Obama has Achieved Many of his Anti Colonialist/Socialist Goals

Bill O’Reilly is finally starting to see what the rest of non-Harvard educated America has seen in Obama for a couple of years now. Obama is an anti American anti colonialist, communist, socialist, whatever. Translated Obama is going to everything in his power to weaken America militarily, economically and socially in the world without tipping off main street dullards like O’Reilly.
As our economic situation deteriorates Obama and those in the Democratic Party would argue Bush got us into the ditch. And they would be for the most part correct. The difference is that Bush tried to regulate Fannie Mae and Freddie Mac and was blocked by Frank, Obama and others. Bush tried to win both wars. Bush tried to do what is best for America. And that is the difference. Obama does everything in his power to weaken America and the American dream in favor of his one world socialist dream.
Bush did everything he could to create economic growth as misguided as he was. Obama opposes economic growth every chance he gets. He wants all the economic growth and power for himself and his socialist buddies.

News Commentator Bill O’Reilly wants to be “fair” to our anti-American socialist president

The problem with Bush is he wasn’t vigorous enough in exposing the bad guys Freddie and Fannie. He spent like a drunkard. He was afraid to fire incompetents like Rumsfeld. For a guy who sad “bring it on” he was a wimp whom lacked the balls to do what was needed to get the job done In the end the Democrats steamrolled Bush with his “compassionate conservative” weakness. Bush was weak in everything but the war on terror.
Obama is none of that. He’s a bold faced liar who spun a bunch of BS to get elected and as soon as the swearing in was over went hard left fascist Hitler style. He leveraged the federal government with a huge assist from TARP, Bush and Hank Paulson. He leveraged the federal government into key industrial sectors, GM and Chrysler. Tried to control the energy markets with cap and trade. Is attempting to control health care. Gained control over education and student loans. In 10 years if Obama dreams came true no white conservative male would get a student loan. No freedom of thought. All goals of totalitarian governments the world over.
Obama and the Democrats have stolen Hitler’s playbook and tweaked it a little bit here and there, repackaged it with liberal doses of affirmative action, globalism, environmentalism, unions, and sold it to the same people who supported Hitler, Stalin, Pol Pot, Mao, Castro, Chavez and every other progressive freak on the planet.

Alexander Solzhenitsyn understood the sickness of socialism

And here comes Bill O’Reilly two years after the fact questioning Obama because he can’t answer a question about jihad from a girl in India. Personally I think a Harvard education produces people like Bush, O’Reilly and Obama who lack the capacity to think clearly but hey that’s just me. There does seem to be a pattern of Harvard graduates getting into places of authority and then screwing everything up they touch. Anyway. Back to Obama’s economic record.
Now first thing you have to understand about socialist is they don’t care about the people. They all say they do and offer government goodies like health care but that’s just to get to the real prize, control and revenue streams. For health care it’s pretty simple. You offer it for free. The ignorant peasants vote you into power. You know its 17% of the GDP. You deliver about 10% of the GDP back to the peasants in the form of health care and pocket the difference. Like they would do in Canada if they weren’t so bloody inefficient. The real appeal for a socialist is you get to kill all your political opponents by denying them medical treatment which most people need sooner or later. Another appeal to having access to that GDP is if you need money for other priorities such as war or a new Obama pyramid or Obama posters all over the country you can deny old farts medical care and divert the money to your favorite pet project. What the hell they are already dying. Hitler knew this and so does every socialist. The object is to get control over the people and the economy. Everything else is secondary.

Yuri Bezmenov understood the sickness of socialism

In the 1930’s when the German economy was booming while the rest of the world suffered they had no gold. They had no silver. Germany went off the gold standard in 1933 when their reserves were depleted. The fascist economic miracle was all done on the promise of a better tomorrow and fiat money. If the currency collapses like it is now for the United States it really doesn’t matter to a socialist. Hitler’s currency had collapsed and it did not stop him for a moment. The train just kept on rolling. As long as the people believe and the socialist have control over the means of production then you can create a socialist government and kill millions to get there. This disconnect from standard business thinking is why so many fail to understand Obama and all the millions of socialist, fascist, communist and one world government types like him.
We saw this thinking in the USSR. Alexander Solzhenitsyn explained it clearly to America. Yuri Bezmenov explained the mindset of a socialist. Still millions like O’Reilly refused to see the obvious and denied it for years when it was right there in front of them. Pinhead.
So let’s take a look at Obama and the Democrats record of economically weakening and detaching America from the rest of the world similar to what happened to Germany in 1932 and 33 when they were finally force to abandon the gold standard and create their socialist dream economy. Remember in the 1930’s the NAZI Party achieved partial power in the Reichstag before Hitler and laid the foundation for Hitler’s rise to dictatorship status.
Since the Democrats took over congress in January of 2007 the civilian participation rate has declined from 66.4% to 64.5%. When Obama took office it was 65.7%. This translates into a loss of 5.5 million to 5.9 million jobs. Millions of jobless peasants just like in the 1930’s.

Every socialist dreams of adoring masses that will do whatever they say. The trick for the socialist is to come up with BS slogans and promises to get power like Obama achieved in 2008. Promise the peasants the world and deliver unemployment, war and dictatorship. Obama has achieved two of the three and is close to the third one. Just one more election cycle to go.

Since the Democrats took office in 2007 the debt has increased 705% from 160,701 million to 1,294,090 million. To a socialist debt means nothing. Control over the means of production is the goal. By the government crowding out the remaining free segment of the private sector Obama and the Democrats have achieved their goal. Wall Street wins. The unions win. Democratic power is solidified. To hell with the peasants. Power is the goal.
Unemployment has been at 9.6% for awhile. This is typical for socialist economies. It’s been that way in Europe for decades. The Democrats must be wondering when the peasants will shut up and get use to it. Socialists want millions unemployed and dependent on government. Socialists want workers to come to them for pay raises. They realize when there excess labor wages will be driven down and the uneducated masses will come crying to the socialist in government for relief.
For decades Americans have enjoyed a 33% higher standard of living, lower poverty rate and lower unemployment than Europeans. Because we are less socialist than European countries. More of our economy is in private hands than in Europe.
Under Obama the US poverty rate has climbed to 15.0%. Not as high as many European country’s but sinful in todays world of productivity advances. The highest rate in almost 50 years. And not a peep out of the “compassionate” socialist in congress. Why? They don’t give a damn about poverty or the people. Its all about the power!

Obama and his adoring socialist masses

It’s all about the power not the people. When the Bill O’Reilly’s of the world understand that basic principal of socialism and socialist then maybe we can have a chance of removing this vile affirmative action dictator wannabe from power in 2012. It took a Indian girl asking Obama about jihad for it to finally sink into O’Reilly’s Harvard educated head that Obama is not nor has he ever been for the American people. Obama is and always has been for socialism and nothing more. It’s all about control and power.
The big difference between the 1930’s Germany and Obama today is information. Glen Beck deserves a lot of credit but so do the many unsung heroes like economist Dan Mitchell, Peter Schiff, Lew Rockwell, Robert Murphy, Murray Rothbard, Ludwig von Mises and others. The public has access to information undreamed of back in the 1930’s. Back in the 1930’s both the German (Hitler) and American (FDR) pubic blindly followed two of the worst dictators in their respective countries with the end results of millions of jobless people and millions of dead people. Hopefully thinking Americans have awakened from their blissful slumber. Hopefully Germany will end its socialist policies and start creating a environment that benefits the natives. Hopefully Americans will stop our own decline, seal the border and eliminate the socialist from government. It’s our only hope to remain a nation.
And while the Democrats can still steal a few major senate races in Nevada, Washington, Colorado and may even try to steal the 2012 presidential election they can’t steal the local elections. The people in the fly over states will revolt sooner or later against the progressives and unions on the coast. It takes just one governor in one state to fire that first shot. We don’t have to live like dogs under the tyrants in Washington. We can and will be free or die.
Obama and the Democrats will go back into hiding behind the blue dog Democrats like in the past. They will extend the Bush tax cuts and try to act like decent people but it’s all just a waiting game until 2012. Socialism is a mental disease and until the Bill O’Reilly’s of the world recognize it for what it is and ostracize those inflicted with the disease the socialist like Obama will continue to plague the planet with their plans for unemployment, starvation and death to millions.

Dan Mitchell’s Comments on Quantitative Easing

CATO scholar and economist Dan Mitchell has given his assessment of why quantitative easing is a bad idea. His remarks will be ignored by the main stream media in stark contrast to anything Paul Krugman writes about that is reported as the gospel. Mr. Mitchell is cautiously right and has a solid understanding of economics and Krugman is almost always wrong and believes in the old fairy tales of an Englishman who should have written fiction novels instead of pursuing economics as a profession. One graduated Georgia and one has a Nobel Prize. If you want Krugman’s view go to the White House web site or the New York Times. In this blog we want to leave the witch doctors to the main stream media and concentrate on real economics and economist.
Mr. Mitchells reasoning is as follows:

CATO scholar Dan Mitchell should have won the 2008 Nobel Prize but he believes in free markets

“There are several reasons why this is a bad idea and one potential argument why it is a good idea.
* It is a bad idea because rising prices are the inevitable result when there is more money chasing the same amount of goods.
* It is a bad idea because it assumes that the economy is weak because of low interest rates. That is nonsense. Interest rates already are very low. Trying to drive them lower in hopes of stimulating borrowing is like pushing on a string.
* It is a bad idea because you don’t solve bad fiscal and regulatory policy with bad monetary policy. The economy is weak in considerable part because of too much spending, new health care interventions, and the threat of higher taxes. You don’t solve those problems by printing money, just like you don’t make rotting fish taste good with ketchup.
* It is a bad idea because the easy-money policy of artificially low interest rates helped create the housing bubble and financial crisis, and “hair of the dog” is not the right approach.
* It is a bad idea because no nation becomes economically strong with a weak currency.
* It is a bad idea because it may lead to “competitive devaluation,” as other nations copy the Fed’s misguided policy in hopes of keeping their exports affordable.”
To follow up I was amused at Donald Trump’s interview with Greta Van Susteren on Fox News. The Donald was complaining about the bad Chinese and their unfair trade practices. He was arguing for a 25% tariff on all Chinese goods imported into the United States. I just had to laugh at his biases in favor of his American business buddies and ignorance (?) of the plunging dollar. Even without QE2 the dollar has dropped a staggering 13.5% in the last 5 months. If the Donald wants a 25% increase in the price of Chinese goods well we are more than half way there. You really want tariffs at this time Donald? He’s an idiot when it comes to economics.

