically cure failed states like Afghanistan. Our solution is a messy one; but a century of manifest failure argues for trying it.

3/17/2009: In Defense of Distrust in Government by Gene Healy

President Barack Obama declared in his inaugural address that "our patchwork heritage is a strength" because people of all backgrounds and creeds had come together to make America great. But there was one group, Obama suggested, that wasn't quite welcome in the American family: the "cynics," those miserable killjoys who dare to "question the scale of [the federal government's] ambitions."

There, Obama echoed his 2008 opponent, John McCain, who has repeatedly warned that there's a specter haunting our country, in the form of a "pervasive public cynicism" toward government.

"Cynicism" is a scare word, meant to discredit those who cast a skeptical eye on politicians' grand designs. But Obama and McCain are right that distrust of government is on the rise.

For five decades, researchers at the University of Michigan have asked Americans "How much of the time do you think you can trust the government in Washington to do what is right?"

Declining trust in government is a good thing, something that Americans of every political stripe ought to celebrate.

In the early 1960s, three-quarters of respondents answered "just about always" or "most of the time." After Vietnam and Watergate, Americans weren't quite so gullible, and the trust numbers never again reached their Kennedy/Johnson-era peak.

This month, Michigan's National Election Studies group released new survey data that reveals another decline: Only some 30 percent of Americans trust the feds most of the time or always, which is down sharply from trust's post-9/11 high.

When political trust declines, the D.C. cognoscenti typically wring their hands and hold earnest conferences at the Brookings Institution, exploring how best to restore the people's faith in their rulers.

But, as usual, the political elites have it precisely backwards. Declining trust in government is a good thing, something that Americans of every political stripe ought to celebrate.

Conservatives should welcome increasing skepticism toward federal power, because that skepticism makes ambitious federal programs much less likely to pass. Vanderbilt University's Marc Hetherington, one of America's leading scholars on the subject, writes that declining faith in the feds makes "another Great Society or New Frontier... unlikely in a post-Cold War world."

Professor Hetherington leans left, so he's not happy that the data has driven him to that conclusion. But even though increased political distrust presents major challenges for the Democratic agenda, liberals should recognize that there's a silver lining in the growing cloud of skepticism.

When Americans trust their government too readily, they tend to support policies that most liberals oppose. The post-9/11 period led to the greatest rise in political trust since Watergate, which helped George W. Bush make the case for what turned out to be a disastrous war in Iraq.

Professor Hetherington's research shows that declining trust decreases support for foreign-policy adventurism, and other scholars have shown that it also makes the public less likely to endorse restrictions on civil liberties.

In the '50s and '60s, high levels of political trust served as a presidential enabler, allowing unrestrained spying at home and unnecessary wars abroad. In 1971, just as Americans were beginning to wake up to the dangers of excessive trust in the federal government, the Watergate tapes captured an interesting exchange between Richard Nixon and his chief of staff, H.R. Haldeman.

The two were debating what to do about the impending release of the Pentagon Papers, a classified history of the Vietnam War that documented a host of government lies. Haldeman warned Nixon that the release would undermine the public's belief in "the implicit infallibility of presidents, which has been an accepted thing in America," and reveal that "people do things the President wants to do even though it's wrong, and the President can be wrong."

No American today could pronounce that phrase, "the implicit infallibility of presidents," without a smirk, and we should be very glad about that. Our Founding Fathers knew that no man was infallible.

With that insight in mind, they designed a constitution that would prevent any one man, or body of men, from seizing unchecked power. Today's politicians and pundits may lament rising political distrust, but when the voters refuse to take claims of federal benevolence on faith, they're honoring their forefathers and fulfilling their duty as citizens.

What, after all, could be more American than distrust of government?

Gene Healy is a vice president at the Cato Institute and author of The Cult of the Presidency: America's Dangerous Devotion to Executive Power.

3/16/2009: Doesn’t the economic crisis argue in favor of a greater regulatory role by government? by Tibor Machan

Q: I think I know the answer is going to be “no,” but I’m still interested. Doesn’t the economic crisis argue in favor of a greater regulatory role by government?

- Dave M., Duluth, MN

A: Government regulation of the American economy–with the implication for all economies–is back in favor with politicians, bureaucrats and, most importantly, certain outspoken economists. (Nobel Laureate and Princeton University professor Paul Krugman, who is a regular columnist for The New York Times and a very frequent talks show guest is a good example, as is political scientist James Galbraith of the University of Texas at Austin.) These and a lot of other people have lamented the very moderate deregulatory efforts under the Reagan and subsequent Republican administrations. Their refrain goes, “If only there had been more government regulation, the current economic fiasco would never have happened.” A couple of matters need to be said in response to the mania for government economic regulation.

First and foremost, government regulators are no Gods, nor angels, but human beings every bit as susceptible to making mistakes and even being corrupted as are all those folks who work in the market place. The question, “And who will regulate the regulators?” hasn’t ever been answered satisfactorily because no one will. It is an irreparable situation–something for which Professor James Buchanan received the Nobel Prize when he and Gordon Tullock identified the problems with public choice. The gist of this theory is that all persons, in or outside government, tend to promote their own agendas. I would add that this is especially the case in government where accountability and budgetary constraints are minimal and where the very loose, vague idea of the public interest is impossible to follow as a guide to forging policy.

There is also a serious problem with government regulation that is rarely mentioned, namely, that it involves something inimical to the free society, namely, prior restraint. In the criminal law it is well recognized that no one may be incarcerated or otherwise punished unless he or she has been convicted of a crime. But government regulations impose burdens on millions in the market place who haven’t been convicted of any crimes! This is unjust. Not that matters of injustice figure heavily in contemporary political thinking which is now proudly pragmatic, unprincipled, and thus allows for arbitrariness.

Third, government regulation is very, very costly and removes resources from the market place that could generate economic growth, employment, and deposits that could be used to provide loans for starting business enterprises. I am not here in the position to recount the enormous cost of government economic regulations but there are many works that demonstrate it clearly and convincingly, including such popular fares as John Stossel’s early special on ABC-TV, “Are We Scaring Ourselves to Death?” Stossel showed, with concrete numbers, that the cost of government economic regulation actually results in extensive poverty, something that is the major cause of misery in a society.

Arguments for government regulation are plenty but they aren’t good ones. One is based on the phenomenon of market failures (the cause you cite, David, as a reason for a “greater regulatory role”) but omits the fact that there is a far greater hazard from political failures when governments regulate the market. Another is based on the myth of positive human rights, duties everyone owes to others to take care of them, a position that encourages impermissible involuntary servitude in society.

The only slightly credible support for government regulation, identified in an article by Kenneth J. Arrow, another Nobel Laureate in Harper’s Magazine back in 1984, comes from what Arrow called judicial inefficiencies associated with air pollution and other negative externalities or harmful side effects of economic activities such as manufacturing. But even this is unnecessary when one considers that such bad side effect could be dealt with through public health laws that prohibit defiling the air mass and other public realms.

All in all, the case for government regulation is weak and those who promote the idea seem more convinced of their own invincibility as managers of the economic lives of the rest of us than of any positive elements of the process. It is time to stop the expectation that government regulators can solve our problems.

3/19/2009: Goldman Sachs, Welfare Queen
Wall Street's most storied firm is surviving on taxpayer dollars. By Daniel Gross

While it was singed in the credit meltdown, Goldman Sachs, the alpha male of Wall Street, has emerged as a survivor. The cover of last week's Barron's heralded the resurrection of Goldman and Morgan Stanley—"the sole standouts," as Andrew Bary called them. The company's shares have rallied back above $100, and its market capitalization is nearly $47 billion. Goldman's emergence from the wreckage could be seen as yet another glorious chapter for the firm. Charles Ellis, in his book about Goldman, The Partnership, lionized the firm as the only company "with such strengths that it operates with almost no external constraints in virtually any financial market it chooses, on the terms it chooses, on the scale it chooses, when it chooses, and with the partners it chooses." For the paperback, Ellis might want to add the following proviso: so long as the government is willing to give it billions of dollars.

People sometimes refer to the firm as Government Sachs because so many of its former employees wind up in high positions in Washington (Robert Rubin, Henry Paulson, etc.). But the sobriquet sticks today because the company is heavily reliant on the government for support. Tally up the various forms of direct and indirect taxpayer assistance Goldman has received in the last several months, and it turns out that you and I are providing billions of dollars to bail out the proud firm. The former undisputed heavyweight champion of the financial services sector has become one of New York's biggest welfare queens.

Last fall, in the wake of the failure of Lehman Bros., Goldman transformed itself from an unregulated investment bank into a bank holding company so it could accept deposits. Like other banks, Goldman participated in the TARP program. On Oct. 28, Goldman sold $10 billion in preferred stock to the government, which bears an interest rate of 5 percent through 2013 (after which the rate bumps up to 9 percent). Like other TARP recipients, Goldman received capital on pretty easy terms. Just a month earlier, when Goldman raised $5 billion from investor Warren Buffett, it sold preferred shares that carried a 10 percent interest rate. (At the same time, Goldman also raised $10 billion in a public offering of stock.) The difference between borrowing $10 billion at 5 percent and borrowing $10 billion at 10 percent—in other words, the value of the government subsidy—is $500 million per year. David Viniar, the chief financial officer of Goldman, has made noises about paying back the TARP funds soon. But the firm hasn't made any moves to do so yet.

But wait—there's more! Last fall, concerned that financial firms could raise funds only by issuing expensive debt to the likes of Buffett, the Federal Deposit Insurance Corp. established a program to guarantee new unsecured debt sold by banks. Many banks felt they didn't need to participate. (Here's a list of those that have opted out.) While the FDIC discloses the amount of debt that has been issued under the program (about $250 billion by the end of January), it doesn't disclose which firms have tapped into this program. In November, Goldman was the first company to tap the program, issuing $5 billion in three-year notes at a 3.367 percent rate. On March 12, it sold another $5 billion. In all, the company says it has sold $21 billion in such bonds. Thanks to the government guarantee, and accounting for fees, Goldman is saving several hundred million dollars per year in interest.

