“Is life so dear or peace so sweet as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take, but as for me, give me liberty or give me death!” — Patrick Henry, 23 March 1775

"Democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury, with the result that a democracy always falls under loose fiscal policy." — Sir Arthur Francis Tyler

“The great principles of right and wrong are legible to every reader; to pursue them requires not the aid of many counselors. The whole art of government consists in the art of being honest.” —Thomas Jefferson

If stupidity got us into this mess, then why can't it get us out?" — Will Rogers

“Be wary of strong drink. It can make you shoot at tax collectors – and miss.” — Robert Heinlein

Alexander Hamilton started the U.S. Treasury with nothing, and that was the closest the country ever came to breaking even. — Will Rogers

"I consider the foundation of the Constitution as laid on this ground that 'all powers not delegated to the United States, by the Constitution, nor prohibited by it to the states, are reserved to the states or to the people.' To take a single step beyond the boundaries thus specially drawn around the powers of Congress, is to take possession of a boundless field of power, not longer susceptible of any definition." — Thomas Jefferson (Opinion on the Constitutionality of a National Bank, 15 February 1791)

11/27/2008: Subject: Quotes from Thomas Jefferson: Some very interesting quotations of Thomas Jefferson who has seemingly foretold the future......OUR future!

• When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.
• The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.
• It is incumbent on every generation to pay its own debts as it goes, a principle which, if acted on, would save one-half the wars of the world.
• I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.
• My reading of history convinces me that most bad government results from too much government.
• No free man shall ever be debarred the use of arms.
• The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.
• The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
• To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.
• and a very Interesting quote in light of the present financial crisis, it's interesting to read what Thomas Jefferson said in 1802: "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."

Let's hope the printing presses run out of ink!!!

11/27/2008: from the Daily Reckoning

Financial markets are part of public life. As a consequence they follow the rules of all public spectacles. That is, they are one part rational and sensible...one part incomprehensible...and one part pure humbug. You never know exactly which part it is you’re looking at.

But the markets are also moral, not mechanical. That is, they follow moral rules, such as – Thou Shalt Buy Low and Sell High...Thou Shalt Save Thy Money...Thou Shalt Not Speculate Unless Thou Knowest Exactly What Thou Art Doing.

Break those commandments...and you’re on the road to money Hell. No point in tinkering with the machine. You can’t ‘fix’ it. That’s just the way it works. Financial sins are punished, one way or another.

But moral lessons – as opposed to mechanical knowledge – are cyclical, rather than cumulative. One generation learns. The next forgets. That’s why the biggest market trends tend to follow great, long cycles – approximately generational in length. In 1929, for example, stocks hit a generational high. They didn’t recover until 1954 – 25 years later. They reached a peak in 1966...and then declined until 1982. They didn’t reach another major peak until 2000 – 34 years later.

We all know what has happened since. The market tried to correct in 2001-2002, but the feds wouldn’t let it. They inflated the biggest bubble of credit and speculation in history...

...that bubble has just burst.

What now? Well, we can expect a long period of regret, reorganizing and repentance. It takes time to undo mistakes. It takes time to learn. It takes time to correct the errors of a 25-year bull market.

If the real top of the bull market cycle came in 2000, we will probably see the next peak around 2025. Meanwhile, there is a dark valley to cross.

But wait...there’s more.

Because while the private economy is reluctantly owning up to its mistakes...going into rehab...making amends...rebuilding balance sheets....and promising never to do such stupid things again...

...our leaders are doing all they can to stop the learning process.

“Here’s $800 billion,” was yesterday’s temptation. “Go out and have a good time.”

“Rescue, Part 2” is how the International Herald Tribune describes it. The plan itself has two features. In the first, the feds will spend $200 billion to buy up loans made to consumers and small business. In the second, another $600 billion will be offered to the mortgage industry.

Our colleagues at contrarianprofits.com describe the program:

“It’s an $800 billion slush fund aimed at loosening credit for homebuyers, consumers and small businesses.

“And it may get bigger...

“Treasury Secretary Hank Paulson has left the door open for more funds. He says, “The facility may be expanded over time and eligible asset classes may be expanded later.”

“Why doesn’t this come as a surprise?

“So there is still no telling how much more money the government will throw at this crisis. But our back-of-the-envelope calculations puts the running total at over $8 trillion.”

The Washington Post sums it up beautifully. “A year ago, the central bank had assets of $868 billion, of which about 90 percent was in Treasuries. Last week, it had assets of $2.2 trillion on its books, of which 22 percent was in Treasuries.”

How this will end, we don’t really know.

But we know this: You can’t pump $8 trillion in funny money into the economy and not expect consequences.”

Meanwhile, the Europeans don’t want to be left behind:

“The European Commission urged EU governments Wednesday to jointly combat the economic slowdown with euro200 billion (US$256.22 billion) in spending and tax cuts to boost growth and consumer and business confidence.

“If fully enacted, its two-year ``European Economic Recovery Plan'' would see the 27 EU governments spend 1.5 percent of the bloc's gross domestic product to halt the slowdown that has already pushed some European nations into recession.”

But let’s not get distracted by the details. The markets are teaching people a lesson. The feds don’t like it. They want people to believe that the economy is a mechanical system...that they just need to find the right screws to turn...and the right levers to pull.

Since the “machine” is visibly slowing down, these simpletons think they can get it going again. Just add more fuel!

Of course, as we saw in 2001-2007, the feds can certainly have a big effect on the economy. Their “economy as a machine” theory often seems to work. In fact, practically everyone believes it will work. They just argue about which screw to turn...and who should do the screwing.

The Keynesians say you turn the screw marked “fiscal policy.” When private spending slumps, just replace it with government spending. Pretty simple, no? But when the feds turned that screw – arguably, too far – in the ‘60s and ‘70s, it didn’t seem to work. Instead, they got stagflation.

So, Milton Friedman pointed to the lever marked “monetary policy.” Give that a pull, he said. It will make sure that the economy always has just the right amount of credit at just the right price. So, Maggie Thatcher and Ronald Reagan both pulled on the monetary policy lever. And Alan Greenspan swore by it. He yanked it so hard in the recession of 2001-2002, the handle practically broke off. Milton Friedman was still alive at the time and actually approved of Greenspan’s handiwork, saying that he had ‘spared the economy a worse recession,’ or words to that effect.

Now the machine has broken down again. It has thrown itself into reverse; the 3rd quarter showed an absolute decline in US output – and it’s speeding up in the wrong direction! And now the terrified feds are ‘pulling out all the stops.’ Which means they using both Keynes and Friedman, and every other tool they can get their hands on.

But the real problem is this: the “economy as a machine” theory is much too simple. No theory, said the philosopher Godel, is ever complete. In science, each one is a stepping stone, towards a fuller and more complete theory. Even theories that take you in the wrong direction are useful – at least in science. They are eliminated...and discarded, so science can take a new direction.

In economics, no theory is ever discarded. Instead, they are merely recycled as market conditions change. “Markets make opinions,” say the oldtimers. In a boom, it is the free market theories everyone wants. “Leave the market alone...it will take care of itself,” they say. But in a bust, the cry goes up: “Help!”

For the moment, Mr. Market’s correction still dominates the economy. One way or another, it will continue for many years. But the Feds are turning the screws and pulling on the levers. Keynes is in fashion...for the present. But Friedman is still around too. Between the lot of them, they ought to be able to do some spectacular damage

But there is plenty of room for surprises...and more mischief from the feds. At some point, we presume the feds will succumb to the lure of the printing press. By some accounts, they already have. Then, we’ll really see some excitement...

11/27/2008: Happy Thanksgiving!

The Great Thanksgiving Hoax by Richard J. Marbury

Each year at this time school children all over America are taught the official Thanksgiving story, and newspapers, radio, TV, and magazines devote vast amounts of time and space to it. It is all very colorful and fascinating.

It is also very deceiving. This official story is nothing like what really happened. It is a fairy tale, a whitewashed and sanitized collection of half- truths which divert attention away from Thanksgiving's real meaning.

The official story has the pilgrims boarding the Mayflower, coming to America and establishing the Plymouth colony in the winter of 1620-21. This first winter is hard, and half the colonists die. But the survivors are hard working and tenacious, and they learn new farming techniques from the Indians. The harvest of 1621 is bountiful. The Pilgrims hold a celebration, and give thanks to God. They are grateful for the wonderful new abundant land He has given them.

The official story then has the Pilgrims living more or less happily ever after, each year repeating the first Thanksgiving. Other early colonies also have hard times at first, but they soon prosper and adopt the annual tradition of giving thanks for this prosperous new land called America.

The problem with this official story is that the harvest of 1621 was not bountiful, nor were the colonists hardworking or tenacious. 1621 was a famine year and many of the colonists were lazy thieves.

In his `History of Plymouth Plantation,' the governor of the colony, William Bradford, reported that the colonists went hungry for years, because they refused to work in the fields. They preferred instead to steal food. He says the colony was riddled with "corruption," and with "confusion and discontent." The crops were small because "much was stolen both by night and day, before it became scarce eatable."

In the harvest feasts of 1621 and 1622, "all had their hungry bellies filled," but only briefly. The prevailing condition during those years was not the abundance the official story claims, it was famine and death. The first "Thanksgiving" was not so much a celebration as it was the last meal of condemned men.

But in subsequent years something changes. The harvest of 1623 was different. Suddenly, "instead of famine now God gave them plenty," Bradford wrote, "and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God." Thereafter, he wrote, "any general want or famine hath not been amongst them since to this day." In fact, in 1624, so much food was produced that the colonists were able to begin exporting corn.

What happened?

After the poor harvest of 1622, writes Bradford, "they began to think how they might raise as much corn as they could, and obtain a better crop." They began to question their form of economic organization.

This had required that "all profits & benefits that are got by trade, working, fishing, or any other means" were to be placed in the common stock of the colony, and that, "all such persons as are of this colony, are to have their meat, drink, apparel, and all provisions out of the common stock." A person was to put into the common stock all he could, and take out only what he needed.

This "from each according to his ability, to each according to his need" was an early form of socialism, and it is why the Pilgrims were starving. Bradford writes that "young men that are most able and fit for labor and service" complained about being forced to "spend their time and strength to work for other men's wives and children." Also, "the strong, or man of parts, had no more in division of victuals and clothes, than he that was weak." So the young and strong refused to work and the total amount of food produced was never adequate.