The Philips Curve is a Keynesian fairy tale from the past that our current Federal Reserve Chairman Ben Bernanke believes in and was most likely his justification for QE2

Some “experts” predict this cheapening of the dollar will lead to a 20% devaluation. That would mean the dollar index which has dropped from 88.5 five months ago to 76.5 today would plunge to 64. Ouch! Unchartered territory and certainly would fit into Obama’s “spread the wealth” anti colonialist philosophy. A weak president supporting a weak dollar policy with his appointee Ben Bernanke doing the heavy lifting.
One thing is absolutely certain is that the QE2 policy will cheapen the dollar conservatively 4%. That means 4% more for gas and all other imports. A 4% tax on every man, woman and child with no representation or impute into this arbitrary decision. Ben Bernanke and his buddies just decide to tax everyone 4% and that’s final.
Dan Mitchell states that the only justification provided by his monetarist buddy is:
“* The only legitimate argument for quantitative easing is if more money needs to be put in the system to counteract deflation. In other words, if the Fed focuses on its one appropriate responsibility – price stability, and if there is a legitimate concern of falling prices in the future, then an “easy-money” policy today could offset that future deflation.”
I think this misses the mindset of Bernanke. Bernanke is a student of the Great Depression and John Maynard Keynes. Bernanke probably does believe in the Phillips Curve which states that there is a trade off between inflation and unemployment. As Mr. Mitchell correctly points out this is ludicrous when you have massive federal spending and the misallocation of resources that accompany that spending. Combined with massive federal intrusiveness into the economy with health care and financial regulations no amount of inflation will cure the problem of a decaying economy. At best it will provide a short lived economic expansion followed by inflation and a even worse long run economic decline. To put it bluntly this QE2 stimulus could make the top ten Federal Reserve blunders of all time. This doesn’t even take into account the foreign policy implications such as the Chinese getting just a little pissed off seeing the United States willfully and purposefully cheapening its dollar.
Ben Bernanke is the wrong Federal Chairman at the wrong time in history. Washington needs more economist like Dan Mitchell who understands economics from the Austrian perspective or even monetarist closer to Dr. Freidman’s view of monetary policy. Bernanke is going to do his QE2 and it will be a disaster. Stock up on the oatmeal folks and elect a president that will replace Ben Bernanke.

The Not So Hidden Agenda of Obama’s India Trip

It just blows me away at how stupid the media thinks the American people are. Obama and American taxpayers are going to spend $200 million a day to promote trade with India, Japan, Indonesia and South Korea. The US will be taking along about 3,000 people including Secret Service agents, US government officials and journalists to accompany the President. Several officials from the White House and US security agencies are already here for the past one week with helicopters, a ship and high-end security instruments. In addition 34 war ships will accompany the president.

The last sentence should be a clue as to the real intent of the trip. Really if the United States wants to have more trade sign a free trade agreement in Washington. A whole lot cheaper than sending over our president who just had his ass handed to him this last election.
Now I know the terrorist are tough but 34 war ships to combat the possibility of a squad of terrorist taking on the secret service? Can you say overkill? Did the Taliban just take over the Pakistani Army? I must have missed that news cycle.
The real reason for the trip is to fly the US flag in Asia and secure allies for a possible future war with China. China has a 3 million man army in peacetime and could easily quadruple that in war time. With 1.3 billion people and a GDP of $8.8 trillion (compared to the US GDP of $14.3 trillion) with 10% growth rates it’s not a question of if but when China challenges the US and Japan for supremacy in the east and possibly the world.
The economic steps our Federal Reserve and federal government are taking pretty much match the economic policies of the 1930’s that eventually lead to WWII and 65 million dead. A New World Order as spooky dude George Soros and George H. W. Bush would say. Economic collapse prior to war makes the peasants much more compliant and happy to just have a job when the government seizes 37% of the GDP, or 50% in the case of England. I guess it would be the equivalent of the farmer fatting up the cow right before the slaughter. Beat down the peasants with job losses and inflation and when war comes around maybe picking up a gun or working in a ship yard making $400.00 a month won’t seem so bad.

So for the straight thinkers among us this trip is a photo opportunity for the affirmative action president and his Marie Antoinette wife but more importantly for the military and state department to line up military commitments for future possible confrontations with China.
To put it another way America is telling China that there will be inflation in America. China will lose billions of their hard earned $$$$$ they invested into American bonds and if they are smart they will grin and bear it. And for now this strategy will work. Not so sure a decade or two from now.
As for Obama he probably has no clue as to the significance of what the military and state department are doing. For him its just another junket to show his black ass and ethnocentric wife to the world.

Central Florida and Florida Break Away from Progressives

Here in Central Florida we have seen the fruits of our political labor come to fruition through a lot of “ground work.” All politicians know what the meaning of that is and they know the routine. Walk the district, make the calls, put up the signs, and attend every political function for a year or two depending on the race. Quite frankly it’s exhausting but has been shown to be the recipe for success generation after generation. Money also plays a part but if the message doesn’t resonate all the money in the world will not help a candidate such as Alan “$5.1 million” Grayson found out. You could argue that the side that is fired up the most will have the best ground game and that is simply independent of the overriding dependence on the issues of the day. Probably true but a good ground game can and does make a difference.

Florida District 24 Congresswoman elect Sandy Adams celebrates a political ass whipping with a 60% to 40% victory over progressive incumbent Congresswoman Suzanne Kosmas

In Central Florida our ground game got serious back on April 15, 2009 when thousands showed up at Lake Eola for our first Tea Party. We had hundreds of political organization meetings for the Fair Tax, Tea Party, Orange County Republican Executive Committee, Libertarian, interrupted meetings, espionage meetings and it isn’t over yet. We had hundreds of rallies with every Republican, Libertarian; No Party Affiliation and an occasional Democrat (Thanks Leo Cruz).
What I am trying to convey to the rest of the country is we the people of Central Florida did not get rid of our progressives by sitting on our ass watching Glen Beck. We went out there and sweated like pigs in the intolerable Florida 95 degree and 90% humidity during the dog days of summer. Those of us that could make $10.00, $25.00, $50.00 donations to our favorite candidates did so. We made those dreaded stupid telephone calls and we attended the rallies big and small. Most of the Republican primary losers remained active in the campaigns of the winners or related projects such as the Fair Tax. In short we formed a formidable team and we made a difference.
Now before people in other parts of the country criticize us as being a red neck state let me say we are very diverse especially in Orlando which is an international city if there ever was one. We are not Paris but we attract 52 million tourists annually. 16.1% of the population is black and 21.5% Hispanic. We are like most other states with a progressive infestation of one of our political parties.

Dan Webster put a ass whipping on progressive Alan Grayson 56% to 38%.

What did we achieve for all our hard work? Congressman Alan “Die Quickly” Grayson gone. Progressive Congresswoman Suzzane Kosmas who refused to meet with her constituents unless they were democrats or in a controlled setting is gone. Our flip flop governor and senate candidate Charlie Crist is gone. I guess Charlie can come out of the closet now. The Republicans dominated the state races so much that they now control the governor’s mansion and have veto proof majorities in the house and senate chamber. Every office at the state level is in Republican hands. Expectations will be high.
Without Democrats Florida can now write voter laws that weed out illegal aliens, dead people, mentally incompetent and felons from voter rolls.
Without Democrats Florida can write voucher legislation that will allow impoverished kids to escape the educational institutions that have failed them and condemned them to poverty for decades.
Without Democrats Florida can pass tort reform saving the people millions in health care cost.
Without Democrats Florida can destroy teacher unions or any union for that matter as they see fit.
Without Democrats Florida can lower taxes and regulation to help our businesses.
Without Democrats Florida can fight Obamacare and illegal immigration as they see fit. Let the Feds fight it out with Republican Pam Bondi if they want to.
Expectations will be high for the new governor and legislature. They have no excuse not to perform. We the people worked and donated our time so those we elected can and will serve we the people and not special interest. We have this rare opportunity to do good things for our state. Don’t blow it.

Alan “Die Quickly” Grayson’s Last Debate

Florida District 8 congressional loon Alan “Die Quickly” Grayson had most likely his last debate this past Wednesday, 10-27-2010. Polls show his Republican opponent Dan Webster with a 7 point lead. The only hope Grayson has is if his reportedly $40,000 funded debate opponent Peg Dunmire of the fake “Florida Tea Party” can get enough votes from Webster on November 2nd. Independent conservative candidate George Metcalf participated in the debate as well. The one missing candidate was Republican Dan Webster who changed his mind about debating Grayson after Grayson insisted third party candidates be present and the infamous “Taliban Dan” adds. Webster even called Grayson a “bully.”

Dunmire and Metcalf did a public service by presenting the conservative view to the split audience that was notably subdued. Compared to the contentious District 24 debate between Sandy Adams and Suzanne Kosmas (and a left loon professor) this debate was more like a funeral procession as the Grayson faithful tried repeatedly to get fired up when he made a good quip or played the class warfare game. The empty seats in the small venue and modest press coverage were in stark contrast to the full auditorium of rancorous Kosmas/Adams supporters wanting to go at each other. A very sad and most likely farewell to one of the worst and most despised politicians ever elected to congress.
Grayson who is a lawyer worth $31 million played his Democrat fans for the fools that they are. He whipped out the class warfare card for medical care reform, economics and the standard cry me a river leftist bull crap. None of it based on facts. He even claimed to be a Keynesian and explained briefly we need to fill the GDP “gap” with more spending. No doubt most of it ending up in his friends pockets. He played with and distorted facts to the delighted of his uneducated fans, fellow uber rich socialist comrades and the press corps.

Sparse crowd and media attention to the debate

At one point in the debate he blamed the Bush tax cuts for the current deficit. According to Mr Grayson if only the tax cuts were not in place the federal government would have, whola, exactly $1.7 trillion dollars in additional revenue to cover the deficit! It’s magic Alan Grayson economics! His ignorant fans applauded in admiration of his brilliance and I had to restrain myself from barfing in front of his congregation and revealing my true beliefs. Of course the truth is after the Bush tax cuts in 2003 federal receipts increased a whopping 40.1%! And of course the real problem was spending that increased 66.1% over the 8 Bush years or 8.3% a year. Eventually the boom years ended and all that reckless spending as well as TARP killed the economy not tax cuts.
I just had to marvel at the psychopathological liar Grayson playing his crowd for the fools that they are. The $31 million dollar man played some health care sob story here, a little economic misinformation there. It was obvious his core fans were incapable of any logical thought and operated on emotions that Mr. Grayson was more than willing to supply them. It was sad in a way, most of Grayson’s supporters were working single women, 20 something’s and 50 something’s men about to retire looking for solutions, salvation and hand outs from their narcissist congressman. Through years of indoctrination in government schools and the inability to see through bull crap they were the sheeple they so vehemently accuse the people on the right of being.
It was almost as if I had been transformed back in time to 1960 and the wicked alcoholic sinful preacher man Elmer Gantry was standing there before my eyes telling me that if I just repented my evil libertarian ways he would deliver to me all of my worldly wants and desires. Salvation through government. Peace, harmony, love big brother. How could I be so unreasonable as to question the judgment of one so blessed and knowledgeable as Mr. Grayson and his comrades. They just wanted to take care of me.