And there's still more! A good chunk of the money taxpayers gave to AIG as part of the bailout found its way to financial institutions—including Goldman Sachs. Here's the full list of AIG counterparties, which documents payments made by different entities. AIG's securities lending unit paid Goldman $4.8 billion, Maiden Lane III (the entity created to unwind credit default swaps) paid Goldman $5.6 billion, and AIG has posted another $2.5 billion in collateral to Goldman. Goldman, and many other firms, made the mistake of a) buying insurance from a company that, it turned out, couldn't make good on its insurance contracts, and b) borrowing securities from, and lending securities to, a company that essentially went bankrupt. In normal bankruptcies, firms in these in situations have to get in line with other creditors and ultimately settle for a fraction of the amounts they're owed. As Eliot Spitzer pointed out, because the government didn't let AIG formally file for bankruptcy, Goldman, and so many others, have instead been made whole.

Goldman may still be an outstanding company, as Barron's argues. But without the expensive federal crutches, the firm would likely be limping.

Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at moneybox@slate.com. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published as an e-book

3/18/2009: The Daily Reckoning Presents: Bill Jenkins has been scoping out the headlines lately...and noticingthe tendrils of socialism grasping more firmly around our society. Below, he looks at why this widespread push to socialism hasn't yet worked. Read on...

[Margaret Thatcher said, "The problem with socialism is that you eventually run out of other people's money."]

[Capitalism is a law established by God, just like gravity. Its foundation is in the 9th Commandment, "Thou shalt not covet." I am never free to desire to take what is my neighbor's. Not his wife. Not his house. Not his lands. Not his possessions. I can trade him for them if I have something he wants more than what he has. (Except his wife, of course...) I can buy them from him if my offer is right. But I cannot steal (or vote) away his property into my account. That is not wealth creation; it is merely re-distribution. God condemns it, and He will not be mocked by those who think that they can make socialism "fly" forever. Eventually, they will run out of other people's money. And when they do, their plane will come crashing to the ground.]

[Obama and the fed believe that "...if you add five gallons of water to five gallons of gasoline you get 10 gallons... Certainly we can go further on twice as much fuel, right? Yeah, Right. Whatever you say, Comrade. Meanwhile, anybody who knows better had better be preparing a parachute.]

The Problem with Socialism by Bill Jenkins
Havre de Grace, Maryland

As I read the headlines, I can't help but see the tendrils of socialism grasping more and more very day. And it always brings to mind my uncle, Wm. R. Duvall.

When I was a boy, my uncle was the richest man I knew. He was fond of saying, ""There are three things you need to get rich: time, leverage and other people's money." I didn't know what it meant at the time, but when I got older, I wanted to hear how he made it big

"I always knew I would be rich," he said. "Even when I didn't have two nickels to rub together."

He started out as a barber, renting a chair in another man's shop for $20 a week. "10 heads," he said, "that's all I needed. After that, every dollar was mine."

"At that point," he remarked, "all I had was time. I was making money, but I wasn't getting rich." It finally occurred to him that a real way to get ahead in barbering was to have his own shop and rent out his own chairs to other guys who were getting started in the barbering business.

So he looked high and low until he found a dumpy old place where he could afford the rent, then spent his nights and weekends fixing it up. In a couple months, he had it ready and went to work. He rented out the five chairs in the shop while he still worked at the same chair he had rented for several years. "It seemed like a risky idea to leave the spot where my customers were used to coming," he told me.

Unfortunately, after a year, his landlord realized how good the business was and forced my uncle out. "What a setback," he said. "All these customers and nowhere to go."

His first thought was to look for a new place to rent. But then he was hit with a stroke of genius: "Own my own place, and I can't get kicked out again!" It only took him a handful of days to locate what would become his goldmine: 3 acres of land with a corner shop and two houses.

He set out his shingle in the shop, bought a trailer for $150 and moved it onto the back of the property, then rented the two little houses. He had talked the owners into selling him the whole ball of wax with 100% financing over 10 years. After he got his extra chairs rented out and moved another trailer onto the property, he was flush with cash. In the end, the property was paid off in eight years. But in the meantime he dabbled in other real estate, left the country and bought a house in Cancun where he lived as a tour guide. Years later he came back and bought a beachfront house on a local river, where he lived until just recently.

"Everybody gets the same amount of time, Billy," he would often say. "But that's not enough to get you to the top of the heap." His experience with collecting the rent from four other barbers showed him the power of leverage. His no-money-down real estate deal taught him about other people's money. And I imagine he probably watched a boatload of late-night infomercials that helped formulate his "Wealth Outline."

I have come to find that what he said (even though it was completely borrowed and not original) held a great deal of truth.

But up to this point, you're probably wondering what in the world this has to do with socialism. Seems like a pretty entrepreneurial story. Right? You are correct.

Seeing the proper working of a man and his wealth, well, that makes a counterfeit all the more easily spotted. But we could add to that story our own little adventure in currency options. The same three principles are at work. Time, leverage and other peoples' money.

But the path to wealth through socialism is not so clearly seen. As a matter of fact, it is more like a path to nowhere. Because socialism denies the capitalistic importance of these four pillars: wealth, time, leverage and other people's money. Instead, they corrupt them to their own destructive ends.

Any socialist will tell you wealth is important. As a matter of fact, that is the big carrot held out to entice people to follow such a muddleheaded plan. They will also tell you that time is important. Not because you need it to build wealth, but because you need it to spend wealth. In other words, the here-and-now is what is of the utmost importance. And you must be rich now, in order to enjoy what time you have here!

Leverage is also important to the socialist. As poor men manage their wealth very poorly (but seem to know instinctively how to manage their ballot), it is imperative to leverage out the efforts of the poor man into large voting blocks. One poor man cannot get a candidate into office. But 100,000 of them, that's a horse of a different color.

Finally, we have the socialist's take on other people's money. They love it. They covet it. And they'll do anything to get it. Obviously it is impossible to enrich the poor men who voted for them with the candidate's own money. This is why other people's money is so critically important. Unfortunately for them, they have forgotten the words of U.K. Prime Minister Margaret Thatcher, who said, "The problem with socialism is that you eventually run out of other people's money."

Whether she actually believed that or not is a question for another day. But it still has the ring of an eternal truth.

My uncle's understanding of other people's money was that it could be used to make money for himself. And he was right. But here is a key difference. The "other people" in my uncle's life lent him that money VOLUNTARILY, not because they were coerced. And they expected a real cash return on their funds, not just the "warm feeling" that comes from being forced to help an indolent person by way of government-run charity!

Because socialists reward those who treat money poorly and penalize those who treat money well, the system will never work. True, advocates of wealth redistribution can point to circumstances where it did "work," and where it does "work" from time to time (if only for a limited time). But I can also point to circumstances where the laws of gravity are temporarily suspended, such as when I get on a plane.

But even God will not help me if I just assume because I can fly for a few hours from here to there that I can fly forever. At some point my plane has to come back to the ground. At some point the laws of gravity will resume their authority, and I will realize that my flight and my violation of gravity's laws are coming to an end.

Capitalism is a law established by God, just like gravity. Its foundation is in the 9th Commandment, "Thou shalt not covet." I am never free to desire to take what is my neighbor's. Not his wife. Not his house. Not his lands. Not his possessions. I can trade him for them if I have something he wants more than what he has. (Except his wife, of course...) I can buy them from him if my offer is right. But I cannot steal (or vote) away his property into my account. That is not wealth creation; it is merely re-distribution. God condemns it, and He will not be mocked by those who think that they can make socialism "fly" forever.

Eventually, they will run out of other people's money. And when they do, their plane will come crashing to the ground.

One more thing. All around us, we see the widespread push toward more socialism, even when it hasn't yet worked. How could that be? To explain what we are seeing currently, we must acknowledge that if the socialists manage to escape complete annihilation in the plane that they wreck, they will begin a campaign of propaganda, reminding the people that if only the free market force of gravity hadn't gotten involved, they would have been successful. And that all they need is more fuel (other people's money) to get the thing going again.

And, of course, the people will see the wisdom of their case, and will vote for more fuel or parts or anything, just so long as we don't let those stupid Gravitarians have control of the cockpit.

More groundbreaking efforts will be tried, such as debasing the fuel, so that we have more of it. Sure, if you add five gallons of water to five gallons of gasoline you get 10 gallons... Certainly we can go further on twice as much fuel, right? Yeah, Right. Whatever you say, Comrade. Meanwhile, anybody who knows better had better be preparing a parachute.

As the major nations of the world move deeper and deeper into the "Pit of Despair" (to borrow a good term from The Princess Bride), their solutions will work less and less. Each effort will become more and more futile. Perhaps then we will learn our lessons. If not we will be doomed to repeat them.

All that being said, we did have a big news item from last week. Chinese Premier Wen Jiabao fired a shot across the bow of the Good Ship USS Treasury.

It was not just a request, and it was not couched in the tactfulness of political diplomats.

China warned the United States to "Keep its word." Seems that the Moral Empire of America has a hard time with the bad habits of lying and stealing.

And now the rest of the world knows it.

And now we know that the Chinese know it.

And we know that we need their lending to keep up our little charade.

And they know we need their lending.

Now they are telling us, do not fool with our investments. China has options of where to put their money. What options do we have? How many nations can lend us the amounts we are consuming? China has options. We don't. "The borrower is servant to the lender."

The world is changing... and we will keep looking for opportunities to profit from it.