To rectify this situation, in 1623 Bradford abolished socialism. He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit. In other words, he replaced socialism with a free market, and that was the end of famines.

Many early groups of colonists set up socialist states, all with the same terrible results. At Jamestown, established in 1607, out of every shipload of settlers that arrived, less than half would survive their first twelve months in America. Most of the work was being done by only one-fifth of the men, the other four-fifths choosing to be parasites. In the winter of 1609-10, called "The Starving Time," the population fell from five-hundred to sixty.

Then the Jamestown colony was converted to a free market, and the results were every bit as dramatic as those at Plymouth. In 1614, Colony Secretary Ralph Hamor wrote that after the switch there was "plenty of food, which every man by his own industry may easily and doth procure." He said that when the socialist system had prevailed, "we reaped not so much corn from the labors of thirty men as three men have done for themselves now."

Before these free markets were established, the colonists had nothing for which to be thankful. They were in the same situation as Ethiopians are today, and for the same reasons. But after free markets were established, the resulting abundance was so dramatic that the annual Thanksgiving celebrations became common throughout the colonies, and in 1863, Thanksgiving became a national holiday.

Thus the real reason for Thanksgiving, deleted from the official story, is: Socialism does not work; the one and only source of abundance is free markets, and we thank God we live in a country where we can have them.

11/26/2008: Ivan and Boris Again by Thomas Sowell

There is an old Russian fable, with different versions in other countries, about two poor peasants, Ivan and Boris. The only difference between them was that Boris had a goat and Ivan didn't. One day, Ivan came upon a strange-looking lamp and, when he rubbed it, a genie appeared. She told him that she could grant him just one wish, but it could be anything in the world.

Ivan said, "I want Boris' goat to die."

Variations on this story in other countries suggest that this tells us something about human beings, not just Russians.

It may tell us something painful about many Americans today, when so many people are preoccupied with the pay of corporate CEOs. It is not that the corporate CEOs' pay affects them so much. If every oil company executive in America agreed to work for nothing, that would not be enough to lower the price of a gallon of gasoline by a dime. If every General Motors executive agreed to work for nothing, that would not lower the price of a Cadillac or a Chevrolet by one percent.

Too many people are like Ivan, who wanted Boris' goat to die.

It is not even that the average corporate CEO makes as much money as any number of professional athletes and entertainers. The average pay of a CEO of a corporation big enough to be included in the Standard & Poor's index is less than one-third of what Alex Rodriguez makes, about one-tenth of what Tiger Woods makes and less than one-thirtieth of what Oprah Winfrey makes.

But when has anyone ever accused athletes or entertainers of "greed"?

It is not the general public that singles out corporate CEOs for so much attention. Politicians and the media have focused on business leaders, and the public has been led along, like sheep.

The logic is simple: Demonize those whose place or power you plan to usurp.

Politicians who want the power to micro-manage business and the economy know that demonizing those who currently run businesses is the opening salvo in the battle to take over their roles.

There is no way that politicians can take over the roles of Alex Rodriguez, Tiger Woods or Oprah Winfrey. So they can make any amount of money they want and it doesn't matter politically.

Those who want more power have known for centuries that giving the people somebody to hate and fear is the key.

In 18th century France, promoting hatred of the aristocracy was the key to Robespierre's acquiring more dictatorial power than the aristocracy had ever had, and using that power to create a bigger bloodbath than anything under the old regime.

In the 20th century, it was both the czars and the capitalists in Russia who were made the targets of public hatred by the Communists on their road to power. That power created more havoc in the lives of more people than czars and capitalists ever had combined.

As in other countries and other times, today it is not just a question of which elites win out in a tug of war in America. It is the people at large who have the most at stake.

We have just seen one of the biggest free home demonstrations of what happens in an economy when politicians tell businesses what decisions to make.

For years, using the powers of the Community Reinvestment Act and other regulatory powers, along with threats of legal action if the loan approval rates varied from the population profile, politicians have pressured banks and other lending institutions into lending to people they would not lend to otherwise.

Yet, when all this blows up in our faces and the economy turns down, what is the answer? To have more economic decisions made by politicians, because they choose to say that "deregulation" is the cause of our problems.

Regardless of how much suffocating regulation may have been responsible for an economic debacle, politicians have learned that they can get away with it if they call it "deregulation."

No matter what happens, for politicians it is "heads I win and tails you lose." If we keep listening to the politicians and their media allies, we are all going to keep losing, big time. Keeping our attention focused on CEO pay-- Boris' goat-- is all part of this game. We are all goats if we fall for it.

11/26/2008: http://howobamagotelected.com/

On November 4th, 2008, millions of Americans were shocked that a man of Barack Obama's limited experience, extreme liberal positions, and radical political alliances could be elected President of the United States. For many of these Americans, the explanation was rather simple... the news media, completely enamored with Obama, simply refused to do their job.

On Election day, twelve Obama voters were interviewed extensively right after they voted to learn how the news media impacted their knowledge of what occurred during the campaign. These voters were chosen for their apparent intelligence and verbal abilities and willingness to express their opinions to a large audience. The rather shocking video below seeks to provide some insight into which information broke through the news media clutter and which did not.

Zogby Poll

512 Obama Voters 11/13/08-11/15/08 MOE +/- 4.4 points

97.1% High School Graduate or higher, 55% College Graduates

Results to 12 simple Multiple Choice Questions

57.4% could NOT correctly say which party controls congress (50/50 shot just by guessing)

71.8% could NOT correctly say Joe Biden quit a previous campaign because of plagiarism (25% chance by guessing)

82.6% could NOT correctly say that Barack Obama won his first election by getting opponents kicked off the ballot (25% chance by guessing)

88.4% could NOT correctly say that Obama said his policies would likely bankrupt the coal industry and make energy rates skyrocket (25% chance by guessing)

56.1% could NOT correctly say Obama started his political career at the home of two former members of the Weather Underground (25% chance by guessing).

And yet.....

Only 13.7% failed to identify Sarah Palin as the person on which their party spent $150,000 in clothes

Only 6.2% failed to identify Palin as the one with a pregnant teenage daughter

And 86.9 % thought that Palin said that she could see Russia from her "house," even though that was Tina Fey who said that!!

Only 2.4% got at least 11 correct.

Only .5% got all of them correct. (And we "gave" one answer that was technically not Palin, but actually Tina Fey)

11/25/2008: ‘Jolting’ the Economy: Does our economy need it? And . . . will it help? By Thomas Sowell

Barack Obama says that we have to “jolt” the economy. That certainly makes sense, if you take the media’s account of the economy seriously — but should the media be taken seriously?

Amid all the political and media hysteria, national output has declined by less than one-half of one percent. In fact, it may not have declined even that much — or at all — when the statistics are revised later, as they very often are.

We are not talking about the Great Depression, when output dropped by one-third and unemployment soared to 25 percent.

What we are talking about is a golden political opportunity for politicians to use the current financial crisis to fundamentally change an economy that has been successful for more than two centuries, so that politicians can henceforth micro-manage all sorts of businesses and play Robin Hood, taking from those who are not likely to vote for them and transferring part of their earnings to those who will vote for them.

For that, the politicians need lots of hype, and that is being generously supplied by the media.

Whatever the merits of trying to shore up some financial institutions in order to prevent a major disruption of the credit flows that keep the whole economy going, what has in fact been done has been to create a huge pot of money — hundreds of billions of dollars — that politicians can use to give out goodies hither and yon, to whomever they please for whatever reason they please.

No doubt we could all use a few billion dollars every now and then. But the question of who actually gets it will be strictly in the hands of Barack Obama, Nancy Pelosi, and Harry Reid. It is one of the few parts of the legacy of the Bush administration that the Democrats are not likely to criticize.

Much as we may deplore partisanship in Washington, bipartisan disasters are often twice as bad as partisan disasters — and this is a bipartisan disaster in the making.

Too many people who argue that there is a beneficial role for the government to play in the economy glide swiftly from that to the conclusion that the government will in fact confine itself to playing such a role.

In the light of history, this is a faith which passeth all understanding. Even in the case of the Great Depression of the 1930s, increasing numbers of economists and historians who have looked back at that era have concluded that, on net balance, government intervention prolonged the Great Depression.

Many of those who have, over the years, praised the fact that this was the first time that the federal government took responsibility for trying to get the country out of a depression do not ask what seems like the logical follow-up question: Did this depression therefore end faster than other depressions where the government stood by and did nothing?

The Great Depression of the 1930s was in fact the longest-lasting of all our depressions.

Government policy in the 1930s was another bipartisan disaster. Despite a myth that Herbert Hoover was a “do nothing” president, he was the first President of the United States to step in to try to put the economy back on track.

With the passing years, it has increasingly been recognized that what FDR did was largely a further extension of what Hoover had done. Where Hoover made things worse, FDR made them much worse.

Herbert Hoover did what Barack Obama is proposing to do. Hoover raised taxes on high-income people and put restrictions on international trade, in order to try to save American jobs. It didn’t work then and it is not likely to work now.

Perhaps the most disastrous of all the counterproductive policies of the federal government was the National Industrial Recovery Act under FDR, which set out to do exactly what the politicians today want to do — micro-manage businesses.

Fortunately, the Supreme Court declared that Act unconstitutional, sparing the country an even bigger disaster.

Today, it is unlikely that the courts will let anything as old-fashioned as the Constitution stand in the way of “change.” In short, the economy today has some serious problems but things are not desperate, though they can be made desperate by politicians.

— Thomas Sowell is a senior fellow at the Hoover Institution.

