Wednesday, February 27, 2013

'Bond Bubble' Explosion now a Fait Accompli



Bernanke is right now caught in an economic conundrum of his own making and he doesn’t want any of the stupid, befuddled Sheeple to   know it. 

What follows is what he said today and what we believe he should have said. 

 

Bernanke Says Fed May Decide Not to Sell Securities

By Caroline Salas Gage & Joshua Zumbrun - Feb 27, 2013 4:24 PM ET
Federal Reserve Chairman Ben S. Bernanke said the central bank may decide to hold bonds on its $3.1 trillion balance sheet to maturity (1) as part of a review of its strategy for an exit from record monetary easing.
Bernanke told lawmakers in Washington today that he expects to revisit “sometime soon” an exit plan that policy makers outlined in June 2011 (2).
Federal Reserve Chairman Ben S. Bernanke is the third policy maker in the last week to voice support for altering the central bank’s exit strategy to delay or eliminate asset sales.
Under that plan, the Fed would cease reinvesting some or all principal payments from its securities, revise its interest- rate outlook, raise the federal funds rate and then start selling housing debt to eliminate it from the central bank’s portfolio in three to five years.
 

How Long

Bernanke echoed that view today. “One issue is how long to hold the securities and whether to use that as a substitute, an alternative to asset purchases,” he said. “That’s something worth discussing.”
The Fed is purchasing $85 billion of Treasury and mortgage- backed securities a month in an effort to (3) spur the economy and reduce a jobless rate that stood at 7.9 percent in January.
  Bernanke said today the central bank’s easing policies are helping to improve demand for homes and cars (4) by lowering long- term interest rates.

Bernanke ‘Confident’

The Fed chairman said he’s “pretty confident” that the “basic outline” of the exit strategy policy makers agreed upon would “still be in force.”
If the Fed doesn’t sell any securities, “it doesn’t mean that our balance sheet is going to be large for many years,” he said. “It just would be maybe an extra year. That’s all it would take to get back down to a more normal size.” …”

Here follows what we believe (thus there are no quotation marks to indicate actual quotes) Bernanke should have said:
#1 Federal Reserve Chairman Ben S. Bernanke said the central bank may decide to hold bonds on its $3.1 trillion balance sheet to maturity because no one in the financial markets is capable or stupid enough to buy up all that junk debt.  So, the Fed will be forced to eat it.
#2 Bernanke told lawmakers in Washington today that he expects to revisit “sometime soon” an exit plan because he has no idea how in the H_ll the Fed can get out of this mess.
#3 The Fed is purchasing $85 billion of Treasury and mortgage- backed securities a month in an effort to save all the banks from declaring BANKRUPTCY.

#4 Bernanke said today the central bank’s easing policies are totally distorting demand for homes and cars by providing ‘Free Money’ to the banks so that they can provide loans to anyone that can “Fog a Mirror,” just as they did for housing back in 2002 through 2005, which insane policy led to the last economic disaster and the credit-Crisis of 2007/08.   

Monday, February 11, 2013

#2 KNOWING THE TRUTH WILL SAVE YOUR A_S!!


Note to this Blog from last year:  We have now set the ultimate price target for this totally insane and unjustified rally in the Dow Jones for 18,500 in the Spring to Fall of 2015.

Also, this rally is very likely to end in October the 13th to 27th of that year.  

And all the other equity markets of the entire world will follow this 'March to the Death,' which will finally and utterly shear the 'Sheeple' of all the earth of what little wealth (and sanity) they have left to them!

 

Wednesday, May 2, 2012

Knowing The Truth Will Save Your A__!


As I have noted before:
Every once in a great while the MSM gets it right and reports the truth.  The following is a prime example.  I need add NOTHING to this very fine and accurate piece of journalism.
Are you and your company ready for the Financial Debacle of the century that will follow the “Great Deception of 2012” when all the ‘Sheeple’ will have finally been persuaded to put their last bits of money into the world’s stock markets and then be entirely fleeced - once again - with the Greatest Stock Market Crash ever in the Winter of 2014 from the roughly 16,500 level on the DOW?

Incidentally, I am just about to reset our projected insane target level on the DOW to 18,000.  I think that will be MADE necessary by the fact that the "Powers That BE" (PTB) are having a VERY difficult time moving the 'Sheeple' back into Stocks.  And the 'Sheeple' must be 'All In' (just like Real Estate in 2006) the insanely overpriced PAPER of the stock markets before the PTB can 'PULL the Curtain" on this 'Monkey Show,' just as they did three times in the late 60's and 72 and 1987 and 2001!

Doubt us?  

Well, just watch the rhetoric rise to fever pitch by the 'talking heads' and 'professional pitchmen' of the Devil on the country's FV's (Funny Visions) over this coming year and you WILL see our prediction come entirely true! 

ON that I will take bets from anybody at very nearly any odds!

Finally, the "Age of Austerity" just briefly mentioned in this article is upon our doorstep, as I did cover in  some detail on our website Home pages and New Normal pages and Econometrics pages at www.polestarcomm.com and in MUCH greater details in our Market Review of 2011 and our Quarterly Reviews since then and in a cursory fashion in these Blogs.

IMO - you and your company should be preparing NOW for these things, otherwise, your company is sure to join the long list of those companies (some are listed at the bottom of our home page) that were destroyed in the FIRST wave of the Super-Tsunami "Kondratieff" Long-Wave that did strike this country and the entire world in 2007 and 2008.

And remember, the SECOND wave of the Super-Tsunami "Kondratieff" Long-Wave will be three times as horrific and financially catastrophic as the first wave, which increased intensity is merely a factor of wave harmonics, but will be credited to the $700,000,000,000,000 Derivatives Issue by the 'talking heads'  and 'professional pundits' of the Devil in late 2014 and 2015.

Yale’s Shiller: World in a 'Late Great Depression'

www.moneynews.com; Monday, 30 Apr 2012 07:50 AM; By Forrest Jones
“ The global economy is mired in a "late Great Depression" despite central bank stimulus policies, says Yale economist and author Robert Shiller.

"Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller tells CNBC.

The Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England have propped up their respective economies via liquidity injections known as quantitative easing, tools designed to spur recovery but dubbed by critics as printing money out of thin air.

He says the world is in a “new age of austerity.”
Critics say such monetary tools don't improve fundamental economic problems of too much debt and too little growth, although Shiller points out that the jury is still out whether fiscal measures taken to tackle those problems such as budget cuts and tax hikes in Europe especially are having a desired effect.

"Quantitative easing is not as prominent a policy as austerity ... the effect of austerity is not crystal clear because it depends how people react to it," says Shiller, who accurately called the tech bust of the early 2000s and the housing bust later that decade.

"It might help, but I don’t know if it's going to overwhelm the general mood of austerity, which is affecting the housing market."

….  "Fifty years ago, there wasn’t this talk of housing as an investment. It was a zeitgeist of the early 2000s, and it has gradually gone."

The housing sector appears to be bouncing along a bottom….

… Housing prices will drop by a further 20 percent as the downturn gripping the United States deepens, leading economist Gary Shilling says.

Writing in the Christian Science Monitor, Shilling said more and more people are looking to rent as homeownership becomes increasingly rare.

“Housing activity remains depressed, with the only life coming from the multifamily component, which is being driven by the zeal for rental apartments as homeownership falls,” he wrote.

“Homeowners are losing their abodes to foreclosures; many can’t meet stringent mortgage lending standards; some worry about homeownership responsibilities in the face of job uncertainty; and many people have no desire to buy an asset that continues to fall in price.

“I am looking for a further 20 percent slide in housing prices.”

Read more: Yale’s Shiller: World in a 'Late Great Depression'

Tuesday, February 5, 2013

From Dogs to Pigs to Cows to ?