Regards, Bill Jenkins for The Daily Reckoning www.DailyReckoning.com

3/18/2009: Just Wait Till Last Year
Why doesn't AIG avail itself of the Obama dodge? By James Taranto\

Politicians in Washington have been denouncing American International Group, the insurance company that has received some $170 billion in federal bailout funds, for paying retention bonuses amounting to just under 1/1,000th of this sum to executives in its financial products division. AIG says it is contractually obligated to pay out the bonuses, but maybe a more effective argument would be: Hey, forget it! This is last year's business!

Don't laugh. That's the argument the Obama administration used, as the Washington Post noted in an editorial earlier this month:

The congressional budget process--and process is an awfully polite word for the current chaos--gets uglier and uglier. The $410 billion omnibus spending bill that is crawling to final passage and an unenthusiastic signature comes nearly halfway through the fiscal year. . . . President Obama's not-my-problem stance may be canny politics: Why put any political capital into this one when there are so many other difficult fights to come? But his asserted stance that this is, in the words of White House Chief of Staff Rahm Emanuel, "last year's business," borders on irresponsible. This may be last year's business, but Mr. Obama is this year's president.

The Post editorial points out that notwithstanding Obama's stated opposition to earmarks, the spending law contained some $8 billion worth of them--nearly 50 times the amount of the AIG bonuses.

Also angry is a leading Hill Democrat, according to a Post report:

"I warned them this would be met with an unprecedented level of outrage," Sen. Christopher J. Dodd (D-Conn.), the chairman of the banking committee and part of a group of senators who pressed Treasury Secretary Timothy F. Geithner to stop the bonuses, said [Monday].

It turns out, however, that the bonuses are legally protected under last month's so-called stimulus law. In a most amazing coincidence, this provision is known as the Dodd amendment, as Fox Business Channel reports:

While the Senate was constructing the $787 billion stimulus last month, Dodd added an executive-compensation restriction to the bill. The provision, now called "the Dodd Amendment" by the Obama Administration provides an "exception for contractually obligated bonuses agreed on before Feb. 11, 2009"--which exempts the very AIG bonuses Dodd and others are now seeking to tax.

Dodd's original amendment did not include that exemption, and the Connecticut Senator denied inserting the provision.

"I can't point a finger at someone who was responsible for putting those dates in," Dodd told FOX. "I can tell you this much, when my language left the senate, it did not include it. When it came back, it did."

"Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made," Dodd Spokesperson Kate Szostak in a response to FOX Business.

If that doesn't give you confidence in our political leaders in Washington, maybe this will, from Politico:

Sen. Charles Grassley is so angry over AIG bonuses that he says the executives should resign or kill themselves.

In a comment aired this afternoon on WMT, an Iowa radio station, Grassley (R-Iowa) said: "The first thing that would make me feel a little bit better towards them if they'd follow the Japanese model and come before the American people and take that deep bow and say I'm sorry, and then either do one of two things--resign, or go commit suicide."

If a Democratic senator said anything that foolish, he'd be vice president by now.

Obama, this year's president, is also last year's junior senator from Illinois, in which capacity, according to a chart posted by blogger Jeff Lehner, he was Congress's second-biggest recipient of donations from AIG employees. The biggest? Chris Dodd. Washington's Examiner drolly terms Obama's take "a $101,332 bonus from AIG."

Bloomberg argues that the president's "attempt to harness public anger" at the AIG bonuses "may backfire on him as Republicans try to redirect that anger toward his administration." Didn't someone once observe that when you point at someone else, three fingers are pointing back at you?

3/18/2009: Silver's Bravery Not an Act By Ann Coulter

I wish I could ask Ron Silver what he thinks of the AIG bonuses. He'd have some original take -- maybe propose re-opening the bonuses paid to Franklin Raines and Jamie Gorelick for their yeoman's work running Fannie Mae into the ground and then collecting bonuses of $90 million and $24.7 million, respectively. Or maybe he'd just make a joke.

3/18/2009: Obama Wants to Disarm U.S. Pilots By David A. Patten

[Just like Lenin and Hitler, Obama wants to disarm everyone. He's starting with a small group that has shown absolutely no abuse of the right to carry weapons while flying a plane. He doesn't care about our safety. He wants to be able to implement his "vision" of socialism and become an absolute dictator. "We are the one we've been waiting for. Also check out Emily Yoffe's slate.com's article about narcissitic personality disorder; you'll find a description of Obama, our Messiah President and many of his minions, and the speaker of the House, Nancy Pelosi.]

But Enough About You …What is narcissistic personality disorder, and why does everyone seem to have it? By Emily Yoffe

http://www.slate.com/id/2213740/?wpisrc=eDialog

2/17/2009: Obama's Attack on Medical Civil Liberties By Newt Gingrich & Rick Tyler

[I am now convinced: Obama really is evil. We all need to lobby Congress to NOT do his bidding. He needs to fail miserably at everything he tries. We need to find and elect a worthy replacement in 2012.]

2/17/2009: from the Daily Reckoning

We spent the weekend working with the gardener again. We were joined by a neighbor, Paul, a round fellow, 75 years old - cutting firewood, splitting it, hauling it, stacking it.

Both Damien and Paul worked with cigarettes in their mouths. And both worked hard. Damien rarely says anything. But Paul never stopped talking.

"He's trying to kill us both," he said, pointing at Damien.

"Damien really knows how to work. He's been working hard all his life. Well, just try to find someone like Damien today. Young people don't want to work at all. And if they get a job, they expect a machine to do all the hard work. They don't know what a shovel is. You'd have a hard time getting a young person out to help us do this work...

"Everything has changed so much since I was young. You know, I was here in Normandy when the Americans landed. I remember seeing them go by. I was only 10 years old. But it made quite an impression on me. They had so many machines...tanks...trucks...jeeps. I had never seen so many vehicles.

"When I was ready to go to work, I went to work as a gardener. We worked by hand... We didn't have mechanical cultivators or garden tractors. We turned the ground with a spade. It was hard work...but I liked it.

"Then, I got into an argument with the boss. It was over nothing really. He told me to put up some cold frames...you know, for starting out the plants in the early spring. So they won't freeze. Then, he went off. He was a rascal. He didn't really do anything. He'd just tell us what to do and leave. And then he'd come back drunk later in the day and yell at us.

"So I put up the cold frames. And he came back and yelled at me:

"'What do you think you're doing... Don't you know how to put up cold frames correctly... My old crew could do this right. They were great workers. How come you don't know how to set up a cold frame?' He went on and on. So I just took of my apron and threw it at him.

"'Here...' I said, 'then let your old buzzards to it.' And I started to walk off. And he tried to stop me. What was I doing...who did I think I was, he said. Then, he even offered me more money to stay - another 50 centimes per hour.

"You laugh. But that was real money back then. And then, we got paid by the hour. We worked by the hour...as many hours as we wanted... and that was all there was to it.

"And I'll tell you something else. It wasn't like today. If you're starting out today, you have a hard time getting a job. You have to go to the right school and then get a trial period...and have the right training and get into the right program. And then, they interview you for days. Everybody is afraid to hire anyone because it so hard to fire them.

"It wasn't like that when I was starting out. You could just walk onto almost any jobsite and ask. If they needed help, you could start working the same day. I did a lot of things - I drove a truck, ran a café, worked for a food delivery service. If I didn't like the boss, I just quit. I always worked hard. Some bosses like that. Some don't. And I never minded saying what was on my mind. So when I saw something that didn't add up, I said so. And sometimes, I lost my job because of it. But it didn't matter, because there were plenty of jobs for someone who was willing to work.

"It's not like that now... That guy, what's his name, George...you know, the one who comes to help over here from time to time. He's on 'permanent disability' because he hurt his back. He can still walk. He can still talk. But he's considered permanently disabled because he was a mason...and now he can't carry heavy bags of cement. It's ridiculous. He could just go do something else. He's only about 40 years old. Instead, he does nothing - and we taxpayers support him.

"You know, they say that this financial crisis is going to be the end of capitalism. I don't think so. I think it's going to be the end of socialism...this kind of socialism we've had in France for the past 20 years. We can't afford it. There are too many people not working. Too many rules. Too much interference. A third of the country works. Another third tries to stop them from working. And the final third does nothing at all.

"I think the financial crisis is going to put an end to it... we can't afford it anymore."

2/17/2009: from Today's Papers at Slate.com

[this analyst's comment unintentionally shows the problem with regulation and government control: Rather than making products for the consumers (the people who pay for everything, including the salaries of useless government employees and Obama's parties in the White House, not to mention Air Force One's trip to Denver just so he could sign the Stimulus Bill (I guess they didn't have a pen in the White House), the car manufacturers are building cars to satisfy congress and the Brain-dead liberal environmental wackos]

The LAT points out that demand for hybrids has plunged just as automakers are releasing more of the fuel-efficient cars than ever before. It's hardly a secret that the whole auto industry is doing badly, but hybrids are particularly difficult to get off the sales floor because consumers are reluctant to pay a premium for fuel-efficiency when the average price of gasoline has dropped below $2 a gallon. Automakers, however, feel as though they have no choice but to keep producing these types of vehicles because of pressure from Washington. "The automakers are in the situation of needing to pacify politicians that are in the position to bail them out with expensive fuel-efficient cars," an analyst said.