11/25/2008: "One of the main reasons there's all of this 'money on the sidelines' out there among private investors is that Wall Street doesn't know what the government will do next. Will it bail out the auto industry? The insurance companies? Which taxes will go up? How far will interest rates go down? How long will the federal government own stakes in the banks? Will more stimulus checks go out? If so, how big will the deficit get? Interventionists, bailout czars and 'bold experimenters' in all parties claim to be like firefighters; they can't stop what they're doing until the fire is out. But this analogy only works if you understand the nature of the fire. If it's a credit crisis, that's one thing. If it's uncertainty, it's quite another. And if the problem right now is uncertainty, then these aren't firefighters, they're arsonists. Treasury Secretary Henry Paulson told Congress he'd spend his kitty of tax dollars on bad mortgage-backed securities. Instead, in the spirit of bold experimentation, he's spent much of it to date buying banks. Obama insisted he had a specific plan for the economy -- but his plan seems to be to 'project confidence.' The problem with this 'In Obama We Trust' approach is that it makes private-sector decision-making very difficult. If your boss says he will lay off half his employees next month, but he doesn't know who yet, will you buy a new house this month? In a time of stability and growth, government can afford bold, persistent experimentation. But in a time of uncertainty, the last thing it needs is more uncertainty."

--National Review Editor Jonah Goldberg

11/25/2008: "I was always taught when growing up that when you reward bad behavior all you get is more bad behavior. From the mortgage meltdown to the automaker debacle to cities and states going under, it's all bad behavior. It should not be rewarded. The problem here is that our culture of debt -- both personal and corporate -- has created a culture of dependency. Everyone is calling out to our central government to give them money. And horrors of horrors, many are willing to let the federal government take ownership stakes in these entities and have a hand in their management. That is the road to socialism. The first step to ending the culture of dependency is to tell these corporations, cities and states they need to start taking responsibility for their actions by dealing with the consequences they have created for themselves. If not, then we could accumulate a national debt that even our grandchildren will never pay off."

--columnist and former Mayor of Cincinnati Ken Blackwell

11/24/3008: Great move Obama! Make Hillary the Secretary of State; she has to giver up her Senate seat. Then, after the seat is filled by someone else, slowly push her out. Then we're all rid of her. Machiavelli, move over. Or is it just keep your friends close but your enemiers closer.

11/24/2008: The Sidwell Choice - The Obama family leads by example.

Michelle and Barack Obama have settled on a Washington, D.C., school for their daughters, and you will not be surprised to learn it is not a public institution. Malia, age 10, and seven-year-old Sasha will attend the Sidwell Friends School, the private academy that educates the children of much of Washington's elite.

Vice President-elect Joe Biden's grandchildren attend Sidwell -- as did Chelsea Clinton -- where tuition is close to $30,000 a year. The Obama girls have been students at the private University of Chicago Laboratory Schools, where tuition runs above $21,000. "A number of great schools were considered," said Katie McCormick Lelyveld, a spokeswoman for Mrs. Obama. "In the end, the Obamas selected the school that was the best fit for what their daughters need right now."

Note the word "selected," as in made a choice. The Obamas are fortunate to have the means to send their daughters to private school, and no one begrudges them that choice given that Washington's public schools are among the worst in America.

Most D.C. parents would also love to be able to choose a better school for their child, but they lack the financial means to do so. The Washington Opportunity Scholarship Program each year offers up to $7,500 to some 1,900 kids to attend private schools, but Democrats in Congress want to kill it. Average family income for kids in the voucher program is about $22,000.

Mr. Obama says he opposes such vouchers, because "although it might benefit some kids at the top, what you're going to do is leave a lot of kids at the bottom." The example of his own children refutes that: The current system offers plenty of choice to kids "at the top" while abandoning those at the bottom.

11/24/2008: Change Our Public Schools Need Obama and the Democrats should put kids before unions.

Can Barack Obama bring change to American education? The answer is: Yes he can. The question, however, is whether he actually will. Our president-elect has the potential to be an extraordinary leader, and that's why I've supported him since the beginning of his campaign. But on public education, he and the Democrats are faced with a dilemma that has boxed in the party for decades.

Democrats are fervent supporters of public education, and the party genuinely wants to help disadvantaged kids stuck in bad schools. But it resists bold action. It is immobilized. Impotent. The explanation lies in its longstanding alliance with the teachers' unions -- which, with more than three million members, tons of money and legions of activists, are among the most powerful groups in American politics. The Democrats benefit enormously from all this firepower, and they know what they need to do to keep it. They need to stay inside the box.

And they have done just that. Democrats favor educational "change" -- as long as it doesn't affect anyone's job, reallocate resources, or otherwise threaten the occupational interests of the adults running the system. Most changes of real consequence are therefore off the table. The party specializes instead in proposals that involve spending more money and hiring more teachers -- such as reductions in class size, across-the-board raises and huge new programs like universal preschool. These efforts probably have some benefits for kids. But they come at an exorbitant price, both in dollars and opportunities foregone, and purposely ignore the fundamentals that need to be addressed.

What should the Democrats be doing? Above all, they should be guided by a single overarching principle: Do what is best for children. As for specifics, here are a few that deserve priority.

They need to get serious about accountability. The unions want it eviscerated, and many Democrats are eager to sing their tune: denouncing No Child Left Behind, excoriating standardized tests, opposing consequences for poor performance, and demanding more money.

Real accountability is about standing up for children. The adults are supposed to be teaching kids something, and accountability demands hard, objective measures -- through sophisticated testing and information systems -- of how well they are actually doing that. Good performance needs to be rewarded. But poor performance needs to be uprooted: Schools need to be reconstituted, teachers need to be moved out of the classroom, jobs need to be put at risk -- because if they aren't, children continue to be victimized.

Democrats also have to get serious about school choice. The unions oppose it because they don't want one student or one dollar to leave the regular public schools, where their members teach. So the Democrats have been timid and weak in putting choice to productive use -- even though their constituents are the ones trapped in deplorably bad urban schools, whose futures are being ruined, and who are desperate for new educational opportunities.

If children were their sole concern, Democrats would be the champions of school choice. They would help parents put their kids into whatever good schools are out there, including private schools. They would vastly increase the number of charter schools. They would see competition as healthy and necessary for the regular public schools, which should never be allowed to take kids and money for granted.

The Democrats also need to get serious about the downside of collective bargaining. They have long looked the other way as labor contracts impose page after page of onerous work rules -- basing teacher assignments on seniority, for example, or making it virtually impossible to dismiss anyone. These rules fundamentally shape -- and distort -- the organization of schooling. Because of them, schools are organized to promote the interests of adults, not children. This needs to change.

The Democrats are a party of noble ideals, with a proud history of fighting for the underdogs. So far, their Faustian bargain with the unions has prevented them from living up to what they truly believe. Yet there are two grounds for optimism.

The first is Barack Obama, the party's new leader. He has hinted at a willingness to break with the teachers' unions, and his massive success at decentralized fund raising and recruiting volunteers may enable him to do that. He talks -- vaguely -- about removing mediocre teachers, holding educators accountable, basing pay on performance, and expanding school choice. But his positions on these scores are hedged with qualifications, and his education agenda as a whole is mainly (not entirely) a laundry list of typical Democratic ideas.

The second basis for optimism is that two new groups that speak for disadvantaged kids -- the Education Equality Project and Democrats for Education Reform -- have finally stood up within the party and spoken out against the unions. Including key figures such as Cory Booker, Joel Klein, Michelle Rhee and Al Sharpton, these groups want real accountability, they want more school choice, they want to end restrictive work rules -- and they insist that children come first. This internal rebellion is one of the most important developments in modern American education.

It all boils down to a simple question. Will President Obama have the courage to unite with the rebels inside his party, champion the interests of children over the interests of adults, and be a true leader who really means it when he talks about change? We can only stay tuned. And have the audacity of hope.

Mr. Moe is a senior fellow at the Hoover Institution and the William Bennett Munro professor of political science at Stanford University.

11/22/2008: Barrons Online: Looking for the Last Refuge By THOMAS G. DONLAN

FOR MONTHS, AMERICANS HAVE BEEN MADE to understand that there used to be a housing bubble, fueled by easy credit and an excess of consumer confidence. But what we still do not accept is that those days are gone for this generation. We keep trying to bring them back with more cheap credit and appeals to the restoration of confidence, no matter how unwarranted.

The Treasury Department and the Federal Reserve give away money to banks, and then Congress complains that the banks don't, in turn, lend it, neither writing mortgages nor business loans.

Why should they lend? To whom would they lend? Their best customers are trying to get rid of their debt, not take on more. Their worst customers would love more credit, of course, especially if they don't have to pay it back, but who wants that kind of customer in times like these?

11/21/2008: When it comes to your life and government regulation, the government has two rules. The first: Government is never wrong. The second: Should there be an exception to the first rule, government was at least trying to do the right thing, so they are still right.

Even after growing up, going to college and becoming a functioning part of society as an adult, the government looms over us like an overbearing and extremely protective parent. Firearms are dangerous, so the government tells us we must put trigger-locks on all of our guns. Certain light bulbs are good for saving money, so government requires by law us to use compact fluorescent lights. And, my absolute favorite, cigarette smoke is unhealthy, so government goes ahead and gets rid of smoking at private businesses so that I don't have to make the choice of whether to go to a smoking or nonsmoking bar.

Thanks government! I couldn't have done it without you.

After all, our government officials are great role models for the citizenry. I could learn a thing or two about nutrition from Sen. Ted Kennedy (or, for that matter, substance abuse), or, how about a lecture on family-values from Sen. David Vitter? And, let's not forget the life-lesson of always telling the truth from the Bush administration.

Let's face it—if government is supposed to be a role model for how to live life, we're destined for either an early death or a long stint in rehab.

With so many of its own problems, why is it then that government feels so compelled to tell us how to live our own lives?

If there is one issue that is the perfect paradigm of choice versus government authoritarianism, it is in the regulation of our diets and food choices. From keeping sweets out of the classroom, to banning fast food restaurants in the neighborhood (one wonders if can business get around this by serving food very, very slowly?), government has taken upon itself to regulate the very food we pick up and put into our mouth. As if it weren't obvious that a diet of strictly anything that begins in "Mc" isn't the healthiest of choices, government feels compelled to keep us from making this mistake.

Now, a new study out shows that banning fast food ads may mitigate childhood obesity, and it won't be long before this becomes the new rallying cry of those whom Rick Berman and the Center for Consumer Freedom call "Food Cops."

Berman is the founder of the Washington-based media firm Berman and Company, which runs the Center for Consumer Freedom—a nonprofit consumer advocacy coalition that promotes consumer choice and debunks the myths behind government regulation. Berman has made an enemy of food radicals who seek to enact legislation to inhibit, or outright prohibit, choices we make as consumers.

