[91] News from Absurdistan - Learning To Hate Oil

From cooler heads blog:

... [the] argument against oil seems to be based on a syllogism: Islamists produce oil, Islamists are bad, therefore oil is bad. The fact is that 80% of our oil comes from non-islamist sources. Our top sources for petroleum are Canada and Mexico. We even import more oil from Africa than from the Middle East. The rest of the world isn't going to switch away from the most cost-effective source of transportation energy just because we choose something different. So by switching to methanol (which would also require massive amounts of land) we cut off our nose to spite our face. The Islamists will keep getting their funding from other nations, just like they do now, and we'll be less resilient in the face of their attacks because we'll be paying more for a less efficient form of energy (and we'll therefore be less competetive with, eg, China as well). It's ludicrous. If you really want to reduce our imports and lower the world price, campaign for an end to the silly restrictions that keep us from utilizing our vast reserves of oil and gas that are locked away in ANWR, the Rockies and the Outer Continental Shelf. The American consumer is not our enemy.

[5] Money Matters - You Ain't Seen Nothing Yet

The Telegraph wonders whether 1929 might look like "a walk in the park":

As central banks continue to splash their cash over the system, so far to little effect, Ambrose Evans-Pritchard argues things are rapidly spiralling out of their control. Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects.

"Liquidity doesn't do anything in this situation," says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression."It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue," she adds.Lenders are hoarding the cash, shunning peers as if all were sub-prime lepers. Spreads on three-month Euribor and Libor - the interbank rates used to price contracts and Club Med mortgages - are stuck at 80 basis points even after the latest blitz. The monetary screw has tightened by default.York professor Peter Spencer, chief economist for the ITEM Club, says the global authorities have just weeks to get this right, or trigger disaster.
"The central banks are rapidly losing control. By not cutting interest rates nearly far enough or fast enough, they are allowing the money markets to dictate policy. We are long past worrying about moral hazard," he says."They still have another couple of months before this starts imploding. Things are very unstable and can move incredibly fast. I don't think the central banks are going to make a major policy error, but if they do, this could make 1929 look like a walk in the park," he adds.The Bank of England knows the risk. Markets director Paul Tucker says the crisis has moved beyond the collapse of mortgage securities, and is now eating into the bedrock of banking capital. "We must try to avoid the vicious circle in which tighter liquidity conditions, lower asset values, impaired capital resources, reduced credit supply, and slower aggregate demand feed back on each other," he says.New York's Federal Reserve chief Tim Geithner echoed the words, warning of an "adverse self-reinforcing dynamic", banker-speak for a downward spiral. The Fed has broken decades of practice by inviting all US depositary banks to its lending window, bringing dodgy mortgage securities as collateral.Quietly, insiders are perusing an obscure paper by Fed staffers David Small and Jim Clouse. It explores what can be done under the Federal Reserve Act when all else fails.Section 13 (3) allows the Fed to take emergency action when banks become "unwilling or very reluctant to provide credit". A vote by five governors can - in "exigent circumstances" - authorise the bank to lend money to anybody, and take upon itself the credit risk. This clause has not been evoked since the Slump.Yet still the central banks shrink from seriously grasping the rate-cut nettle. Understandably so. They are caught between the Scylla of the debt crunch and the Charybdis of inflation. It is not yet certain which is the more powerful force.America's headline CPI screamed to 4.3 per cent in November. This may be a rogue figure, the tail effects of an oil, commodity, and food price spike. If so, the Fed missed its chance months ago to prepare the markets for such a case. It is now stymied.This has eerie echoes of Japan in late-1990, when inflation rose to 4 per cent on a mini price-surge across Asia. As the Bank of Japan fretted about an inflation scare, the country's financial system tipped into the abyss.In theory, Japan had ample ammo to fight a bust. Interest rates were 6 per cent in February 1990. In reality, the country was engulfed by the tsunami of debt deflation quicker than the bank dared to cut rates. In the end, rates fell to zero. Still it was not enough.When a credit system implodes, it can feed on itself with lightning speed. Current rates in America (4.25 per cent), Britain (5.5 per cent), and the eurozone (4 per cent) have scope to fall a long way, but this may prove less of a panacea than often assumed. The risk is a Japanese denouement across the Anglo-Saxon world and half Europe.Bernard Connolly, global strategist at Banque AIG, said the Fed and allies had scripted a Greek tragedy by under-pricing credit long ago and seem paralysed as post-bubble chickens now come home to roost. "The central banks are trying to dissociate financial problems from the real economy. They are pushing the world nearer and nearer to the edge of depression. We hope they will eventually be dragged kicking and screaming to do enough, but time is running out," he said.Glance at the more or less healthy stock markets in New York, London, and Frankfurt, and you might never know that this debate is raging. Hopes that Middle Eastern and Asian wealth funds will plug every hole lifts spirits.Glance at the debt markets and you hear a different tale. Not a single junk bond has been issued in Europe since August. Every attempt failed.Europe's corporate bond issuance fell 66pc in the third quarter to $396bn (BIS data). Emerging market bonds plummeted 75pc."The kind of upheaval observed in the international money markets over the past few months has never been witnessed in history," says Thomas Jordan, a Swiss central bank governor."The sub-prime mortgage crisis hit a vital nerve of the international financial system," he says.The market for asset-backed commercial paper - where Europe's lenders from IKB to the German Doctors and Dentists borrowed through Irish-based "conduits" to play US housing debt - has shrunk for 18 weeks in a row. It has shed $404bn or 36pc. As lenders refuse to roll over credit, banks must take these wrecks back on their books. There lies the rub.Professor Spencer says capital ratios have fallen far below the 8 per cent minimum under Basel rules. "If they can't raise capital, they will have to shrink balance sheets," he said.Tim Congdon, a banking historian at the London School of Economics, said the rot had seeped through the foundations of British lending.Average equity capital has fallen to 3.2 per cent (nearer 2.5 per cent sans "goodwill"), compared with 5 per cent seven years ago. "How on earth did the Financial Services Authority let this happen?" he asks.Worse, changes pushed through by Gordon Brown in 1998 have caused the de facto cash and liquid assets ratio to collapse from post-war levels above 30 per cent to near zero. "Brown hadn't got a clue what he was doing," he says.The risk for Britain - as property buckles - is a twin banking and fiscal squeeze. The UK budget deficit is already 3 per cent of GDP at the peak of the economic cycle, shockingly out of line with its peers. America looks frugal by comparison.Maastricht rules may force the Government to raise taxes or slash spending into a recession. This way lies crucifixion. The UK current account deficit was 5.7 per cent of GDP in the second quarter, the highest in half a century. Gordon Brown has disarmed us on every front.

In Europe, the ECB has its own distinct headache. Inflation is 3.1 per cent, the highest since monetary union. This is already enough to set off a political storm in Germany. A Dresdner poll found that 71 per cent of German women want the Deutschmark restored.With Brünhilde fuming about Brot prices, the ECB has to watch its step. Frankfurt cannot easily cut rates to cushion the blow as housing bubbles pop across southern Europe. It must resort to tricks instead. Hence the half trillion gush last week at rates of 70bp below Euribor, a camouflaged move to help Spain.The ECB's little secret is that it must never allow a Northern Rock failure in the eurozone because this would expose the reality that there is no EU treasury and no EU lender of last resort behind the system. Would German taxpayers foot the bill for a Spanish bail-out in the way that Kentish men and maids must foot the bill for Newcastle's Rock? Nobody knows. This is where eurozone solidarity stretches to snapping point. It is why the ECB has showered the system with liquidity from day one of this crisis.Citigroup, Merrill Lynch, UBS, HSBC and others have stepped forward to reveal their losses. At some point, enough of the dirty linen will be on the line to let markets discern the shape of the debacle. We are not there yet.Goldman Sachs caused shock last month when it predicted that total crunch losses would reach $500bn, leading to a $2 trillion contraction in lending as bank multiples kick into reverse. This already seems humdrum."Our counterparties are telling us that losses may reach $700bn," says Rob McAdie, head of credit at Barclays Capital. Where will it end? The big banks face a further $200bn of defaults in commercial property. On it goes.The International Monetary Fund still predicts blistering global growth of 5 per cent next year. If so, markets should roar back to life in January, as though the crunch were but a nightmare. There again, the credit soufflé may be hard to raise a second time.

Ron Paul - Keep on Keeping on

Letter from Dr. Paul

From the campaign:

December 17, 2007

What a day! I am humbled and inspired, grateful and thrilled for this vast outpouring of support.

On just one day, in honor of the 234th anniversary of the Boston Tea Party, the new American revolutionaries brought in $6.04 million, another one-day record. The average donation was $102; we had 58,407 individual contributors, of whom an astounding 24,915 were first-time donors. And it was an entirely voluntary, self-organized, decentralized, independent effort on the internet. Must be the "spammers" I keep hearing about!

The establishment is baffled and worried, and well they should be. They keep asking me who runs our internet fundraising and controls our volunteers. To these top-down central planners, a spontaneous order like our movement is science-fiction. But you and I know it's real: as real as the American people's yearning for freedom, peace, and prosperity, as real as all the men and women who have sacrificed for our ideals, in the past and today.

And how neat to see celebrations all across the world, with Tea Parties from France to New Zealand. This is how we can spread the ideals of our country, through voluntary emulation, not bombs and bribes. Of course, there were hundreds in America.