Liberty Magazine (March 2009): Both the media and the government, for slightly different reasons, have a huge stake in keeping the populace terrified. The first headline in the business section of a recent Denver Post reads, “Home prices in record plunge...Experts fear it’s bound to get worse.” Worse? For whom? Am I supposed to be frightened that housing is finally becoming affordable? In the second headline, a couple of pages later, we learn that gas prices have dropped to 2004 levels. And then discover that these low gas prices suggest “the U.S. is headed toward the worst recession in decades.” Yep. I’m scared to death that I can now afford to fill my tank. The truly scary thing is that the government has been working so hard, for so many years, to distort the pricing of everything, that no one knows any longer what anything is worth, particularly the dollar. Is a gallon of gas worth $1.75 or $4.75? Is my house worth $175,000 or $475,000? Nobody knows. Pricing is information, set most accurately by free men exchanging goods and services for their mutual benefit. We distort that pricing information with a roller coaster of bad regulation, bad policy, and now bailouts, and wonder why investors are not confident enough to invest, lenders are not confident enough to lend, and consumers are not confident enough to consume. Yep, I’m terrified, but not by low home prices or low gas prices. — Doug Gallob

2/13/2009: Obama's Poll Numbers Are Falling to Earth by Douglas E. Schoen and Scott Rasmussen [Obama's approval rates already are lower than Bush in 2001]

[I always thought Baby Bush was a moron; Papa Bush wasn't much better. But Obama (God help us!) is even worse...and a brain-dead socialist to boot (Socialism is often defined as "having nothing and wanting to share it with everyone). Americans have already figured out that he's a dope and the polls show it. If the economy recovers, he'll get credit for it even though any recovery would be in spite of his and Bush's actions, not because of them. Clinton won re-election and Obama (our liberal "feel good" affirmative action president) was elected not because anyone really thought they were qualified but because they ran against Dole and McCain (and Hillary). Likewise, Baby Bush won because he ran against Gore (I talk to the trees and they answer me) and Kerry (the French-looking guy who ran on his four-month record in Vietnam). Papa Bush won because he was supposed to be Reagan's third term. Where are the statesmen (or women)? I believe that our celebrity culture has deteriorated to the point where no one qualified to actually do the job, no one with the intelligence and humility necessary to actual do a good job as president is willing to be subjected to the process. Instead of qualified chief executives we get good campaigners; we get narcissistic pinheads like the Bushes, Clinton, Obama, and Schwarzenegger.]

It is simply wrong for commentators to continue to focus on President Barack Obama's high levels of popularity, and to conclude that these are indicative of high levels of public confidence in the work of his administration. Indeed, a detailed look at recent survey data shows that the opposite is most likely true. The American people are coming to express increasingly significant doubts about his initiatives, and most likely support a different agenda and different policies from those that the Obama administration has advanced.

Polling data show that Mr. Obama's approval rating is dropping and is below where George W. Bush was in an analogous period in 2001. Rasmussen Reports data shows that Mr. Obama's net presidential approval rating -- which is calculated by subtracting the number who strongly disapprove from the number who strongly approve -- is just six, his lowest rating to date.

Overall, Rasmussen Reports shows a 56%-43% approval, with a third strongly disapproving of the president's performance. This is a substantial degree of polarization so early in the administration. Mr. Obama has lost virtually all of his Republican support and a good part of his Independent support, and the trend is decidedly negative.

A detailed examination of presidential popularity after 50 days on the job similarly demonstrates a substantial drop in presidential approval relative to other elected presidents in the 20th and 21st centuries. The reason for this decline most likely has to do with doubts about the administration's policies and their impact on peoples' lives.

There is also a clear sense in the polling that taxes will increase for all Americans because of the stimulus, notwithstanding what the president has said about taxes going down for 95% of Americans. Close to three-quarters expect that government spending will grow under this administration.

Recent Gallup data echo these concerns. That polling shows that there are deep-seated, underlying economic concerns. Eighty-three percent say they are worried that the steps Mr. Obama is taking to fix the economy may not work and the economy will get worse. Eighty-two percent say they are worried about the amount of money being added to the deficit. Seventy-eight percent are worried about inflation growing, and 69% say they are worried about the increasing role of the government in the U.S. economy.

When Gallup asked whether we should be spending more or less in the economic stimulus, by close to 3-to-1 margin voters said it is better to have spent less than to have spent more. When asked whether we are adding too much to the deficit or spending too little to improve the economy, by close to a 3-to-2 margin voters said that we are adding too much to the deficit.

Support for the stimulus package is dropping from narrow majority support to below that. There is no sense that the stimulus package itself will work quickly, and according to a recent Wall Street Journal/NBC poll, close to 60% said it would make only a marginal difference in the next two to four years. Rasmussen data shows that people now actually oppose Mr. Obama's budget, 46% to 41%. Three-quarters take this position because it will lead to too much spending. And by 2-to-1, voters reject House Speaker Nancy Pelosi's call for a second stimulus package.

While over two-thirds support the plan to help homeowners refinance their mortgage, a 48%-36% plurality said that it will unfairly benefit those who have been irresponsible, echoing Rick Santelli's call to arms on CNBC.

And although a narrow majority remains confident in Mr. Obama's goals and overall direction, 45% say they do not have confidence, a number that has been growing since the inauguration less than two months ago. With three-quarters saying that they expect the economy to get worse, it is hard to see these numbers improving substantially.

There is no real appetite for increasing taxes to pay for an expanded health-insurance program. Less than half would support such an idea, which is 17% less than the percentage that supported government health insurance when Bill Clinton first considered it in March of 1993.

While voters blame Republicans for the lack of bipartisanship in Washington, the fact is that they do not believe Mr. Obama has made any progress in improving the impulse towards cooperation between the two parties. Further, nearly half of voters say that politics in Washington will be more partisan over the next year.

Fifty-six percent of Americans oppose giving bankers any additional government money or any guarantees backed by the government. Two-thirds say Wall Street will benefit more than the average taxpayer from the new bank bailout plan. This represents a jump in opposition to the first plan passed last October. At that time, 45% opposed the bailout and 30% supported it. Now a solid majority opposes the bank bailout, and 20% think it was a good idea. A majority believes that Mr. Obama will not be able to cut the deficit in half by the end of his term.

Only less than a quarter of Americans believe that the federal government truly reflects the will of the people. Almost half disagree with the idea that no one can earn a living or live "an American life" without protection and empowerment by the government, while only one-third agree.

Despite the economic stimulus that Congress just passed and the budget and financial and mortgage bailouts that Congress is now debating, just 19% of voters believe that Congress has passed any significant legislation to improve their lives. While Congress's approval has increased, it still stands at only 18%. Over two-thirds of voters believe members of Congress are more interested in helping their own careers than in helping the American people. When it comes to the nation's economic issues, two-thirds of voters have more confidence in their own judgment than they do in the average member of Congress.

Finally, what probably accounts for a good measure of the confidence and support the Obama administration has enjoyed is the fact that they are not Republicans. Virtually all Americans, more than eight in 10, blame Republicans for the current economic woes, and the only two leaders with lower approval ratings than Harry Reid and Nancy Pelosi are Republican leaders Mitch McConnell and John Boehner.

All of this is not just a subject for pollsters and analysts to debate. It shows fundamentally that public confidence in government remains low and is slipping. We face the possibility of substantial gridlock along with an absolute absence of public confidence that could come to mirror the lack of confidence in the American economy that the Dow and the S&P are currently showing.

Mr. Schoen, formerly a pollster for President Bill Clinton, is the author of "Declaring Independence: The Beginning of the End of the Two Party System" (Random House, 2008). Mr. Rasmussen is president of Rasmussen Reports, an independent national polling company.

2/10/2004: Five Signs of Financial Reckoning Day By Dan Denning [an oldie but a goodie]

"People keep buying things they don't need to impress people they don't know with money they don't have and will never be able to pay back."

3/13/2009: from a reader of the Daily Reckoning www.DailyReckoning.com

"I have been reading your comments regularly for a past few years, during which I was a Managing Director at Lehman Brothers and, thereafter, at Deutsche Bank. I am now semi-retired, living in the English countryside and watching the meltdown from afar. In my youth I was drawn to Austrian and Libertarian thinking and, as I progressed in the financial industry, never forgot these roots. Now I feel fortunate to have that grounding as it helps me to better understand what is really going on.

"During 2004-07 I saw the financial industry stacking up the powder kegs that would eventually blow up. I tried on occasion to warn people. But my warnings fell on deaf ears at Lehman and elsewhere, but not for the reasons you might think.

"I recall numerous conversations with senior people at various global financial firms on topics ranging from Fed policy, to the US/UK housing markets, securitisation and its potential pitfalls, the CDS tangle, and so on. One thing that is clear to me is that key people at these firms were aware for the most part what risks they were taking. They knew that it was all going to blow up someday, if not so spectacularly as it now has done. But they all believed that somehow they would be quicker and cleverer than rival firms, that they would effectively hedge themselves and they would get out first, before things got really ugly. As you well know, that sort of collective "greater fool theory" mindset is characteristic of bubbles and, if widely held, almost ensures that liquidity will dry up suddenly as markets turn for the worse.

"Believe me, they knew they were playing with fire to a much greater extent than is currently acknowledged. They blame 'animal spirits' and 'market forces' when they were, in fact, the most important market participants. No wonder a hedge didn't work if most major global financial institutions held the exact same hedge! If you are curious I can fill you in on some of the details although I suspect you know much of this already.

"In any event, I admire you and those few who are tirelessly pointing out that it was most emphatically not the free-market, but rather central banking and misguided regulation, that got us into this mess. You are doing the next generation a great service. Sadly, the current generation is probably beyond help at this point. I hope and pray that, like a phoenix, a form of proper, free-market capitalism rises from the ashes of the current conflagration."

[Note: "Financial Reckoning Day: Surviving the Soft Depression of the 21st Century," [peruse in Goggle Books] published in 2003 by the founders of the Daily Reckoning (William Bonner & Addison Wiggin), describes exactly what is going on in the United States economy.

3/13/2009: from the Daily Reckoning http://www.dailyreckoning.com

HOW TO SAVE THE WORLD by Bill Bonner

The problem was pronounced "contained," by then-US Treasury Secretary Hank Paulson on April 7th, 2007. And then, on July 20th, Fed chairman Ben Bernanke admitted that the crisis could bring losses up to $100 billion.

But there was no container large enough to hold the subprime losses. Each time one was set out, it quickly overflowed. The latest reports tell us that the bilge is now 500 times deeper than the Fed head forecast...and still rising. And this comes after $11.7 trillion has been committed in the US alone to pumping it out. Whether the plumbers are plain idiots or clever rogues, we can't say, but it should be obvious after two years of watching them, their pumps don't work.