Well, let’s see:  the lexicon of ‘Colorful Financial Metaphors’ is now growing, yet again:


The Eisenhower corrections of the 50’s, yielded ‘Dogs’ for crappy stocks, 

The three Great Stock Market Crashes from the 1000 level, culminating with the Crash of 72-74, so scared the sh_t out of the Sheeple that 'Dogs’ was forever adopted in the common vernacular,

The Internet Bubble of 1997-2001 yielded, ‘Pigs’ and “Slap some lipstick on that Pig,”

Now in the following article, we learn that the Great Housing Bubble has yielded ‘Cows’ as a metaphor for stupidly blind financial analysts who were supposedly grading the credit worthiness of the ‘Junk’ Mortgage Bonds.  

Now, I ask what?

What new, nifty and colorful metaphors will this entirely phony Stock Market Rally be remembered for?


By the by, please remember: that we project that this completely PHONY Rally that began with the Great Deception of 2012 will ABSOLUTELY explode with a massively deceptive move to Dow Jones 18,500 in roughly the summer of 2015, only to be followed with the ‘Mother of all Stock Market Crashes!!' 

To see why this will be so, read all our Blogs of late 2011 and early 2012 about the Great Deception of 2012, which occurred right on schedule, we might add!

S&P Analyst Joked of Bringing Down the House Before Crash

By David McLaughlin - Feb 5, 2013 4:54 PM ET
Standard & Poor’s employees joked about the company’s willingness to rate deals “structured by cows” and sang and danced to a mock song inspired by “Burning Down the House” before the 2008 global financial collapse, according to a U.S. government lawsuit.
Two S&P analysts in April 2007 discussed the company’s model for collateralized debt obligations, with one messaging that a deal was “ridiculous” and that S&P “should not be rating it,” according to the complaint filed yesterday in federal court in Los Angeles.
Feb. 5 (Bloomberg) -- Floyd Abrams, a partner at Cahill Gordon & Reindel LLP, talks about a U.S. Justice Department lawsuit against McGraw-Hill Cos. and its Standard & Poor’s unit. The government alleges that S&P knowingly understated the credit risks of bonds and derivatives that were central to the worst financial crisis since the Great Depression. Abrams is an attorney representing S&P in the lawsuit. He speaks with Sara Eisen on Bloomberg Television's "Lunch Money." (Source: Bloomberg)
“We rate every deal,” the other replied, prosecutors said. “It could be structured by cows and we would rate it.”
The analysts’ messages are among internal communications cited in the Justice Department’s complaint against S&P and its parent, New York-based McGraw-Hill Cos.
The U.S. claims S&P, driven by a desire to increase revenue and market share, defrauded investors as it issued ratings on mortgage products while ignoring market risks. It rated more than $2.8 trillion of residential mortgage-backed securities and about $1.2 trillion of collateralized-debt obligations from September 2004 to October 2007, the government said.
A 2008 investigation into credit rating companies by the U.S. Securities and Exchange Commission found that that the firms improperly managed conflicts and weighed the risk of losing market share based on their ratings.

Ratings Report

The report on Moody’s Investors Service, S&P and Fitch Ratings cited the discussion about the deal structured by “cows” and quoted an analyst who wrote in an e-mail: “Let’s hope we are all wealthy and retired by the time this house of cards falters.”
According to the U.S. lawsuit, S&P in 2004 was considering a process for changing its rating criteria and reached out to investors and issuers of mortgage securities for their feedback. One executive questioned this practice, saying, “[W]e NEVER poll them as to content or acceptability!”
Employees meanwhile were raising concerns about losing deals to competitors, according to the complaint. One analyst in May 2004 wrote that the company was losing a “huge” deal to a competitor because S&P was more conservative than others, the government said.
“This is so significant that it could have an impact on future deals,” the analyst wrote, according to the complaint. “There’s no way we can get back on this one, but we need to address this now in preparation for future deals.”

Volume, Standards

In 2007, one CDO analyst wrote to a former co-worker: “Does company care about deal volume or sound credit standards?”
E-mails and text messages can give prosecutors insight into the “unvarnished perspective” of company insiders and help them win trials because they’re easier for jurors to understand than more formal documents, said Robert Mintz, a partner at McCarter & English.
“They tend to give jurors a flavor for the general atmosphere inside a company, and that in connection with other documents can often be quite damning,” said Mintz, a former federal prosecutor in New Jersey.
S&P said in a statement that the government’s lawsuit is “meritless” and that at all times the company’s ratings “reflected our current best judgments” about mortgage securities and CDOs.
“Unfortunately, S&P, like everyone else, did not predict the speed and severity of the coming crisis and how credit quality would ultimately be affected,” the company said.

‘Cherry-Picked’

The reference to a deal “structured by cows” had “nothing to do with RMBS or CDO ratings or any S&P model,” it said, contradicting the complaint. RMBS stands for residential mortgage-backed securities.
“The e-mail excerpts cherry-picked by DOJ have been taken out of context, are contradicted by other evidence, and do not reflect our culture, integrity or how we do business,” it said.
Beginning in the fall of 2006 and continuing to about the spring of 2007, one executive regularly expressed frustration to colleagues that she was prevented by other executives from downgrading ratings of subprime mortgage securities because of concern that the company’s business would be affected, the government said.
“This market is a wildly spinning top which is going to end badly,” said another executive in 2006, according to the complaint.

New Lyrics

In March 2007, an analyst wrote lyrics to the tune of “Burning Down the House” by the rock group Talking Heads.
According to the complaint, it began:
“Watch out / Housing market went softer / Cooling down / Strong market is now much weaker / Subprime is boi-ling o-ver / Bringing down the house.”
The government said the analyst later sent a video of himself singing and dancing the first verse “before an audience of laughing S&P co-workers.”

Monday, February 4, 2013

#5 What Gradual Economic Devolution Looks Like to Bill Gross of Pimco



Beware 'Credit Supernova' Looming Ahead : Gross

Published: Monday, 4 Feb 2013 | 12:02 PM ET
By: Jeff Cox ; CNBC.com Staff Writer
"Pimco's Bill Gross looks at the investing universe and sees a dangerous supernova - a looming explosion that could see investors lost in space.
The head of the Pacific Investment Management bond giant has issued an ominous forecast in which he worries that the global central bank-induced credit bubble "is running out of energy and time." ...
As a result, investors will have to get used to an atmosphere of diminishing returns and portfolios that will hold more hard assets like commodities and fewer less-tangible financial assets like stocks.
"Our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic," Gross said in his February newsletter.
"When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets," he added.
Gross advocates investors turn to gold and other commodities for inflation protection and currencies and assets in other countries that don't have such active central banks and huge debt loads. He favors Australia, Brazil, Canada and Mexico. ..."


Sunday, January 20, 2013

#4 What Gradual Economic Devolution Looks Like - to the average American Worker


Well Folks, we’ve had a great Holiday and are looking forward to a great New Year that we are equally certain will not be so great for all those that are not prepared for the unexpected.

For instance, all bears on the stock markets and Gold and residential Real Estate will be slaughtered, because ... 

 

Everything that we have expected for over five years, and predicted, is being ‘Rolled Out’ by the PTB (Powers That Be) right on schedule.

 

 #1 the US Economy is continuing its slow dissolutive devolution and the US is now on track to becoming a ‘Third World’ nation by 2022,  

SPECIAL NOTE: Ignore the false signal of economic robustness and health indicated by car sales ---- because the PTB and the Stupid Bankers are doing with cars EXACTLY what they did with houses in 2002 to 2006, i.e. they are allowing the Car Dealers to sell a car with NO money down, NO credit worthiness established, NO income qualifications and NO liability (because they are once again selling 'Bundled Loans' to really stupid investors) to anybody that can FAM (Fog A Mirror).  

And the results for the auto industry, and the country, will be very similar to the Real Estate crash of 2006 to 2009.   

 

#2 the US real inflation rate (NOT that phony rate reported by the US CD) is now raging out of total control, somewhere in the range of 9.5 to 11.5% per annum.