As I dropped in on a cheering, laughing crowd of about 600 near my home in Freeport, Texas, I noted that they call us "angry." Well, we are the happiest, most optimistic "angry" movement ever, and the most diverse. What unites us is a love of liberty, and a determination to fix what is wrong with our country, from the Fed to the IRS, from warfare to welfare. But otherwise we are a big tent.

Said the local newspaper (http://www.thefacts.com/story.lasso?ewcd=36475b4d132fc0a1): "The elderly sat with teens barely old enough to vote. The faces were black, Hispanic, Asian and white. There was no fear in their voices as they spoke boldly with each other about the way the country should be. Held close like a deeply held secret, Paul has brought them out of the disconnect they feel between what they know to be true and where the country has been led."

Thanks also to the 500 or so who braved the blizzard in Boston to go to Faneuil Hall. My son Rand told me what a great time he had with you.

A few mornings ago on LewRockwell.com, I saw a YouTube of a 14-year-old boy that summed up our whole movement for me. This well-spoken young man, who could have passed in knowledge for a college graduate, told how he heard our ideas being denounced. So he decided to Google. He read some of my speeches, and thought, these make sense. Then he studied US foreign policy of recent years, and came to the conclusion that we are right. So he persuaded his father to drop Rudy Giuliani and join our movement.

All over America, all over the world, we are inspiring real change. With the wars and the spying, the spending and the taxing, the inflation and the credit crisis, our ideas have never been more needed. Please help me spread them https://www.ronpaul2008.com/donate in all 50 states. Victory for liberty! That is our goal, and nothing less.

Sincerely,

Ron

[90] News from Absurdistan - The Pope Is Getting It

While Polar bears are looking on, the Pope, ever suspicious of rival creeds, seems to be getting it. From The Daily Mail:

Pope Benedict XVI has launched a surprise attack on climate change prophets of doom, warning them that any solutions to global warming must be based on firm evidence and not on dubious ideology.

The leader of more than a billion Roman Catholics suggested that fears over man-made emissions melting the ice caps and causing a wave of unprecedented disasters were nothing more than scare-mongering.

The German-born Pontiff said that while some concerns may be valid it was vital that the international community based its policies on science rather than the dogma of the environmentalist movement.

His remarks will be made in his annual message for World Peace Day on January 1, but they were released as delegates from all over the world convened on the Indonesian holiday island of Bali for UN climate change talks.

The 80-year-old Pope said the world needed to care for the environment but not to the point where the welfare of animals and plants was given a greater priority than that of mankind.

"Humanity today is rightly concerned about the ecological balance of tomorrow," he said in the message entitled "The Human Family, A Community of Peace".

"It is important for assessments in this regard to be carried out prudently, in dialogue with experts and people of wisdom, uninhibited by ideological pressure to draw hasty conclusions, and above all with the aim of reaching agreement on a model of sustainable development capable of ensuring the well-being of all while respecting environmental balances.

"If the protection of the environment involves costs, they should be justly distributed, taking due account of the different levels of development of various countries and the need for solidarity with future generations.

"Prudence does not mean failing to accept responsibilities and postponing decisions; it means being committed to making joint decisions after pondering responsibly the road to be taken."

Efforts to protect the environment should seek "agreement on a model of sustainable development capable of ensuring the well-being of all while respecting environmental balances", the Pope said.

He added that to further the cause of world peace it was sensible for nations to "choose the path of dialogue rather than the path of unilateral decisions" in how to cooperate responsibly on conserving the planet.

The Pope's message is traditionally sent to heads of government and international organisations.

His remarks reveal that while the Pope acknowledges that problems may be associated with unbridled development and climate change, he believes the case against global warming to be over-hyped.

A broad consensus is developing among the world's scientific community over the evils of climate change.

But there is also an intransigent body of scientific opinion which continues to insist that industrial emissions are not to blame for the phenomenon.

Such scientists point out that fluctuations in the earth's temperature are normal and can often be caused by waves of heat generated by the sun. Other critics of environmentalism have compared the movement to a burgeoning industry in its own right.

In the spring, the Vatican hosted a conference on climate change that was welcomed by environmentalists.

But senior cardinals close to the Vatican have since expressed doubts about a movement which has been likened by critics to be just as dogmatic in its assumptions as any religion.

In October, the Australian Cardinal George Pell, the Archbishop of Sydney, caused an outcry when he noted that the atmospheric temperature of Mars had risen by 0.5 degrees celsius.

"The industrial-military complex up on Mars can't be blamed for that," he said in a criticism of Australian scientists who had claimed that carbon emissions would force temperatures on earth to rise by almost five degrees by 2070 unless drastic solutions were enforced.

[89] News from Absurdistan - Mad Gesture Politics

From EU Referendum:

Following our rather elegant "cathedrals of insanity", it is Booker's turn to have a go at what he does not hesitate to call "the maddest single decision ever made by British ministers."

This was announced by John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, the startlingly insane plan to build 7,000 giant offshore wind turbines round Britain's coast by 2020, to meet our EU target on renewable energy.

No matter that Mr Hutton's officials warned him in August it was not conceivable that we could achieve even a much lower target, writes Booker, so keen was Mr Brown that Britain should "lead Europe on climate change" that Mr Hutton was told to ignore his officials.

The interesting thing is that, by and large, the media reported his claims without questioning whether such a megalomaniac project was remotely feasible, the New Statesman in fact lauding the "U-turn" on windfarms as "important".

What is especially interesting is that no one mentioned costs. Hutton spoke of his turbines, equivalent to one every half mile of coastline, as having a capacity of 33 gigawatts (GW), a hefty chunk of the 75GW of power we need at peak demand. But Booker has worked it out.

With the cost of giant offshore turbines, as tall as 850 feet, estimated at £1.6 billion per GW of capacity, this represents a bill of more than £50 billion - equivalent to the colossal sum earmarked last week by central banks to shore up the world banking system.

But of course the point about offshore turbines is that, because wind blows intermittently, they only generate on average at a third or less of capacity. So Mr Hutton's 33GW figure comes down to 11GW. To generate this much power from "carbon-free" nuclear energy would require six or seven nuclear power stations and cost, at something under £20 billion, less than half as much as the turbines.

This, however, is only the start of the madness. Because those turbines would generate on average only a third of the time, back-up would be needed to provide power for the remaining two thirds - say, another 12 nuclear power stations costing an additional £30 billion, putting the real cost of Mr Hutton's fantasy at nearer £80 billion - more than doubling our electricity bills.

Then that are a few other minor problems. Booker asked energy expert Professor Ian Fells whether it would be technically possible to carry out the most ambitious engineering project ever proposed in Britain, one which would require us to raise from the seabed two of these 2,000 ton structures every working day between 2008 and 2020.

So we turn to Denmark for an indication. With the world's largest offshore wind resource, it has never managed to build more than two a week, and marine conditions allow such work for only a third of the year.

But it does not stop even there. The turbines' siting would mean that much of the national grid would have to be restructured, costing further billions. And because wind power is so unpredictable and needs other sources available at a moment's notice, it is generally accepted that any contribution above 10 percent made by wind to a grid dangerously destabilises it.

Two years ago, much of western Europe blacked out after a rush of German windpower into the continental grid forced other power stations to close down. The head of Austria's grid warned that the system was becoming so unbalanced by the "excessive" building of wind turbines that Europe would soon be "confronted with massive connector problems".

Yet Mr Hutton's turbines would require a system capable of withstanding power swings of up to 33GW, when the only outside backup on which our island grid can depend is a 2GW connector to France (which derives 80 per cent of its electricity from nuclear power).

Nothing better illustrates the fatuity of windpower than the fact that Denmark, with the highest concentration of turbines in the world, must export more than 80 per cent of its wind-generated electricity to Norway, to prevent its grid being swamped when the wind is blowing, while remaining heavily reliant the rest of the time on power from Sweden and Germany.

The Danes, who decided in 2002 to build no more turbines, have learnt their lesson. We British have still to learn it. Every time we hear that over-used term "green" we should remember it has another meaning: someone who is naively foolish and dangerously gullible.

So says Booker, but Spiked online has a different "take". What is being agreed in all these announcements is not government action, it says, "but rather yet more planning interrogations."

What Hutton actually did was launch a Strategic Environmental Assessment of the seas surrounding the UK, "paving the way for a possible 'third round' of wind energy development and beyond." This is a "draft" plan for a "potential" major expansion in offshore wind, and will be subject to the outcome of the Strategic Environmental Assessment.

In the housing sector, Spiked adds planning used to mean planning for more houses, but today it means preventing new houses being built. It is the same with energy.

The government now pursues offshore wind in the hope that it can avoid the fate of large onshore wind devices, which are caught in interminable objections by the Royal Society for the Protection of Birds (RSPB) and other aesthetically minded environmentalists. But New Labour exercises in planning and consultation already promise to kill nuclear energy stone dead, and will likely do the same for offshore wind.

Certainly, whichever way you look at it, Hutton's plan is not achievable – even The Guardian is sceptical – all of which would seem to suggest that we are dealing with a particularly mad form of gesture politics.

The bottom line is that this is designed to allow Gordon Brown can cosy up to his EU "colleagues" and tell them everything is in hand with his renewable energy plans. By the time it comes to deliver, he will be long gone, and David Cameron will be hooking his bike up to a generator to keep the lights on.