All I had to do was let the $31 million dollar man do the hard work in Washington and I could rest assured I would have food, clothing, housing, medical care, babysitting services, women, legalized drugs and would work a mere 35 hours week at the 7-11 to get it. All I needed to do was to submit to his powerful presence and return his ilk back to Washington for another two years. He had all the answers right there in his ever powerful immense mind that must have been at the 138 IQ level. Just punish those evil rich and the world was there for the taking. Well except the rich lawyers like him, shhhhhh! And then I woke up.
Grayson and those like him are blinded by ideology, greed and a prevaricated ethnocentric view of the world. They use government as the tool of choice to extract riches and power from the peasants and middle classes that always leads to bankruptcy, lower standards of living and poverty. In the worst case scenario death, war, famine and destruction. In a decent society people like Dan Webster shun such evil.
From his vicious attacks on Webster’s religious faith it’s clear Grayson hates Christians and Christianity. How could a reasonable man conclude otherwise after his complete disregard for the truth of Webster’s statement and misrepresentation of Webster and his faith with Jesus Christ? Can anyone fault Webster for not debating such a malevolence man?
The truth, Mr. Grayson, and more so to the democratic peasants that follow these pernicious men and women is that our standard of living is increased by increasing productivity more than population growth. We can kill people, abort them, jail them or we can practice the economics of increasing production so more of us can live closer to Mr. Grayson’s lavish $31 million dollar lifestyle. Being more productive “supply side, voodoo economics” is not a very attractive picture if you are lazy. It means getting a job in the private sector where you have to work producing a good or service for others who will part with their money to pay you for your work. Most private sector work is boring and repetitious. Yes being more productive means eliminating millions of wasteful paper pushing jobs in the government sector and having those people transition into the private sector. Yes producing in the private sector is stressful, often times boring and pays less than government work, and is the only way we will increase our standard of living the humane way.

Increasing taxes on the rich will lower our standard of living because the rich will hire less private workers and there will be less private production. Less private production means less good and services can be consume and the pie gets smaller. We need more private sector production, particularly manufacturing, to increase our standard of living including health care access and affordability. Lowering the corporate and capital gains taxes to zero would be a start.
Cuba has free health care that is almost non existent for everyone but the highest of comrades. They have little private production of goods and services that they can trade for medical supplies. Cuba has a abundance of doctors to export to Venezuela but if you have no antiseptic and bandages who will benefit? Certainly not the working class.
Yes the true economics of our living standards is quite simple, boring, stressful and competitive. There is no magic formula. Increase the supply of goods and services faster than the population growth. How? Lower taxes and have federal, state and local governments consume NO MORE than 25% of the GDP. Preferably 20%. 10% federal and 10% state and local. Yes it is boring but as we see in Greece, France, England and soon coming to America there really is no escaping the laws of gravity or economics. So the ignorant peasant democrats will have to be educated and the greedy nihilist like Grayson exposed and defeated.
Do that and anyone who has a job would in a free market be able to afford their own personal health care, housing and transportation needs without government. Amen brother Webster.

Heavy Inflation Numbers Combined with Tax Increase Spell Disaster in 2011

Ben Bernanke may be clueless and is planning his inflation campaign after the November 2nd election but some people are actually paying attention. Here are some commodity numbers that should wake your ass up. These numbers are the volatility over the last 52 weeks of the following commodities as of 10-25-2010.
For Bernanke’s (and Krugman’s) rationalization of creating inflation go here and here. Look at the rational and justification gymnastics used. Pray tell what happens when the Federal Reserve is forced to defend the dollar? I am just a simple peasant with limited intelligence but it looks like a fancy way to justify printing money to me. Am I being obtuse?
Seniors clinging to their Social Security benefits and 0% COLA, savers, and workers will be killed. Debtors, capital owners (business, stocks, property) and the government will be the winners. And the biggest winner of them all will be the biggest creditors of them all. The federal government, which conveniently gets increased revenue from capital gains which are not indexed for inflation, devalued benefit payments to seniors (Bush told seniors to reform Social Security in 2004 oh well) as well as all other federal programs with fixed payment schedules. How convenient. Wall Street bankers get 2008 dollars they have invested elsewhere and now we get the inflation and a devalued dollar. So let the numbers begin and may the tears start flowing.

Corn prices up 70.6%

Gold up 31.5%
Silver up 66.1%
Platinum up 2.2%
Copper up 34.3%
Corn up 70.6%
Soybeans up 37.1%
Wheat up 72.0%
Lean Hogs up 24.4%
Pork Bellies up 8.5%
Live Cattle up 16.9%
Feeder Cattle up 13.6%
Cocoa up 23.6%
Coffee up 49.3%
Cotton up 46.7%
Are we seeing a trend yet?
Sugar up 85.2%
Oil up 27.2%
Heating Oil up 24.2%
Natural Gas up 96.8% (What do the insiders know about natural gas availability we don’t)
Unleaded Gas up 9.0%
And what is the average of all these essentials? Just a whooping 38.9%. Yes and the Deparment of Labor keeps feeding the press that 0.1% inflation inflation rate bogus number and the press obediently keeps you folks in the dark. What was that M-3 number the Federal Reserve quit reporting in 2006? What a proxy for the real inflation rate? No! You jest!
Did any of the politicians tell you about inflation when they passed TARP? Did any of the politicians talk about inflation when they passed the “stimulus?” All that spending to “save” the economy. The only ones telling you the truth have been the few economist (not you Mr. Krugman) who actually understand economics. The VERY few. Gee I wonder who that would be?
We are in for some serious crap after the election. With the tax hike in 2011 combined with inflation the economy is looking at negative growth, stagnation and inflation. If any politicians are reading this in Washington DC can we get rid of the Keynesian economist and hire a few real economist?

Wheat up 72.0%

Most of these politicians don’t understand all this but they should have some people around them telling them the strait story. We don’t need no “fair trade” debates right now. Any trade we can get in the coming years will be a blessing fair or not. We don’t need fancy budget crunchers, inflation will make budget planning next to impossible. We need some MF’s who understand the problem with America is social entitlements that consume 44.7% of our federal budget. We need some people with vision that will not be afraid to go down with the ship. We need politicians to acknowledge America has been a socialist nation for decades and all socialist societies go bankrupt sooner or later. Now is latter.
Admit the problem was Social Security, Medicare, prescription drugs and all the other programs combined with Obamacare and eliminate the problem in a humane way. Socialism doesn’t work. Politicians need to understand this principal and quit denying America is not a socialist nation with huge socialist bankruptcy problem. Until politicians admit the problem is federal entitlement programs there is no hope for a resolution.
We get the government we vote for. Our day of reckoning is just beginning. These financial melt downs can last decades.

Local Orlando Gadfly Behind “Fake” Tea Party Headed to Jail

The man allegedly behind the fake “Tea Party” here in Central Florida has been sentenced to 60 days in the hole for his role in distributing more than 5,000 illegal mailers in the 2006 Winter Park mayoral race.
Guetzloe, the political consultant behind the “fake” Florida Tea Party that is reported to be funded by District 8 Congressman Alan “Die Quickly” Grayson, pleaded no contest in November 2006 to distributing an electioneering communication without a required disclaimer and was sentenced to 60 days in jail. He remained free during the appeals process.

60 Days in the Hole for Doug Guetzloe

And so another chapter in the local saga of Mr. Guetzloe is played out. The sentence seems a little harsh but when his record of corruption in local politics is looked at in total maybe the sentence was justified.
In 2005 and 2006, Guetzloe’s company received nearly $500,000 from the law firm representing the Carlisle developers. Neither Guetzloe nor the firm would say what the money was for.
One of the Carlisle’s developers, Alan Keen, in his role as then-chairman of the Orlando Orange County Expressway Authority, also arranged in 2004 through 2006 for Guetzloe’s company to receive $107,500 in toll money, largely for a three-page report on why people do not like higher tolls.
A 2007 grand jury report called it “hush money” and noted that “a quieter Ax the Tax seemed to flow from the $107,500 payment to Doug Guetzloe.”
Keen resigned from the authority shortly after Local 6 exposed the payments to Guetzloe’s company.
The Carlisle was never built.
And Mr. Guetzloe has been accused by the Orlando Sentinel of receiving money from the Orlando Magic for not opposing the new arena now in use.
What can you say? Orlando is not Chicago and Doug Guetzloe is not Jessie Jackson.
Don’t drop the soap Mr. Guetzloe.

Intolerant Left Sacks Juan Williams

Former NPR news analyst and Fox News contributor Juan Williams was fired this week for remarks he made about Muslims. While on the O’Reilly Report discussing Bill’s incident on the View where Whoopi Goldberg and Joy Behar walked off because Bill said “Muslims” cause 9-11 instead of “fanatical Muslims,” Juan confessed “Look, Bill, I’m not a bigot. You know the kind of books I’ve written about the civil rights movement in this country. But when I get on the plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they are identifying themselves first and foremost as Muslims, I get worried. I get nervous.” A simple statement of Juan’s feelings and he gets fired.