 

#3 because the real Inflation rate is around 9.5 to 11.5%, the US GDP is contracting at around 5.5 to 7.5% per year as will be corroborated by anybody in business,

 

#4 the PTB are pushing all stock markets to totally insane levels despite the horrific condition of the US economy and we are still confident that the ultimate target for the Dow Jones is roughly 18,500 in late 2014. 

I do very well know that this sounds insane to those with absolutely no experience of these things, but there is now no other ‘Investment Game’ in town for the enormous pools of liquidity and the bank’s roughly $43,000,000,000 of new QE money, each and every month, is going straight into the markets - as we did very clearly predict back in 2011!!!

 

#5 American workers, and all Americans, are now in a mammoth struggle for survival which they will lose, when the second wave of the Super Tsunami ‘Kondratieff’ Long-Waves crashes over all the world’s economies in late 2014 to 2015.

 

#6 Gold is clearly headed to $2,200 to 2,500 per ounce in 2013 and many thousands of dollars per ounce in 2015 to 2017, when the US and all Western Fiat currencies crash, contiguous with the bursting of the greatest Bubble of all FED promulgated Bubbles, i.e. the BOND BUBBLE!!

 

#7 the poor befuddled and confused Sheeple are being set up by the MSM PORE (PSY-Ops Reporting and Editorializing) to buy Real Estate so that they will be utterly destroyed in the second wave of the Super Tsunami 'Kondratieff' Long-Waves, when all Real Estate prices will absolutely crater!!!!   

 

The further unraveling of the ‘American Dream’ is right out there for all to see, if they will but look: 

 Corporate Profits Reach Record High, While Workers Struggle

The Huffington Post  |  By Bonnie Kavoussi Posted: 11/30/2012 10:34 am EST Updated: 11/30/2012 10:34 am EST
While finance executives urge Congress and the President to rein in spending, finance companies are raking in profits.
Corporate profits reached a record high in the third quarter, according to a Commerce Department report out Thursday. And the financial sector is doing particularly well. Financial companies accounted for all of the net growth in domestic corporate profits during the third quarter, according to analysis by Haver Analytics cited by The New York Times. Catherine Rampell writes:
Domestic profits of financial corporations rose $71.3 billion in the third quarter, after falling $39.7 billion in the second. Domestic profits of nonfinancial corporations, on the other hand, decreased $1 billion in the third quarter, after rising $27.8 billion in the second quarter.
Meanwhile, workers are struggling. Average hourly pay, when adjusted for inflation, has fallen 0.7 percent over the past year, according to the Labor Department. And the unemployment rate in October was 7.9 percent -- it was at a low of 4.4 percent in May 2007 before the recession.
It's a "zero-sum game," Moody's Analytics economist Aaron Smith told The Huffington Post in February. Companies are earning record profits largely because they are squeezing more productivity out of their workers without paying them more. Workers are afraid to slack off because it's become so hard to find another job.
Investors, on the other hand, are reaping money. Indeed, this month many companies issued special year-end dividends ahead of expected tax hikes in 2013. If you had a few million dollars lying around in early 2009, you could have made a fortune by investing in the stock market. The S&P 500 has more than doubled since its lowest point of the recession, in March 2009.
Check out how much corporate profits have boomed since 2009:
corporate profits

Friday, December 7, 2012

#3 What Gradual Economic Devolution Looks LIke - to the average American Worker



The following, clearly structured and presented, economic expose is from one of the best alternative websites out there that is telling the American ‘Sheeple’ the truth.


http://theeconomiccollapseblog.com/archives/from-good-jobs-to-bad-jobs-to-no-jobs-the-tragic-downfall-of-the-american-worker


I can add nothing more to this sad requiem of the American Worker, except I see and hear the very same anecdotal evidence from all over the country.  And I really hear it from all those very sad and forlorn part-timers, euphemistically called ‘Associates,” at the Big Box Stores.  

BUT, don’t be fooled!!

 

The PTB (Powers That Be) will not let these horrific facts dissuade them from utilizing the FMMM (FED’s Magic Money Machine) of the now endless and forever QE’s to run the Dow Jones to the 18,500 range in mid to late 2015 - and all the other markets similarly.

 (These original projections of ours were extended over five times: we were forced to do so by the continual extension of the FED's ZIRP - by the Panicked Banking Authorities.  Therefore, we were forced to extend the projected timing of the ultimate Mother of All Crashes out to roughly the summer 2016!

{{2nd Edit of 4/3/18 This edit was caused by further extensions of FED's ZIRP that are only now in 2018 being altered.  So, the timetable has been further extended, so that in 2017 I extended the:

Mother of All Crashes to 2022!

And that is because the FED quite simply can not now move interest rates back to historic norms seen prior to the Kandratieff of 2008-9!

For if they did that then the Total Collapse of this still very fragile economy would be instantaneous and beyond the unimaginable, both in severity and in breadth of destruction; e.g. if just auto loans were again at 7-9% per annum instead of 0%, then auto sales would totally collapse and all of the economy would die with the auto sector, etc., etc! }}

 

So, I really hope you and your company are preparing for the worst, as the ‘Great Deception of 2012’ evolves into the ‘Great Deception of 2013' and 2014 in the stock markets ONLY while the American economy continues its devolution into that of a Third World, second rate, has-been - which disastrous future is directly ahead of all of us unless our PEC (Professional Economic Class) abandon their EMM (EconoMystical Mystic) mumbo-jumbo and the PPC (Professional Political Class) WAKE UP!!   

 

For if the American economy continues on its present glide-path, then the worst is certainly YET TO COME, when the 2nd wave of the Super Tsunami ‘Kondratieff’ Long-Waves sweeps over all the world’s economies in early to late 2015.

Following is from:

http://theeconomiccollapseblog.com/archives/from-good-jobs-to-bad-jobs-to-no-jobs-the-tragic-downfall-of-the-american-worker

From Good Jobs To Bad Jobs To No Jobs - The Tragic Downfall Of The American Worker