[4] Money Matters - Outline of a Depression

Writes James Grant, courtesy of the Ludwig von Mises Institute:

ECONOMISTS cannot reliably forecast recessions. Nor can they detect for certain when a recession is in progress. Only after the fact do the official cyclical timekeepers identify the beginning and ending dates of a slump.

Though deficient in the powers of foresight and observation, economists do believe they know how to treat an economy on the brink of recession, as this one seems to be. They administer what non-economists know as the “hair of the dog that bit you.”

But booms not only precede busts, they also cause them. Bargain-basement interest rates are a potent stimulant. Borrowing more than they might at higher rates, people stretch. Businesses stock up on labor, machinery and buildings. Consumers buy cars and houses — houses, especially, these past five years. The G.D.P. takes flight.

Then unwelcome facts intrude. Easy money, it seems, was an illusion. Society was not so rich as it seemed. The prosperous future for which people had collectively prepared is slow to arrive. The inflation rate picks up. Supposedly creditworthy consumers and businesses turn out to be risky. They were creditworthy only so long as lenders were willing to advance them more and more funds at those ever-so-affordable low rates.

Now what to do? Why, slash interest rates to coax forth still more lending and borrowing. It’s the customary curative, seemingly as humane as it is politic.

And if recessions served no useful purpose, it might be. But recessions do. On Wall Street, they speak of “corrections.” What corrections correct are errors in judgment. So do recessions.

They allow the sorting out of boomtime error. They permit — indeed, force — the repricing of inflated assets. In a downturn, previously overpriced businesses, houses and buildings are made affordable again.

Naturally, people hate these painful, salutary interludes. Nobody likes insecurity, bankruptcy and joblessness. So the Fed keeps slashing interest rates. And this balm does mitigate the suffering. Homeowners and businesses refinance their debts. Fewer houses are thrown on an overstocked market.

Observe, however, that the great preceding illusion is undispelled. Prices have not come down as they should have. Neither has indebtedness. The architecture of the economy remains as it was. Land, labor and capital are still structured for an imagined glittering future.

Presently, a new upcycle does begin, but it’s slow off the mark. The world’s top economy seems curiously sluggish. And the economists and politicians ask, “What happened to America’s dynamic economy?” The answer: It’s wrapped in the coils of debt.

[88 ] News from Absurdistan - Cathedrals of Insanity

From EU Referendum:


Despite advice from their own civil servants that it is simply unachievable, it looks like this mad government is set to go for the EU target of 20 percent renewable energy supply by 2020.

This is from Business Secretary John Hutton who is telling us that every household in Britain could be powered by off-shore wind farms, with up to 7,000 turbines installed around the UK's coastline.

At the moment, a mere two percent of Britain's power comes from renewables – and much of that from landfill methane, with providing less than 1 gigawatt. But the government is now looking for around 34 gigawatts - which using current technology would mean introducing some 7,000 turbines.

Asked whether having a wind installation every half-mile around the coast was acceptable, Mr Hutton replied: "It is going to change our coastline, yes for sure. There's no way of making the shift to low carbon technology without making a change and that change being visible to people."

The worst of it though is that this madcap idea simply cannot work. With an average load factor of around 35 percent, alternative generation capacity will have to be built for the two-thirds of the time when the wind farms are producing no electricity at all – at ruinous cost.

But an even bigger problem is that, when highly variable wind power approaches ten percent of total production, it risks destabilising the grid, precipitating total collapse of the system.

Furthermore, in the highly corrosive maritime atmosphere, equipment is expected to last far less than its land-based equivalents, increasing downtime and costs dramatically.

And all this to deal with the miasma of global warming – a fantasy of our ruling classes which defies logic. The vision, therefore, is of a world gone mad – to which these cathedrals of insanity will bear witness.

Ron Paul - The March of Honesty

From my friends at RedStateEclectic:

By Lawrence W. Lepard

I recently spent a significant sum of money running a full-page advertisement in USA Today supporting the candidacy of Ron Paul for President of the United States. Several people have asked me why I did it, so I have decided to explain my reasoning.

I believe that as American citizens we stand at an important crossroads in history. We are faced with a very important decision that will have repercussions for many, many years. We need to make a decision as to what we want America to represent, and to become. History will record the outcome of our decision. If we blow it, many more innocent people will die, and history will not be kind. As I say to my closest friends, I do not want to have to explain to my grandchildren that I was one of the “good Germans.”

Let me state it clearly. The America that I grew up in believed in the rule of law, not men. The America that I grew up in believed in telling the truth. The America that I grew up in believed in following Judeo/Christian values, and yet made room for those of different faiths and backgrounds. The America I grew up in had a religious flavor, but we were wary of those who wore their religion on their sleeves. The America that I grew up in believed in the golden rule: treat people the way we would like them to treat us. The America that I grew up in believed that you did not lie, cheat or steal. The America that I grew up in believed in the inherent goodness of most men, but recognized that evil exists. Nevertheless, the America that I grew up in did not believe in an eye for an eye. It believed in protecting oneself from evil, but in the process of doing so we were cautioned not to become what we were protecting against. In short, the America that I grew up in was a place where one could be proud of one’s country, and thankful to the men and women who had sacrificed so much in the past to give us this heritage.

I wake up today as a 50-year-old husband and father of three, and I wonder where that America has gone. I see a President who called the U.S. Constitution “just a goddamned piece of paper.” He replaced a President who blatantly lied to the American public. Admittedly the lie was about something that was none of the Public’s business. However, when a country is led by a liar, it lowers that country’s level of discourse and makes lying seem acceptable. It is not. Are these the best leaders this Country can produce? I see that the prior President’s wife running for President with the attitude that because her husband was elected, she too deserves to be President. Says who? Do Americans really believe she will act in our best interest given all the money she has received from the military industrial complex? I see the U.S. involved in an aggressive undeclared war against a country that did not represent a threat to us in any way. Deliberate lies were told to get this war started. To date the outcome of this war is that between 100,000 and 1.0 million innocent people have died. These figures are between 30 and 300 times the number of people killed in 911. Do two wrongs make a right? Furthermore, the majority of the 911 hijackers were Saudis. Not Iraqis. We are allies with Saudi Arabia and yet Saudi Arabia is far from being a democracy. Yet we went to war to create a democracy in Iraq and set an example for the Middle East. The hypocrisy is staggering. The mistakes that were made are criminal. Why anyone believes one thing that is said by the people who lied us into this war is a mystery to me. We would be greeted as liberators. No. Oil revenues will pay the cost. No. A secular democracy will emerge and be an inspiration for other countries. No. The list of misjudgments goes on an on. If they were a baseball team one would be forced to wonder “can anyone here play this game?”

The civilian Iraqis killed by our preemptive war: were they collateral damage or is that just a euphemism for murder? Has anyone taken the time to look at their pictures on the web? I wonder how their relatives and friends feel about the United States? I wonder if they are more or less likely to become terrorists as a result of the actions of the United States. I see a Country that has violated the Geneva Conventions. I see a Country that has violated the Christian doctrine of “just war”. I see a Country that has started a war that is illegal under international law. As President Eisenhower said, “Preventive war was an invention of Hitler. Frankly, I would not listen to anyone who seriously talked about such a thing.” I see a flock of Presidential candidates, most of whom voted for this war and many of whom believe “all options should be on the table” in dealing with Iran. For those who are not current on this subject, that language is code for: we should be prepared to attack Iran with conventional or nuclear weapons.

Think about that for a moment. Leaders in this Country are actually talking about using a nuclear weapon against a country that has not attacked us. Are they insane? I hear Neocon pundits calling for the beginning of World War III. I see a Country that has suspended habeas corpus. I see a Country that has stripped its citizens of the Constitutional protections against an overreaching government. I see a Country that has sanctioned “rendition” which is just another term for the kidnapping of anyone, anywhere, throughout the world, and then spiriting them off to a remote location where they can be subject to “enhanced interrogation techniques”. Which we are told are not torture. Another lie. I see a Country that has engaged in torture. Hell, one leading Presidential candidate wants to “double Guantanamo” and thinks his son’s campaigning for him is equivalent to serving in the military. Of course, he got a deferment to avoid serving in Vietnam. I see a Country where the top advocates of war have never fought in one. Worse yet, they sought and obtained deferments when others were fighting. You cannot make this stuff up. The irony is incredible. If there is karma in the world, we are surely screwed.

I see a Country that thinks that it owns and controls the world. I believe this is ethically wrong. Furthermore, we cannot afford it, so even attempting to run the world is pointless. I see a Country that thinks it should have bases in the Middle East for the next fifty years. I see a Country where the dominant political party, the Neocons, believe the world is a dark and evil place. I believe the people who feel this way are projecting their own views onto the rest of the world. They need therapy. I see a Country that has adopted the Old Testament view of an eye for an eye. If we adopt this view we are on the road to becoming a modern day Pottersville. In short, I see a Country that has lost its soul. Out of malfeasance, fear, ignorance, or incompetence we have implemented the wrong policies and taken the wrong course. Since this is true, then effectively the terrorists are winning. God surely has a great sense of humor. Irony abounds.