Juan Williams was fired from NPR for being the “House Negro” on Fox News

Anyone who has watched Williams over the years knows he is firmly in the left column. He has “balanced” the debate on Fox News for years. He is not a Tea Party member nor will he ever be. But apparently he was to far right and socialized with the enemy too much for NPR and was canned when they had a excuse to fire him.
Of course the rules do not apply to leftist like Behar when she makes anti-catholic remarks or denigrates home schooled parents and children “A lot of them are demented when they’re homeschooled.”
I never thought in a million years would be defending Juan Williams but he was sacked because he was the “house negro” for Fox News in the eyes of the leftist like Warren Ballentine. Mr. Williams was even told to “go back to the porch” by Ballentine.
Of course we all know what is happening. The left is purging itself of “moderates” and undesirables much like the Tea Party is purging “moderates” like Delaware’s Mike Castle. Only difference is one is for speaking his feelings and one is at the ballot box. Pretty clear in case anyone didn’t notice what vicious closed minded bastards people on the left are.
Leftist hate free speech. Exhibit A Juan Williams. Make a comment that offends someone and you are fired. Not far enough to the left and you will not be protected like Behar is.
As for Williams comment, after 9-11 and the Christmas underwear bomber, any rational person would think like he does. The problem with “radical” Muslims is they are fanatical and irrational. We need to keep killing them until they understand it’s not okay to kill people who do not believe in Islam. History show us with the Germans and Japanese that when you kill enough of them they will become civilized and stop killing us.
My condolences to Mr. Williams and welcome to the treatment everyone on the right gets from the loons on the left. Don’t sweat Juan. Ignore them if you are weak or confront them. They will lose in the end. They always do.

Strange Debate Tactics in Central Florida

Recently in Central Florida Districts 24 and 8 encompassing Orange, Seminole and other counties we have had a couple strange debates. The strangest by far was Alan “Die Quickly” Grayson having a debate with third party challenger Peg Dunmire of the fake “Tea Party” reportedly funded by Alan Grayson himself. Joining the entourage was George Metcalfe, an independent; and Steven Gerritzen, a write-in candidate from the Whig Party. Mr. Grayson clearly wants as many conservatives to the right of Republican challenger Dan Webster as possible to siphon off conservative votes. The one person not attending was Dan Webster himself.

Dan Webster wisely chose not to show up at the Florida District 8 debate with incumbent Alan “Die Quickly” Grayson, Dunmire and two others.

For those not familiar with Webster he is a elderly soft spoken deeply Christian man of honor and integrity. His speaking style is, shall we say, adequate. Even his most ardent supporters would never say he is a inspiring speaker. Having a free for all with Grayson taking shots at Webster with the other three vying for media attention with the modest Webster would not be the best of debate outcomes. Webster was correct in declining the debate invitation as in the end it did turn into a media circus.
Mr. Grayson stated that he would not debate unless all the other challengers were invited and Webster has stated he only wants a one on one debate essentially closing the possibility of any debates in the future.
In District 24 there was a debate October 13 with incumbent Democrat Suzanne Kosmas and challenger Republican Sandy Adams one day after the Democratic Congressional Campaign Committee pulled $650,000 on television ads for the freshman Democrat scheduled to be spent in the final week before Election Day. The Channel 2 reporter asked her about the DCCC decision and she replied that is showed confidence in her that she would win. Good reply but Adams is projected to have a 83% chance of winning this seat.

Republican challenger Sandy Adams, incumbent Suzanne Kosmas and write in Green Party candidate Nicholas Ruiz III

Adams like Webster is a clean safe candidate that voters will feel comfortable with. There are no skeletons in the closet for either of these candidates and we assume no police repots hidden away of them waking up drunk in the front of the Millennium Mall. Safe choices for the voters come November 2.
The one bit of intrigue in the District 24 debate was Green write in candidate Doctor Nicholas Ruiz III. Why was he there? Adams is not that fussy about much of anything. She probably didn’t care one way or the other. Why would Kosmas agree to having a candidate to the left of her and possibly costing her votes? Grayson used the opposite strategy stacking the debate with candidates to the right of Webster. Why a switch in strategy to the left? To make Kosmas appear “moderate.” I don’t know at this time.
One thing is clear was that Dr. Ruiz III did not add much to the debate and should not have been on the stage. He is not on the ballot and is a write in candidate. Maybe he had ties to the sponsor of the debate and Brevard Community College. Maybe he was a reflection of the political opinions of the administration and staff at BCC? Whatever the reason it made no sense to have leftist garbage thrown out for one third of the debate. If the guy is not on the ballot he should not have been on stage, period.

Suzzane Kosmas doesn’t seem to understand that the Social Security lock box has been raided by politicians

There is a place in debates for third party candidates who are on the ballot. Franklin Perez won the Libertarian primary in Florida House District 33. If there was a debate he would have every right to be on stage with Democrat Leo Cruz and Republican Jason Brodeur. State qualified and on the ballot Florida Libertarian Senate candidate Alex Snitker cannot get a seat at any senate debates with Rubio, Crist and Meeks so why does Dr. Ruiz get a seat at the table?
This is important because as we have seen in recent debates with Christine O’Donnell, Meg Whitman and even Rubio getting ganged up on in a debate or any fight is just not fair and to a certain extent that is what happened in the District 24 debate.
Kosmas and Ruiz took exception to Sandy Adams position that the people should decide how they choose their senators. Most of the uneducated masses don’t know the original constitution had senators selected by state legislators for the expressed propose of giving states direct representation in the federal legislative process. Adams supports allowing the people of each state choose how they want to select senators by either a direct vote or state legislature. Let the people decide. Kosmas and Ruiz mocked her for this position. Ruiz went so far as to say this is why we broke from English rule. This of course is a complete misunderstanding of the constitution and why Adams wants to repeal the 17th amendment. But as we know in politics facts mean little and perception is everything. And this brings me to the main topic, why was Ruiz on that stage?

Sandy Adams is a no nonsense Republican challenger in District 24.

As a Green Party candidate and elitist Dr. Ruiz’s position have little bearing on reality. His speaking at this event was a complete waste of time. For example while the nation is going bankrupt Dr. Ruiz believes that the retirement age for Social Security should be 55.
To quote Dr. Ruiz, “My reasoning is that for Social Security we should lower the age of Social Security retirement eligibility to 55, and increase the benefit by 20%. This policy will encourage people to retire sooner, allowing them to enjoy their later years in better health, while freeing them to contribute to society in other ways. And then concurrently, for Unemployment, by lowering the retirement eligibility age and increasing the benefit, we encourage people to retire earlier, while simultaneously realizing new job openings created by their retirement that can then be filled by the unemployed.
Fiscal responsibility and the pursuit of societal justice is a matter of priorities – what policies we’re willing to fund and support, and not – and to what extent.”

Dr. Nicholas Ruiz III Green economic policies would lead to government ownership of humans, some would call it slavery, and result in the massive starvation of millions maybe billions of humans. Maybe that's the goal of the Green Party?

Now you don’t have to be a economist, although I am one, to see the flaws in this argument. Social justice is fine in the next life but on this planet real people have to work real jobs to provide food and shelter for themselves. The Social Security tax is 12.4% and the system is already in the red. Just to keep benefits at current levels the payroll tax would need to be raised to 18% this decade. So we allow people to retire at 55 for all those baby boomer’s and we raise the social security tax to 30% of a person’s paycheck? 30% to support perfectly healthy people who can work? What about other federal programs? State taxes? Local taxes? I guess a 70% tax rate on individuals is social justice for Dr. Ruiz? Why not 100%? We use to have slavery to the master why not the state? What the hell?
We got enough bull crap from Kosmas saying that Social Security was viable for the “next 25 years.” I guess Suzanne doesn’t realize the Social Security lock box is filled with IOU’s from the federal government who raided the fund for decades. Earth to Suzanne there is no lock box and the money is long gone. To the uneducated masses (Democrats) this is a valid argument and Adams could have chosen to point out the obvious but she didn’t. Having that debate would have been valid and proper. Having some leftist elitist throwing out trash just deflated the debate into the area of absurdity.
So to me the real question in the future for political debates is who we allow to be at the table and who do we omit. The democrats are notorious for BS tactics like we saw in District 8 and 24. It’s about time the Republicans like Dan Webster call their bluff and let the buffoons sit there looking like the asses that they are. Why was 20 minutes of the District 24 debate wasted on a elitist leftist living in la la land? The voters of District 24 deserved better.

Obama is Accusing the Republicans of Accepting Foreign Donations

The latest BS to come out of the White House is the American Chamber of Commerce is accepting membership dues from foreign members who would like to be a part of the organization for whatever reason so the 2010 election is tainted by Republican foreign money. Get it? No? Well you must have a IQ over 100 then.
Does Obama have the shortest memory ever or does he think you are stupid? Does he not remember 2008? For those who forgot below is a response from Pamela Geller who investigated this fraud and exposed it. Of course no one in the MSM picked up on it or reported it. Obama has one hell of a set of balls to complain about foreign contributions
Below is a link from Pamella Geller of Atlas Shrugs
It took years, but there is something I finally agree with Barack Obama and Al Franken on. Obama and his propaganda machine in the mainstream media, not to mention his party of corruption, are calling for an investigation of “foreign money” in campaigns.
Finally.
I have been calling for a special prosecutor for years, ever since I exposed the millions Obama received from Muslim nations, Hamas-controlled Gaza and other foreign countries.