By Michael, on December 5th, 2012

  There was a time in America when virtually anyone that wanted a job could go out and get one and the United States boasted the largest and most prosperous middle class in the history of the world.  Sadly, those days are long gone.  Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job.  But now there are millions of Americans in their prime working years that cannot find a job.  Millions of others are working low wage jobs or part-time jobs because that is all they can get.  The other day I went to a large retail store and I got into a conversation with the lady who was checking me out.  She said that she had worked professional jobs all her life, and that she had taken this job to tide her over as she searched for a new job, but now she had been there for two years with no end in sight.  I felt really bad for her, because she was obviously a sharp lady with a lot of skills.  But this is the new reality.  Good paying manufacturing and professional jobs are being replaced by low paying service jobs.  We are transitioning from an economy with plenty of good jobs to an economy with plenty of bad jobs.  The next stage in our transition will be to an economy where it seems like there are no jobs for anyone.  We are witnessing the tragic downfall of the American worker, and it is heartbreaking.
Many of our politicians insist that things are getting better for American workers, but that is simply not true.  Just look at the chart below.  Back at the start of 2008, the percentage of working age Americans with a job was sitting at about 63 percent.  Since then it has fallen below 59 percent and it has stayed there for over 3 years.  After every other recession in the post-World War II era the employment-population ratio has always bounced back.  That has not happened this time...
If this number was going to recover, it would have done so by now.  We are rapidly approaching the next major economic crisis and the percentage of working age Americans with a job is going to go even lower.
And our politicians are certainly not helping matters.  Many of the things that they have done are actually going to accelerate the loss of good jobs.  For example, as one small business owner recently pointed out, Obamacare is going to force businesses all over the United States to minimize the number of full-time workers they are using and replace them with part-time workers...
Here is what I am doing for the rest of the year -- working with every manager in my company so that as of January 1, 2013, none of our employees are working more than 28 hours a week.   I think most readers know the reason -- we have got to get our company under 50 full time employees or else I am facing a bill from Obamacare in 2014 that will be several times larger than my annual profit.  I love my workers.  They make me a success.  But most of my competitors are small businesses that are exempt from the Obamacare hammer.  To compete, I must make sure my company is exempt as well.  This means that our 400+ full time employees will have to be less than 50 in 2013, so that when the Feds look at me at the start of 2014, I am exempt.  We will have more employees working fewer hours, with more training costs, but the Obamacare bill looks like about $800,000 a year for us, at least, and I am pretty sure the cost of more training will be less than that.
This will be unpopular but tolerable to most of my employees.  The vast majority of them are retired and our company is merely an excuse to stay busy, work outdoors, and get a little extra money.
But this is going to be an ENORMOUS change in the rest of the service sector.  I have talked to a lot of owners of restaurants and restaurant chains, and the 40-hour work week is a thing of the past in that business.  One of my employees said that in Hawaii, it was all the hotel employees could talk about.   Many chains are working on mutli-team systems where two teams of people working part-time replace the former group of full-time employees.  2013 is going to see a lot of people (who are not paid very well to begin with) getting their hours and pay cut by 25%.  At the same time that they are required, likely for the first time since many are relatively young, to purchase health insurance.
How could we be so foolish?
Unfortunately, this is not something new.  Our economy has been replacing good jobs with bad jobs for quite some time.  If you can believe it, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
Will nearly all of us eventually be working in fast food restaurants or stocking shelves at retail giants like Wal-Mart?
Amazingly, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
No wonder our middle class is being absolutely destroyed.
At this point, wages as a percentage of GDP are at an all-time low in America.  As millions more good jobs are shipped out of the country, the competition for the remaining jobs will become incredibly fierce and that number will get even lower.
Many Americans that actually do have jobs right now find that they simply don't make enough to take care of themselves and their families.  They are called "the working poor", and their ranks are growing steadily.  Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.
American households are getting poorer at a time when prices continue to rise.  Median household income in America has declined for four years in a row.  Overall, it has fallen by over $4000 during that time span.
But have the prices in the stores declined?
Of course not.
No wonder middle class families are feeling more financial stress than ever before.  A survey conducted by the Pew Research Center found that 85 percent of middle class Americans say that it is harder to maintain a middle class standard of living today than it was 10 years ago.
The transition from good jobs to bad jobs in our economy has been taking place for a very long time, and it is not going to be reversed overnight.  Back in 1980, less than 30% of all jobs in the United States were low income jobs.  Today, more than 40% of all jobs in the United States are low income jobs.  There are less tickets to the middle class than there used to be, but neither political party seems interested in stopping the flow of good jobs out of the country.
If we keep doing the same things that we have been doing, we will continue to get the same results.
When I was young, I was told that there would always be "good jobs" available for anyone that got a good education and that worked hard.
What a crock of baloney that turned out to be.
According to a paper that was recently released by the Center for Economic and Policy Research, only 24.6 percent of all jobs in the United States qualify as "good jobs" at this point.
In a previous article, I detailed the three criteria that they used to define what a "good job" is….
#1 The job must pay at least $18.50 an hour.  According to the authors, that is the equivalent of the median hourly pay for American workers back in 1979 after you adjust for inflation.
#2 The job must provide access to employer-sponsored health insurance, and the employer must pay at least some portion of the cost of that insurance.
#3 The job must provide access to an employer-sponsored retirement plan.
More than 75 percent of all jobs in the U.S. today are not "good jobs", and things are not looking promising for the future.
No wonder so many families are barely surviving these days.  Right now, approximately 77 percent of all Americans are living paycheck to paycheck at least some of the time.  That is a dreadful number.
But if you still do have a job, you should consider yourself to be fortunate.
There are millions upon millions of Americans out there without any job at all.
Did you know that 53 percent of all Americans with a bachelor's degree under the age of 25 were either unemployed or underemployed during 2011?
Hordes of fresh college graduates are entering the marketplace each year only to find that the good jobs that they were promised simply are not there.
And now it looks like things are getting even worse.  This week Citigroup announced that it plans to eliminate 11,000 jobs in an attempt to reduce costs.  But Citigroup is far from alone.  We have seen dozens of major layoff announcements since the election.  If you doubt this, just see this article and this article.
It is time to wake up and admit that our economy is in an advanced state of decline, that we need to quit shipping our jobs out of the country, and that what we are doing now is clearly not working.
If we are "the greatest economy on earth", then why are approximately 48 percent of all Americans either considered to be "low income" or are living in poverty?
We need to return to the principles that our Founding Fathers founded this country on or else things are going to get a lot worse and people are going to get very, very angry.
Our politicians have been pitting different groups of people against one another and many of them have been blaming the wealthy for all of our problems.  Never before in my lifetime have I seen so much anger directed toward those that have money.  This anger is even being expressed in ways that you would not normally expect.  For example, the California Federation of Teachers recently produced a video that portrays wealthy people peeing on poor people.  That shocked me.
Eventually, all of this anger is going to lead to violence if we are not careful.  When the next major wave of the economic crisis strikes and unemployment gets significantly worse, I fear for what might happen.  I believe that it is very possible that we may see mobs of struggling people storm into wealthy neighborhoods and play "Robin Hood" with their possessions.
Instead of hating one another, we need to return to the principles that once made our economy so great.  Those principles would enable everyone to prosper.
Unfortunately, this country continues to turn away from those principles and hate and anger continue to grow.
If we continue down this path, the end result is going to be a complete and total nightmare.
It is possible to turn this economy around.  But we can't do the same things that we have been doing.  We have to start making better decisions.

Wednesday, November 21, 2012

An Excellent Analysis of the USA's Cultural, Economic and Political Devolution



This farewell message from Rep. Ron Paul, delivered on the floor of the United States House of Representatives, is – in reality – a eulogy for the America that I was born in, grew up in and dearly loved.  It is a long, 17 pages, tightly focused review of a period in the history of this Once Great Constitutional Republic, i.e. America was never intended to be a ‘Democracy’ and the failure of that basic understanding of Civics is a clear indication of the political and economic ignorance of the citizenry that is leading to the Economic, Cultural and Political Devolution (ECPD) of the USA.   

#1 On page 2, Rep. Paul identifies the problem, i.e. the United States of America is BROKE.
#2 On page 4, Rep. Paul presents one of the best philosophical analyses of the American dilemma
 #3 On page 3, Rep. Paul identifies the age of ‘Bread and Circuses ‘ that is now upon this once great Constitutional Republic.
#4 On page 5, Rep. Paul identifies the inevitable outcome of these things
#5 On page 5, Rep. Paul identifies the ‘atomization’ of individuals and the Balkanization of regions of the country in this formally united United States.
#6 On page 6, Rep. Paul identifies the tragic moral and financial costs of carrying out totally ILLEGAL Wars -- That is, our recent military incursions in other lands have been ILLEGAL when solely initiated by the President, because that office does NOT have the authority to engage in Wars under the ‘Powers’ granted to the three separate branches of this former Constitutional Republic by the US constitution that has now been shredded!
#7 On page 10, Rep. Paul identifies the sad truth that the USA does NOT have a ‘Free Market’ economy, but rather a Centralized Economically Planned one – just like the Communists of old!!  
#8 On page 11, Rep. Paul identifies the current insanity of our legal system’s treatment of Drug Crimes and the inherent cost.
#9 On page 13, Rep. Paul identifies the new ‘Culture of Violence’ that is now enveloping this once peaceful and tranquil land and creating a country that is foreign to those of us over fifty years of age, as evidenced by the rampantly popular and horrifically revolting type of ‘professional’ fighting that is now reverenced and emulated and admired that is NOT dissimilar to the Gladiatorial ‘Fights to the Death’ that so entranced the Romans in their years of decline, BEFORE their utter and complete ruination (in their Era of ‘Bread & Circuses!) and by the sickening ‘Body Art’ and implanted jewelry of males and females that does exemplify the ‘Body Art’ of the ‘Pagans of Old’ and of Satanism, violence, death, naked aggression, hate -- and nothing else!
#10 On page 14, Rep. Paul does identify the evil consequences of the rise of ‘Human Secularism.’  
#11 On page 18, Rep. Paul does very clearly reveal the consequences of the rotting of the very ‘Soul’ of the citizens of this Once Great Constitutional Republic, due to the evisceration and near total extirpation of the once ‘High Moral Code’ that did imbue every American’s character in prior generations!