It is not often that we are called upon to advise the world's government. In fact, we can't remember a single time. But we can't resist a lost cause. So, we offer the Daily Reckoning Plan to Save the World, or DRPtStW for short.

We begin with a brief rehearsal of what went wrong: The economy as it was before the spring of 2007 was too wonderful for words; whenever you tried to describe it, it sounded ridiculous. For example: "The richest get richer and richer by borrowing from the poorest."

"We think; they sweat," said one analyst, explaining how Americans could live beyond their means year after year. The West was just recycling the East's "savings glut," added Bernanke. Meanwhile, derivatives - based on mortgage debt from people who couldn't pay - "helped to make the banking and overall financial system more resilient," said the IMF in 2006.

Each sentence must have made the gods choke...groan...and then laugh. But beginning in 2007, came a correction. Suddenly, the big spenders saw their houses fall in value. Lenders watched their collateral collapse. The end was nigh. Two years later, $50 trillion has been lost, according to an estimate from the Asian Development Bank. After a slap in the face like that, you'd expect a little clarity. Instead, the public seems to have acquired a taste for bamboozle; now they can't get enough of it.

Just read the Financial Times. This week it has a windy series on the "Future of Capitalism," inviting readers to imagine how the decaying old creed might be reformed. Alas, for capitalism, it's out of the frying pan, into the toilet. Larry Summers, Obama's number one financial advisor, voiced the prevailing view: "This notion that the economy is self-stabilizing is usually right, but it is wrong a few times a century. And this is one of those times...there's a need for extraordinary public action at those times."

The gist of his program can be expressed in another wistful absurdity: The consumer economy died because of too much spending; now we will revive it by spending more. "Give me your cunning bankers, your hopeless CEOs, your huddled masses of chiselers, spendthrifts and boondogglers," says the Obama team, "and we'll give them other peoples' money!"

"There's no place that should be reducing its contribution to global demand right now," explained Summers. "The world needs more demand." But it was demand that the world recently had too much of. English speakers took on too much debt to create it...and built too many houses and too many shopping malls to satiate it. And despite the ready cash offered by Bush, Bernanke, and Paulson, demand has sunk, because the real problem is not an absence of spending, but a surfeit of debt. In America, for example, total debt went from 150% of GDP in the '80s to 350% in 2007. The financial markets panicked when it became clear that debtors didn't have the cash flow to pay off the debt...and that an entire world economy had been fizzed up to supply products to people who couldn't afford them. Investors have been discounting debt-soaked assets ever since.

The fix is obvious - reduce the level of debt. About $20 trillion worth of debt, in the United States alone, needs to disappear. Then, consumers can go back to doing what they do best - consuming. But how do you reduce the debt level? Former Treasury Secretary Andrew Mellon had the right idea in 1929: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate... It will purge the rottenness out of the system... Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."

What's the cure for a depression? It's a depression. Let willing buyers and sellers mark debt down to what it is really worth. Mellon's plan was not followed by the Hoover or Roosevelt administrations. Instead, they introduced elaborate bailouts, stimulus programs, and boondoggles. That is why the depression is known as the Great Depression, rather than the So-so Depression. By the end of the 30s, the US economy was almost exactly the same size it had been at the beginning. Likewise, in Japan, holding off liquidation brought a "lost decade" in the '90s. Bush followed in Hoover's footsteps. And now, the Obama administration follows in Roosevelt's and Miyazawa's.

Here's our advice: forget it. Let the depression do its work. Let the bad times roll!

3/12/2009: From an address given by John Kenneth Galbraith at the London School of Economics in June 1999 called "The Unfinished Business of the Century":

We have far more people selling derivatives, index funds and mutual funds (as we call them) than there is intelligence for the task. I am cautious about prediction; I discovered years ago that my correct predictions are forgotten, the others meticulously remembered. But some things are definite; when you hear it being said that we have entered a new economy of permanent prosperity with prices of financial instruments reflecting that happy fact, you should take cover. This has been the standard justification of speculative excess for several centuries -- for a good part of the millennium. My one-time Harvard colleague Joseph Schumpeter thought inevitable and even beneficial what he called "creative destruction" -- the cyclical process by which the system eliminates the people and institutions which are mentally too vulnerable for useful economic service. Unfortunately the process has larger and less benign effects, including the possibility of painful recession or depression.

3/12/2009: Obama's Poll Numbers Are Falling to Earth by Douglas E. Schoen and Scott Rasmussen

...Polling data show that Mr. Obama's approval rating is dropping and is below where George W. Bush was in an analogous period in 2001. Rasmussen Reports data shows that Mr. Obama's net presidential approval rating -- which is calculated by subtracting the number who strongly disapprove from the number who strongly approve -- is just six, his lowest rating to date.

...All of this is not just a subject for pollsters and analysts to debate. It shows fundamentally that public confidence in government remains low and is slipping. We face the possibility of substantial gridlock along with an absolute absence of public confidence that could come to mirror the lack of confidence in the American economy that the Dow and the S&P are currently showing.

[Read the entire article]

3/12/2009: Now at Reason.tv: Slumdog Thousandaires—What the celebrated movie can teach Americans about economic stimulus

Perhaps the only people who don't like the hit movie Slumdog Millionaire are those who compete against it at awards shows. After all, it's already cleaned up at the Golden Globes, and the BAFTAs, and it's poised to repeat these feats at the Oscars.

The film follows an Indian orphan named Jamal who grows up and hits it big on the famous game show Who Wants to be a Millionaire? In important ways, Slumdog tells the story of India itself-a poverty-stricken underdog with its own rags-to-riches tales. British rule ended in 1947, and the economic woes America faces now are nothing compared to the widespread malnutrition and starvation India faced then.

Indians were enthusiastic about self-rule, but "the problem was that the Indian political leaders had this very Fabian Socialist idea," says Shikha Dalmia, a senior analyst at Reason Foundation and native of India. "And that completely thwarted the entrepreneurship of the country."

For decades would-be entrepreneurs staggered under the weight of corruption and bureaucracy. Want to import a computer for your business? You'd have to get permission from a bureaucrat. Want to sell food from a small cart? You'd need all kinds of licenses.

But in the 1990s, India emerged as a high-tech powerhouse. What changed?

"In the 1990s India started liberalizing its economy," says Dalmia, "and it did three things: cut taxes, liberalized trade, and deregulated business." Although they failed to cut the kind of red tape that entangled Slumdog's orphans, the reforms did make it easier for more Indians to start businesses and hire employees.

"One IT company doesn't just employ computer professionals," says Dalmia. "It also needs landscaping services, cleaning services, and restaurants. There was this tremendous spillover effect that allowed people to lift themselves out of poverty."

Since the early 1990s, India has cut its poverty rate in half. About 300 million Indians-equivalent to the population of the entire United States-escaped the hunger and deprivation of extreme poverty thanks to pro-market reforms that increased economic activity.

Yet here in America we're turning away from market reform. Says Dalmia, "It's just this great conundrum that at the same time that deregulation and markets have produced such dramatic results in India, they are falling into suspicion in America." Dalmia's prescription for India is at odds with what politicians have chosen to "stimulate" the United States. "What India needs to do is continue apace with its liberalization effort, but expand it to include the poor. Release them from the shackles of government corruption and government bureaucracy."

"Slumdog Thousandaire" is written and produced by Ted Balaker. The director of photography is Alex Manning.

3/12/09: Obama's strategy requires the perpetual crisis his economic policy produces By Mark Tapscott

Lost in the hue and cry over Rush Limbaugh’s hope that President Barack Obama “fails” is this key fact – it’s the Chief Executive, not the mighty mouth of Talk Radio, who sees an opportunity in the nation’s suffering to change America.

Whatever one thinks of Limbaugh, he’s not the one trying to use rising unemployment, a plummeting stock market, the alleged impending collapse of the financial system and a host of other fears about the future to advance his policy agenda.

White House chief of staff Rahm Emanuel gave the game away back in November with his observation that:

"You never want a serious crisis to go to waste. What I mean by that is it's an opportunity to do things that you think you could not do before. This is an opportunity…And this crisis provides the opportunity for us, as I would say, the opportunity to do things that you could not do before."

Emanuel even helpfully specified the issues where the opportunity would be most helpful to the new administration – “health care area, energy area, education area, fiscal area, tax area, regulatory reform area - things that we had postponed for too long that were long-term are now immediate and must be dealt with.”

Initially, Emanuel’s disturbing words were dismissable as just his own, but the president himself and most recently Secretary of State Hillary Clinton have since repeated variations on the theme. So it is clearly the Obama strategy to use the current economic crisis as justification for his radical agenda.

Call it policy-making by perpetual crisis.

This is a not a new phenomena in the political world, of course. One need look no further than North Korea’s “Dear Leader,” with his constant invocation of the illusory threat of U.S. military invasion to keep his suffering people in their chains.

Kim Jong il is not unique, only the most bald-faced about using real or manufactured threats to justify his dictatorial policies. Other examples from history quickly come to mind, including communist titans like Stalin and Mao continually warning of “imperialist aggressors” from the capitalist West.

What is different now is that we’ve never before seen an American president so explicitly invoke this strategy of using a domestic crisis to achieve long-term domestic policy goals. Consider the economic stimulus package and how it was sold.

Back in February, Obama said this of his then-$800 billion-plus proposal: "It is the right size, it is the right scope. Broadly speaking it has the right priorities to create jobs that will jump-start our economy and transform it for the 21st century."

Since then, not much in the way of optimism has been heard. More often, we've been reminded that failure to pass the bill would lead to a “catastrophe” that could stretch into a decade or more of economic misery.