"People should not be led around by the nose by bad information," says Berman in an interview with 60 Minutes. "You can make up your own mind as to whether or not margarine is really rat poison, as some people say."

Berman says the regulators and Food Cops create a "'Chicken Little' mentality, that the sky is falling, over everything," and "drive the government to fill this artificial public need."

"If the government is truly interested in my health and welfare, then I'm appreciative of it, but I think I can take care of myself," says Berman.

If people have a child in the house, common sense says to keep firearms protected from misuse. If there is a financial incentive to use more fuel- efficient light bulbs, then people will make the switch. And if people are bothered by cigarette smoke, they will patronize restaurants and bars that make the choice to ban smoking.

Likewise, if food is unhealthy, then it is the responsibility of the consumer to decide to eat it or not to eat it.

The government doesn't have to tell us what we all already know.

Perhaps Nick Naylor, a Washington lobbyist played by Aaron Eckhart in the 2005 movie "Thank You For Smoking," said it best. "Gentlemen, it's called education," says Naylor during a Senate hearing on a new warning label for cigarettes. "It doesn't come off the side of a cigarette carton; it comes from our teachers, and more importantly our parents. It is the job of every parent to warn their children of all the dangers of the world, including cigarettes, so that one day when they get older they can choose for themselves."This is what Berman seeks to do: Replace government regulation with consumer choice, and give consumers the information they need to make informed decisions for themselves. When consumers decide fast food is not for them, fast food establishments will make healthier choices available. And, it's already happened, in case you haven't noticed the plethora of "healthy" choices on fast food menus.

Imagine that—consumer preference in the free market actually works. And wouldn't you know, government regulation hasn't.

Granted, some people are just stupid and make really bad choices, but government can't legislate intelligence. People must learn from their own mistakes, and when government gets involved, it spreads the blame across the board—much like the teacher punishing the whole class for the antics of a single student. Instead, individuals should—and must—take responsibility for their own mistakes without government there telling them its not their fault.

Besides, it's not just about effectiveness.

In fact, whether the regulation works (which, it doesn't) is second to the fact that government has no right to make these decisions to begin with. There is something inherently wrong with government taking food off your plate. That's a decision for you to make as a consumer and because it's your body. That sick feeling in your stomach is your conscience telling you that this isn't right—that is, if it isn't you starving to death because government won't let you eat.

Therefore, for his work in protecting the freedom of consumers, promoting the free market over government regulation and illuminating the absurdities of a paternalistic government, we are making Rick Berman our free market hero of the week.

By: Andrew Davis

11/19/2008: Evil Concealed By Money by Walter E. Williams

Evil acts can be given an aura of moral legitimacy by noble-sounding socialistic expressions such as spreading the wealth, income redistribution or caring for the less fortunate. Let's think about socialism.

Imagine there's an elderly widow down the street from you. She has neither the strength to mow her lawn nor enough money to hire someone to do it. Here's my question to you that I'm almost afraid for the answer: Would you support a government mandate that forces one of your neighbors to mow the lady's lawn each week? If he failed to follow the government orders, would you approve of some kind of punishment ranging from house arrest and fines to imprisonment? I'm hoping that the average American would condemn such a government mandate because it would be a form of slavery, the forcible use of one person to serve the purposes of another.

Would there be the same condemnation if instead of the government forcing your neighbor to physically mow the widow's lawn, the government forced him to give the lady $40 of his weekly earnings? That way the widow could hire someone to mow her lawn. I'd say that there is little difference between the mandates. While the mandate's mechanism differs, it is nonetheless the forcible use of one person to serve the purposes of another.

Probably most Americans would have a clearer conscience if all the neighbors were forced to put money in a government pot and a government agency would send the widow a weekly sum of $40 to hire someone to mow her lawn. This mechanism makes the particular victim invisible but it still boils down to one person being forcibly used to serve the purposes of another. Putting the money into a government pot makes palatable acts that would otherwise be deemed morally offensive.

This is why socialism is evil. It employs evil means, coercion or taking the property of one person, to accomplish good ends, helping one's fellow man. Helping one's fellow man in need, by reaching into one's own pockets, is a laudable and praiseworthy goal. Doing the same through coercion and reaching into another's pockets has no redeeming features and is worthy of condemnation.

Some people might contend that we are a democracy where the majority agrees to the forcible use of one person for the good of another. But does a majority consensus confer morality to an act that would otherwise be deemed as immoral? In other words, if a majority of the widow's neighbors voted to force one neighbor to mow her law, would that make it moral?

I don't believe any moral case can be made for the forcible use of one person to serve the purposes of another. But that conclusion is not nearly as important as the fact that so many of my fellow Americans give wide support to using people. I would like to think it is because they haven't considered that more than $2 trillion of the over $3 trillion federal budget represents Americans using one another. Of course, they might consider it compensatory justice. For example, one American might think, "Farmers get Congress to use me to serve the needs of some farmers. I'm going to get Congress to use someone else to serve my needs by subsidizing my child's college education."

The bottom line is that we've become a nation of thieves, a value rejected by our founders. James Madison, the father of our Constitution, was horrified when Congress appropriated $15,000 to help French refugees. He said, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." Tragically, today's Americans would run Madison out of town on a rail.

11/20/2008: from the Daily Reckoning: www.dailyreckoning.com

A NEW BRETTON WOODS VS. THE OLD BRETTON WOODS
by Nathan Lewis

In 1944, the world leaders that gathered in New Hampshire decided on a system based on gold. This was no innovation, as monetary systems for the past few centuries had also been based on gold. In the Bretton Woods system, the dollar was pegged to gold at $35/oz., and other currencies were pegged to the dollar. Currencies didn’t float in those days. Floating, manipulated currencies were considered an abomination. Exchange rates remained fixed. This stable, gold-linked system formed the foundation for a wonderful worldwide expansion of wealth in the 1950s and 1960s – even among the war’s losers, Germany and Japan.

Unfortunately, there was a flaw in this plan. Interest rate manipulation, as practiced by the Fed, was surging in popularity. It was hoped this currency tomfoolery would prevent another Great Depression, and every other little recession along the way. This “monetary policy” and currency manipulation was contrary to the simple, automatic currency board-like mechanisms by which gold standard systems should be operated. The result was that the fixed exchange rates and gold link came under constant pressure.

For a while, governments attempted to have it both ways. They imposed various capital controls to keep exchange rates fixed – while at the same time their central banks played games that caused exchange rates to diverge. The dollar/gold peg was not maintained by judicious supply adjustment, as a currency board would operate, but by heavy-handed intervention in the gold market in London.

Eventually, the conflict between manipulative central banks and the gold link became overwhelming. In January 1970, Richard Nixon installed his friend Arthur Burns as Chairman of the Federal Reserve. Burns immediately opened the monetary floodgates to help offset the recession of the time – following the day’s conventional wisdom. In August 1971, the conflict between Burns’ manipulation and the gold link became too great, and, rather than abandoning Burns’ currency games, it was decided to abandon the gold link instead. The dollar had become a floating currency. By 1973, all the major currencies floated.

An economic catastrophe ensued, the inflation of the 1970s. Even in the 1980s and 1990s, as currencies were stabilized somewhat, economies never regained the health they showed in the 1950s and 1960s. Emerging markets, in particular, were beset by regular currency disasters.

The environment of monetary chaos that we have lived in for the past thirty-seven years has finally produced a political willingness to fix the problem. Governments sense that, if they do not take action now, a worldwide crisis may ensue. Just as in 1944, governments want to return to the monetary stability upon which capitalism was founded. On November 15, governments will gather to talk about a “New Bretton Woods.” There is even some talk that gold will play a part. The creators of this New Bretton Woods, if they are able to agree on anything at all, would do well to recognize the successes and failures of the original Bretton Woods.

Bretton Woods was, overall, a great success. This was due to the link with gold, and the fixed exchange rates worldwide. Capitalism since the Industrial Revolution had been based on this monetary principle, and it worked again as it had in the past.

The reason that the Bretton Woods gold standard did not persist indefinitely was not government deficits, or insufficient gold bullion reserves, “current account imbalances” or any other such thing. The only reason that governments decided to abandon the gold link was that they preferred to play central bank games with their currencies. A New Bretton Woods must wholly and completely abandon such practices.

Without these guiding principles, this month’s discussions are likely to devolve into an unworkable hodgepodge of currency baskets, CPI targets, promises likely to be broken, and rhetorical vagaries. Certainly no usable system would emerge, although an unusable system might.

A New Bretton Woods, of gold-linked currencies worldwide, would be very easy to create. It could be done in a weekend, and wouldn’t cost a dime. It is merely a decision to manage currencies one way – a gold link – rather than another way. Unfortunately, I don’t think today’s generation of monetary bureaucrats in the U.S. and Europe have the talent, skills or understanding to accomplish this solution. They can’t even identify it.

I place my hopes on Russia, China and the Middle East. Their monetary bureaucrats don’t have the skills either, as far as I can tell, but they are willing to learn. As outsiders, they can see that the G7’s conventional wisdom isn’t working.

I wish the best for those governments willing to step up with a solution to the problems that have plagued the world since 1971. I just hope they get on with it before things get too out of hand.

Regards,
Nathan Lewis
for The Daily Reckoning

Editor’s Note: Nathan Lewis is the author of Gold: the Once and Future Money (2007), published by Agora Book Publishing and John Wiley. Get your copy here.

You can read more from Nathan Lewis at his website: www.NewWorldEconomics.com

11/20/2008: from the Daily Reckoning: www.dailyreckoning.com

Now you don’t talk so loud...
Now you don’t feel so proud...
About havin’ to be scroungin’ your next meal...
– Bob Dylan

A few months ago, working on Wall Street was about the most prestigious thing you could do. Rock legends earned less. Heart surgeons got less respect. Porches had less power. Screen stars had fewer girlfriends. You were on top of the world. You earned more than anyone else. You knew more. You were better educated...the top of the class from the top schools. You understood what a CDO was...and a swap...and a derivative.