This may well be the last time I speak on the House Floor. At the end of the year I'll leave Congress after 23 years in office over a 36 year period. My goals in 1976 were the same as they are today: promote peace and prosperity by a strict adherence to the principles of individual liberty.

It was my opinion, that the course the U.S. embarked on in the latter part of the 20th Century would bring us a major financial crisis and engulf us in a foreign policy that would overextend us and undermine our national security.

To achieve the goals I sought, government would have had to shrink in size and scope, reduce spending, change the monetary system, and reject the unsustainable costs of policing the world and expanding the American Empire.

The problems seemed to be overwhelming and impossible to solve, yet from my view point, just following the constraints placed on the federal government by the Constitution would have been a good place to start.

How Much Did I Accomplish?

In many ways, according to conventional wisdom, my off-and-on career in Congress, from 1976 to 2012, accomplished very little. No named legislation, no named federal buildings or highways -- thank goodness. In spite of my efforts, the government has grown exponentially, taxes remain excessive, and the prolific increase of incomprehensible regulations continues. Wars are constant and pursued without Congressional declaration, deficits rise to the sky, poverty is rampant and dependency on the federal government is now worse than any time in our history.

All this with minimal concerns for the deficits and unfunded liabilities that common sense tells us cannot go on much longer. A grand, but never mentioned, bipartisan agreement allows for the well-kept secret that keeps the spending going. One side doesn't give up one penny on military spending, the other side doesn't give up one penny on welfare spending, while both sides support the bailouts and subsidies for the banking and corporate elite. And the spending continues as the economy weakens and the downward spiral continues
. As the government continues fiddling around, our liberties and our wealth burn in the flames of a foreign policy that makes us less safe.
#1

The major stumbling
block to real change in Washington is the total resistance to admitting that the country is broke. This has made compromising, just to agree to increase spending, inevitable since neither side has any intention of cutting spending.

The country and the Congress will remain divisive since there's no "loot left to divvy up."

Without this recognition the spenders in Washington will continue the march toward a fiscal cliff much bigger than the one anticipated this coming January.

I have thought a lot about why those of us who believe in liberty, as a solution, have done so poorly in convincing others of its benefits. If liberty is what we claim it is- the principle that protects all personal, social and economic decisions necessary for maximum prosperity and the best chance for peace- it should be an easy sell. Yet, history has shown that the masses have been quite receptive to the promises of authoritarians which are rarely if ever fulfilled.

#2

Authoritarianism vs. Liberty

If authoritarianism leads to poverty and war and less freedom for all individuals and is controlled by rich special interests, the people should be begging for liberty. There certainly was a strong enough sentiment for more freedom at the time of our founding that motivated those who were willing to fight in the revolution against the powerful British government.

During my time in Congress the appetite for liberty has been quite weak; the understanding of its significance negligible. Yet the good news is that compared to 1976 when I first came to Congress, the desire for more freedom and less government in 2012 is much greater and growing, especially in grassroots America. Tens of thousands of teenagers and college age students are, with great enthusiasm, welcoming the message of liberty.

I have a few thoughts as to why the people of a country like ours, once the freest and most prosperous, allowed the conditions to deteriorate to the degree that they have.

Freedom, private property, and enforceable voluntary contracts, generate wealth. In our early history we were very much aware of this.
But in the early part of the 20th century our politicians promoted the notion that the tax and monetary systems had to change if we were to involve ourselves in excessive domestic and military spending. That is why Congress gave us the Federal Reserve and the income tax. The majority of Americans and many government officials agreed that sacrificing some liberty was necessary to carry out what some claimed to be "progressive" ideas. Pure democracy became acceptable.

They failed to recognized that what they were doing was exactly opposite of what the colonists were seeking when they broke away from the British.

Some complain that my arguments makes no sense, since great wealth and the standard of living improved for many Americans over the last 100 years, even with these new policies.

But the damage to the market economy, and the currency, has been insidious and steady. It took a long time to consume our wealth, destroy the currency and undermine productivity and get our financial obligations to a point of no return. Confidence sometimes lasts longer than deserved. Most of our wealth today depends on debt.

The wealth that we enjoyed and seemed to be endless, allowed concern for the principle of a free society to be neglected. As long as most people believed the material abundance would last forever, worrying about protecting a competitive productive economy and individual liberty seemed unnecessary.

#3

The Age of Redistribution

This neglect ushered in an age of redistribution of wealth by government kowtowing to any and all special interests, except for those who just wanted to left alone. That is why today money in politics far surpasses money currently going into research and development and productive entrepreneurial efforts.

The material benefits became more important than the understanding and promoting the principles of liberty and a free market. It is good that material abundance is a result of liberty but if materialism is all that we care about, problems are guaranteed.

The crisis arrived because the illusion that wealth and prosperity would last forever has ended. Since it was based on debt and a pretense that debt can be papered over by an out-of-control fiat monetary system, it was doomed to fail. We have ended up with a system that doesn't produce enough even to finance the debt and no fundamental understanding of why a free society is crucial to reversing these trends.

If this is not recognized, the recovery will linger for a long time. Bigger government, more spending, more debt, more poverty for the middle class, and a more intense scramble by the elite special interests will continue.

#4

We Need an Intellectual Awakening

Without an intellectual awakening, the turning point will be driven by economic law. A dollar crisis will bring the current out-of-control system to its knees.

If it's not accepted that big government, fiat money, ignoring liberty, central economic planning, welfarism, and warfarism caused our crisis we can expect a continuous and dangerous march toward corporatism and even fascism with even more loss of our liberties. Prosperity for a large middle class though will become an abstract dream.

This continuous move is no different than what we have seen in how our financial crisis of 2008 was handled. Congress first directed, with bipartisan support, bailouts for the wealthy. Then it was the Federal Reserve with its endless quantitative easing. If at first it doesn't succeed try again; QE1, QE2, and QE3 and with no results we try QE indefinitely -- that is until it too fails. There's a cost to all of this and let me assure you delaying the payment is no longer an option. The rules of the market will extract its pound of flesh and it won't be pretty.

The current crisis elicits a lot of pessimism. And the pessimism adds to less confidence in the future. The two feed on themselves, making our situation worse.

If the underlying cause of the crisis is not understood we cannot solve our problems. The issues of warfare, welfare, deficits, inflationism, corporatism, bailouts and authoritarianism cannot be ignored. By only expanding these policies we cannot expect good results.

Everyone claims support for freedom. But too often it's for one's own freedom and not for others. Too many believe that there must be limits on freedom. They argue that freedom must be directed and managed to achieve fairness and equality thus making it acceptable to curtail, through force, certain liberties.

Some decide what and whose freedoms are to be limited. These are the politicians whose goal in life is power. Their success depends on gaining support from special interests.

#5

No More 'isms'

The great news is the answer is not to be found in more "isms." The answers are to be found in more liberty which cost so much less. Under these circumstances spending goes down, wealth production goes up, and the quality of life improves.

Just this recognition -- especially if we move in this direction -- increases optimism which in itself is beneficial. The follow through with sound policies are required which must be understood and supported by the people.

But there is good evidence that the generation coming of age at the present time is supportive of moving in the direction of more liberty and self-reliance. The more this change in direction and the solutions become known, the quicker will be the return of optimism.

Our job, for those of us who believe that a different system than the one that we have had for the last 100 years, has driven us to this unsustainable crisis, is to be more convincing that there is a wonderful, uncomplicated, and moral system that provides the answers. We had a taste of it in our early history. We need not give up on the notion of advancing this cause.