Obama warned Thursday that “groups that receive foreign money are spending huge sums to influence American elections, and they won’t tell you where the money for their ads come from.” He also said that “just this week, we learned that one of the largest groups paying for these ads regularly takes in money from foreign corporations.”
Franken then duly hurried to do Obama’s bidding, calling on the Federal Election Commission to investigate the Chamber of Commerce, the group to which Obama was referring.
We move to a theater of the absurd upon hearing Al Franken, who lost his election on election night and began pulling votes out of car trunks to steal that election, calling for an investigation of foreign money.
Nonetheless, the Democrats’ mainstream media shills then took up the cause. On MSNBC, Rachel Maddow confronted Oregon Republican Congressional candidate Art Robinson with accusations about foreign contributions: “If you get elected in part because of this spending and you find out that it’s from criminals, or foreign interests, or communists or something, wouldn’t that bother you?”
Whether or not it should bother Robinson, it should bother Obama. While he is calling for an investigation into the Chamber of Commerce, there should be a full investigation into the foreign millions Obama received for his campaign.
As I show in great detail in my book The Post-American Presidency: The Obama Administration’s War On America (Simon & Schuster), Obama’s 2008 campaign finance records are full of riddles, mysteries, and unanswered questions. It was I who broke the explosive news stories of Obama’s contributions from Gaza (Hamas-controlled Rafah) (documentation here), and of how he lied about refunding those jihad donations — not to mention the tens of millions of dollars Obama received in donations from foreign countries (scroll this link).
Yes, I checked over John McCain’s FEC records, too. They were so clean, you could eat dinner off them. Not Obama’s. Contributing nearly $25,000 to the Obama campaign was Monir Edwan, who was listed on FEC documents as contributing from the city of Rafah in the state “GA.” Georgia? No – there is no Rafah in the Peach State. Monir Edwan sent money to Obama from Rafah, Gaza.
Rafah is a Gaza refugee camp.
According to the FEC, contributions to the Obama campaign from three brothers, Osama, Monir and Hossam Edwan, all from Rafah, totaled $33,000. And they weren’t alone. Al-Jazeera reported on March 31, 2008 that Gazans were manning phone banks for the Obama campaign. Here is video of those Gaza phone banks.
The Obama campaign claimed that they had returned $33,500 in illegal contributions from Gaza – despite the fact that records do not show that it was returned, and the brothers said they did not receive any money. And indeed, Obama’s refunds and redesignations on file with the FEC show no refund to Osama, Hossam, or Monir Edwan in the Rafah refugee camp.
When I confronted Congressman Jerrold Nadler (D-NY) about the Gaza phone banks issue in South Florida in early November 2008, he said that if there “really were phone banks in Gaza, that would be a major campaign issue.” But he laughed at the idea that Obama was receiving campaign contributions from Gaza. The mainstream media laughed with him, continuing its refusal to cover this explosive story.
And to this day Obama’s foreign contributions have never been investigated.
The Democrat party today is so corrupt that Boss Tweed is blushing. The Democrats are so contemptuous of the American people, they think they can pull a stunt like this while being unequivocally guilty of what they’re accusing the Chamber of Commerce of doing.
As for the Chamber of Commerce, spokesperson Tita Freeman said: “We’re careful to ensure that we comply with all applicable laws. No foreign money is used to fund political activities.”
Remember when Obama said, “We are the ones we have been waiting for”? Yes, indeedy. And today, he is the one he is looking for.
This is our moment. This is the moment we have been waiting for. This is the time to investigate Obama’s contributions. It could, and should, mean the end of Obama’s presidency.

The Great Depression Explained for Grandma and Grandpa

This is dedicated to my grandmother and all the grandmothers and fathers out there who were so profoundly affected by the Great Depression but to this day do not have a coherent factual understanding of what happened.
One of the biggest areas of rewriting history is the Great Depression. We all know the story. The greedy capitalist had a stock market crash in 1929 and the economy was destroyed. Republican President Hoover who was a laissez faire, hands off, president who sat in his office counting his money while the United States economy went into collapse. Democrat President Roosevelt came to the rescue on his white horse and gave America the New Deal and got the people back to work. The history books paint Hoover as the villain and Roosevelt as the hero. Even today some of the most astute political pundits believe this fairy tale like Dick Morris. In one of his blogs he classifies Hoover as a laissez-faire president “Americans have learned their lesson, just as they learned from Hoover the evils of Republican laissez-faire economics.” Dick Morris is reported to be a Republican these days and he should certainly know better. Even Glen Beck gets it wrong sometimes. On 10-5-2010 he said because of the uncertainty of Roosevelt economic policies in 1937 the economy that was previously recovering was sent back to the dog house because of Roosevelt. Partially true but not the main culprit as we shall see. So what is the truth?

93 year old Ruth Bechtel still idolized FDR and likes government control over the economy

The roaring twenties were the result of President Harding (1921-1923) and Coolidge (1923-1929) sound economic policies. Harding entered office in 1921 with budget deficits, inflation, and 20% unemployment. He is consistently ranked as one of the worst presidents’ because of political scandals but economically he was a superstar. He laid the groundwork for the roaring 20’s with what we would call today simple conservative values.
Harding was very effective at cutting spending. He reduced the federal budget 50% in just two years. Taxes were cut from 77% to eventually 25% in 1925 posthumously under President Coolidge. He restricted immigration to protect American jobs from cheap foreign labor. The affect was dramatic and almost immediate reduction in unemployment to an astonishing 3.3% for the remainder of the decade.
Unfortunately Harding passed the Fordney–McCumber Tariff bill in 1922 that implemented tariffs on agricultural products at a 38.5% effective rate. As usual when one country passes increased tariffs other countries are sure to follow. France raised their tariffs on automobiles 45% to 100%. Spain raised tariffs on American goods 40% and Italy and Germany raised tariffs on American wheat. Henry Ford protested vigorously but to no avail. Unfortunately this series of tariffs would eventually end in disaster a decade latter with the passage of Smoot-Hawley.
And so Harding and Coolidge really did for the most part practice laissez-faire economic policies with the exception of trade. And the roaring 20’s was born.
During the 20’s a situation with the stock market developed very similar to our recent housing bubble and bust. Stock brokers were allowing small investors to borrow typically 67% and even up to 90% of the purchase price of a stock. It was a scam that worked very well as long as the market went up. Everyone made money in the up market very similar to the peak in housing values during the boom. Of course in the long run all speculative bubbles run out of steam and must bust sooner or later. And so did the stock market bubble on October 28 and 29th of 1929 with the DJIA losing 24.55% if it’s value.

Unemployment averaged 17.2% in the 1930’s under FDR’s (1933-1944) leadership but the old folks still love him

It’s important to emphasize that stock markets and other areas of the economy can and do crash periodically and economic activity resumes in a short period of time. On October 16th, 1987 the DJIA (2722.42) lost 22.6% of its value and as we know the federal government and Federal Reserve response was quite different than 1929 and the economy proceeded forward with positive growth for the year. By 1990 the DJIA was at an all time high of 2999.75. Clearly the federal government and Federal Reserve response in the 1980’s was much less damaging than in the 1920’s and 1930′s.
So what happened that made a stock market crash turn into a lost decade of economic contraction eventually sowing the seeds for WWII and 65 million dead?
As in 1987 by December of 1929 the stock market had stabilized. There were no major bank or business failures just like 1987. In fact the market was up 48% from its low of 198.69 in 1929 to 294.07 in 1930. Unemployment had increased from 3.2% to 8.7% but was nowhere near its eventual peak of 24.9% in 1933. It surly was a recession and not the best of times economically but it was not a depression.
So what happened to cause unemployment to increase so rapidly and the stock market to continue its plunge to 41.22 in 1932?
President Hoover the “laissez-faire” guy raised taxes from 25% to 63%. He raised the corporate tax rate from 11% to 15%. Hoover increased federal spending from $2.9 billion in 1928 to $4.6 billion in 1932. A huge 63% increase in four years. By 1932 the federal budget deficit was $2.7 billion. The budget deficit was 6.8% of the GDP. Not as high as today’s 9.6%, which should scare the hell out of anyone with any economic sense.
Last but certainly not least Hoover’s crowning achievement for economic incompetence was the protectionist Smoot-Hawley tariff act of 1930. Tariffs were raised on various products from the Fordney-McCumber rate of 38.5% to 41.14%. Some products saw rates climb as high as 77.21%. The movement of the tariff schedule from 38.5% to 41.14% may not seem significant but it could not have come at a worse time. The global economy was in a downturn and the pressure on foreign leaders to retaliate was enormous. And retaliate they did. Canada our largest trading partner accounting for 18% of our exports raised tariffs on 16 products making up 30% of US exports to Canada. The decline in exports contributed 21% to the US decline in GDP. 23 trading partners protested. France and Britain developed new trading partners. Germany cut off trade and concentrated on becoming self sufficient to the point of not trading with any nation. A precursor to a war economy? US imports decreased 66% and exports decreased 61%. Overall world trade decreased by 66% from 1929 to 1934.

Herbert Hoover (1929-1933) was not laissez faire as depicted by the progressives who have rewritten history. He destroyed the economy by making all the wrong moves.

The effects of Hoover’s economic policies are reflected in the GDP decline of 26.7%! Imagine a president with a negative growth rate of 6.7% per year! Unemployment went from 3.2% in 1929 to a astonishing 24.9% in 1933. Is it any wonder the people voted for FDR?
Now before we go on from here lets not forget the Federal Reserves contribution to this mess. There are several things the Federal Reserve did to contribute. The first being to raise the Federal Funds rate consistently from 1928 into 1929 well after the recession had started. Typical Federal Reserve policy today would be to lower interest rates when economic activity declines. As investors panicked after the crash they began returning paper dollars for gold at their local banks. This cause a run on bank reserves which at that time was gold. The surplus of dollars and the scarcity of gold reserves caused the Federal Reserve to raise interest rates in 1931 to attract more reserves essentially making money more expensive during a recession. This runs opposite of what the Federal Reserve would do today. As the recession wore on price deflation was apparent and the Federal Reserve did not increase the money stock which is conventional practice today. Investors continued to withdraw funds from banks and failure rates skyrocketed with no intervention from the Federal Reserve to halt the panic. With no assurance from the Federal Reserve consumer confidence in banks plummeted resulting in more bank runs and liquidations. Consumers with cash seeing the rapid deflation did the prudent thing and held on to their cash “under the mattress.” In the end the comedy of errors reduced the money supply a staggering 30%.
Some Monetarist and maybe Austrian economist today would argue the Federal Reserve should have taken a more active role in backing up banks and trying to quell the fears of the nation. At that time the Federal Reserve had huge quantities of gold from WWI. During the war Europe sent gold over to the United States to pay for war supplies. By the end of the war the United States had 75% of the worlds $6 billion gold supply. Forget all the other interventionist policies proscribed above by Ben Bernanke and the Keynesians. If the Federal Reserve had shown up like the cavalry with some of that $4.5 billion gold supply to back up the banks under duress at the very minimum the people would have had real money in their hands for latter use. In the end no matter how you look at it the Federal Reserve compounded Hoover’s mistakes and made the economy much worse for their efforts.
Unfortunately for the people FDR was just as bad as Hoover and some would argue worse. FDR pretty much followed the same economic policies implemented by Hoover and then some. In Roosevelt’s first year in office he would institute massive expansion of the federal government including the Agricultural Adjustment Administration, the Civilian Conservation Corps, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Emergency Relief Administration, the National Recovery Administration, the Public Works Administration, the Tennessee Valley Authority, the Emergency Banking Bill, the Glass-Steagall Act of 1933, the Farm Credit Act, the National Industrial Recovery Act and the Truth-in-Securities Act. Between 1934 and 1936 Roosevelt would institute the Federal Communications Commission, the National Mediation Board, the Securities and Exchange Commission, the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration. Congress passes the Banking Act of 1935, the Emergency Relief Appropriation Act, the National Labor Relations Act, and the Social Security Act.
Tax rates went up from 63% to 79% in 1936. The federal debt increased 75% and the federal budget increased 61% from 1933 to 1940.
Despite FDR’s massive intrusion into the economy the unemployment rate averages a staggering 17.2% for the decade. The lowest peace time unemployment rate for FDR was 14.3% in 1937 which brings up the last blow to the economy of the 1930’s by the Federal Reserve.
Reserve requirements for banks were increased from 7% to 10.5% for county banks in 1936 and eventually to 14% in 1937. This was done to “soak up” excess reserves in the banking system and quell fears of inflation due to a increased monetary base. Federal spending was reduced from $8.2 billion to $7.6 billion. Combined with increased Social Security taxes the GDP plunges a staggering 18% and unemployment increased to 19.0% in 1938.
Austrian economist argue the tightening of credit was caused by economic uncertainty due to the drop in the stock market and the growing differential between real wages and productivity. They argue that a increased gold influx from Europe caused inflation, union wages combined with stagnant productivity and heavy stock market regulation caused the economic downturn and a collapse of banking reserves.
Either way you want to look at it the easy money policies of the Federal Reserve from 1933 to 1936, increasing the money stock 46% with inflation rate of 31% as well as increasing the monetary base by raising the price of a ounce of gold from $20.67 to $35 caught up with the rest of the economy in 1937 and 38. The Federal Reserve had screwed up again. FDR actually did something right in reducing federal spending.
The bottom line is between the Federal Reserve, Hoover and Roosevelt the people of the 1930’s were taking economic fire from all sides. All were guilty in creating the Great Depression. In this blog I have only scratched the surface of the blunders these institutions have made. What is important is to understand that the stock market crash did not cause the Great Depression. Recession yes, depression no.
The Great Depression was the result of large centralized banking and the federal government interfering in the economy without a clue as to what would help and what would hurt. We know now most of what was done was negative. I would argue 90% or more of the federal government and banking actions had a negative and profoundly devastating effect on the economy.
Today we have a battle between the discredited Keynesians who support many of the policies used by the federal government and the Federal Reserve during the Great Depression. The same policies we see today. Artificially low interest rates. Deficit spending. Huge federal budgets. Massive increases in the money supply. The same policies used during the Great Depression.
The Austrians and Monetarist economist who argue for little or no interference into the economy. Stable money supply in the form of gold or a stable dollar and a stable monetary base. The key point to grasp is that private markets are much better equipped to recover from a economic downturn than the federal government or the Federal Reserve interventionist policies. When resources are misallocated during a boom like the 1920’s stock market it is best to let the economy suffer the recession and in time without intervention private markets will reallocate resources back into productive sectors of the economy. The stock market data shows that the recovery was already under way in 1930 before disaster struck.
All those FDR work projects were nothing more than a misallocation of resources prolonging the depression. All the at first contractionary and then expansionist policies of the Federal Reserve simply made for more misallocation of resources. All that federal regulation from 1933 to 1935 didn’t do anything positive. By 1938 unemployment was back to 19.0%.
The lesson we should all take from this is that Harding and Coolidge and Federal Reserve Chairman Benjamin Strong (who passed away in 1928) were the economic heroes of that time and Hoover, FDR and the Federal Reserve were the villains