Naturally, other people...ordinary people...looked up to you. They gave you good tables at restaurants. They parked your car without scratching it against a fire hydrant. Women wanted to meet you...and men asked your advice on economics, politics, fashion, art – you name it. You were what every mother wanted her son to be – a member of that special club...the secret order...the high priests of the modern world...the ruling elite of Planet Goldman...the Confrérie of Finance.

But now, they that did ride so high now lie in the gutters of lower Manhattan. People practically spit at you on the street. They blame you for their losses...for taking away their retirements...for wrecking the whole world’s economy. You were a hero...now, you’re a schmuck.

Yesterday, the Dow fell another 427 points – to under 8,000. This morning, stocks fell, as recession fears and jobs data plagued the market. O’ Bama! Where is thy bounce!

Consumer price inflation fell by 1% – the biggest drop in history.

Houses in Southern California are now down 41%, according to the latest report. “Harsh reality,” says the Wall Street Journal , is now “hitting home.”

Architects, too, say their billings have taken a record dip.

About the only profitable business left is hijacking ships!

The typical stock market investor has lost about half his money. He’s looking for someone to blame – surely, it’s not his own fault!

And so now, poor Wall Street, the public is catching on to your scam...

...that the special knowledge you claimed was nothing but smooth talking claptrap...

...that you really didn’t know any more than anyone else about what was actually going on...

...that what you were doing was skimming money from honest businesses with a lot of fancy shenanigans and unnecessary transactions...

...and selling stocks to naive lumpen – claiming that equities “always go up in the long run”

...and loading up business and consumers with more debt than they could carry...

...and then greasing the debt over to investors, softly assuring them that “our models show the risk of default is negligible...it won’t happen, not in a thousand years.”

That was only a few months ago. And now the debt has gone bad – trillions worth of it. And now, so many things that Wall Street promised have turned out to be lies and humbug that the whole world financial system has seized up.

...

And here we switch from the “innocent fraud” of Wall Street, as Galbraith calls it, to the armed robbery of government.

You see, the Obama Administration will have one overriding priority: to unblock the credit markets, put things back to “normal,” and get the economy moving again. If he can do that – or even appear to do that (which is the only possibility) – Obama will go down in history as one of the nation’s greatest presidents.

Of course, everyone is rooting for him. When times are good...we like horror movies and terrorist threats. But when they are bad, we want flicks with happy endings. Obama’s election was a landmark for many reasons. But he won largely because voters wanted a “Hollywood ending” to the campaign. And now they want a Hollywood ending to the new national nightmare.

Will they get it?

Nah...but they might like the show anyway.

*** Dan Amoss offers his two cents:

“Those fearing deflation assume that every American consumer is stereotypical: an overextended, credit card-addicted, house-flipping gambler. This is simply not the case. Many Americans don’t have a mortgage. And most Americans with mortgages are still making their payments. They have, however, temporarily reigned in discretionary spending because of falling house and stock prices.

“Those fearing deflation also assume that demand for debt is low and falling. But demand for debt doesn’t always come from businesses or households looking to invest more or spend more. Any business or household looking to refinance existing debt at lower rates – and there are many – is a source of demand for new debt. Banks borrowing at the Fed window at 1% or less will be looking to supply this new debt by make highly profitable loans to creditworthy borrowers.

“Once borrowers refinance, they may not be as aggressive about spending or expanding business as they used to be. But at least they will have access to credit. In the Great Depression, they did not. So the economy fell into a negative feedback loop of asset sales, bank failures, and rising unemployment.

“Treasury and the Fed will keep taking extreme measures to slow down the pace of credit contraction and housing prices – cutting off this deflationary feedback loop. This could include nationalizing Fannie Mae and Freddie Mac and using the Treasury’s low borrowing costs to refinance hundreds of billions in existing mortgage debt into new 40- or 50-year mortgages with reduced principal balances.

“Sure, such an action would guarantee a decade or more of stagnation in housing prices, but it will also slow or flatten the rapid decline in prices. This is the essence of the Treasury and Fed actions: to stop the deleveraging from getting out of control – even at the cost of future economic stagnation. Like it or not, I think this is the most likely outcome from this crisis.”

...

***And now, let’s look at what the Federal Reserve is doing...

As you’ll recall, the main man at the Fed, Ben Bernanke, has spent almost his entire life studying what went wrong in the United States in the ’30s and in Japan in the ’90s. He’s determined not to let it happen again – not on his watch.

And so, he’s taking America’s central bank where no central bank has ever gone before.

From the day of its founding in 1913, the Fed’s assets – the foundation capital of the U.S. banking system – grew, reaching $1 trillion on the 24th of September, 2008. But then, something extraordinary happened. Something breathtaking. And for a classical economist – something incredibly reckless. In the next six weeks, the Fed added another trillion. And the head of the Dallas Branch of the Fed said that he expected to add another trillion before the end of the year.

How does the Fed get these “assets?” Simple. It buys them. Where does it get the money to buy them? Simple again: it creates it. It makes it up. It conjures it out of nothing.

“If it comes from nothing,” you might wonder, “what could it really be worth?” But we’re not going to answer that question. We don’t have time. Besides, it takes us in such a deep metaphysical swamp, we’re afraid we may never slosh our way out...or at least not get out in time for lunch. Instead, we’re going to answer this question:

“If it was that easy, how come the Fed didn’t do it before?”

The answer to that is simple: because when the Fed inflates the money supply it risks inflating consumer prices. People don’t like that. They like it when asset prices go up. But not when gasoline and milk increase.

But now, no one is worried about consumer prices. In fact, the Fed is worried about deflation...about falling prices. Bernanke knows what happens when consumer prices begin to fall. Consumers stop spending – knowing that they will be able to get a better deal in the future. That further depresses the economy...and pretty soon it’s the ‘90s again and you’re back in Tokyo. So the Fed has begun a huge program of monetary inflation, intended to offset Mr. Market’s price-cutting.

And now another question: Isn’t there some risk that the Fed will overdo it?

Oh, dear reader...that’s a puffball of a pitch. If we can’t hit that, you can take our laptop away...you can break our sword...and send us back to the dugout.

Remember what happened in the slump of the early 2000s? Alan Greenspan panicked...cut rates to 1%...and left them there for more than a year. He gave the market the wrong medicine at the wrong time...and then delivered such a horse-sized dose, it set off the biggest bubble in mankind’s whole bubbly history.

Now, it’s a different kind of slump...a credit slump. And once again, the Fed is on the scene, like a quack doctor at the side of a heart-attack victim. This time, he’s giving stronger medicine...not just a 1% lending rate, but actual monetary inflation. Trillions of dollars worth of it.

For the moment, Mr. Market is taking away dollars faster than the Bernanke Fed is replacing them. That could continue...for a few months...or even for several years. But it won’t continue forever.

And here, we affirm our unshakeable faith in the people who lead us. They are trying to cause inflation. Eventually, they will get the hang of it. They may shoot for 2% per year; but they are sure to overshoot. Money printers always do.

11/19/2008: Let the Obama Disaster Begin: Get Ready for a Toxic Brew of Big Government, Big Bureaucracy, Big Unions...and Lots of Lawyers! By Wayne Allyn Root - 2008 Libertarian Vice Presidential Candidate

We're handing our country over to a man with no experience. No experience as a businessman, or as a government official. All because we dislike George W. Bush. America wanted ABB (Anything But Bush).

Well congratulations! We've now elected a man to govern America whose entire experience 'governing' is having served less than 4 years in the US Senate. During which time he never put his name on one bill of any significance. He never even held a meeting for the committee that he chaired!

He arrived in Washington as a celebrity and then, spent 4 years running for President. Worse yet, he now takes over the White House during the worst economic crisis of our lifetime.

People across America naively say they hope Obama will solve this economic crisis. Those who voted for him not only hope so, but believe it so.

I have a question for you. When I hire someone, I want to know about their skills and experience for the job they're applying for. So, America thinks Obama can fix this mess. With what? Voodoo? How can he solve a business problem, when he knows absolutely nothing about business?

In the 25 years since we graduated Columbia University Class of '83 together, Obama has never started a business, run a business, or risked his money on a business deal. Not once in 25 years. During the campaign, he talked about creating millions of jobs. Well, the next one he creates will be his first. Good luck with that.

President-Elect Obama has never met a payroll, not to mention paying employee payroll taxes or health insurance. Yet his supporters, fans and voters think he holds the answers to a crumbling economy? I don't think he could run a bakery, let alone the U.S. economy. How frightening is this scenario?

I feel like a father who's fallen ill and had to hand over the keys to his business to his 16 year old son- whose entire prior business experience was running a lemonade stand at age 6. That's what we've just done to the entire United States economy, except Obama hasn't even run a lemonade stand.

My educated guess is Obama was the type of kid who got the neighborhood lemonade stand shut down by calling City Hall to complain. His complaint: the kid's lemonade stand didn't have a government-issued business license.

Lawyers to the left of me – lawyers to the right; but not a drop of common sense.

Let's talk about the only serious experience Obama has. Experience that I consider quite a negative.

It's not bad enough that he's never had any business experience. It gets worse. Far worse. Obama is a lawyer. Lawyers mess up almost every business deal they get involved with. Why? Because of a deadly combination of big egos, combined with a lack of business acumen.

Lawyers learn absolutely nothing about business in law school. If they learned about business, it would be called 'Business School.' In law school, lawyers-to-be are taught how to sue businesses. There aren't even offered courses on how to run one. There certainly aren't any courses on how to run an economy.

Once out in the real world and practicing law, lawyers jump into business deals with confidence, bravado and gusto. As well as one goal in mind- screwing up every deal they can get theiur hands on- to prove how important they are. And to justify their fat fees.

Their huge egos force them to weigh in on things they know absolutely nothing about. After years of dealing with lawyers, I learned to appreciate one of the great "inside lawyer" jokes: What is the most amazing trait of lawyers? They can quote their fees without smiling.

This is one of the big problems of modern-day government. It's made up of lawyers. Lawyers with some of the biggest egos on the planet. Lawyers interested in playing the game. Interested in acquiring power and control over your life. Because that's what lawyers do.

These lawyers try to get government involved in every and any facet of our lives, no matter what. This whether they know a thing about what they are getting involved in or not! Why? Because these lawyers-turned-politicians want to justify their fat salaries and lofty titles. They learned this in Law School- how to act important, charge big fees and take control of everything they're involved in.