It worked, but we allowed our leaders to concentrate on the material abundance that freedom generates, while ignoring freedom itself. Now we have neither, but the door is open, out of necessity, for an answer. The answer available is based on the Constitution, individual liberty and prohibiting the use of government force to provide privileges and benefits to all special interests.

After over 100 years we face a society quite different from the one that was intended by the Founders. In many ways their efforts to protect future generations with the Constitution from this danger has failed. Skeptics, at the time the Constitution was written in 1787, warned us of today's possible outcome. The insidious nature of the erosion of our liberties and the reassurance our great abundance gave us, allowed the process to evolve into the dangerous period in which we now live.

#6

Dependency on Government Largesse

Today we face a dependency on government largesse for almost every need. Our liberties are restricted and government operates outside the rule of law, protecting and rewarding those who buy or coerce government into satisfying their demands. Here are a few examples:

• Undeclared wars are commonplace.

• Welfare for the rich and poor is considered an entitlement.

• The economy is overregulated, overtaxed and grossly distorted by a deeply flawed monetary system.

• Debt is growing exponentially.

• The Patriot Act and FISA legislation passed without much debate have resulted in a steady erosion of our 4th Amendment rights.

• Tragically our government engages in preemptive war, otherwise known as aggression, with no complaints from the American people.

• The drone warfare we are pursuing worldwide is destined to end badly for us as the hatred builds for innocent lives lost and the international laws flaunted. Once we are financially weakened and militarily challenged, there will be a lot resentment thrown our way.

• It's now the law of the land that the military can arrest American citizens, hold them indefinitely, without charges or a trial.

• Rampant hostility toward free trade is supported by a large number in Washington.

• Supporters of sanctions, currency manipulation and WTO trade retaliation, call the true free traders "isolationists."

• Sanctions are used to punish countries that don't follow our orders.

• Bailouts and guarantees for all kinds of misbehavior are routine.

• Central economic planning through monetary policy, regulations and legislative mandates has been an acceptable policy.

Questions

Excessive government has created such a mess it prompts many questions:

• Why are sick people who use medical marijuana put in prison?

• Why does the federal government restrict the drinking of raw milk?

• Why can't Americans manufacturer rope and other products from hemp?

• Why are Americans not allowed to use gold and silver as legal tender as mandated by the Constitution?

• Why is Germany concerned enough to consider repatriating their gold held by the FED for her in New York? Is it that the trust in the U.S. and dollar supremacy beginning to wane?

• Why do our political leaders believe it's unnecessary to thoroughly audit our own gold?

• Why can't Americans decide which type of light bulbs they can buy?

• Why is the TSA permitted to abuse the rights of any American traveling by air?

• Why should there be mandatory sentences -- even up to life for crimes without victims -- as our drug laws require?

• Why have we allowed the federal government to regulate commodes in our homes?

• Why is it political suicide for anyone to criticize AIPAC ?

• Why haven't we given up on the drug war since it's an obvious failure and violates the people's rights? Has nobody noticed that the authorities can't even keep drugs out of the prisons? How can making our entire society a prison solve the problem?

• Why do we sacrifice so much getting needlessly involved in border disputes and civil strife around the world and ignore the root cause of the most deadly border in the world-the one between Mexico and the US?

• Why does Congress willingly give up its prerogatives to the Executive Branch?

• Why does changing the party in power never change policy? Could it be that the views of both parties are essentially the same?

• Why did the big banks, the large corporations, and foreign banks and foreign central banks get bailed out in 2008 and the middle class lost their jobs and their homes?

• Why do so many in the government and the federal officials believe that creating money out of thin air creates wealth?

• Why do so many accept the deeply flawed principle that government bureaucrats and politicians can protect us from ourselves without totally destroying the principle of liberty?

• Why can't people understand that war always destroys wealth and liberty?

• Why is there so little concern for the Executive Order that gives the President authority to establish a "kill list," including American citizens, of those targeted for assassination?

• Why is patriotism thought to be blind loyalty to the government and the politicians who run it, rather than loyalty to the principles of liberty and support for the people? Real patriotism is a willingness to challenge the government when it's wrong.

• Why is it is claimed that if people won't or can't take care of their own needs, that people in government can do it for them?

• Why did we ever give the government a safe haven for initiating violence against the people?

• Why do some members defend free markets, but not civil liberties?

• Why do some members defend civil liberties but not free markets? Aren't they the same?

• Why don't more defend both economic liberty and personal liberty?

• Why are there not more individuals who seek to intellectually influence others to bring about positive changes than those who seek power to force others to obey their commands?

• Why does the use of religion to support a social gospel and preemptive wars, both of which requires authoritarians to use violence, or the threat of violence, go unchallenged? Aggression and forced redistribution of wealth has nothing to do with the teachings of the world great religions.

• Why do we allow the government and the Federal Reserve to disseminate false information dealing with both economic and foreign policy?

• Why is democracy held in such high esteem when it's the enemy of the minority and makes all rights relative to the dictates of the majority?

• Why should anyone be surprised that Congress has no credibility, since there's such a disconnect between what politicians say and what they do?

Is there any explanation for all the deception, the unhappiness, the fear of the future, the loss of confidence in our leaders, the distrust, the anger and frustration? Yes there is, and there's a way to reverse these attitudes. The negative perceptions are logical and a consequence of bad policies bringing about our problems. Identification of the problems and recognizing the cause allow the proper changes to come easy.

Trust Yourself, Not the Government

Too many people have for too long placed too much confidence and trust in government and not enough in themselves. Fortunately, many are now becoming aware of the seriousness of the gross mistakes of the past several decades. The blame is shared by both political parties. Many Americans now are demanding to hear the plain truth of things and want the demagoguing to stop. Without this first step, solutions are impossible.

Seeking the truth and finding the answers in liberty and self-reliance promotes the optimism necessary for restoring prosperity. The task is not that difficult if politics doesn't get in the way.

We have allowed ourselves to get into such a mess for various reasons.

Politicians deceive themselves as to how wealth is produced. Excessive confidence is placed in the judgment of politicians and bureaucrats. This replaces the confidence in a free society. Too many in high places of authority became convinced that only they, armed with arbitrary government power, can bring about fairness, while facilitating wealth production. This always proves to be a utopian dream and destroys wealth and liberty. It impoverishes the people and rewards the special interests who end up controlling both political parties.

It's no surprise then that much of what goes on in Washington is driven by aggressive partisanship and power seeking, with philosophic differences being minor.

#7

Economic Ignorance

Economic ignorance is commonplace. Keynesianism continues to thrive, although today it is facing healthy and enthusiastic rebuttals. Believers in military Keynesianism and domestic Keynesianism continue to desperately promote their failed policies, as the economy languishes in a deep slumber.

Supporters of all government edicts use humanitarian arguments to justify them.

Humanitarian arguments are always used to justify government mandates related to the economy, monetary policy, foreign policy, and personal liberty. This is on purpose to make it more difficult to challenge. But, initiating violence for humanitarian reasons is still violence. Good intentions are no excuse and are just as harmful as when people use force with bad intentions. The results are always negative.

The immoral use of force is the source of man's political problems. Sadly, many religious groups, secular organizations, and psychopathic authoritarians endorse government initiated force to change the world. Even when the desired goals are well-intentioned -- or especially when well-intentioned -- the results are dismal. The good results sought never materialize. The new problems created require even more government force as a solution. The net result is institutionalizing government initiated violence and morally justifying it on humanitarian grounds.

This is the same fundamental reason our government uses force for invading other countries at will, central economic planning at home, and the regulation of personal liberty and habits of our citizens.

It is rather strange, that unless one has a criminal mind and no respect for other people and their property, no one claims it's permissible to go into one's neighbor's house and tell them how to behave, what they can eat, smoke and drink or how to spend their money.

Yet, rarely is it asked why it is morally acceptable that a stranger with a badge and a gun can do the same thing in the name of law and order. Any resistance is met with brute force, fines, taxes, arrests, and even imprisonment. This is done more frequently every day without a proper search warrant.