Is it possible that America has lost its soul? As citizens each and every one of us is somewhat responsible for the acts of our government. All it takes for evil to flourish is for good people to do nothing. So, has America lost it soul: yes or no? I would submit that while the current U.S. Administration and the vast majority of the Senate and Congress have lost their souls, the American people have not. We were lied to. Nearly 70% of the American population is against this war, and yet the war goes on. The vast majority of the American people want peace. People know what is right, yet the government does the wrong thing. How can this be? We are supposed to be a government OF, FOR and BY the People. Are we? What do you think? Is the government the American people? Does it really represent the American people? Do you think the U.S. government should kill innocent Iraqis to make us safer? Would you advocate killing a man who lives down the street because you think he might do you harm in the future, even though he has done nothing to you yet? Do you think the 2 million dead Vietnamese citizens died in a cause that was just for either side? That is what we are about to find out.

I will say it right now, clearly and loud: THE FEDERAL GOVERNMENT WE HAVE TODAY DOES NOT REPRESENT ME. I FURTHER BELIEVE THAT IT DOES NOT REPRESENT A MAJORITY OF AMERICANS. The huge disconnect between what a majority of this country wants and what our government is doing is the elephant in the room that no one will discuss. I cannot in good conscience condone or support the policies of the Neocons, the military industrial complex, or the oil industry. I do not believe in “Full Spectrum Dominance”. I do not believe “We Are The Indispensable Nation”. I do not believe we are “History’s Actors.” I do not believe we can “Make Our Own Reality”. I do not believe we should be an Empire. I think we have great power and military superiority, and that with these come enormous responsibility. We are a Constitutional Republic. I do not believe we need to have strategic influence all over the world. I believe there is a power higher than my government and that the Founders drew upon this power when they drafted the Declaration of Independence and the U.S. Constitution. We hold these truths to be self evident, that all men are created equal. That reads “all men.” Not “all Americans.” All men have god given rights. Governments are made to protect these rights, not destroy them. Until recently, I believe the American government did a good job of protecting these rights if you were an American. For many years now I believe the American government has used a different standard or play book when dealing with foreign countries and foreign citizens. But that is a story for a different essay.

If it sounds like I am mad, then that is right. I am mad as hell and I am not going to take it anymore. (Source: Howard Beale: Network) I am mad that my money becomes worth less every year because the Federal Reserve can print money out of thin air. I am mad that the U.S. Government inflation statistics are a lie, thanks to Bill Clinton’s changing of the CPI calculation. I am mad that this change and the Federal Reserve have put the economy on a roller coaster leading to a boom and bust cycles that benefit financiers at the expense of the middle class, retirees and the poor. I am mad that Wall Street titans and speculators have been rewarded while savers and honest labor have been punished. I am mad that honesty is considered quaint and naïve by the political classes. I am mad at the arrogance of those who hold power in Washington, DC. I am mad that the actions of some men in my Country have taken away the moral high ground that the U.S. used to occupy. I am mad that my tax dollars are used for weapons rather than for peaceful purposes. I do not want the blood of innocents on my hands. I do not agree with many of Michael Moore’s positions, but his statement “dude, I want my country back” resonates with me. I believe that it resonates with a large portion of the American voter base.

Individual Americans are great people. If 70% of this country is opposed to the war then there is still hope. Of course the mainstream media, the press and the vested industrial and political interests would have us all believe that we cannot make a difference. They say we need to listen to them as they tell us who the next President will be. We have to choose between the two candidates they will serve up to us. We are told who the two front runners are, and we are discouraged from looking elsewhere. Why bother, they say? No one else even stands a chance. Maybe so, maybe not. This time I think they have gone too far. I would submit that the outcome of this election it is not so clear. The establishment dam has sprung a leak. The leak may be small now, but it is growing. It is growing exponentially. The word is spreading. The candidates who represent change are moving up. The candidates who represent the status quo are moving down (Rudy Guiliani and Hillary Clinton). Even Rudy is being forced to talk about what a great religion Islam is in order to soften his “ kill’em all, and let god sort them out message.“

The lines could not be more clearly drawn.

Ron Paul’s message is clear and beautiful and true. It resonates with people. You hear it and you say, “that’s right, that’s what I believe”. This is why his poll numbers are rising faster than any other candidate. Yet, the media still ignores him or treats him poorly. It is beautiful irony that every attack on him only brings him more attention as intelligent Americans wonder, “who is this guy that everyone keeps attacking……I wonder if there is a reason”. They say he cannot win. They say he is a fringe candidate. They say he will lose big. I disagree. First, I think there is a very good chance he will be our next President. Second, I think he has won, even if he does not win. Why? Because he has put the Freedom message out there. It is like a virus. It is spreading. It cannot be stopped. I believe history will record the Ron Paul Freedom Movement as a seminal political event in the history of U.S. politics. It is an honor to support this man. We should be so lucky as to have him for our President.

Having said that, we could all help history along a little bit by supporting the Ron Paul campaign. My favorite movie is “It’s A Wonderful Life.” To me, the message of that movie is that we all make a difference. Individually, none of us have the power of the Neocons and the political classes, but collectively they are supposed to work for us. If we self -organize and unite, we have them badly out numbered. They are terrified, believe me on this. And it is happening. The growth in this movement is exponential. We can and will win this struggle. Anyone who tells you otherwise is a defeatist or is working for the other side. I ran the USA Today Advertisement because I wanted to plant a seed and make a difference. WE ALL MAKE A DIFFERENCE. Every conversation, every person converted, every e-mail , every effort, it all counts. The internet is what has made it possible. What a beautiful thing. The trend is really changing and it is fun to watch the old guard struggle as their fortress crumbles.

So what can you do?

Coming up this December 16th we are holding a one day Fund Raiser for Ron Paul. The last time we did this over 37,000 people donated $4.3 million dollars, or an average of $116 per person. That made this event the largest one day political fund raiser in history. On December 16th we will raise even more money. Every contribution counts. Ten dollars is not too little. Each contribution represents another American who has said, enough is enough. I am mad as hell and I am not going to take it anymore. Think about it, what is freedom worth? I would submit that it is priceless. If you care about the future of this Country, I know that Ron Paul will not let you down. If you care about our troops, then you must vote for Ron Paul. They will come home and defend America, not someone else’s country. Ron Paul has more donations from active military personnel than all the other candidates combined. Why do you think that is? Have you heard about it from the Mainstream Media? I think not.

This is it folks. Once in a lifetime. You will never see another politician with more integrity, and a better message or track record. Rarely has our Country been so far off track. Our Founding Fathers pledged their lives, fortunes and sacred honors in order to establish this Nation. Perhaps we have taken for granted the risk they took and the sacrifices they made. But we are being called. We are being tested. How will we answer? Will we meet the test or will we fail? Each of us makes a difference.

So what are you going to do? Are you going to be a Loyalist or a Patriot? Are you going to storm the ramparts or huddle with the bourgeoisie? Are you going to stick your neck out or be a turtle. Americans are brave people. I believe we can set this country back on the right track and that we will all be better off for doing so. We can show the evil men who call themselves Neocons that this great country will not be hijacked by people who call themselves Christians but are anything but. In short, we can say to the two entrenched political parties: we will not be governed by liars and fools. You can no longer piss on our leg and tell us it is raining. The criminal gang which includes Dick Cheney and the Neocons will be reviled in history for the actions they have taken and America will experience a renaissance of Peace, Freedom and Prosperity.

The danger to our Republic is real—we must act now!

Remember, each one of us makes a difference.

If you agree please support Ron Paul by pledging to donate to his campaign on December 16th at www.teaparty07.com. Also, please vote for Ron Paul in your State Republican Primary and encourage your friends and neighbors to do the same.

You can also learn more at http://www.ronpaullibrary.org/index.php about Ron Paul's positions on the issues that concern you.

Ron Paul - The People Are Running for President

From Disinter:

Carl Fiser writes:

Ron Paul, like Ling, is a great truth-teller. His voting record is one of the most consistent this writer has ever seen. No flip-flops are to be found. As well, he is a courageous and wise man, and a heck of an economist. Just ask the Wall Streeters. However, he bears to his fellow countrymen (and countrywomen), an empty pot. He can’t claim to have brought you wars or higher taxes, which we now have. He never brought you an unbalanced budget, which is a perennial joke. He never voted himself a wage increase and, to this day, gives back part of his salary every year. He has always voted to preserve the Constitution, cut government spending, lower healthcare costs, end the war on drugs, secure our borders with immigration reform and protect our civil liberties. Sorrowfully, he was outvoted or shot down on all measures. The Constitution has been chiseled down, government spending is through the roof, healthcare costs are out of control, the war on drugs keeps getting less effective, immigration issues remain unresolved and our civil liberties have been crimped for our own safety. I’ll just throw in that Ron Paul opposes regulation of the internet, which has been a revolution in the exchange of ideas, this article being a case in point.

He continues with this most interesting point:

The eye-popping reality of the situation is this. No longer can it be said that Ron Paul is running for President. Amazingly enough, his candidacy has been hijacked, and it appears now that the people are running for President. . . through Ron Paul! That’s the true revolution about which your neighbors are speaking.

Very true.

[87] News from Absurdistan - Easy Money, Easier Than Ever

RedStateEclectic has this important observation to offer:

From Bloomberg.com, an arcane article which is actually HUGE news, and even though they explain it as though it were impossible to understand, which it isn't.