Critics predicted Obama’s proposal would fail to get the economy growing again because it consisted mainly of pork barrel spending unlikely to stimulate anything but Washington's ever-hungry special interests, and, according to the non-partisan Congressional Budget Office (CBO), wouldn’t even take affect until months after the current recession was history.

So, Congress passed the only slightly reduced $787 billion version of the stimulus package, but the bad economic news continued and even worsened. We might then have expected to hear a continuing litany of cautionary requests to give the package time to work and assurances that a job-creation bonanza, not economic catastrophe, is what is right around the corner .

Instead, what we hear now are White House press secretary Robert Gibbs and other administration officials effortlessly gliding into promotional mode for a second stimulus package after House Speaker Nancy Pelosi and the Democratic House leadership are reported to be conferring with White House economic advisors on the idea.

“House Democrats are looking at yet another economic stimulus bill beyond the $787 billion one just enacted as investors and consumers continue to show little faith in the economy,” The Hill’s Jared Allen reported earlier this week.

So, when debate begins on Stimulus II, remember that, according to Obama, the only "long-term solution" for the economic crisis is his package of proposals to put bureaucrats in charge of health care, make Americans use less and pay much more for energy, and drastically increase the federal funding and direction that has pretty much ruined American public education.

Now you know why one thing is certain here: If Obama gets his policies, his prediction of long-term economic crisis will be self-fulfilling.

Mark Tapscott is editorial page editor of The Washington Examiner and proprietor of Tapscott’s Copy Desk blog on dcexaminer.com.

Keynesianism in a Nutshell By Henry Hazlitt • November 1982

Henry Hazlitt, a frequent contributor to The Freeman, has a long and distinguished career as an economist, journalist, editor, and literary critic. Best known of his numerous books is Economics in One Lesson, originally published in 1946 and since translated into eight languages with sales of more than 700,000 copies. The recently revised edition is once more available in inexpensive paperback.

John Maynard Keynes was, basically, an inflationist. This has not been clearly recognized because he never spelled out, step by step, the consequences of his proposed remedy for unemployment and depression. That remedy was deficit spending by the government. He recognized that increased government spending paid for by equally increased taxation would not “add purchasing power.” The increased taxation would offset any “stimulus” that the increased government spending would provide. What counted, he confessed, was the government deficit. But he failed to take his readers beyond this step. How would that deficit be financed? Either the money would have to be borrowed, or new (paper) money or credit would have to be created. But if the money were borrowed, then the previous spending stimulus would be reversed by a deflation when the borrowing was repaid. The only thing to prevent this reversal would be to allow the new spending to remain outstanding. In other words, the Keynesian solution to every slowdown in business or rise in unemployment was still another dose of inflation.

I may point out (if that is still deemed necessary in this inflationary era) that no inflation of which we have historical knowledge resulted in sound and continued business expansion but only in currency depreciation, a wanton redistribution of profits and losses, disorganized output, and economic demoralization. This has been true whether we begin with the coinage debasement of ancient Rome or the paper money scheme of John Law in 1716.

The lessons of inflation are soon forgotten. They apparently must be relearned in every generation.

3/11/2009: Recession: When your neighbor loses their job

Depression: When you lose yours

Recovery: When Obama loses his

3/11/2009: Good Ideas by Walter E. Williams

During winter months, I work out 10 minutes on the treadmill and lift weights at seven stations four mornings a week. Over the years, during the spring through fall months, I racked up about 2,000 miles on my road bike. This level of exercise helps account for why, at 73 years, I'm in such good health and physical fitness. So my question to you is whether you think regular exercise is a good idea. I think the answer is definitely yes, if nothing other than its beneficial effects on health care costs. Since exercise is a good idea, would you support a congressional mandate that all Americans engage in regular exercise?

Instead of simply saying, "Williams, you're a lunatic!" and rejecting such a congressional mandate out of hand, let's ask why it should be rejected. We should keep in mind that there's precedent for congressionally mandated measures to protect our health and safety. Seatbelt and helmet laws are examples. If you're in an accident and wind up a vegetable, you will be a burden on taxpayers; therefore, it's argued, Congress has a right to mandate seatbelt and helmet usage. Wouldn't the same reasoning apply to people who might burden our health care system because of obesity or sedentary lifestyles? If it is a good idea for Congress to force us to buckle up and wear a helmet on a motorcycle, isn't it also a good idea to force us to regularly exercise?

There is only one question to ask were there to be a debate whether Congress should mandate regular exercise. Whether regular exercise is a good idea or a bad idea is entirely irrelevant. The only relevant question is: Is it permissible under the Constitution? That means we must examine the Constitution to see whether it authorizes Congress to mandate exercise. From my reading, the Constitution grants no such authority.

You say, "Aha, Williams, you've blown it this time. What about Article I, Section 8 of the Constitution, which says Congress shall provide for the 'general welfare of the United States.'? Surely, healthy Americans contribute to the nation's general welfare." That's precisely the response I'd expect from your average law professor, congressman or derelict U.S. Supreme Court justice. Let's look at what the men who wrote the Constitution had to say about its general welfare clause. In a letter to Edmund Pendleton, James Madison, the father of the Constitution, said, "If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one ..." Madison also said, "With respect to the two words "general welfare," I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators." Thomas Jefferson said, "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."

If you compare the vision of our nation's founders to the behavior of today's Congress, White House and U.S. Supreme Court, you would have to conclude that there is no longer rule of law where there is a set of general rules applicable to all persons. Today, we are commanded by legislative thugs who, with Supreme Court sanction, issue orders commanding particular people to do particular things. Most Americans neither understand nor appreciate the spirit and letter of the Constitution and accept Congress' arbitrary orders and privileges based upon status.

What to do? Thomas Jefferson advised, "Whensoever the General (federal) Government assumes undelegated powers, its acts are unauthoritative, void, and of no force." That bit of Jeffersonian advice is dangerous. While Congress does not have constitutional authority for most of what it does, it does have police and military power to inflict great pain and punishment for disobedience.

3/10/2009: Subsidizing Bad Decisions by Thomas Sowell

Now that the federal government has decided to bail out homeowners in trouble, with mortgage loans up to $729,000, that raises some questions that ought to be asked, but are seldom being asked.

Since the average American never took out a mortgage loan as big as seven hundred grand-- for the very good reason that he could not afford it-- why should he be forced as a taxpayer to subsidize someone else who apparently couldn't afford it either, but who got in over his head anyway?

Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house, but who went ahead and bought one anyway?

We hear a lot of talk in some quarters about how any one of us could be in the same financial trouble that many homeowners are in if we lost our job or had some other misfortune. The pat phrase is that we are all just a few paydays away from being in the same predicament.

Another way of saying the same thing is that some people live high enough on the hog that any of the common misfortunes of life can ruin them.

Who hasn't been out of work at some time or other, or had an illness or accident that created unexpected expenses? The old and trite notion of "saving for a rainy day" is old and trite precisely because this has been a common experience for a very long time.

What is new is the current notion of indulging people who refused to save for a rainy day or to live within their means. In politics, it is called "compassion"-- which comes in both the standard liberal version and "compassionate conservatism."

The one person toward whom there is no compassion is the taxpayer.

The current political stampede to stop mortgage foreclosures proceeds as if foreclosures are just something that strikes people like a bolt of lightning from the blue-- and as if the people facing foreclosures are the only people that matter.

What if the foreclosures are not stopped?

Will millions of homes just sit empty? Or will new people move into those homes, now selling for lower prices-- prices perhaps more within the means of the new occupants?

The same politicians who have been talking about a need for "affordable housing" for years are now suddenly alarmed that home prices are falling. How can housing become more affordable unless prices fall?

The political meaning of "affordable housing" is housing that is made more affordable by politicians intervening to create government subsidies, rent control or other gimmicks for which politicians can take credit.

Affordable housing produced by market forces provides no benefit to politicians and has no attraction for them.

Study after study, not only here but in other countries, show that the most affordable housing is where there has been the least government interference with the market-- contrary to rhetoric.

When new occupants of foreclosed housing find it more affordable, will the previous occupants all become homeless? Or are they more likely to move into homes or apartments that they can afford? They will of course be sadder-- but perhaps wiser as well.

The old and trite phrase "sadder but wiser" is old and trite for the same reason that "saving for a rainy day" is old and trite. It reflects an all too common human experience.

Even in an era of much-ballyhooed "change," the government cannot eliminate sadness. What it can do is transfer that sadness from those who made risky and unwise decisions to the taxpayers who had nothing to do with their decisions.

Worse, the subsidizing of bad decisions destroys one of the most effective sources of better decisions-- namely, paying the consequences of bad decisions.

In the wake of the housing debacle in California, more people are buying less expensive homes, making bigger down payments, and staying away from "creative" and risky financing. It is amazing how fast people learn when they are not insulated from the consequences of their decisions.

Copyright © 2009 Salem Web Network. All Rights Reserved.

3/10/2009: The 10 Biggest Amateur Mistakes By the Obama Administration So Far by John Hawkins

During the 2008 presidential campaign, people speculated whether someone like Barack Obama, who has never really run anything or had any major achievements other than winning political office, could handle a three AM crisis call. Well, as it turns out, Obama has been such a bumbling incompetent that he probably couldn't handle a trip through a Wendy's drive-in window without a teleprompter telling him what to order and whether he wants a Coke or a Mountain Dew. Even though Obama has been in office less than two months, he has already made more boneheaded errors than most Presidents do in an entire term.

10) After doing the "We've got to have this stimulus package passed right this second or the economy is going to explode" routine so convincingly that not one single soul in Congress actually had time to read the entire bill before it was signed, Barack Obama then promptly went on a three day vacation to celebrate before he signed it. If the bill was so important that no one could even have time to read it before it was passed, then why wasn't it important enough for Obama to skip dinner at Table Fifty-Two in Chicago to immediately make it a law?