No Government Monopoly over Initiating Violence

Restraining aggressive behavior is one thing, but legalizing a government monopoly for initiating aggression can only lead to exhausting liberty associated with chaos, anger and the breakdown of civil society. Permitting such authority and expecting saintly behavior from the bureaucrats and the politicians is a pipe dream. We now have a standing army of armed bureaucrats in the TSA, CIA, FBI, Fish and Wildlife, FEMA, IRS, Corp of Engineers, etc. numbering over 100,000. Citizens are guilty until proven innocent in the unconstitutional administrative courts.

Government in a free society should have no authority to meddle in social activities or the economic transactions of individuals. Nor should government meddle in the affairs of other nations. All things peaceful, even when controversial, should be permitted.

We must reject the notion of prior restraint in economic activity just we do in the area of free speech and religious liberty. But even in these areas government is starting to use a backdoor approach of political correctness to regulate speech-a dangerous trend. Since 9/11 monitoring speech on the internet is now a problem since warrants are no longer required.
#8

The Proliferation of Federal Crimes

The Constitution established four federal crimes. Today the experts can't even agree on how many federal crimes are now on the books -- they number into the thousands. No one person can comprehend the enormity of the legal system -- especially the tax code. Due to the ill-advised drug war and the endless federal expansion of the criminal code we have over 6 million people under correctional suspension, more than the Soviets ever had, and more than any other nation today, including China. I don't understand the complacency of the Congress and the willingness to continue their obsession with passing more Federal laws. Mandatory sentencing laws associated with drug laws have compounded our prison problems.

The federal register is now 75,000 pages long and the tax code has 72,000 pages, and expands every year. When will the people start shouting, "enough is enough," and demand Congress cease and desist.

Achieving Liberty

Liberty can only be achieved when government is denied the aggressive use of force. If one seeks liberty, a precise type of government is needed. To achieve it, more than lip service is required.

Two choices are available.

• A government designed to protect liberty -- a natural right -- as its sole objective. The people are expected to care for themselves and reject the use of any force for interfering with another person's liberty. Government is given a strictly limited authority to enforce contracts, property ownership, settle disputes, and defend against foreign aggression.

• A government that pretends to protect liberty but is granted power to arbitrarily use force over the people and foreign nations. Though the grant of power many times is meant to be small and limited, it inevitably metastasizes into an omnipotent political cancer. This is the problem for which the world has suffered throughout the ages. Though meant to be limited it nevertheless is a 100% sacrifice of a principle that would-be-tyrants find irresistible. It is used vigorously -- though incrementally and insidiously. Granting power to government officials always proves the adage that: "power corrupts."

Once government gets a limited concession for the use of force to mold people habits and plan the economy, it causes a steady move toward tyrannical government. Only a revolutionary spirit can reverse the process and deny to the government this arbitrary use of aggression. There's no in-between. Sacrificing a little liberty for imaginary safety always ends badly.

Today's mess is a result of Americans accepting option #2, even though the Founders attempted to give us Option #1.

The results are not good. As our liberties have been eroded our wealth has been consumed. The wealth we see today is based on debt and a foolish willingness on the part of foreigners to take our dollars for goods and services. They then loan them back to us to perpetuate our debt system. It's amazing that it has worked for this long but the impasse in Washington, in solving our problems indicate that many are starting to understand the seriousness of the world -wide debt crisis and the dangers we face. The longer this process continues the harsher the outcome will be.

The Financial Crisis Is a Moral Crisis

Many are now acknowledging that a financial crisis looms but few understand it's, in reality, a moral crisis. It's the moral crisis that has allowed our liberties to be undermined and permits the exponential growth of illegal government power. Without a clear understanding of the nature of the crisis it will be difficult to prevent a steady march toward tyranny and the poverty that will accompany it.

Ultimately, the people have to decide which form of government they want; option #1 or option #2. There is no other choice. Claiming there is a choice of a "little" tyranny is like describing pregnancy as a "touch of pregnancy." It is a myth to believe that a mixture of free markets and government central economic planning is a worthy compromise. What we see today is a result of that type of thinking. And the results speak for themselves.

#9

A Culture of Violence

American now suffers from a culture of violence. It's easy to reject the initiation of violence against one's neighbor but it's ironic that the people arbitrarily and freely anoint government officials with monopoly power to initiate violence against the American people -- practically at will.

Because it's the government that initiates force, most people accept it as being legitimate. Those who exert the force have no sense of guilt. It is believed by too many that governments are morally justified in initiating force supposedly to "do good." They incorrectly believe that this authority has come from the "consent of the people." The minority, or victims of government violence never consented to suffer the abuse of government mandates, even when dictated by the majority. Victims of TSA excesses never consented to this abuse.

This attitude has given us a policy of initiating war to "do good," as well. It is claimed that war, to prevent war for noble purposes, is justified. This is similar to what we were once told that: "destroying a village to save a village" was justified. It was said by a US Secretary of State that the loss of 500,000 Iraqis, mostly children, in the 1990s, as a result of American bombs and sanctions, was "worth it" to achieve the "good" we brought to the Iraqi people. And look at the mess that Iraq is in today.

Government use of force to mold social and economic behavior at home and abroad has justified individuals using force on their own terms. The fact that violence by government is seen as morally justified, is the reason why violence will increase when the big financial crisis hits and becomes a political crisis as well.

First, we recognize that individuals shouldn't initiate violence, then we give the authority to government. Eventually, the immoral use of government violence, when things goes badly, will be used to justify an individual's "right" to do the same thing. Neither the government nor individuals have the moral right to initiate violence against another yet we are moving toward the day when both will claim this authority. If this cycle is not reversed society will break down.

When needs are pressing, conditions deteriorate and rights become relative to the demands and the whims of the majority. It's then not a great leap for individuals to take it upon themselves to use violence to get what they claim is theirs. As the economy deteriorates and the wealth discrepancies increase -- as are already occurring -- violence increases as those in need take it in their own hands to get what they believe is theirs. They will not wait for a government rescue program.

When government officials wield power over others to bail out the special interests, even with disastrous results to the average citizen, they feel no guilt for the harm they do. Those who take us into undeclared wars with many casualties resulting, never lose sleep over the death and destruction their bad decisions caused. They are convinced that what they do is morally justified, and the fact that many suffer just can't be helped.

#10

When the street criminals do the same thing, they too have no remorse, believing they are only taking what is rightfully theirs. All moral standards become relative. Whether it's bailouts, privileges, government subsidies or benefits for some from inflating a currency, it's all part of a process justified by a philosophy of forced redistribution of wealth. Violence, or a threat of such, is the instrument required and unfortunately is of little concern of most members of Congress.

Some argue it's only a matter of "fairness" that those in need are cared for. There are two problems with this. First, the principle is used to provide a greater amount of benefits to the rich than the poor. Second, no one seems to be concerned about whether or not it's fair to those who end up paying for the benefits. The costs are usually placed on the backs of the middle class and are hidden from the public eye. Too many people believe government handouts are free, like printing money out of thin air, and there is no cost. That deception is coming to an end. The bills are coming due and that's what the economic slowdown is all about.

Sadly, we have become accustomed to living with the illegitimate use of force by government. It is the tool for telling the people how to live, what to eat and drink, what to read and how to spend their money.

To develop a truly free society, the issue of initiating force must be understood and rejected. Granting to government even a small amount of force is a dangerous concession.

Limiting Government Excesses vs. a Virtuous Moral People

Our Constitution, which was intended to limit government power and abuse, has failed. The Founders warned that a free society depends on a virtuous and moral people. The current crisis reflects that their concerns were justified.