Bottom line: The federal reserve is going to start allowing banks to directly borrow from the Federal Reserve through the discount window instead of borrowing from each other(because the banks will not lend to each other FOR FEAR OF BANKRUPTCY!.)The inability of the banks to lend to each other is the central problem right now. They don't trust each other one bit. So in comes the Federal Reserve with a "handful of credit card applications" and a sweetheart of a deal. "Hey, big boy, BORROW THE MONEY DIRECTLY FROM US AT ONLY a 1/4 of a percent penalty (usually its a FULL PERCENTAGE POINT) and you can have all the liquidity you want."

IT'S DIRECT, BAREFACED INFLATION!! They aren't even going to bother trying to hide the inflation anymore. They'll just start printing the money AND DROPPING IT FROM HELICOPTERS... Hence the term "Helicopter Ben" - (Ben Bernanke was quoted as saying this before he became Fed Chair.) Ay carumba. No me gusta.

[86] News from Absurdistan - Sorry, Folks: Got That One Wrong, Too: World War Is Off

This one refers to US Intelligence Services pointing out recently that the presumed nuclear threat posed by Iran is not quite, well, what it was supposed to look like.

Farideh Farhi, at our group blog, Global Affairs, says she listened to Bush's press conference on Tuesday -- which was full of implausible statements -- and now wants to know what George W. Bush has been smoking. Uh, I don't think that substance is typically smoked so much as snorted. Or maybe his current favorite is just a stong bottle of beer.

The Los Angeles Times notes a controversy over what the president knew and when he knew it:

' Seven weeks ago, Bush said that in the interest of "avoiding World War III" Iran should be prevented from gaining the knowledge needed to make a nuclear weapon. That was roughly two months after J. Michael McConnell, the director of national intelligence, reported to Bush that he had "some new information" about Iran.

"He didn't tell me what the information was; he did tell me it was going to take awhile to analyze," the president said. He said he was not briefed on the report until last week, and that in the interim no one had suggested that he tone down his language.

Sen. Joseph R. Biden Jr. of Delaware, chairman of the Senate Foreign Relations Committee and a candidate for the Democratic presidential nomination, expressed incredulity that Bush, "who gets briefed every morning, who is fixated on Iran," had not sought details of the new assessment after learning of it in August.

"I can't believe that," he said in a phone call with reporters. '

Washington insiders say that Director of National Intelligence Mike McConnell would certainly have been kept in the loop by the analysts producing this NIE. McConnell briefs Bush and said this summer he had new evidence coming in.

At his press conference Bush reverted to his old ploy of declaring people and things dangerous even when there is no objective measure of such things. He used to say that Saddam Hussein had been "dangerous" even when it was discovered that Saddam had no chemical, biological or nuclear research facilities. Now Iran is intrinsically dangerous, regardless of whether it has a weapons program or not. Does anyone still believe this sort of essentializing and fear-mongering?

Bush's circle is like a medieval court with scheming courtiers. His subordinates apparently routinely do things that he doesn't (and the other courtiers don't) know about until later. Take for instance when then Secretary of Defense Donald Rumsfeld ordered the Iraqi army dissolved, with Bush only discovering it afterwards.

My guess is that Admiral William J. Fallon, the CENTCOM commander now, and the Chairman of the Joint Chiefs of Staff, Admiral Michael Mullen, may well have cooperated with figures in the intelligence world to get this report written and some of it released, especially since Congress had mandated that it be completed and its findings conveyed to them by a date certain.

Gareth Porter reported that 'A source who met privately with Fallon around the time of his confirmation hearing and who insists on anonymity quoted Fallon as saying that an attack on Iran "will not happen on my watch". Asked how he could be sure, the source says, Fallon replied, "You know what choices I have. I'm a professional." Fallon said that he was not alone, according to the source, adding, "There are several of us trying to put the crazies back in the box." '

Mullen has worried that the way the US military is bogged down in Afghanistan and Iraq will prevent Washington from replying decisively to any other foe or crisis.

Snow Bush with some occasional hints that the NIE has some new findings, sure that he won't bother to ask for details or read any actual document (he seldom does), then you could spring this thing on the Cheneyites and blindside them.

Cheney clearly was making a push for war on Iran this fall. The real puzzle is how the NIE got past his team of plumbers, which still informally includes convicted perjurer Scooter Libby. That's why I say there was moxie behind this NIE, of the sort an admiral has, or better two admirals.

[85] News from Absurdistan - The Rule Of Irrelevance: The Last Refuge of the Shallow

Earnestness is the last refuge of the shallow, suggested Oscar Wilde, and he was being mild in view of what we are dealing with here - from the Kennebec Journal:

As I watched the Republican and Democratic debates on television, I found it interesting that the candidate most ignored by the media, Congressman Ron Paul, was the only candidate with a different message. In fact, he was the only candidate with a message. All other candidates simply parroted the same old same old. The only difference being in the way they would execute their version of the same old same old.Ironically, as long as I can remember, no matter which party raises up the newest president, nothing changes as far as policy is concerned. And where is it leading us? I see industry moving out of the country at alarming rates. Masses of illegal immigrants swarm across our unprotected borders while our military is used to protect the borders of foreign countries and big oil. I see a policy of endless preemptive war against an undefined enemy. I see the United States being dictated to by the United Nations. I see dangerous legislation, such as the "Patriot Act," eroding our constitutional rights, passed by a Congress who swore an oath to protect those rights, and I see debates with candidates who argue with each other as to how best to continue these policies.I hope the American people will tire of the media choosing our leaders and listen to the message of and look up the record of this 10-term congressman from Texas and vote Paul for president. Robert WallaceFarmingdale

[84] News from Absurdistan - Up, Up, and Away: Ron Paul Waving Goodbye to Absurdistan

Businessweek interviewing Ron Paul:

MARIA BARTIROMO: As President, how would you strengthen the economy?

RON PAUL: The most important thing is to get control of the budget, because the more we spend and the higher the deficit, the more we have to tax and borrow and inflate the currency—literally create new credit to buy Treasury bills. We need to restore confidence in the dollar before [its decline] gets out of control. The easiest place to cut spending is overseas because it's doing so much harm to us, undermining our national defense and ruining our budget. I would start saving hundreds of billions of dollars by giving up on defending the American empire. I'd start bringing our troops home, not only from the Middle East but from Korea, Japan, and Europe, and save enough money to slash the deficit. We can actually pay down the national debt and still take care of people here at home. That would restore a lot of confidence.

B: What is the most important change you would make?

RON PAUL: Aim for the federal government to immediately live within its means, to take the pressure off the Fed to create money.

B: And that means what?

RON PAUL: Means no more inflation. If the Fed doesn't create money out of thin air—and they do it mostly to accommodate the deficits—that would restore the soundness of the dollar and give us our purchasing power back.

B: But as President, you're supposed to be independent from the Fed. You would encourage the Fed to stop printing money?

RON PAUL: You know this idea that we can create a secret bank and they manage things and rarely tell us—or Congress or the Executive Branch—what they're really doing, there's a problem there. I can't even go to a monetary policy board meeting of the Federal Reserve, and I'm on the Banking Committee of the U.S. Congress. I want open government, and certainly the Fed ought to be open. But it's an institution that really shouldn't exist. [Its financing] allows Big Government to get bigger without being responsible. And that's why we have runaway spending for both warfare and welfare.

B: Hasn't the Fed been effective in providing liquidity in the current credit crisis?

RON PAUL: You're right, but it's sort of like a drug addict. The drug addict demands more or he's going to have convulsions. The economy would have a convulsion if the Fed didn't inject more credit. But if you continue to do that, the problem gets worse. You can't solve the problem of monetary inflation with monetary inflation. These circumstances have all been created by our government and the Fed.

B: How was the recent crisis caused by our government?

RON PAUL: It was astounding that you could get a mortgage at 4%, and this was all due to the Fed creating money and artificially lowering rates, which gets people to do the wrong thing. Builders do the wrong thing, and people borrow money and buy houses they can't afford.

B: How would you change tax policy?

RON PAUL: Ideally, get rid of the income tax. In the meantime, I'd give huge tax credits to anybody who wanted to take care of their own medical care. I'd give tax credits for all educational benefits. I'd get the government out of managing education and medicine. And do it by changing the tax code. I have a bill right now that is very popular, especially for people who are trying to work their way through college or who are having a tough time making ends meet, and that is to exempt all taxes on tips. People who have a first job or a second job waiting on tables and doing other things, they're harassed by government rules and regulations, and sometimes they have to pay higher taxes than the tips they actually receive. I'd move next to saying no taxes on anybody who's trying to get through college. Why do we tax them, make it hard for them, then give them grants? It doesn't make any sense.

B: Who are your economic advisers?

RON PAUL: I don't have any. I read Austrian economics, which I've been doing for 30 years. So my advisers have been [von] Mises and Hayek and Sennholz.

B: Do you consider yourself a friend or a foe of Wall Street?

RON PAUL: If they believe in freedom, free markets, and sound money, they'll love me. But if they like creating credit out of thin air, they'll see me as a threat. I was one of three people who voted against Sarbanes-Oxley because I thought it was detrimental to Wall Street. I'd repeal it.

B: You want to take the troops out of Iraq, but what about Iran? What do we do if other nations turn hostile?