Once these lawyers are elected as Mayor, to Congress, to Senate, or worse yet, to the White House- do you think they'll ever let on that they don't know what they're doing?

Politicians will never admit government doesn't have the solution.

If they did, they would lose their power and control over you.

President Obama will have to prove his brilliance and assert his power by trying to solve things - even if government can only make it worse. To a lawyer-politician, that's far better than admitting they don't know.

Obama and his wife are both lawyers. Neither have built a business. Neither have ever been exposed to the real business world. As a matter of fact, they weren't even business lawyers- they were both civil rights lawyers and 'community activists.'

Do you have any idea what that means? They have spent their lives suing and intimidating banks and businesses. The closest Obama ever got the banking system was as ACORN's lawyer. Then, and as a 'community activist', he pressured and intimidated banks to lend to unqualified buyers. And on property that was not worth the paper the mortgage was written on.

This 'affirmative action lending' that banks were forced to do was the single biggest cause of the mortgage meltdown and implosion of the American banking system. Based on this "success" we've now put Barak Obama in charge of the entire United States economy?

So what's the first thing a lawyer with a huge ego and no knowledge of business will think he should do as President? He'll use the money and power of government to try and fix the economy. Conveniently forgetting it's your money he's playing with.

President Obama will create more laws while adding more regulations. He's already said he wants to raise the minimum wage (thereby hurting business and costing jobs). Of course, in the spirit of fairness, he's planning on ending secret ballot voting for unions (This will instantly create an environment of intimidation and manipulation for dissenting union members).

President Obama is planning to raise taxes dramatically on our most successful entrepreneurs and business owners, America's job-creators, to provide himself with more money to 'fix' the economy.

Obama will punish success, while rewarding people who expect handouts. He'll "create" jobs by expanding government. He'll spend billions on government projects. All while create millions of new government jobs for bureaucrats (increasing the size and power of government employee unions). He was so brazen, it was recently disclosed, that Obama sent letters in the days before the election to federal employees telling them how he'd give them more power and expand their ranks. And of course he will redistribute the wealth from taxpayers to union members by bailing out the Big 3 Automakers. This is the least he can do to repay the huge contributions from those same unions.

Hey dude – Where's MY Bailout?

The Big 3 quietly received $25 Billion with a “B” just weeks ago. Few Americans noticed this during the giant distraction of the stock market meltdown. Now they've come back asking for $25 Billion more only weeks later.

Guess where the money will go? To pay for the same outrageous union pay, pension plans and lifetime health care that bankrupted the Big Three Automakers in the first place. We are simply subsidizing failed union contracts that destroyed the U.S. auto industry in the first place.

Of course, it also wiped out the city of Detroit, which now wants a $10 billion dollar bailout, and gave Michigan the worst performing state economy in the entire country. Gotta love those union contracts- the unions in Detroit are like Canadian Mounties- they always get you. They'll either bankrupt you today...or tomorrow...or the next day. But they always complete the job. With friends like that, who needs enemies?

Does this sound like good business practice to you?

Of course, there is no choice for Obama and the Democratic Congress- they received millions of votes and tens of millions of dollars from auto unions and auto workers. They need to repay them today to keep their support, not to mention their donations in 2012.

Only lawyer-politicians could possibly dream up this agenda to 'save' our economy. But what are they saving it from? From capitalism?

Obama won't rest until the U.S. economy resembles France.'s The stagnant French economy is dominated by big unions and big government. There are few entrepreneurs or business owners in France- with taxes so high, there is no way for individuals to ever save enough money to open a business. Even if they did, the onerous taxes and regulations destroy their chances of success. There are only two viable career routes in France: work for government, or join a union and work for a big corporation. Is that what we want our economy to become? I don't think Americans really want Europe's version of big-government social capitalism (a nice way of saying Socialism).

"GM, Ford and Chrysler are literally dead men walking.”

Where does it all end? Government giving another $25 Billion to GM, Ford and Chrysler makes absolutely no business sense. Because of their outrageous union contracts, the Big 3 Automakers can never turn their companies around. They are 21st century dinosaurs - GM, Ford and Chrysler are literally dead men walking.

Their entire business is based on a failed model (excuse the pun). Notice that Honda, Nissan and Toyota aren't asking to be bailed out. They're building new plants across America with non-union employees. They beat the Big 3 U.S. Automakers by cutting costs and increasing efficiency. This is in large part by keeping their payroll costs down to $30 to $40 per hour, instead of the $70 per hour that American auto companies pay to union employees. Don't get me wrong- If you can make that kind of wage- GREAT! Go get it. But only if you can earn it without bankrupting your company, or asking taxpayers to bail you out. One thing is clear with the auto industry- those $70 per hour wages are a fraud- they can only work if they are subsidized by the U.S. government.

Is it fair to pay $50 Billion (if that's even enough) to the Big 3 Automakers while successful companies get nothing? Why would we reward failure and incompetence by the companies and unions? Oh, I forgot, that's Obama's business model. Spread the wealth around, punish the successful and reward people asking for handouts (his voters).

Who will pay for my bailout?

Many Americans are asking 'who will pay for my bailout?'

I'm a small business owner. I'm having tough times as well. My friends with small businesses are all in big trouble right now. We're struggling to survive. If you sell anything for a living right now, you are in big trouble- because American consumers have stopped buying anything. Small business creates a majority of private sector jobs in America and 75% of all new jobs. Aren't we too important to the U.S. economy to fail? Who is bailing us out? If we create by far more jobs than the Big 3 Automakers, why isn't there a small business bailout plan from the U.S. Treasury?

Is it because small businesses aren't unionized? Or is it because they didn't give huge donations to Obama and the Democratic Congress?

Allow me to present the free market alternative. It's simple- get government out of the way. Any money government gives as 'bailouts', no matter to whom, is money taken away from you and me. It's money taken from taxpayers, investors and business people who would have used it to efficiently create jobs and wealth. Now it's been confiscated by big government who will inefficiently use it to create less jobs than the private sector could have created. You haven't gained a thing with a New Deal or Great Society government program. For every job it creates, 2 (or more) jobs are lost in the private sector. Money doled out by government to 'solve' this crisis, is money taken away from you and me, away from the taxpayers and job-creators.

Money given to the Big 3 Automakers is a gigantic waste, temporarily propping up (and rewarding) failed companies. One thing is certain about bailing out the auto industry- they'll be back for more money...soon.

The free market alternative is to let the automakers go bankrupt or otherwise find their own way. Will they go out of business? Probably not. The courts will allow them to reorganize. They can and should renegotiate their union contracts, through bankruptcy. Once they do this, they'll emerge as leaner and more efficient companies.

Then and only then they will be able to compete with Toyota, Honda and Nissan. If they don't, they'll be replaced by new auto companies with better business plans. That's called capitalism.

Did the airline industry as we know it end when TWA went out of business? Of course not. Out of the ashes, Southwest Airlines emerged with a new business model. And it works! They get you there on time, don't lose your luggage, charge low fares, and a nice profit. A profit both they and their shareholders pay taxes on, too!

TWA deserved to fail. If we had bailed out TWA, there may never have been room in the marketplace for a Southwest Airlines. What we need right now is a "Southwest Motors."

The other choice to bankruptcy is a government bailout that allows the auto industry to continue with their reckless, bloated business model at taxpayer expense.

Most importantly, all of this money the federal government is giving away has to come from someone and somewhere. It's being stolen from us, the American taxpayer, without explanation, discussion, debate or permission.

It's not government's money to give. It is our money- yours and mine. These endless bailouts will keep our children, grandchildren and great grandchildren enslaved. Enslaved by big government, with oppressively high taxes for generations to come. But then that was Obama's plan in the first place.

Wayne Allyn Root's Commentaries can be found at: www.ROOTforAmerica.com

11/19/2008: from the Daily Reckoning www.dailyreckoning.com

“Winter Fuel Payments...don’t miss out!”

Yes, dear reader, this is how societies collapse. People invent problems. Then, they find solutions to the problems. Then, the solutions cause more problems. And finally the cost of all the solutions brings the whole system falling down.

A news report out today tells us that the weekend will be cold. An “arctic blast” is said to be on its way.

Of course, some parts of the city already feel as though they were in a nuclear winter. London’s main industry is finance. And finance has iced up. A headline in yesterday’s paper told us that London is expected to lose 370,000 jobs over the next two years.

But thank God for the world improvers:

“Our records show that you may become eligible for a payment this winter,” begins the letter.

Why? Because your editor is enrolled in the Britain’s national health service (a requirement for employment). NHS records must have revealed to the authorities that your editor turned 60 in September. Accordingly, he is eligible for 125 pounds to help him with his heating costs this winter.

Imagine the miserable bureaucrats administering this program. They have computers to program...letters to write...records to keep...internal procedures to devise, administer and respect. They have to hire people...and then support them for the rest of their lives, paying for pensions and holiday, just like any other business. Then, they have to work out internal disputes...make sure the coffee maker is working properly...and organize an annual Christmas party. It probably costs more than 125 pounds to send out each check!

And why should someone over 60 get money and not someone under 30? The older person has had 30 more years to stuff newspaper in the cracks, firewood in his garage and money in his bank account. If he’s cold this winter...it’s his own damn fault.

But if you’re going to give him money to help him keep warm, why not some extra money to help him with his eating needs? He has to eat, doesn’t he? And why doesn’t HM Government just send him a bottle of Chateau Margaux? Maybe 1985. To help him with his drinking needs.

11/19/2008: from the Daily Reckoning www.dailyreckoning.com

Not only is the bust unlike anything we’ve ever seen before...so is the planet-wide effort to stop it. All over the globe, the feds are going ‘into the wild’ with extraordinary measures. They’re mobilizing troops to fight the crisis in the boardrooms. They’ll fight it in the stock markets. They’ll fight it at home – with house-to-house combat to stop foreclosures and defaults. They’ll fight it abroad – the U.S. government is even loaning money to foreign governments! They’ll fight it with loans and giveaways. They’ll fight it with fiscal policy. They’ll fight it with monetary policy. They’ll fight it with every weapon available to them – including the printing press.

And they will lose.

*** To give you an idea of the wild measures undertaken by the feds, we look at what is happening at the world’s leading bank – the U.S. Federal Reserve.