9) In a juvenile stunt, reminiscent of something a third grader might come up with, Secretary of State Hillary Clinton handed Russian foreign minister Sergei Lavrov a button that was supposed to say "reset." However, incredibly, the word on the button translated to "overcharge," not "reset." Apparently, despite the enormous deficit the government is going to run up this year, Team Obama forgot to budget enough money to hire someone who speaks Russian for the State Department. If only America could just press a button and reset the entire Obama presidency so far and start over.

8) When Barack Obama was trying to sell America his stimulus bill that will put the country more than a trillion dollars in debt, he alerted America that, "Caterpillar's chief executive…told him the company will rehire some laid-off workers if the stimulus bill passes." But, when he was asked about Obama's statement, Caterpillar CEO Jim Owens said, "I think realistically no. The truth is we're going to have more layoffs before we start hiring again."

7) A large part of Barack Obama's appeal was the idea of racial reconciliation. The implicit deal was that by putting our first black President in office, America would prove once and for all that it wasn't racist, and we could put all this silly squabbling about race in the rear view mirror once and for all. However, not only has it failed to work out that way, Obama's Attorney General Eric Holder issued an an insulting challenge on the topic to the American people,

"Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and I believe continue to be, in too many ways, essentially a nation of cowards."

Maybe someone should ask the poor guy who did an innocent cartoon for the New York Post that made fun of the stimulus bill and the rampaging monkey that was in the news why people might be afraid to get dragged into a debate about race.

6) Typically, Presidents don't pick fights with pundits and talk radio hosts for obvious reasons. It draws more attention to their criticisms, elevates their status, and comes across as thin skinned and a little creepy, much like Richard Nixon's "Enemies list."

But, the Obama Administration hasn't figured this out -- yet. They've launched attacks at Rick Santelli, Jim Cramer, and most prominently, Rush Limbaugh. Ratcheting up the creepiness factor a couple of notches in Limbaugh's case, the President of the United States, members of the mainstream media, and liberal interest groups are all coordinating an attack on a private individual for daring to criticize Barack Obama. That sounds more like something that would happen in the old Soviet Union than in the United States.

But happily, if you look at the results of the White House campaign, it has backfired in every instance. Rush Limbaugh is on pace to make more revenue by the end of March than he made all last year, there are Santelli inspired "Tea Parties" popping up all across the country, and every criticism of Obama that Jim Cramer utters is now linked by the Drudge Report.

5) The first task a new President engages in is bringing a staff on board. After choosing Joe Biden, who has behaved like he was kicked in the head by a horse as a child, things have really gone down hill from there. Bill Richardson quit as Commerce Secretary after coming under investigation. Republican Senator Judd Gregg accepted, then declined Obama's offer to be his Commerce Secretary over irreconcilable differences. Tom Daschle quit after having tax problems. So did Nancy Killefer. Ron Kirk also has tax problems, but he's trying to hang in there like Hilda Solis and another cabinet member who gets his own special entry -- and keep in mind, Obama has a considerable number of positions left to fill. Hey Barry, the word of the day is "vetting." You should look into it.

4) George Bush spent a lot of time strengthening our ties to Eastern European nations like Poland and the Czech Republic during his two terms in the White House. Yet, it took Barack Obama less than two months to undo much of Bush’s good work with those nations.

Obama wrote a "secret" letter to Dmitri Medvedev offering to leave Poland and the Czech Republic twisting in the wind on missile defense in return for Russia's help in stopping Iran from getting nukes. The problem was that the letter went public even as Russia turned down the deal. So, in other words, our friends in Eastern Europe were publicly alerted that we were willing to sell them down the river to the Russians, who they were already afraid of, and yet we got nothing out of the deal. That's a real "welcome to the Big Leagues" maneuver from the Russians for our naive, rookie President.

3) After making a stink by sending back a Winston Churchill bust, Barack Obama blew off a press conference with British Prime Minister Gordon Brown -- but, the real kicker was the gifts.

After Brown presented Obama with a pen holder crafted from the timbers of the 19th century British warship HMS President (whose sister ship, HMS Resolute, provided the wood for the Oval Office's desk), Obama offered up ... 25 DVDs of American movie classics.

The Brits offered Obama a thoughtful, priceless gift and he handed them back a bad Netflix queue that was probably picked up at Wal-mart earlier that day.

2) Choosing tax cheat Timothy Geithner to be his Treasury Secretary was such an incredible screw up that it deserves it own entry. It's mind boggling that any Administration would choose a tax cheat to run the department that's in charge of the IRS. Moreover, in Obama's case, he has already announced plans for the largest tax hike in American history, nearly a trillion dollars, and the man in charge of that effort doesn't pay his taxes? Prediction: a few years from now, if the New York Times isn't out of business by then, they'll write an article telling you that they're baffled, baffled I tell you, by the massive increase in the number of people cheating on their taxes.

1) Barack Obama may be a liberal thriller, but he's also a stock market killer. Since he came into office, his Bunyanesque new spending proposals, his plans for a trillion dollar tax hike, his regular badmouthing of the economy, and his incessant tinkering with banks and the housing market have caused the stock market to go into a freefall. Granted, stocks would have likely dropped anyway because of the economic crunch we're in, but the market wouldn't have already reached the lowest level since 1997 without lots of help from Obama. As Democratic financial wiz, Jim Cramer, has said of Obama’s performance, "it's amateur hour at our darkest moment" and it's "crushing nest eggs around the nation."

3/10/2009: The Orwellian Presidential Bully Pulpit by David Limbaugh

Does the following statement from Melody C. Barnes, director of President Barack Obama's Domestic Policy Council, strike you as a) patronizing or b) Orwellian? "The president believes that it's particularly important to sign this (presidential memorandum authorizing federal funding for human embryonic stem cell research) so that we can put science and technology back at the heart of pursuing a broad range of national goals."

Your answer should be both a and b, especially when considered in conjunction with another presidential memorandum "aimed at insulating scientific decisions across the federal government from political influence."

The president brazenly sermonizes against scientifically challenged conservatives while triggering federal funding of research that is scientifically controversial and preparing to impose cap and trade penalties on corporate America in deference to global warming junk science.

While you won't hear much about this in the mainstream media, there is a meeting currently taking place in New York City that serves as an ironic backdrop for Obama's embryonic stem cell order.

OneNewsNow.com reports that more than 70 scientists -- representing the views of tens of thousands more scientists -- are meeting at The Heartland Institute's second annual International Conference on Climate Change to make the case that politically motivated alarmism, not science, is driving climate change activism, which potentially threatens the sovereignty of the United States.

At the conference, European Union and Czech Republic President Vaclav Klaus likened those pushing global warming hysteria to the communists of Old Europe, who refused to listen to opposing views. Their goal, Klaus warned, is to control the public.

Sounds familiar. The Obama administration repeatedly implements policies that are in direct contradiction to its benign rhetoric, which is what I mean by "Orwellian." Consider its fiscal recklessness accompanied by promises of fiscal responsibility, including its staggering denial that it is promoting earmarks. Or its boasts of bipartisanship while shutting Republicans out of the legislative process. Or calling its plan to chill an employee's choice to opt out of union membership the "Employee Free Choice Act."

But Obama's statements while introducing his embryonic stem cell executive order truly take the cake. He said: "But after much discussion, debate and reflection, the proper course has become clear. The majority of Americans, from across the political spectrum and from all backgrounds and beliefs, have come to a consensus that we should pursue this research -- that the potential it offers is great, and with proper guidelines and strict oversight, the perils can be avoided."

It would take several columns to parse that statement alone, but just look at the misleading phraseology: "The majority of Americans … have come to a consensus." Assuming a majority favors embryonic stem cell research -- and even federal taxpayer funding for it -- is it not deceptive to imply that a majority constitutes a consensus?

Of course, those who agree on a proposition always share a consensus among themselves, but doesn't "consensus" suggest that there is almost unanimity on the issue?

The answer is yes. The Obama left repeatedly uses this type of language to manufacture the impression that only a fringe minority disagrees with the overwhelmingly accepted majority view. They declare a consensus when there isn't one and bully the true opposition from voicing their concerns. They do it with global warming, embryonic stem cell research, "intelligent design" theory and now Keynesian economics.

They have plenty of help from the liberal lapdog media. They dutifully report that Obama is lifting a ban on embryonic stem cell research when there has been no ban on such research, only a restriction on federal funding for it. Nowhere do they acknowledge the genuine ethical objections to or the scientific problems that have been encountered in such research. Instead, they just portray opponents of federal subsidies for the practice as Luddites.

While the left ridicules those who don't buy into their decreed "consensuses," they are the ones who suppress scientific inquiry and debate on various issues. They are the ones who suppress publication of facts that contradict their agenda.

You'll rarely hear from them about the failures and hazards of embryonic stem cell research, such as a report that embryonic cells injected into a boy caused multiple brain tumors. You'll never hear them speak about the increasing successes of adult stem cell research, even though adult stem cell science is less expensive, more accessible, probably involves less cancer-causing risk, and is not ethically controversial.

Beware; when the Obama left mounts its rhetorical high horse and tells us it is advancing science in furtherance of a consensus, it is most likely signaling that it is implementing a highly controversial, scientifically dubious policy whose opposition it intends to intimidate and silence with the formidable force of the presidential bully pulpit.

3/10/209: Broad Generalizations by Mike S. Adams

...liberalism is an emotional disorder rather than a political philosophy. I believe I can say that since I am a former liberal.

[Read it all]

3/10/2009: Now that Obama claims to have "taken ideology out of science" what about Global Warming? Have we merely replaced right-wing idiots with left-wing idiots? Where is the science in Global Warming? There is none; it is just an excuse for more government control and scams by crooks like Al Gore. We all care about the environment, but rational thinkers (which excludes most liberals and conservatives) believe in the scientific method and there is little or no evidence for anthropomorphic global warming.