Where Have You Gone, Ludwig von Mises?

Mises: The Last Knight of Liberalism • By Ludwig von Mises • Ludwig von Mises Institute, 2007
Washington’s stunning economic power grabs — healthcare centralization, Keynesian fiscal stimulus, and Federal Reserve bailouts — are creating an unintended consequence: an increasing demand for freedom literature. Exhibit A would have to be F.A. Hayek’s 66-year-old Road to Serfdom recently hitting number one for all books on Amazon.com. Those desiring an even deeper education in the ideas of liberty are well advised to study the life and work of Hayek’s brilliant teacher and friend, Ludwig von Mises.

Mises was the premier Austrian economist of his generation, whose legacy reveals him to be the greatest economist of the 20th century. Almost single handedly, he kept the embers of free-market economics burning during the interwar years. After immigrating to New York during World War II, he helped establish a living legacy of thinkers and authors who understand and promote the nature and consequences of a free society. Mises’s story is magnificently told by Guido Hülsmann in his biography, Mises: The Last Knight of Liberalism.
Hülsmann’s work is a scholarly tour de force that is easily the best, most researched, and most significant biography of Mises. Hülsmann displays an extraordinary knowledge of the economic literature that is both humbling and inspiring. It is clear he has read everything on Mises. Not only has he read and digested Mises’s works, but Hülsmann places Mises in the context of the Austrian historical, political, and social setting. He also shows how Mises and his contribution to economics fit into the larger history of the Austrian tradition. More, Hülsmann successfully contextualizes Mises and the Austrian economic tradition in light of the entire history of economic thought.
Additionally, Hülsmann has crafted a very readable story of the life of Mises. He gives us knowledge about Mises, and allows us to more fully and correctly understand what we thought we already knew. He provides precious information about Mises’s early life and education, documenting the importance of the Hapsburgs’ relative openness to Jewish intellectual life for the milieu into which Mises was born. As for World War I, we gain insight on how Mises’s experience at the front and with the war bureaucracy helped shape his classical-liberal political philosophy and economics. We are provided details of Mises’s early pioneering work in the field of monetary economics, produced while he was working full time with the Austrian Chamber of Commerce.
We get to observe Mises’s valiant work as monetary advisor to the Austrian government that ultimately prevented a German-style collapse of the Austrian krona. We are also treated to an insider’s view of Mises’s efforts with Max Weber to turn the highly influential Association of Social Policy away from German Historicism, establishing social science as a viable discipline. The reader receives an intimate glimpse of Mises’s theoretical achievements relating to economic calculation and the failures of socialism, government intervention, economic epistemology, and business-cycle theory.
Hülsmann’s account of Mises escaping the Nazi attempts to silence him is positively gripping. One of the most page-turning sections of the book chronicles Mises and his wife’s harrowing bus trip through partly occupied territory, culminating in their departure by ship from Lisbon, Portugal. Upon his arrival in New York without his library, without his friends, and without a job, Mises courageously established himself with the help of people like Henry Hazlitt. After gaining a New York University visiting professorship funded by sympathetic businessmen, Mises subsequently became the intellectual fountainhead for the American libertarian movement, in large part by reviving his renowned “private seminar” at NYU. From there he mentored important economists such as Israel Kirzner, Murray Rothbard, and Hans Sennholz.
Hülsmann also explains the importance of Mises’s classic Human Action, which offered a fully integrated, systematic treatise on economics built upon the foundation of all social phenomena. Hülsmann hits the nail on the head in the last chapter of the book by attributing Mises’s staying power and intellectual attractiveness to his realism. Good economics is worth studying and pursuing as a vocation because it is rooted in the reality of human action. It is this economic realism that brings successive generations back to Mises’s work, not out of antiquarian interest, but as a starting point for living economic analysis.
Mises: The Last Knight of Liberalism is a truly amazing scholarly triumph for an author who is only in his early 40s. It demonstrates the highest level of scholarship and is wonderfully written, and by an author for whom English is not his first language. Ultimately, it does what every biography of an intellectual giant should do: it makes the reader want to go back and reread Mises’s own works in light of Hülsmann’s analysis. Anyone at all interested in the life and work of the greatest economist of the 20th century should avail himself of this biography.

Dick Morris Endorses Newt Gingrich for President in 2012

Dick Morris recently paid a visit to Orlando this last Friday, 10-1-2010. The local Central Florida faithful of mostly republican and one Libertarian (me) got to meet Mr. Morris at the Downtown Orlando Sheraton. The event was sponsored by the West Orange County Tea Party and we all owe them a debt of gratitude. Thanks.
After the speeches of the local politicians running for office was complete Mr. Morris light up the stage with his presence giving the faithful a big helping of red meat and wildly optimistic projections of 80 to 100 congressional seats and obliterating a generation of democrats just around the corner. The crowd loved every second of it and ate up ever last word.

Dick Morris fires up the base in Orlando, Florida on 10-1-2010

Mr. Morris gave the crowd a shocking and hilariously funny off color joke about then British Prime Minister Clement Attlee and former Prime Minister Winston Churchill going into the bathroom together in the House of Commons after the end of WWII and during the time the British government was busy socializing every industry that was profitable and valuable. They both entered the bathroom at the same time and approached the urinals. Churchill moved as far away from Attlee as possible to the last urinal at the end of the room. Attlee slightly offended asked “What seems to be the problem Winston? A little shy?” Churchill responded “No it’s just that every time you see something of enormous size that is big and beautiful you socialize it.” The crowd doubled over in laughter with the possible exception of some retirees.
The real announcement was that Mr. Morris has concluded that Sarah Palin has been beaten up by the media too much to be viable in 2012. He stated that he wouldn’t want to spend time rehabilitating her image to the public when he could be spending time on the issues. In another indirect slap at Palin Mr. Morris stated that Gingrich could run intellectual circles around Obama in a debate indirectly implying that Palin could not. The crowd of core Republicans riotously agreed and applauded Mr. Morris and his logic.
I completely disagree. While Mrs. Palin has received harsh media treatment and was blindsided Mr. Gingrich has some real scandals and a real history to contend with.
For example his adultery with Callista Bisek, a “willowy blond Congressional aide 23 years his junior.”
He avoided military service during the Vietnam War through a combination of student and family deferments. He married one of his teachers at age 19.
He walked out on his first wife according to his ex. “He walked out in the spring of 1980…. By September, I went into the hospital for my third surgery. The two girls came to see me, and said, “Daddy is downstairs. Could he come up?” When he got there, he wanted to discuss the terms of the divorce while I was recovering from my surgery.” – Jackie, his first wife. The hospital visit wasn’t the end of it, either. Jackie had to take Newt to court to get him to contribute for bills, as utilities were about to be cut off.
Remember the House Banking scandal, where so many congressmen wrote rubber checks on government money? Newt bounced 22 checks himself, which almost cost him reelection in 1992. Mr. Gingrich voted for the “secret” House pay raise, and he was chauffeured around Washington in a Lincoln Town Car. Can anyone detect a large inflated ego billowing up to the heavens? After Obama and his ego do we need another Mt. Rushmore sized ego in the White House?
This is just a partial list. He has book deals during his tenure as Speaker of the House and a second marriage with baggage. So why would Mr. Morris choose to endorse Mr. Gingrich, a man with a mountain of garbage the Democrats can pick on, over Sarah Palin who admittedly was blindsided by the leftist media. It makes no sense.
As for the intelligence issue Sarah Palin would easily run intellectual circles around Obama. Obama doesn’t have an original thought in his head. He regurgitates garbage from his father and every communist he has encountered. Understand colonialism, communism and you got Obama’s thought process. He is incapable of modifying his thoughts. A smart 5th grader could out debate Obama.
Is Newt smarter than Palin? Maybe but he can’t keep his pants zipped up. Sorry Mr. Morris but Newt Gingrich is unacceptable.
Okay enough of playing stupid boring political talk.
I appreciate all the work Mr. Morris has done for Republicans and his efforts on their behalf. That said I don’t know if I totally and completely trust an insider Jewish man from Columbia University and Washington DC. Do I know this man’s ulterior motives? Not a chance. He turned against his fellow Democrats. Could he turn against the Republicans? All I know is the Democrats would tear Newt Gingrich to pieces in the media. The politics of personal destruction would turn into a shark infested feeding frenzy. With Palin the public is so sick and tired of the “she’s stupid” crap all it would do is infuriate the base and boost turnout as well as increase passion. Not to mention piss off the women voters who are tired of the media double standard. Not a bad trade off. So why Newt?
Did Palin flatly reject or indirectly ignore a possible overture from Mr. Morris to assist her in a possible 2012 run for president? Very possible. Palin has aligned herself with fellow Fox News analysis Greta Van Susteren, Glen Beck and somewhat Bill O’Reilly. Not that any of them would be in her inner circle if she choose to run but its clear she is has her favorites. Is there a history behind the scenes? Probably not but Palin certainly has not sought out Mr. Morris to buddy around with like she does with Greta or Beck.
A second ulterior motive that no one wants to address is the polarizing affect Palin would have on America. She is from the backwoods of Alaska and is strongly adverse to the federal government and all the parasites connected to it. I personally think if she were elected president she would fire 50% of the bureaucrats in Washington, maybe more. She would not play games. She would dismantle as much of the power and privileged classes in Washington as she could. She knows it, the privileged classes in Washington DC know it and Dick Morris knows it. Gingrich is a walking think tank. Palin is a hunter/killer. Who posses the real threat to the Washington DC elites?
The third thing to realize is that Palin would be the equivalent of Abraham Lincoln. Lincoln was a great president but his firm stance against slavery lead to the southern succession and the civil war. Would a Palin presidency and her opposition to the government elites who weld real power over America have the same affect? Would Obama pick up his marbles and move to the new Peoples Republic of America capital in Albany, New York or San Francisco, California?
With the financial melt down becoming more apparent everyday what will the United States be like in 2012? There is a very good possibility that there will be a nasty decline in our fortunes. You can see the elites making their escape plans right now before the fall. Morris knows this. Is he looking for the least painful exit strategy? What is the man’s ulterior motive for picking such a flawed candidate?