The short form of how the Fed operates is this: it holds a certain amount of securities in its vault; this is the cornerstone capital – or monetary base – of the whole banking structure. How does it get this capital? It buys it, creating the money to pay for it as necessary. Naturally, the Fed doesn’t want to create too much money or the inflation rate would get out of control and economists would point their fingers accusingly. But now, people fear dandruff more than inflation. So, the Fed has gone wild.

From the day of its founding in 1913 to September 24, 2008 the Fed’s assets – the aforementioned cornerstone capital for the US financial system – grew to $1 trillion. By November 14, 2008 the amount had grown to over $2 trillion. And in a speech in Texas, the head of the Dallas branch of the Fed said he expected the total to reach $3 trillion by year-end.

For the moment, this explosion of monetary inflation is hardly noticed. Asset deflation has the headlines. People worry about having too few dollars, not about having too many.

Comes the news this morning that U.S. business chiefs are asking the up-coming Obama administration for another $500 billion ‘stimulus’ program. They’ll get it. And much more. Trillions worth.

Trying to stimulate the economy with easier credit in the early 2000s, Alan Greenspan overdid it. He gave the world the credit it wanted, and created the biggest bubble in human history.

Now that bubble is collapsing and his successor – Ben Bernanke – is confronted with a new problem. Now it is cash that people want – income to pay their debts! Bernanke will give them what they want. And, most likely, he will overdo it too.

*** At a recent hearing on Treasury Department use of government assistance funds, Ron Paul, who is well-known for often calling out the Federal Reserve chairman on their liberal use of the printing press, took on Big Ben. Here is the transcript of their interaction, in case you missed the C-SPAN coverage:

Ron Paul: The Austrian free market economists predicted that all these problems would come, and they were certainly correct in everything that they said. Of course they’re not very satisfied including myself with the so-called solutions, because it looks like we’re spending a lot of energy and a lot of money trying to patch a system together that is unworkable.

So we have Congress spending a lot of money, we have Treasury very much involved in trying to pick and choose which worthless asset that we’re going to buy, and of course the Federal Reserve is involved in injecting trillions of dollars that nobody seems to be keeping track of.

But what we’re failing to do I think is to recognize that the system no longer works, but I can understand why we do this because if Congress couldn’t do this and if the Fed couldn’t do this and if Treasury couldn’t do this, it would make us all irrelevant. And instead of looking at the causes of this, and then finding that the solutions aren’t going to be found here, we have to make ourselves feel pretty important.

But I think there’s another reason we think we’re pretty important, it’s because, in a way, our interference in the market corrections that have tried to come about since 1971 seem to work. I mean, the failure was established in 1971 with a system that had no way of automatically correcting the balance of payment and the current account deficits.

And that’s where the problems have been, and economists – whether they were left or right or middle – over the last several decades have always said, this current account deficit is a big problem. And now it’s totally out of hand. So here we are struggling with all these rules and shifting back and forth and really getting nowhere.

My question is directed toward, when we come to the full realization that the current system is unworkable, what are we going to do, what have you thought about doing, and already we see talk in the newspapers. We see articles about a new international world reserve currency, and to me that’s pretty important, because the fiat dollar reserve system is not going to work anymore, and that’s the information that we have to accept and then decide what we’re going to do in the future.

Also, this is not new in history. Currencies have failed, financial systems have failed, and generally, to restore the confidence that everybody is talking about, they usually have to go back to a currency with integrity to it, rather than just fiat money.

And, you know, the stages are there. It’s not impossible; already the central banks of the world still own 15% of all the gold that was ever mined in all of history. So they hold on to this gold for some reason, and therefore something has to give, or are we going to keep trying to waste more money and time patching this system together.

Just last week there was a report that Iran purchased 75 billion dollars worth of gold, took their reserves out of Europe, bought gold, and put it in Asia. So is that a sign of the times, is that moving on?

My question is, in your meetings, and you had a meeting just recently with other central bankers, does this thought come up about a new international world reserve currency, and if so, does the subject of gold ever come up?

How do you restore the confidence? Have you recently had conversations with any central banker, and is there a move on to replace the dollar system, because the dollar system is essentially declared dead, because it’s not working; but this indeed was predictable because of these tremendous imbalances that were never allowed to be corrected, and that were always patched up. We always came in. We’d spend, we’d inflate, we would run up deficits, and since ’71 we’ve been able to "correct" these problems.

Could you tell me what kind of conversations you’ve had regarding a new reserve currency?

Ben Bernanke: Yes, Congressman. I don’t think the dollar system is dead. I think the dollar remains the premier international currency. We’ve seen a good deal of appreciation in the dollar recently during the crisis precisely because there’s been a lot of interest in the safe haven and the liquidity of dollar markets.

And the Federal Reserve has been engaged in swap agreements to make sure there’s enough dollar liquidity in other countries because the need for dollars is so strong. So I think the dollar system remains quite strong.

I do agree with you very much on one point, which is about the current accounts. The current account imbalances have proved to be a very serious problem. It was in fact the large capital inflows in those current accounts which created a lot of the financial imbalances we saw and have led to some of the problems we are seeing, and one of the silver linings in this huge grey cloud is that we’re seeing some improvement and greater balance in our current account deficits.

Ron Paul: But does the subject of a new regime ever come up?

Ben Bernanke: No, it doesn’t.

Ron Paul: And does the subject of gold ever come up in any of your conversations?

Ben Bernanke: Only in terms of the sales that the central banks are planning.

...*** We got a letter from Her Majesty’s government.

11/18/2008: from the Daily Reckoning www.dailyreckoning.com

...After demand collapses, supply collapses. Yes, dear reader, it’s all part of Nature’s plan. In the beginning, there is The Bubble. Then, the bubble pops. Then, people look around and take fright. They realize they’ve got to stop spending. So, demand collapses. Then, stocks collapse too. And asset prices fall too – especially for speculative assets. As orders and asset prices tumble...merchants and manufacturers cut back too. Jobs are lost. And then, with less income...demand collapses some more.

But then, eventually, the bubble is completely flattened. Weak companies have gone out of business. Good companies are holding on, but producing less. Many retail shops have closed. Many malls have gone out of business. Supplies of goods and services have fallen as far as they’re going to fall. Then, with supplies tight, prices begin to rise again.

The whole process takes time. There are millions of mistakes in need of correction. Each one has to be marked down, written off, worked out, and forgotten. We still have to see the show trials. And the perp walks. And the kvetching...the complaining...the whining...the wimpering. The bailouts and the payoffs... The bottles of whiskey and the loaded revolvers. It’s all still ahead!

Dow 5,000...

10% - 15% unemployment...

Another 20% off house prices...

There’s a lot of ruin left to go...

...“The only cure for a bubble is to prevent it from developing.” said Kurt Richebächer.

In other words, you can’t cure a bubble by cutting interest rates, easing bank lending requirements, running bigger government deficits, sending out ‘rebate’ checks, buying up Wall Street’s stupid mistakes, or bailing out sinking businesses. You can’t cure a bubble by reflating it. You can’t cure a bubble at all. You have to let it pop...and then go about your business. Get it over with quickly; that’s the best you can do.

Think that will happen? Where have you been, dear reader? Out of Blackberry range?

No, the feds are at work – with their patches, their rescues, their bamboozles and their swindles.

...Saving America from free-market capitalism will become the Great National Project of the Obama years. Deficits will top $1 trillion...maybe $2 trillion. Brain dead businesses will be kept alive. Whole industries that should be allowed to go broke will be protected. Towns, states, and colleges that should go bust will be propped up. There will also be a huge building boom – in infrastructure. Bridges, trains, highways...

... it may be time to buy cement companies!

The bailouts are just money down the drain. As for the bridges, who knows whether they are worth the money? But this massive program will achieve its real purpose – distracting and diverting Americans from their loss of wealth.

*** If Olympic medals were given for consumer spending, Americans would have won the gold, silver and bronze every year for the last 20. But now, Americans may become champion savers. Savings could rise to maybe 10% of GDP.

What will happen to all this money? It will be lent to the government. (About which...we will have more to say tomorrow.)

So do you see, dear reader, how the new financial system will work? Instead of squandering their money – as Americans have done for the last 20 years – now, the government will squander it for them.

11/17/2008: from the Daily Reckoning www.dailyreckoning.com

...George W. Bush is said to be not merely a lame duck president...but a dead duck too. He cost Republicans a victory, say pundits: he ruined the country...he destroyed the empire...he wrecked the economy. Today, you could accuse the man of sorcery or child molesting and half the nation would believe you.

Before we come to our revisionist look at the man, we repeat our advice. Just this weekend, Barack Obama pledged to put an end to Bush’s disgraceful torture policy. Dubya should watch his back and avoid foreign travel; otherwise he’s likely to arrested and slapped with a human rights violation. After all, most of the world would like to see him do the perp walk. Besides, he deserves it.

But here at The Daily Reckoning we always take the side of the underdog and the lost cause. Poor George is both. So, when we read the text of his speech last week in New York, we found it to our liking. Here is a man who has had some sort of brain operation or brain washing, we decided. They severed the connections, making it possible for him to think one thing and do something entirely different.

“History has shown that the great threat to economic prosperity is not too little government involvement in the market. It is too much government involvement in the market. ... And the surest path to...growth is free markets and free people.

“Capitalism is not perfect. But it is by far the most efficient and just way of structuring an economy. Capitalism offers people the freedom to choose where they work and what they do, the opportunity to buy or sell products they want and the dignity that comes form profiting from their talent and hard work...

“The record is unmistakable: if you seek economic growth, social justice and human dignity, the free market system is the way to go.”

These insights are, to our mind, correct. But the U.S. government with George W. Bush at the controls hardly favored free-market capitalism. Instead, the Bush administration presided over a “mixed economy” – both “innocent fraud,” as John K. Galbraith described the free-market’s excesses, and the government’s armed robbery.