3/8/2009: Why Obama Wants America to Fail by Kevin McCullough

"Not letting a good crisis go to waste."

This idea popped up multiple times in the past seven days as multiple members of Obama's administration seemed to be in total agreement. Their conclusion: by not quickly solving the crisis of the American economy, we can create drastic social and structural change. Not surprisingly, this is the path even President Obama alluded to in his Saturday address to the nation.

On Saturday the President challenged his country to see its hard times as a chance to "discover great opportunity in the midst of great crisis."

"That is what we can do and must do today. And I am absolutely confident that is what we will do," Obama said in his address.

But is that what "we the people" hired him to do? To use "great opportunities" to change the face and fabric of the nation?

"We the People" were promised swift and effective action towards getting the markets repaired by President Obama, but they have dropped about 1400 points each week since he's taken power.

"We the People" were promised greater fiscal responsibility by candidate Obama, yet his own proposals throw us down a black hole of debt, the likes of which we've never seen in a single year of an administration, much less in the first sixty days of one.

"We the People" were promised the greatest commitment ever to oversight of the federal use of the money we send the government. What we've been handed is a series of embarrassing nominations of people who are willing to use the force of a gun to make you pay your taxes, but did not think twice about not paying theirs.

"We the People" were told that his push for a stimulus would get people working again, yet barely 3% of it goes to actual job creation and projects that can even be initiated in the next 24 months.

"We the People" were promised greater employment fulfillment and more vibrant business and economic outlooks when Obama's administration finally put together their plan to save the lending institutions. What we are dealing with is a greater spike in the unemployment numbers in Obama's first sixty days than was experienced under President Bush in his first seven years.

"We the People" were promised an earmark free, pork free, bare bones budget, but as of last count Obama's omnibus bill contained 9200 earmarks.

So I don't find it surprising that recently even Obama supporters are now openly questioning his plan to revive the economy.

As of last month, we know that more than 55% of the American people wanted help for the economy to come primarily through the reduction of taxes. The same poll found that only a little over 20% think more government spending was the answer.

Whoopi Goldberg surprised even herself on The View this week, unintentionally criticizing President Obama's plan to tax the American people into better economic conditions. She doesn't believe that she should have to turn around and write a check to Washington DC for nearly 40% of what she earns.

Who could blame her?

Yet it is important to point out that there are now far more economists on record that have advised the President against larger government and pushed him towards tax relief, than those who supported the increased centralized control of a soft socialism that President Obama seems destined to aim for.

And "We the People" should be asking ourselves why?

If it makes no sense to the free market economists that populate the best economics programs across the nation, if it weakens the ability for the average family to make ends meet, and if it does not increase the number of people actually working, why is President Obama so stubbornly continuing to pursue his economically diabolical plan of destruction?

Because it's part of the master plan to "not let a good crisis go to waste."

President Obama knows the history of recessions and how Americans get out of them. He knows, for example, that if he gave back to the American family in just pure cash handouts what he is instead planning on taxing them (with interest) in the days to come, that the number would loom between $25,000-$65,000 per family, for every family in America.

But pretending to be doing something about the problem is only half the strategy for Obama. He truly intends to see socialized health care, and European styled labor agreements become reality in America. He knows the consequences of doing such things, he's seen all the projections and what the outcomes would be, but he's doing it anyway.

But there is one tiny problem standing in his way to getting there--"We The People!"

He knows that in order to be forced down paths that we don't wish to go, the only way he gets us to change our mind is to create abject suffering and misery.

Then in Venezuelan styled cries for help, he can promise to take America to a better place economically, a place of greater care, a place of true serenity. A place like Venezuela.

Rachel Maddow told Jay Leno this week that she found it "creepy" that someone would want the President's policies to fail.

I find it creepy that Rachel Maddow is so ignorant that she refuses to think analytically concerning her President's plans for this nation. After all she is one of us--"We The People."

President Obama and his team do not intend to solve this crisis as quickly as they possibly could--like he promised on the campaign trail. Instead, his intention is to let us bleed until the whimper we are expressing now finally builds into an all out, gut wrenching, cry of anguish. He does not care what must be done to arrive at that reality, only that we arrive there.

Many think the Obama administration is incompetent, and surely they've proved this, from the vetting of their appointments to handling the limited foreign relationships they've entertained thus far.

But on the domestic agenda they are as sly as foxes, and our future is the henhouse.

And in refusing to allow a "good crisis" to go to waste, the strategic move to remake Amerika anew has begun.

3/8/2009: Whatever happened to global warming? by Jeff Jacoby

SUPPOSE the climate landscape in recent weeks looked something like this:

Half the country was experiencing its mildest winter in years, with no sign of snow in many Northern states. Most of the Great Lakes were entirely ice-free. Last December 25th, not a single Canadian province had woken to a white Christmas. There was a new scientific study discussing a mysterious surge in global temperatures -- a warming trend more intense than computer models had predicted. Other scientists were admitting that, because of a bug in satellite sensors, they had been vastly overestimating the extent of Arctic sea ice.

If all that were happening on the climate-change front right about now, do you think you'd be hearing about it on the nightly news? Seeing it on Page 1 of your daily paper? Would politicians be exclaiming that global warming was even more of a crisis than they'd thought? Would environmentalists be skewering global-warming "deniers" for clinging to their skepticism despite the growing case against it?

Without a doubt.

But it isn't such hints of a planetary warming trend that have been piling up in profusion lately. Quite the opposite.

The United States has shivered through an unusually severe winter, with snow falling in such unlikely destinations as New Orleans, Las Vegas,Alabama, and Georgia. On December 25th, every Canadian province woke up to a white Christmas, something that hadn't happened in 37 years. Earlier this year, Europe was gripped by such a killing cold wave that trains were shut down in the French Riviera and chimpanzees in the Rome Zoo had to be plied with hot tea to keep them warm. Last week, satellite data showed three of the Great Lakes -- Erie, Superior, and Huron -- almost completely frozen over. In Washington, DC, what was supposed to be a massive rally against global warming was upstaged by the heaviest snowfall of the season, which all but shut down the capital.

Meanwhile, the National Snow and Ice Data Center has acknowledged that due to a satellite sensor malfunction, it had been underestimating the extent of Arctic sea ice to the tune of 193,000 square miles -- an area the size of Spain. In a new study, University of Wisconsin researchers Kyle Swanson and Anastasios Tsonis conclude that global warming could be going into a decades-long remission. The current global cooling "is nothing like anything we've seen since 1950," Swanson told Discovery News. Yes, global cooling: 2008 was the coolest year of the past decade -- average global temperatures have not exceeded the record high measured in 1998, notwithstanding the carbon-dioxide human beings continue to pump into the atmosphere.

None of this proves conclusively that a period of planetary cooling is irrevocably underway, or that anthropogenic CO2 emissions are not the main driver of global temperatures, or that concerns about a hotter world are overblown. Individual weather episodes, it always bears repeating, are not the same as broad climate trends.

But considering how much attention would have been lavished on a comparable run of hot weather or on a warming trend that was plainly accelerating, shouldn't the recent cold phenomena and the absence of any global warming during the past 10 years be getting a little more notice? Isn't it possible that the most apocalyptic voices of global-warming alarmism might not be the only ones worth listening to?

There is no shame in conceding that science still has a long way to go before it fully understands the immense complexity of the Earth's ever-changing climate(s). It would be shameful not to concede it. The climate models on which so much global-warming doomsaying rests "do not begin to describe the real world that we live in," says Freeman Dyson, the eminent physicist and futurist. "The real world is muddy and messy and full of things that we do not yet understand."

But for many people, the science of climate change is not nearly as compelling as the religion of climate change. When Al Gore insisted yet again at a conference last Thursday that there can be no debate about global warming, he was speaking not with the authority of a man of science, but with the closed-minded dogmatism of a religious zealot. Dogma and zealotry have their virtues, no doubt. But if we want to understand where global warming has gone, those aren't the tools we're going to need.

(Jeff Jacoby is a columnist for The Boston Globe.)

LETTER FROM THE BOSS......

As the CEO of this organization, I have resigned myself to the fact that Barrack Obama is our President and that our taxes and government fees will increase in a BIG way. To compensate for these increases, our prices would have to increase by about 10%.

But since we cannot increase our prices right now due to the dismal state of the economy, we will have to lay off six of our employees instead. This has really been bothering me, since I believe we are family here and I didn't know how to choose who would have to go.

So, this is what I did. I walked through our parking lot and found six Obama bumper stickers on our employees' cars and have decided these folks will be the ones to let go. I can't think of a more fair way to approach this problem. They voted for change; I gave it to them.

I will see the rest of you at the annual company picnic.

"A just security to property is not afforded by that government, under which unequal taxes oppress one species of property and reward another species." --James Madison

If you subtract from the voting population those who work for the government (at any level), those who sponge off the government and the taxpayers (through welfare, medicaid, etc.), and those who live off government contracts, you are left with a public that generally has nothing but contempt for government. Those of us not lining up at the government trough see nothing noble about the arrogant, lazy, pompous, stupid, overpaid lumps of garbage we deal with in government offices. Add to that the arbitrary fines, penalties, and other abuses heaped on taxpayers and others for the slightest infractions, plus the ridiculous fees charged for doing business, and the widely known fact that the government is the slowest payer on the planet, and any thinking person can figure out why this contempt is so deep. Thankfully, there is still a (unfortunately, small) majority of citizens who see what's happening, and the outrage is already building. There will certainly be a lot of damage done to our society in the next two years, by all the "do-gooders" like Obama who so arrogantly believe they know whats best for us. But 2010 will make 1994 look like a small wave. Americans don't buy the liberal socialist crap. The majority still understand that liberalism is flat out stupid. I only hope that this time, the Republicans don't again fall victim to the old adage that "power corrupts; absolute power corrupts absolutely." But I doubt it.

n

Fund of Funds = Den of Thieves