Most of the White Peasants Get it but the Republicans Still Don’t

We have a date with destiny. The ponzi schemes in Social Security, federal, state and local pensions, bloated government school systems and crazy borrowing will soon plunge us into chaos. With the exception of the old fart blue hairs who can’t think clearly and the liberal class envy emotionally handicapped crowd most rational white people get it. We understand it was all a game our politicians played on us and we were just too self absorbed to pay attention.
One group that is still pretending not to get it is the Republicans. The Republicans rolled out their “Pledge to America” plan. Its sugar and cream and not much substance. Their plan to roll back federal spending to 2008 levels ($2.9 trillion) is unrealistic. The Republicans are not dealing with the reality of the severity of our financial situation.

Most of us white trash folks with IQ’s over 100 understand socialism doesn’t work but Republicans, Democrats and all the elites don’t.

First we owe $13.5 trillion dollars. But forget that for a second. Our current federal tax revenue is $2.8 trillion. So if we go back to 2008 ($2.9 trillion) we only have a deficit of $100 million? Is that progress? Of course they will argue that increased economic activities will increase federal tax receipts but even so did they forget a few things? Let’s assume tax receipts increase to $2.9 trillion and then?
What about that national debt interest? Currently it’s about $200 million. What happens when the economy heats up, there a Republican in the White House and the Keynesian (Democrat) Federal Reserve Chairman Ben Bernanke decides its time to fight inflation by raising interest rates? Most of our debt is short term treasury bills and notes. Our national adjustable rate mortgage could increase considerably in a very short period of time. Opps. Will the Republicans be able to keep the budget at $2.9 trillion?
And what about that ponzi scheme the blue hairs refer to as Social Security? It’s scheduled to be in the red permanently in 2015. With a unfunded liability of $14.5 trillion things could get really nasty. Do the Republicans want to raise the retirement age to 70? The average life expectancy of black men is 70. I can just hear the cat calls of racism now. Do the Republicans’ want to raise the social Security tax to 18%? And break another promise? Or shall they reduce benefits 27%? Of course the only sane rational answer is to get rid of the program and set up personal accounts. But neither party will discuss that option.
What about the $19 trillion prescription drug liability? What about the $76 trillion dollar Medicaid liability? And of course Obamacare which to the Republicans credit they vow to kill.
To a clear thinking white peasant the problem is very clear. Socialism. It never works. They don’t call Social Security Social Security for nothing. It’s socialism. Socialism always leads to failure. Socialism always leads to bankruptcy.
Now I understand the Republicans have to win the popularity contest. I understand that they need the blue haired old ladies votes to win. I respect that but God help us if the leadership actually believes the pledge to America is nothing more than a campaign gimmick. $2.9 trillion will come and go in a nanosecond with our unfunded liabilities and debt payments. If the Republican are serous about getting America back to fiscal sanity and off the road the USSR traveled down they need to address the root cause of the problem and that is socialism.

Paul Krugman Once Again Proves he Doesn’t Understand Economics

I teach economics. I like to think I understand economics better than the average bear. I try to explain to my students who the witch doctors (Keynesians) are. I try to explain that they still believe in blood letting with leeches, borrowing massive amounts of “stimulus” funds. The heroes are the Austrians (F.A. Hayek) and Monetarist (Milton Friedman) understand things like the business cycle and capitalism. Biased? Yes but in the mist of reliving the Great Depression very painful as well.
Ten years ago I swear I kept my politics out of teaching economics as an adjunct professor. I just stood there with my overhead projector and regurgitate Keynesian IS-LM curves to the students like a good dutiful professor. I admit I assigned a money supply class projects here and there to try and get across to the students the concept of inflation and deflation but that was it. A typical boring economics class that surly is repeated thousands of times all over the United States.

Nobel Prize winning economist Paul Krugman pretends to be for the “little people” but lacks the compassion or a understanding of economics to accomplish his professed desire

I left teaching and went into construction. For most this would seem like a step backwards but for me it was quite liberating to be free of all unnecessary human interaction. I actually enjoyed being able to be a part of creating and doing instead of talking about it. And the money was better.
Eventually all things come to an end, sometimes with a huge thud. With the Keynesians in Washington, New York and the Federal Reserve the Florida construction industry shrunk 50%? 80%? Who knows but it’s on life support getting infusions of Obama money here and there for the politically connected and politically correct workers and business owners. Yes for years the appeal of construction was getting away from political correct class of asses, now the politically correct government dweebs control what 70% or was that 80% of the current construction activity. No room anymore for the undisciplined libertarian white guys. No place for us to go now but to form militias and wait for the deconstruction of the United States. Ah revenge just around the corner.
So here I am ten years latter teaching economics again. The Fed has blown up the monetary base 162%, a few trillion stimulus dollars latter American rediscover Roosevelt economics doesn’t work and Paul Krugman is still as dense as ever. Paul Krugman the guy who in 2003 wanted housing prices to rise so as to stimulate the economy, the guy who supports 17th century Mercantilism economic policies, price floors for energy markets, and in general a centralized command and control of the economy by Washington politicians.
I have come to the conclusion that Krugman either doesn’t understand economics and should find another profession or is just a mean bastard that believes the elites are the only ones who should partake and enjoy in the fruits of their labor. I favor the latter theory.
I show videos in class of real economist like Dan Mitchell and even the kind of sort of economist Peter Schiff. Inevitably some bright liberal “balanced” young student will ask for some Paul Krugman videos. I am ashamed to say it but it is true. My response “Paul Krugman doesn’t understand economics.” And as far as I am concerned he doesn’t and neither do 99% of the economists in Washington DC. They basically are the equivalent of the 18th century doctors who believe in blood letting and leeches to drain the sickness from patients for any and every disease that is encountered. Witch doctors who should be shown the door, forever ostracized and forgotten except as a example of what not to do.

Keynesian economics are the 18th century equivalent of doctors using leeches and blood letting to cure a patent. Medicine came out of the Dark Ages and now it is time for economist to come out of the Dark Ages and ostracize those in their profession who do not understand the profession. Just as medicine made dramatic gains in the 19th and 20th centuries now is the time for economist to do the same.

Now if the Paul Krugman’s and Barack Obama’s of the world wanted to be honest they would come out and say they only want 500,000 people on the planet. To get there the elites will have to set up a dictatorship and strip you of your living standard. No car, no television, no refrigerator. If you are a peasant maybe the elites will let you live but on their terms. This is exactly what Krugman is saying when he supports price floors on energy. Why should the peasants be allowed to live with air conditioning and personal transportation? It makes no sense to him or Obama why someone working as a janitor or bookkeeper should have or enjoy air conditioning. The damage to the environment is too great and it’s a luxury not a necessity. They are allowed to believe what they want to but they should have the decency to state their beliefs in public in a honest manner. Instead like all communist, fascist and socialist they cloud their true intentions with rhetoric about being “for the people.”
Krugman should just come out and say “I am for the dictatorship of the elites. I do not think most people on this planet are worthy of the consumption of resources above and beyond bare subsistence levels. If we impoverished people to say Middle Ages levels of income of about $150 per year we would lessen environmental damage and free up resources for the elites to experiment with alternative life styles. Eventually I would like to see a world where there was no need for money and society was classless. To do this the number of humans will need to be reduced down to 500,000 or so.” Now that would be honest. Instead Krugman writes like he is a serious economist giving out supposedly rational advice to improve the standard of living for all. He masquerades about being for the little man. In fact the opposite is true and that’s why I refuse to show Krugman videos in my class.
The latest example of this elitism is Krugman’s article in the New York Times where he professes to be on the side of the working man. He wails out against the angry rich and their Republican allies who have the audacity to ask to be treated like the other 98% of Americans when it comes to extending the Bush Tax Cuts. He is for the common man, right?

Paul Krugman and the elites want the United States peasants to be more like Chinese peasants both in attitude and income levels.