RON PAUL: I'd treat them something like what we did with the Soviets. I was called to military duty [as a U.S. Air Force flight surgeon] in the '60s when they were in Cuba, and they had 40,000 nuclear weapons and intercontinental ballistic missiles, and we didn't have to fight them. We didn't have to invade their country. But to deal with terrorism, we can't solve the problem if we don't understand why they [attack us]. And they don't come because we're free and prosperous. They don't go after Switzerland and Sweden and Canada. They come after us because we've occupied their land, and instead of reversing our foreign policy after 9/11, we made it worse by invading two more countries and then threatening a third. Why wouldn't they be angry at us? It would be absolutely bizarre if they weren't. We've been meddling over there for more than 50 years. We overthrew a democratically elected government in Iran in 1953; we were Saddam Hussein's ally and encouraged him to invade Iran. If I was an Iranian, I'd be annoyed myself, you know. So we need to change our policy, and I think we would reduce the danger. You have vehement new supporters.

B: What's driving the sudden interest in your candidacy?

RON PAUL: I think they're sick and tired of what they're getting. They've lost all trust and faith in the government. They believe in the American Dream, and they're getting a nightmare. And they're rallying behind the program I've been working on for 30 years—defending the Constitution, limited government, free markets, sound money, and self-reliance; believing people can take care of themselves better than government can. The nanny state doesn't work, the police state doesn't work, and neither does the warfare. And they know it.

Maria Bartiromo is the anchor of CNBC's Closing Bell.

[83] News from Absurdistan - Telling It Cold Turkey

From the Competitive Enterprise Institute, we get an after taste of turkey:

CEI’s Fran Smith has listed her Thanksiving “Turkeys on the Hill”. For my Thanksgiving treat, here’s my list of five “Turkeys on the Hill” – legislation that is particularly onerous for consumers, taxpayers, and citizens – by increasing taxpayers’ burdens, rewarding “special interests,” reducing choice, expanding government control, or decreasing health and safety.

1) The 2007 Farm Bill (H.R. 2419) Both the House bill (passed) and the Senate bill (being considered)continue and expand the bloated farm subsidy programs, increase costs to taxpayers, provide more funding for the misguided biofuels programs, and provide taxpayer handouts even to rich farmers. This $286 billion bill, according to the USDA, includes “$37 billion in budget gimmicks and increased taxes.”

2) Energy bills 2007 (S. 1419; H.R. 6) Both the House and the Senate have passed energy bills that increase prices for consumers on an array of goods, including gasoline, automobiles and food, while doing nothing to increase supplies of affordable energy. The bills would vastly increase the renewable fuels boondoogles, would lead to higher energy prices for consumers,
restrict consumer choice in some household products, and would raise the corporate average fuel economy standards (CAFE), forcing consumers into smaller, less safe cars.

3) Mortgage Reform and Anti-Predatory Lending Act of 2007 (H.R. 3915): The bill would limit access to home mortgages in response to disruptions in the market for so-called “subprime” loans. Lenders, rather than applicants themselves, would be required to determine whether loans are considered appropriate for the home buyer’s circumstances. Sure to hit lower-income people and new entries into the credit market the hardest.

4) The Law of the Sea Treaty (Treaty Doc. 103-39) According to the United Nations, LOST “lays down a comprehensive regime of law and order in the world’s oceans and seas establishing
rules governing all uses of the oceans and their resources. It enshrines the notion that all problems of ocean space are closely interrelated and need to be addressed as a whole.” LOST would harm U.S. interests: It would threaten U.S. sovereignty, facilitate United Nations global governance, give the UN international taxing authority, and accomplish backdoor implementation of the Kyoto Protocol.

5) Consumer Product Safety Commission Reform Act (S. 2045) In the wake of reports of unsafe imported products, including children’s toys, this bill would unleash the power of state attorneys general, set up certification systems for children’s products that will increase their costs and may lead to substitution of less safe products, and encourage disgruntled employees to get back at their manufacturer employers. Hope your Thanksgiving turkeys are better than these! And here’s a similar list from Taxpayers for Common Sense. While we are certainly
thankful for the turkey on which we’ll dine, Congress has given us some turkeys this year that taxpayers could do without. Subsidies to big businesses and goodies to pad the waistline of special interests were plentiful, all of which, like a plump turkey, should never fly.

(1) The Fat Farm Bill - With farm crops at record-high prices, the U.S. House of
Representatives passed its re-write of the farm bill back in July, which is little more than a recycling of the old subsidy-heavy legislation. Since 1995, more than $165 billion has been funneled to farm states, with annual costs to taxpayers exceeding $20 billion in many years. The Senate will likely wait until next year to take up consideration of the farm bill.

(2) Million Dollar Oil Royalty Loophole- In October, while oil prices were nearing $100 a barrel, Anadarko Petroleum Corporation, the second-largest oil and natural-gas producer in the U.S., won a court decision arguing that it doesn’t have to pay taxpayers for oil and gas it removed from federal waters. Oil and gas companies lease taxpayer-owned lands and waters from the federal government to drill for oil and gas. In return for this right, they give taxpayers a percentage of the revenue generated from the oil and gas that is extracted. Congress needs to make sure that Anadarko pays their fair share.

(3) Nuclear Power Loan Guarantees - Lawmakers created a new loan guarantee program run by the Department of Energy (DOE) for nuclear power and other energy sources called “innovative technologies” in the 2005 energy bill. This fall Senator Pete Domenici (R-NM) inserted language in the new Senate energy bill that cuts Congress out of the process and hands DOE a blank check for loan guarantees. If enacted, the Senate bill will exempt the loan guarantee program from current oversight law – removing the minimal financial safeguards in place.

(4) Gutting of Earmark Disclosure – In the wake of the last election, transparency was the hot new Washington buzzword. Disregarding Senate Majority Leader Harry Reid’s (D-NV) strong opposition, Senators unanimously passed a bill to require disclosure of the beneficiaries and purpose of each earmark, require that the information be searchable and online, and that each Senator stipulate that neither they nor their family have a financial interest in a project. Then, later in the year and behind closed doors, leadership gutted the original bill by subtly changing the disclosure language. Now, the only documents that will be publicly released are the worthless statements from lawmakers that the earmarks they requested won’t result in personal financial gain. Taxpayers remain in the dark. Lawmakers need to give thanks and start remembering the voters who got them there in the first place, rather than the special interest campaign cash they rely on to keep them in power. Just yesterday, the President held his annual White House ceremony where he pardoned two turkeys from the carving knife. In this case, however, lawmakers need stop stuffing themselves with special interest gravy and give these legislative turkeys the axe.

[82] News from Absurdistan - The Tide Is Changing: An Impressive Message from Salt Lake City

Salt Lake City Mayor Ross C. “Rocky” Anderson gave an awakening speech Oct. 27 at the Salt Lake City & County Building. It was an astonishing and refreshing call to the American people to stand up and be heard in their own governance.

Today, as we come together once again in this great city, we raise our voices in unison to say to President Bush, to Vice President Cheney, to other members of the Bush Administration (past and present), to a majority of Congress, including Utah’s entire congressional delegation, and to much of the mainstream media: “You have failed us miserably and we won’t take it any more.”

“While we had every reason to expect far more of you, you have been pompous, greedy, cruel, and incompetent as you have led this great nation to a moral, military, and national security abyss.”

“You have breached trust with the American people in the most egregious ways. You have utterly failed in the performance of your jobs. You have undermined our Constitution, permitted the violation of the most fundamental treaty obligations, and betrayed the rule of law.”

“You have engaged in, or permitted, heinous human rights abuses of the sort never before countenanced in our nation’s history as a matter of official policy. You have sent American men and women to kill and be killed on the basis of lies, on the basis of shifting justifications, without competent leadership, and without even a coherent plan for this monumental blunder.”

“We are here to tell you: We won’t take it any more!”

“You have acted in direct contravention of values that we, as Americans who love our country, hold dear. You have deceived us in the most cynical, outrageous ways. You have undermined, or allowed the undermining of, our constitutional system of checks and balances among the three presumed co-equal branches of government. You have helped lead our nation to the brink of fascism, of a dictatorship contemptuous of our nation’s treaty obligations, federal statutory law, our Constitution, and the rule of law.”

“Because of you, and because of your jingoistic false ‘patriotism,’ our world is far more dangerous, our nation is far more despised, and the threat of terrorism is far greater than ever before.

It has been absolutely astounding how you have committed the most horrendous acts, causing such needless tragedy in the lives of millions of people, yet you wear your so-called religion on your sleeves, asserting your God-is-on-my-side nonsense – when what you have done flies in the face of any religious or humanitarian tradition. Your hypocrisy is mind-boggling – and disgraceful. What part of “Thou shalt not kill” do you not understand? What part of the “Golden rule” do you not understand? What part of “be honest,” “be responsible,” and “be accountable” don’t you understand? What part of “Blessed are the peacekeepers” do you not understand?

Because of you, hundreds of thousands of people have been killed, many thousands of people have suffered horrendous lifetime injuries, and millions have been run off from their homes. For the sake of our nation, for the sake of our children, and for the sake of our brothers and sisters around the world, we are morally compelled to say, as loudly as we can, ‘We won’t take it any more!’ ”

“As United States agents kidnap, disappear, and torture human beings around the world, you justify, you deceive, and you cover up. We find what you have done to men, women and children, and to the good name and reputation of the United States, so appalling, so unconscionable, and so outrageous as to compel us to call upon you to step aside and allow other men and women who are competent, true to our nation’s values, and with high moral principles to stand in your places – for the good of our nation, for the good of our children, and for the good of our world.”