Most politicians and pundits are aware of the problems we face but spend all their time in trying to reform government. The sad part is that the suggested reforms almost always lead to less freedom and the importance of a virtuous and moral people is either ignored, or not understood. The new reforms serve only to further undermine liberty. The compounding effect has given us this steady erosion of liberty and the massive expansion of debt. The real question is: if it is liberty we seek, should most of the emphasis be placed on government reform or trying to understand what "a virtuous and moral people" means and how to promote it. The Constitution has not prevented the people from demanding handouts for both rich and poor in their efforts to reform the government, while ignoring the principles of a free society. All branches of our government today are controlled by individuals who use their power to undermine liberty and enhance the welfare/warfare state-and frequently their own wealth and power.

If the people are unhappy with the government performance it must be recognized that government is merely a reflection of an immoral society that rejected a moral government of constitutional limitations of power and love of freedom.

If this is the problem all the tinkering with thousands of pages of new laws and regulations will do nothing to solve the problem.

It is self-evident that our freedoms have been severely limited and the apparent prosperity we still have, is nothing more than leftover wealth from a previous time. This fictitious wealth based on debt and benefits from a false trust in our currency and credit, will play havoc with our society when the bills come due. This means that the full consequence of our lost liberties is yet to be felt.

But that illusion is now ending. Reversing a downward spiral depends on accepting a new approach.

Expect the rapidly expanding homeschooling movement to play a significant role in the revolutionary reforms needed to build a free society with Constitutional protections. We cannot expect a Federal government controlled school system to provide the intellectual ammunition to combat the dangerous growth of government that threatens our liberties.

The internet will provide the alternative to the government/media complex that controls the news and most political propaganda. This is why it's essential that the internet remains free of government regulation.

Many of our religious institutions and secular organizations support greater dependency on the state by supporting war, welfare and corporatism and ignore the need for a virtuous people.

I never believed that the world or our country could be made more free by politicians, if the people had no desire for freedom.

Under the current circumstances the most we can hope to achieve in the political process is to use it as a podium to reach the people to alert them of the nature of the crisis and the importance of their need to assume responsibility for themselves, if it is liberty that they truly seek. Without this, a constitutionally protected free society is impossible.

If this is true, our individual goal in life ought to be for us to seek virtue and excellence and recognize that self-esteem and happiness only comes from using one's natural ability, in the most productive manner possible, according to one's own talents.

Productivity and creativity are the true source of personal satisfaction. Freedom, and not dependency, provides the environment needed to achieve these goals. Government cannot do this for us; it only gets in the way. When the government gets involved, the goal becomes a bailout or a subsidy and these cannot provide a sense of personal achievement.

Achieving legislative power and political influence should not be our goal. Most of the change, if it is to come, will not come from the politicians, but rather from individuals, family, friends, intellectual leaders and our religious institutions. The solution can only come from rejecting the use of coercion, compulsion, government commands, and aggressive force, to mold social and economic behavior. Without accepting these restraints, inevitably the consensus will be to allow the government to mandate economic equality and obedience to the politicians who gain power and promote an environment that smothers the freedoms of everyone. It is then that the responsible individuals who seek excellence and self-esteem by being self-reliance and productive, become the true victims.

Conclusion

What are the greatest dangers that the American people face today and impede the goal of a free society? There are five.

1. The continuous attack on our civil liberties which threatens the rule of law and our ability to resist the onrush of tyranny.

2. Violent anti-Americanism that has engulfed the world. Because the phenomenon of "blow-back" is not understood or denied, our foreign policy is destined to keep us involved in many wars that we have no business being in. National bankruptcy and a greater threat to our national security will result.

3. The ease in which we go to war, without a declaration by Congress, but accepting international authority from the UN or NATO even for preemptive wars, otherwise known as aggression.

4. A financial political crisis as a consequence of excessive debt, unfunded liabilities, spending, bailouts, and gross discrepancy in wealth distribution going from the middle class to the rich. The danger of central economic planning, by the Federal Reserve must be understood.

5. World government taking over local and US sovereignty by getting involved in the issues of war, welfare, trade, banking, a world currency, taxes, property ownership, and private ownership of guns.

Happily, there is an answer for these very dangerous trends.

What a wonderful world it would be if everyone accepted the simple moral premise of rejecting all acts of aggression. The retort to such a suggestion is always: it's too simplistic, too idealistic, impractical, naïve, utopian, dangerous, and unrealistic to strive for such an ideal.

The answer to that is that for thousands of years the acceptance of government force, to rule over the people, at the sacrifice of liberty, was considered moral and the only available option for achieving peace and prosperity.

What could be more utopian than that myth -- considering the results especially looking at the state sponsored killing, by nearly every government during the 20th Century, estimated to be in the hundreds of millions. It's time to reconsider this grant of authority to the state.

No good has ever come from granting monopoly power to the state to use aggression against the people to arbitrarily mold human behavior. Such power, when left unchecked, becomes the seed of an ugly tyranny. This method of governance has been adequately tested, and the results are in: reality dictates we try liberty.

The idealism of non-aggression and rejecting all offensive use of force should be tried. The idealism of government sanctioned violence has been abused throughout history and is the primary source of poverty and war. The theory of a society being based on individual freedom has been around for a long time. It's time to take a bold step and actually permit it by advancing this cause, rather than taking a step backwards as some would like us to do.

Today the principle of habeas corpus, established when King John signed the Magna Carta in 1215, is under attack. There's every reason to believe that a renewed effort with the use of the internet that we can instead advance the cause of liberty by spreading an uncensored message that will serve to rein in government authority and challenge the obsession with war and welfare.

#11

What I'm talking about is a system of government guided by the moral principles of peace and tolerance.

The Founders were convinced that a free society could not exist without a moral people. Just writing rules won't work if the people choose to ignore them. Today the rule of law written in the Constitution has little meaning for most Americans, especially those who work in Washington DC.

Benjamin Franklin claimed "only a virtuous people are capable of freedom." John Adams concurred: "Our Constitution was made for a moral and religious people. It is wholly inadequate to the government of any other."

A moral people must reject all violence in an effort to mold people's beliefs or habits.

A society that boos or ridicules the Golden Rule is not a moral society. All great religions endorse the Golden Rule. The same moral standards that individuals are required to follow should apply to all government officials. They cannot be exempt.

The ultimate solution is not in the hands of the government.

The solution falls on each and every individual, with guidance from family, friends and community.

The #1 responsibility for each of us is to change ourselves with hope that others will follow. This is of greater importance than working on changing the government; that is secondary to promoting a virtuous society. If we can achieve this, then the government will change.

It doesn't mean that political action or holding office has no value. At times it does nudge policy in the right direction. But what is true is that when seeking office is done for personal aggrandizement, money or power, it becomes useless if not harmful. When political action is taken for the right reasons it's easy to understand why compromise should be avoided. It also becomes clear why progress is best achieved by working with coalitions, which bring people together, without anyone sacrificing his principles.

Political action, to be truly beneficial, must be directed toward changing the hearts and minds of the people, recognizing that it's the virtue and morality of the people that allow liberty to flourish.

The Constitution or more laws per se, have no value if the people's attitudes aren't changed.

To achieve liberty and peace, two powerful human emotions have to be overcome. Number one is "envy" which leads to hate and class warfare. Number two is "intolerance" which leads to bigoted and judgmental policies. These emotions must be replaced with a much better understanding of love, compassion, tolerance and free market economics. Freedom, when understood, brings people together. When tried, freedom is popular.

The problem we have faced over the years has been that economic interventionists are swayed by envy, whereas social interventionists are swayed by intolerance of habits and lifestyles. The misunderstanding that tolerance is an endorsement of certain activities, motivates many to legislate moral standards which should only be set by individuals making their own choices. Both sides use force to deal with these misplaced emotions. Both are authoritarians. Neither endorses voluntarism. Both views ought to be rejected.

I have come to one firm conviction after these many years of trying to figure out "the plain truth of things." The best chance for achieving peace and prosperity, for the maximum number of people world-wide, is to pursue the cause of LIBERTY.

If you find this to be a worthwhile message, spread it throughout the land.