For the uneducated masses it would seems so. He even states so at the end of his diatribe in case you are too stupid to pick up on the fact that he is for the people, “But when they (Republicans and the rich) say “we,” they mean “you.” Sacrifice is for the little people.” Oh how quaint. We know Krugman is a delusional mean bastard or doesn’t understand economics from this statement.
Okay Mr. Krugman please let me explain it to you. There are certain segments of the tax code that are highly responsive to increases or decreases in tax rates and how it affects GDP. If you increase taxes on cigarettes not much will happen to the economy one way or the other. If you tax the top 2% then that is a completely different matter. That cuts off the already wealthy, already elites from competition in their industries from young upstart entrepreneurs like Bill Gates 35 years ago.
You see Mr. Krugman the elites already have capital and wealth. They already have market share. They can live off their capital quite well thank you. Now who cannot live off their capital and wealth? Who has not accumulated capital and wealth? Maybe the up and coming entrepreneur? Krugman know this or is the dumbest economist on the planet.
Oligopolies the world over know this and favor high taxes and complex tax codes to protect their market share from new and innovative competition. Basically kick the young challengers when they are down tax policies. Deny new competitors capital and the ability to accumulate capital and if you are working for the elite oligopolies of the world you will always enjoy your position of power and privilege. Pay off the political congressmen and senators on a regular basis to maintain the status quo.
When the government increases regulation and taxes the most politically connected and corporations who already are established gain and young entrepreneurs as well as the people who work for them lose. Society becomes rigid and the elites benefit with higher prices and secure market shares for basic products like Coke, oil, catsup, milk and so forth. The poor and working class pay more and have their standard of living lowered, unemployment increased depressing wages and the “little people” really do suffer under Krugman economic policies.

Nicholas Biddle (1786-1844) understood how to limit competition and bribe politicians

If you look at the economic effects of Obama’s financial regulation bill it makes it harder for smaller banking firms to compete by increasing oversight and regulation. Krugman and the elites know this. It’s as old as Nicholas Biddle and his comrades back in 19th century New York society. Squeeze out the competition and gain market share, charge more for your services, gouge the “little people.” Give the Washington politicians bribes and cash to finance their capital projects “for the people.” Been there done that.
Now for a “real” economist like myself its not to hard to see the ulterior motives of Mr. Krugman. When he talks about price floors on energy I see through it. The poor do not deserve air conditioning or heat.
When he talks about protecting the poor by taxing the top 2% I get it. We don’t need more capitalism but must transform society to a socialist statist form of government. The poor and middle class are consuming more than they need to in Mr. Krugman’s view and they should not be allowed to join the ranks of the elites.
When he vilifies Steve Forbes “defending the interests of the rich” I get it. Mr. Forbes should shut up and enjoy his privileged status and stop talking about capitalism and its benefits.
Unfortunately millions of Americans do not. Krugman and his Keynesian buddies are charlatans spreading myths and lies throughout the land to protect their privilege class and status. Dare we ask Mr. Krugman who benefits from centralized government planning? Could it possibly be Mr. Krugman and his statist at the New York Times? Would a Obama dictatorship let the New York Times go bankrupt? Krugman and his pals enjoy the best lifestyle in the world by supporting the elites. Why would he want to change? It’s sickening to realize millions take a bastard elitist like Krugman at face value.
I feel bad in a way about not showing Krugman videos. Freedom of speech right? I guess in ten years when the Keynesians are totally discredited and removed from economics text books across the land I will show video of Krugman like a history teacher would show film of Hitler in 1955 ten years after the end of WWII. Right now as we are in the mist of this horrible economic turmoil caused by Krugman, Bernanke, Greenspan, Bush, Obama and the thousands of Keynesians in Washington spreading this garbage to our leaders. It’s all just too painful to watch. Sorry kids maybe someday you will understand.

Old Theory of Keynesian Stimulus Comes Up against Hard New Facts

by Alan Reynolds
This article appeared in Investor’s Business Daily on September 15, 2010.
ana Milbank, a new Washington Post columnist, thinks Republican politicians “managed to turn the Keynesian notion of economic ‘stimulus’ into such a dirty word that President Obama and his aides are afraid to let it escape their lips.”
He blames “think tanks such as the Cato Institute” for not agreeing that Keynesian theory is so “unassailable” and “universally embraced” that daring to question the elixir of deficit spending “has a flat earth feel to it.”

CATO Senior Fellow Alan Reynolds

Milbank forgets that Keynesian Democrats, including the recently departed OMB director Peter Orszag, constantly hectored Republicans about the evils of budget deficits while Reagan or Bush was in office.
UC Berkeley economist Brad DeLong wrote a 2004 paper for the Center for American Progress assailing Bush’s budget deficit. “A bigger deficit means less investment in America,” he wrote; “And less investment in America means slower economic growth.” DeLong quoted Bush adviser Greg Mankiw who likewise argued that, “government budget deficits reduce the economy’s growth rate.”
Alan Reynolds, a senior fellow with the Cato Institute, is the author of Income and Wealth.
More by Alan Reynolds
Milbank now claims Mankiw supports the exact opposite idea — namely, that budget deficits “stimulate” the economy’s growth rate. Unfortunately, any theory that explains everything must also explain nothing.
The Republican alternative to more fiscal stimulus says Milbank, is for government to “do nothing, and let the human misery continue.” Any doubts about the efficacy of fiscal stimulus, he argues, were discredited by the remarkable discovery that recessions still happen: “Economists offering alternatives to Keynes devised mathematical models showing how markets would behave efficiently. But those ideas collapsed along with everything else in 2008.”
This is ignorant nonsense. Efficiency never meant markets can’t be surprised and crash. Besides, academic criticism of fiscal stimulus is mainly based on fact, not theory.
Apologists for the 2009 spending spree point to an August paper by Ben Page of the Congressional Budget Office, “Estimated Impact of the American Recovery and Reinvestment Act.” The only part of that paper worth reading is the Appendix: “Evidence on the Economic Effects of Fiscal Stimulus.”
Page confesses that, “In analyzing ARRA’s economic effects, CBO drew heavily on versions of the commercial forecasting models of two economic consulting firms. … Because they emphasize the influence of aggregate demand on output in the short run, the macroeconometric forecasting models tend to predict greater economic effects from demand-enhancing policies such as ARRA than some other types of models do.”
Even short-run predictions from such models are notoriously lousy, so CBO simulations of what might have happened under different scenarios tell us more about the models’ assumptions than about reality.
The CBO paper goes on to explain that “another type of research uses historical data to directly project how government policies will affect the economy on the basis of how economic variables such as output and consumption have behaved in the past relative to government spending and revenues …
“Many estimates of this sort suggest that crowding-out effects dominate in the case of government purchases so that the impact on output tends to be less than one-for-� one and tends to diminish over time. … Estimated multipliers for tax cuts are generally higher than those for spending, and they tend to grow over time.”
Footnote 5, where a sample of such non-Keynesian evidence is buried, reads as follows:
See Christina D. Romer and David H. Romer, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” American Economic Review, vol. 100, no. 3 (June 2010), pp. 763—801; Robert J. Barro and Charles J. Redlick, “Macroeconomic Effects from Government Purchases and Taxes,” Working Paper 15369 (Cambridge, Mass.: National Bureau of Economic Research, September 2009); Andrew Mountford and Harald Uhlig, “What Are the Effects of Fiscal Policy Shocks?” Working Paper 14551 (Cambridge, Mass.: National Bureau of Economic Research, December 2008); Roberto Perotti, “In Search of the Transmission Mechanism of Fiscal Policy,” Working Paper 13143 (Cambridge, Mass.: National Bureau of Economic Research, June 2007); Olivier Blanchard and Roberto Perotti, “An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output,” Quarterly Journal of Economics, vol. 117, no. 4 (November 2002), pp. 1329—1368; and Valerie Ramey and Matthew Shapiro, “Costly Capital Reallocation and the Effects of Government Spending,” Carnegie—Rochester Conference Series on Public Policy, vol. 48, no. 1 (June 1998), pp. 145—194.
The first name on that list is Christina Romer, the outgoing head of President Obama’s Council of Economic Advisers. Another is Olivier Blanchard, director of the research department of the International Monetary Fund. The CBO’s Ben Page is not quite in the same league.
In a paper co-authored with Cato Institute scholar Jagadeesh Gokhale, however, Page wrote, “If the government does not pay for what it purchases with current taxes, it must raise them later — either to retire the ensuing debt or to pay interest forever.” That explains why sending borrowed bucks to Peter at the expense of taxpayer Paul is no stimulus.
The CBO’s footnoted paper by Romer and her husband estimates that a legislated “tax increase of one percent of GDP lowers real GDP by roughly three percent.” Moreover, “the output effects are highly persistent,” with a “strong response of investment.” The Romers acknowledge that “when marginal tax rates actually change,” it “could have large supply-side effects … on incentives and productivity.”
The second paper, by Harvard’s Robert Barro and his former student, also finds no evidence that federal spending has a “multiplier” effect on GDP. Barro and Redlick estimate that “a one-percentage-point cut in the average marginal tax rate raises the following year’s GDP growth rate by around 0.6% per year.
The third paper, by Andrew Mountford of the University of London and Harald Uhling of the University of Chicago, found that “investment falls in response to both tax increases and spending increases and that the multipliers associated with a change in taxes (are) much higher than those associated with a change in spending. … The responses of investment, consumption and real wages to a government spending shock are difficult to reconcile with the standard Keynesian approach.”
The other papers in the CBO footnote likewise find little or no “stimulus” from added borrowing and spending. Reducing the highest, most damaging marginal tax rates is far more effective.
As the Romers observed, “The most significant tax cuts to stimulate long-run growth are well known: the 1948 tax cut passed over Truman’s veto; the 1964 Kennedy-Johnson tax cut; the 1981 Reagan tax cut; and the 2001 and 2003 Bush tax cuts.”
Republicans should get some credit for the last two of those growth-oriented reductions in top marginal tax rates (the 1986 tax reform was more bipartisan). Yet Milbank suspects, “Republicans don’t realize that some of their tax-cut proposals are as ‘Keynesian’ as Obama’s program.”
That depends. Any tax policy like the frivolous 10% tax bracket added in 2001 is indeed a Keynesian policy and it always fails. Republicans suggesting that multiple surtaxes on high incomes would be harmless if postponed for a year or two are also using foolhardy Keynesian arguments.
The research by Romer, Barro and others is about raising revenues in ways that do the least damage to economic incentives, not about deliberately planning to minimize short-term tax collections.
Keynes explained that, “taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget.”