In the case of the President and Vice President, this means impeachment and removal from office, without any further delay from a complacent, complicit Congress, the Democratic majority of which cares more about political gain in 2008 than it does about the vindication of our Constitution, the rule of law, and democratic accountability.

It means the election of people as President and Vice President who, unlike most of the presidential candidates from both major parties, have not aided and abetted in the perpetration of the illegal, tragic, devastating invasion and occupation of Iraq. And it means the election of people as President and Vice President who will commit to return our nation to the moral and strategic imperative of refraining from torturing human beings.

In the case of the majority of Congress, it means electing people who are diligent enough to learn the facts, including reading available National Intelligence Estimates, before voting to go to war. It means electing to Congress men and women who will jealously guard Congress’s sole prerogative to declare war. It means electing to Congress men and women who will not submit like vapid lap dogs to presidential requests for blank checks to engage in so-called preemptive wars, for legislation permitting warrantless wiretapping of communications involving US citizens, and for dangerous, irresponsible, saber-rattling legislation like the recent Kyl-Lieberman amendment.

We must avoid the trap of focusing the blame solely upon President Bush and Vice-President Cheney. This is not just about a few people who have wronged our country – and the world. They were enabled by members of both parties in Congress, they were enabled by the pathetic mainstream news media, and, ultimately, they have been enabled by the American people – 40% of whom are so ill-informed they still think Iraq was behind the 9/11 attacks – a people who know and care more about baseball statistics and which drunken starlets are wearing underwear than they know and care about the atrocities being committed every single day in our name by a government for which we need to take responsibility.

As loyal Americans, without regard to political partisanship -- as veterans, as teachers, as religious leaders, as working men and women, as students, as professionals, as businesspeople, as public servants, as retirees, as people of all ages, races, ethnic origins, sexual orientations, and faiths -- we are here to say to the Bush administration, to the majority of Congress, and to the mainstream media: “You have violated your solemn responsibilities. You have undermined our democracy, spat upon our Constitution, and engaged in outrageous, despicable acts. You have brought our nation to a point of immorality, inhumanity, and illegality of immense, tragic, unprecedented proportions.”

“But we will live up to our responsibilities as citizens, as brothers and sisters of those who have suffered as a result of the imperial bullying of the United States government, and as moral actors who must take a stand: And we will, and must, mean it when we say ‘We won’t take it any more.’”

If we want principled, courageous elected officials, we need to be principled, courageous, and tenacious ourselves. History has demonstrated that our elected officials are not the leaders – the leadership has to come from us. If we don’t insist, if we don’t persist, then we are not living up to our responsibilities as citizens in a democracy – and our responsibilities as moral human beings. If we remain silent, we signal to Congress and the Bush administration – and to candidates running for office – and to the world – that we support the status quo.

Silence is complicity. Only by standing up for what’s right and never letting down can we say we are doing our part.

Our government, on the basis of a campaign we now know was entirely fraudulent, attacked and militarily occupied a nation that posed no danger to the United States. Our government, acting in our name, has caused immense, unjustified death and destruction.

It all started five years ago, yet where have we, the American people, been? At this point, we are responsible. We get together once in a while at demonstrations and complain about Bush and Cheney, about Congress, and about the pathetic news media. We point fingers and yell a lot. Then most people politely go away until another demonstration a few months later.

How many people can honestly say they have spent as much time learning about and opposing the outrages of the Bush administration as they have spent watching sports or mindless television programs during the past five years? Escapist, time-sapping sports and insipid entertainment have indeed become the opiate of the masses.

Why is this country so sound asleep? Why do we abide what is happening to our nation, to our Constitution, to the cause of peace and international law and order? Why are we not doing all in our power to put an end to this madness?

We should be in the streets regularly and students should be raising hell on our campuses. We should be making it clear in every way possible that apologies or convoluted, disingenuous explanations just don’t cut it when presidential candidates and so many others voted to authorize George Bush and his neo-con buddies to send American men and women to attack and occupy Iraq.

Let’s awaken, and wake up the country by committing here and now to do all each of us can to take our nation back. Let them hear us across the country, as we ask others to join us: “We won’t take it any more!”

I implore you: Draw a line. Figure out exactly where your own moral breaking point is. How much will you put up with before you say “No more” and mean it?

I have drawn my line as a matter of simple personal morality: I cannot, and will not, support any candidate who has voted to fund the atrocities in Iraq. I cannot, and will not, support any candidate who will not commit to remove all US troops, as soon as possible, from Iraq. I cannot, and will not, support any candidate who has supported legislation that takes us one step closer to attacking Iran. I cannot, and will not, support any candidate who has not fought to stop the kidnapping, disappearances, and torture being carried on in our name.

If we expect our nation’s elected officials to take us seriously, let us send a powerful message they cannot misunderstand. Let them know we really do have our moral breaking point. Let them know we have drawn a bright line. Let them know they cannot take our support for granted – that, regardless of their party and regardless of other political considerations, they will not have our support if they cannot provide, and have not provided, principled leadership.

The people of this nation may have been far too quiet for five years, but let us pledge that we won’t let it go on one more day – that we will do all we can to put an end to the illegalities, the moral degradation, and the disintegration of our nation’s reputation in the world.

Let us be unified in drawing the line – in declaring that we do have a moral breaking point. Let us insist, together, in supporting our troops and in gratitude for the freedoms for which our veterans gave so much, that we bring our troops home from Iraq, that we return our government to a constitutional democracy, and that we commit to honoring the fundamental principles of human rights.

In defense of our country, in defense of our Constitution, in defense of our shared values as Americans – and as moral human beings – we declare today that we will fight in every way possible to stop the insanity, stop the continued military occupation of Iraq, and stop the moral depravity reflected by the kidnapping, disappearing, and torture of people around the world.

[3] Money Matters - Wealth, Its Creation and Its Destruction

Frank Shostak on the prosperity of a free society and the inevitability of destructive business cycles in an interventionist economy, purportedly improved by a central bank. For the original article and many more outstanding contributions by Frank Shostak and the Ludwig von Mises Institute, click on the post's header.

The Causes of the Economic Crisis is a collection of articles on the business cycle, money, and exchange rates by Ludwig von Mises that appeared between 1919 and 1946. Here we have the evidence that the master economist foresaw and warned against the breakdown of the German mark, as well as the market crash of 1929 and the depression that followed.

Mises presents his business cycle theory in its most elaborate form, applies it to the prevailing conditions, and discusses the policies that governments undertake that make recessions worse (even before Keynes's General Theory appeared!). He recommends a path for monetary reform that would eliminate business cycles as we have known them and provide the basis for a sustainable prosperity.

In foreseeing the interwar economic breakdown, Mises was nearly alone among his contemporaries — which is particularly interesting because Mises made no claim to possessing clairvoyant powers. To him, economics is a qualitative discipline. But among those who say that economics must be quantitative with the goal of accurate prediction, neither the pre-monetarists of the Fisher school nor the Keynesians foresaw the economic damage that would result from central bank policies that manipulate the supply of money and credit.

Why is this? Most economists were looking at the price level and growth rates as indicators of economic health. Mises's theoretical insights led him to look more deeply, and to elucidate the impact of credit expansion on the entire structure of the capitalistic production process.

The essays were well known to contemporary German-speaking audiences. They had not come to the attention of English audiences until 1978, four years after F.A. Hayek was awarded the Nobel Prize for, in particular, "his theory of business cycles and his conception of the effects of monetary and credit policies." In tribute to Hayek's excellent contributions, the Austrian theory of the business cycle has long been called a Hayekian theory.

But it might be more justly called the Misesian theory, for it was Mises who first presented it in his 1912 bookand elaborated it so fully in the essays presented in this new book from the Mises Institute.

Although the articles address issues that were debated many years ago, the analysis presented by Mises are as relevant today as they were in his time. Mises reached his conclusions regarding events of the day by means of a coherent theory, as applied to current events, rather than attempting to derive a theory from data alone, as many of his contemporaries did. This is what gave his writings their predictive power then, and it is what makes his writings fresh and relevant today. A proper economic theory such as Mises presents here applies in all times and places.

As in the past, most economists today believe that sophisticated mathematical and statistical methods can torture the data enough to reveal some causal link between events and yield a theory of inflation and the business cycle. But this is a senseless exercise. It is no more fruitful than a purely descriptive account and it has no more predictive value than a simple data extrapolation.

These essays have been buried in obscurity for far too long. How fortunate we are to have them in a form that can reach a mass audience. Reading the writings of this great master economist might convince some economists and policy makers that there is no substitute for sound thinking. Economics is far too important a subject to be left in the hands of the trend extrapolators, data torturers, and monetary central planners who rely on them.

Do we need ever more money?

In his articles from 1919 to 1923. Mises addressed the factors that were responsible for German hyperinflation. For Mises, inflation is defined as money creation, the act of which tends to manifest itself through the fall in the purchasing power of money (PPM). Thus for a given demand for money, an increase in its supply lowers the PPM.

Whenever monetary authorities allow the rate of monetary pumping to proceed at an accelerating pace, the purchasing power of money tends to fall by a much larger percentage than the rate of increase in money supply. Mises attributed this to increases in inflationary expectations. Peoples' expectation that the future PPM is likely to fall causes them to lower the present demand for money. This sets in motion a mechanism that, if allowed to continue unabated, can ultimately break the monetary system.