... 36% of GDP was spent by government...and more than half of all eligible voters depended for their livelihoods – in whole or part – on government checks

...federally–chartered mortgage lenders – Fannie and Freddie – helped stimulate a huge bubble in the housing market

...the US government’s central bank – the Federal Reserve – led by Mr. Bush’s appointee, Alan Greenspan, practically single-handedly caused a huge bubble in finance, credit, speculation and consumer spending

...when the bubble inevitably burst, Mr. Bush’s own Treasury Secretary (recently one of the Wall Street bankers who had most benefited from the financial bubble) rushed in to use government money (aka taxpayers’ money) to buy up Wall Street’s mistakes...

...then, the feds partially nationalized the nations leading banks...

...and further lowered the cost of credit, in order to try to blow the bubble up again...

...and now, the United States, along with the world’s other leading governments, is pledging to give the world what it least needs – more regulation!

11/17/2008: from Karl Denninger’s essay – posted at www.market-ticker.org

“...to fund all this crap that Congress, Paulson and Bernanke have in the pipe (you know, the TARP, the newly-minted SIV that Ben announced this morning to buy commercial paper, etc.) the treasury issue requirements will be north of three trillion dollars in this fiscal year.”

11/16/2008: I think the purpose of life is to be useful, to be responsible, to be honorable, to be compassionate. It is, after all, to matter: to count, to stand for something, to have made some difference that you lived at all. -- Leo C. Rosten (1908-1977) American Writer

11/16/2008: 'Socialism'? It's Already Here. By George F. Will

Conservatism's current intellectual chaos reverberated in the Republican ticket's end-of-campaign crescendo of surreal warnings that big government -- verily, "socialism" -- would impend were Democrats elected. John McCain and Sarah Palin experienced this epiphany when Barack Obama told a Toledo plumber that he would "spread the wealth around."

America can't have that, exclaimed the Republican ticket while Republicans -- whose prescription drug entitlement is the largest expansion of the welfare state since President Lyndon Johnson's Great Society gave birth to Medicare in 1965; and a majority of whom in Congress supported a lavish farm bill at a time of record profits for the less than 2 percent of the American people-cum-corporations who farm -- and their administration were partially nationalizing the banking system, putting Detroit on the dole and looking around to see if some bit of what is smilingly called "the private sector" has been inadvertently left off the ever-expanding list of entities eligible for a bailout from the $1 trillion or so that is to be "spread around."

The seepage of government into everywhere is, we are assured, to be temporary and nonpolitical. Well.

Probably as temporary as New York City's rent controls, which were born as emergency responses to the Second World War and are still distorting the city's housing market. The Depression, which FDR failed to end but which Japan's attack on Pearl Harbor did end, was the excuse for agriculture subsidies that have lived past three score years and 10.

The distribution of a trillion dollars by a political institution -- the federal government -- will be nonpolitical? How could it be? Either markets allocate resources, or government -- meaning politics -- allocates them. Now that distrust of markets is high, Americans are supposed to believe that the institution they trust least -- Congress -- will pony up $1 trillion and then passively recede, never putting its 10 thumbs, like a manic Jack Horner, into the pie? Surely Congress will direct the executive branch to show compassion for this, that and the other industry. And it will mandate "socially responsible" spending -- an infinitely elastic term -- by the favored companies.

Detroit has not yet started spending the $25 billion that Congress has approved but already is, like Oliver Twist, holding out its porridge bowl and saying, "Please, sir, I want some more."

McCain and Palin, plucky foes of spreading the wealth, must have known that such spreading is most of what Washington does. Here, the Constitution is an afterthought; the supreme law of the land is the principle of concentrated benefits and dispersed costs. Sugar import quotas cost the American people approximately $2 billion a year, but that sum is siphoned from 300 million consumers in small, hidden increments that are not noticed. The few thousand sugar producers on whom billions are thereby conferred do notice and are grateful to the government that bilks the many for the enrichment of the few.

Conservatives rightly think, or once did, that much, indeed most, government spreading of wealth is economically destructive and morally dubious -- destructive because, by directing capital to suboptimum uses, it slows wealth creation; morally dubious because the wealth being spread belongs to those who created it, not government. But if conservatives call all such spreading by government "socialism," that becomes a classification that no longer classifies: It includes almost everything, including the refundable tax credit on which McCain's health-care plan depended.

Hyperbole is not harmless; careless language bewitches the speaker's intelligence. And falsely shouting "socialism!" in a crowded theater such as Washington causes an epidemic of yawning. This is the only major industrial society that has never had a large socialist party ideologically, meaning candidly, committed to redistribution of wealth. This is partly because Americans are an aspirational, not an envious, people. It is also because the socialism we do have is the surreptitious socialism of the strong, e.g., sugar producers represented by their Washington hirelings.

In America, socialism is un-American. Instead, Americans merely do rent-seeking -- bending government for the benefit of private factions. The difference is in degree, including the degree of candor. The rehabilitation of conservatism cannot begin until conservatives are candid about their complicity in what government has become.

As for the president-elect, he promises to change Washington. He will, by making matters worse. He will intensify rent-seeking by finding new ways -- this will not be easy -- to expand, even more than the current administration has, government's influence on spreading the wealth around.

mailto:georgewill@washpost.com

11/11/2008: Why would a Black president want slavery? by Garry Reed

Dallas/Ft. Worth Libertarian Examiner

Why oh why would the first black president of America allow, and perhaps even encourage, yet another form of slavery in our nation? Has Barack Obama forgotten the African-American side of his own heritage? Doesn't he know that compulsory community service is just slavery by a different name?

The controversy over coercing young people into national servitude to their political masters emerged almost as soon as Obama named Rahm Emanuel as his Chief of Staff-in-waiting.

J.D. Tuccille, Civil Liberties Examiner for Dallas Examiner.com was one of the first to point out that Emanuel co-authored a book that calls for compulsory service for all Americans ages 18 to 25.

Compulsory is just another word for slavery.

So what about chief of staff Rahm Israel Emanuel himself? By all accounts he's Jewish. Which raises a parallel question: has Rahm Emanuel forgotten his own Jewish heritage? The Jews of Europe who escaped Adolf Hitler's killing camps toiled and died as slave laborers in his war factories. Why would this man want to impose his own version of slavery on America's youth?

Judges already assign community service to lawbreakers in lieu of jail sentences. Now we're going to assign community service to free citizens who have done nothing wrong in lieu of living their lives? This isn't patriotism, this is punishment.

Maybe Obama thinks there's only one kind of slavery that's wrong. White Southern cotton plantation owners have no right to enslave black people, but it's perfectly okay for government to enslave any race and color and creed of its own citizens whenever the power drunk politicians wish it so.

If the people of America choose to ignore the libertarian message on every other subject, they must heed this one message or forever be consigned to Third World peasantry: forcing free and peaceful people to do the bidding of politicians is slavery. Period. Taxation is slavery. Military conscription is slavery. Involuntary public servitude is slavery. Groveling before local government bureaucrats for permission to start a business, erect a storage shed, convert a garage into a room, paint a house any color other than white, and on and on and on - these are all the little forms of slavery that add up to one big grotesque national form of slavery.

Calling slavery anything other than slavery is cowardly. All the jingoist parsing, the circumlocutions, the political spinning, the talking in circles, the denials and exceptions and excuses, the pushing aside of reality for grandiose theorizing and sloganeering does not turn slavery into voluntarism. It doesn't make slavery patriotic. It doesn't make slavery Godly. It doesn't make slavery not slavery.

Coming soon to a neighborhood near you: the Community Service Gulag of the USSA.

Involuntary servitude is not patriotic. Enforcing the Constitution, which every president swears to do with hand flattened firmly atop Bible on inauguration day, is patriotic. President-to-be Obama should read the document he'll be promising to uphold, and the Bill of Rights while he's at it. Then he can do the patriotic thing by shutting down Rahm Emanuel and his nascent Department of National Slavery.

We already have a Drug Czar and a Copyright Czar. We don't need a Slavery Czar.

© 2008 Examiner.com

1/4/2008: Proposition 8 in California: As a libertarian, I believe in live and let live. As a Libertarian candidate for State Assembly in 2000, I was asked about my opinion on marriage. "Should marriage be between a man and a woman?" My two Republican opponents said, "Yes, absolutely." They were at least honest about their opinions (then again, it was a relatively conservative audience). On the other hand, my Social Democrat opponent, Alan Lowenthal, equivocated. He was spineless. Everyone knew he supported gay marriage but he didn't have the guts to admit it. Typical brain-deal liberal. He must try to hide his beliefs from the electorate because we are not enlightened. The really gutless part of his response is that I responded to the questions first with, "among other things." I suggested that government stay out of marriage and not provide anyone with special benefits because they choose to "marry" (after all, marriage was traditionally a religious ceremony). I went on to say that government should allow people to live as they choose, in group marriages, communes, whatever. Live and let live.

Nonetheless, I voted for Proposition 8 (i.e., to ban gay marriage under the California Constitution). First, I object to the California Supreme Courts short-sighted ruling. If equal protection means we all get the same government benefits, then I want my food stamps, welfare checks, farm supports, business subsidies, and all of the other socialist industrial policy government hand-outs. And more importantly, advocates of gay marriage do not advocate freedom (they exclude polygamists and polyandrists). They do not advocate tolerance (they are very intolerant of those with other opinions). Rather, they advocate forcing approval of their chosen life style upon those who may have other opinions. The court's forcing of this issue will have the same adverse effects of Roe v. Wade. The issue will fester for decades and result in many one-issue voters (how else could a moron like Barbara Boxer get elected to student council?) while we continue to lose more and more of our freedoms to a nanny state and kleptocracy (see $700 billion bailout bill).

The final nail in the coffin was on election day. As I approached my polling place, I was followed, almost into the building, by opponents of Proposition 8, handing me "No on 8" propaganda. There are laws against electioneering withing 100 feet of a polling place. A couple years ago, I was all but thrown out of my polling place while I was voting because I wore a T-Shirt with my name on it when I ran for Insurance Commissioner. I was there for less than 5 minutes to vote. But the opponents of Proposition 8 were allowed to continue to hand out propoganda for (as I later found) several hours. I mentioned to the guy who handed me his literature that it was illegal to be so close to the polling place and he backed off, but not 100 feet from the door to the polling place.

Sorry, folks. I support freedom and tolerance, but not liberal (or conserevative) authoritarianism. Get the government out of our lives and only then will you be free. Ask for government benefits and you will be slaves. Read the Declaration of Independence and the Bill of Rights.

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