Inflationary expectations lead the suppliers of goods to ask for prices that are above what the holders of money can pay. Potential buyers don't have the money to purchase the goods. The emerging shortage of money, according to Mises, is an indication that the inflationary process has gained pace and cannot be "fixed" by raising the supply of money. On the contrary, policies that accommodate this shortage can only make things much worse. Ultimately, the sellers demand astronomical prices, transactions with inflated money become impossible, and the monetary system falls apart.

Mises argued that without an impenetrable link to gold, it is not possible to eradicate inflation. Gold cannot be printed, and it thereby evades the politicians' desires and wishes and keeps the economy healthy. For Mises, the real purpose of paper money is to give politicians control over the supply of money. In response to the view that there is not enough gold to support growing trade, Mises argued that any given amount of gold can fulfill all that money is required to do: provide the services of a medium of exchange. Additional quantities of gold cannot improve on the economic function of money.

It was also Mises's view that the international exchange rate of the domestic money tends to follow inflationary trends, all other things being equal. For Mises, a currency rate of exchange is determined by the relative purchasing power of respective monies. Any rate of exchange that deviates from the relative purchasing power of money makes it profitable to sell commodities for overvalued money and buy commodities with undervalued money. This brings the rate of exchange of a currency in line with the relative purchasing power of respective monies. This opinion clashes with popular thinking both then and today that the currency rate of exchange is set by the state of the balance of payments.

Do we need policies aimed at stabilizing prices?

Having established that the purchasing power of money is set by the relative supply and demand for money, Mises ridiculed the view that the PPM can or should be "stable." The notion of stability is compatible only with the imaginary conditions of economic equilibrium — a state of no change. Money is of little use in the state of equilibrium; it is only of use in the state of change.

What's more, once we accept stability as a policy goal, it would appear that having a money paper standard is a policy solution. Only a central bank should manipulate the money supply to bring about price stability and economic equilibrium. In this view, the existence of the gold standard is the major obstacle for attaining the goal of price stability, since the supply of gold is not under the control of the stabilizers, i.e., the central bankers.

There is a problem here, however. Even if we were to agree that the stable purchasing power of money leads to better economic conditions, we need to be able to quantify the PPM to provide a benchmark. But there are no means to determine scientifically the total purchasing power of money (PPM). The various price indexes that were suggested by the American economist Irving Fisher to calculate the PPM were just exercises in wishful thinking. For instance, there is no way to determine what type of average one should select in establishing the average price, and there are no objective criteria to prefer a geometrical average over an arithmetical average.

Mises raises the issue of weighing the importance of various goods in the index. In the world of change such weighting — i.e., the importance people attach to various goods and services — is constantly in flux. So even if one ignores various mathematical problems associated with the construction of price indexes, they can at best only describe frozen human beings, or automatons.

Mises concludes that policies of stabilizing the price level must only lead to more instability. Why? Because policies of stabilizing the PPM are in fact tampering with the prices of goods, which by implication must be a destabilizing act. Also, these policies generate a redistribution of wealth from the late receivers of the newly injected money to the early receivers of money. Some individuals derive benefit at the expense of other individuals.

Economic Business Cycles And Their Causes

In the slump of a cycle, businesses that were thriving come to experience difficulties or go under. They do so not because of firm-specific entrepreneurial errors but rather in tandem with whole sectors of the economy. People who were wealthy yesterday have become poor today. Factories that were busy yesterday are shut down today, and workers are out of jobs.

Businessmen themselves are confused as to why. They cannot make sense of why certain business practices that were profitable yesterday are losing money today. Bad business conditions emerge when least expected — just when all businesses are holding the view that a new age of steady and rapid progress has emerged.

In his writings, Mises argued against the prevailing explanation of the business cycle by overproduction and under-consumption theories, and he critically addressed various theories that depended on vague notions of mass psychology and irregular shocks. In the psychological explanation, an increase in people's confidence regarding future business conditions gives rise to an economic boom. Conversely, a sudden fall in confidence sets in motion business stagnation. Now, there can be no doubt that during a recession people are less confident about the future than during good times. But to observe this is not to explain it. Likewise theories that view various shocks and disruptions as the central cause behind boom-bust cycles do not advance our knowledge regarding the boom-bust cycle phenomenon.

Neither explains how the boom and bust come about, nor why they are of a recurrent nature. To arrive at a correct explanation, we need to trace the change in business conditions back to a previously established and identified phenomena, and that is precisely what these theories do not do. Hence Mises concluded that all these theories do not provide an explanation but rather describe the phenomenon in a different way. That is to say, it does not help us to understand rain to define it as something that makes the ground wet.

Mises also held that various statistical and mathematical methods are others ways of describing but not explaining events. Statistical methods make it possible to generate charts of data fluctuations but they do not improve on our knowledge of what causes the fluctuations.

The Circulation Credit Theory of Business Cycles

Mises made a distinction between credit that is backed by savings, and credit that does not have any backing. The first type of credit he labeled commodity credit. The second he labeled circulation credit. It is circulation credit that plays the key role in setting the boom-bust cycle process.

Consider a producer of consumer goods who consumes part of his produce while saving the rest. In the market economy, our producer could exchange the saved goods for money. The money that he receives can be seen as a receipt as it were for the goods produced and saved. The receipt is his claim on the goods. He can then make a decision to lend the money to another producer through the mediation of a bank. By lending the money of the original saver, the lender transfers his claims on real savings to the borrower. The borrower can now use the money — i.e., the claims — and secure consumer goods that will support him while he is engaged in the production of other goods (say, tools and machinery).

The credit in this case is fully backed by savings and permits the expansion of tools and machinery. With better infrastructure, it is now possible to produce not only more goods but goods of a better quality. The expansion of real wealth is now possible. Once a lender lends his money, he relinquishes his claims on real goods for the duration of the loan.

In an unhampered market economy, borrowers are users of savings who make sure that savings are employed in the most efficient way: generating profits. This means that real savings are employed in accordance with consumers' most important priorities. We can thus see here that as long as banks facilitate commodity credit, they should be seen as agents of wealth generation.

In contrast, whenever banks embark on the lending of circulation credit they in fact become agents of real wealth destruction. As opposed to commodity credit, circulation credit is not supported by any real saving. This type of credit is just an empty claim created by banks. In the case of commodity credit, the borrower secures goods that were produced and saved for him. This is, however, not the case with respect to the circulation credit. No goods were produced and saved here. Once the borrower uses the unbacked claims, it is at the expense of the holders of fully backed claims. In this way, circulation credit undermines the true wealth generators.

Now, as a result of an increase in the supply of circulation credit money, market interest rates fall below the natural rate, that is, the rate that would be established by supply and demand if real goods were loaned directly in barter without the use of money. (In his later articles, Mises referred to the natural rate as the rate that would be established in a free market.)

As a result of the artificial lowering of interest rates, businesses undertake various new capital projects to expand and lengthen the production structure. Prior to the lowering of interest rates, these capital projects didn't appear to be profitable. Now, however, as money market rates are kept below the natural rate, economic activity zooms ahead and an economic boom emerges.

Such a situation cannot last. Mises here explains the important role played by the subsistence fund. The expansion of the production structure is always constrained by the availability of the means of sustenance (saved consumer goods) to maintain workers during the period of the expansion and the enhancement of the production structure.

The forced lowering of interest rates bring into being production processes that would not otherwise be undertaken. A production structure is now created that produces goods and services that consumers in fact cannot afford. Instead of using the limited pool of the means of sustenance to make tools and machinery that will generate consumer goods on the highest individual priority list, the means of sustenance are wasted on capital goods that are geared towards the production of low-priority consumer goods. At some point, the producers of such goods will discover that they cannot make a profit or even complete their plans. What we have here is not over-investment but misdirected investment or malinvestment.

The expansion of the production structure takes time and the limited subsistence fund may not be sufficient to support the expansion of the capital structure. If the new flow of the production of consumer goods does not emerge quickly enough to replace the currently consumed consumer goods, the subsistence fund comes under pressure.

At some point in time, banks discover that they don't have the savings to back their loans and that marginal businesses are starting to under-perform. All this causes them to curtail the expansion of circulation credit, which in turn raises interest rates. This undermines business funding, and can often be the precipitating event that leads to an economic bust.

Mises wrote that the bust phase of the business cycle process could be precipitated by other events. The expansion in the money supply enriches the early receivers of money. Those individuals who have now become wealthier as a result of receiving the money may alter their pattern of consumption. This may force businesses to adjust to this new setup. Once the rate of expansion in money slows down or comes to a halt, the new pattern of consumption cannot be supported and the new capital structure that was erected becomes unprofitable and must be abandoned.

It is not surprising that Mises was strongly opposed to the idea that central banks should impose "low" interest rates during a recession in order to keep the economy going. Instead, he believed that the policy makers should not engage in the artificial lowering of interest rates but rather refrain from any attempts to manage the economy via monetary policy. By curtailing its interference with businesses, the central bank provides breathing space to wealth generators and thereby lays the foundation for a durable economic recovery.

In the shelves of books on the business cycle, this one stands out for its theoretical clarity and also its historical prescience. May its appearance earn for Mises his rightful place in history as an economist who dared to break with the pack, think for himself, and provide a clear explanation while everyone else was in panic.

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Frank Shostak is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org. He is chief economist of Man Financial, Australia. Send him mailand see his outstanding Mises.org Daily Articles Archive. Comment on the blog.