Global Warming: Policy Change, Not Climate Change, Is the Real Danger

By Julian Dunraven, J. D., M.P.A.

Honorable friends:

Global warming does indeed seem to be a pervasive problem. Yesterday it plagued me in my morning paper, harangued me from radio and television broadcasts, and even managed to insinuate itself into the conversation of irksome social acquaintances. Although I have become accustomed to bad policy masquerading as good science, and even look forward to reading my Global-Warming-Article-of-the-Day in the paper, yesterday’s news was particularly insufferable.

Todd Hartman of The Rocky Mountain News started it off, trumpeting Dr. Susan Solomon’s new pronouncement that CO2 emissions “will irreversibly change the planet,” for centuries to come no matter what we do. I suppose someone should suggest to Dr. Solomon that, if she has noticed human behavior has little to no impact on climate change, it might be because the whole things is part of the earth’s natural and periodic cycles. However, I was rather hoping her pronouncement might end the climate change squawking; after all, she does not seem to have much hope that there is anything more to be done. Alas, fortune is not so kind.

True believers never lose hope, and so NPR did its best to keep the faith alive by broadcasting proposed solutions. It seems a few members of the scientific community were watching “The Simpsons” and drew a bit too much inspiration from Mr. Burn’s attempt to block the sun by raising a giant metal disk over Springfield. Of course, the earth is a lot bigger than the town of Springfield, and thus there would have to be quite a few of these disks launched into orbit before we could block enough sunlight to begin cooling the earth. The disks would also have to be replaced occasionally as they fell out of orbit. The real sticking point is the cost, which is currently several trillion dollars. It is always unfortunate when mere economics gets in the way of good Simpsons . . . or science rather.

Another absurd proposal NPR and others have deigned to promulgate, involves launching sulfur particles into the atmosphere. This, would be far cheaper than the Mr. Burns plan, and would sufficiently darken the sky to promote global cooling. Unfortunately, it may also severely change weather patterns, increase acid rain, and—oh yes—darken the sky. No one quite knows how many species of animal and plant life would be devastated from a decrease in light sufficient to cool the earth. It might eventually leave the world a barren wasteland, but everyone agrees it would be a cooling barren wasteland.

Fortunately, it is only bureaucrats like those running the UN Intergovernmental Panel on Climate Change (IPCC) who seem to use middle school science fair projects as the standard for publishable research. The IPCC’s report, which was authored by a mere 52 scientists, was widely touted as representing the final and absolute conviction among the scientific community that Global Warming is the result of human produced CO2 emissions. Instead, the Republican minority of the U.S. Senate Committee on Environment and Public Works, led by Sen. James Inhofe (R-OK), has soundly refuted this in its Minority Report, which cites over 650 scientists, all contesting the IPCC’s claims.

One of the more interesting dissenters is Dr. Don Easterbrook, whose study of the climate indicates normal and alternating periods of warming and cooling stretching back for millennia. Not only does Dr. Easterbrook contest the idea that Global Warming is caused by humans, after looking at the sun’s recent activity and the Pacific Ocean’s decadal oscillation, he has staked his reputation on his theory that we are now entering a period of Global Cooling, and the Warming advocates will soon see their arguments collapse.

Whether or not he turns out to be correct will be largely irrelevant for the next four years. President Barack Obama’s cabinet selections clearly indicate the he accepts the idea of human caused Global Warming absolutely, and intends to write policy with that in mind. In his January 2009 Monthly Review, Richard Loomis of World Energy gives a thorough analysis of “President. Obama’s Energy Picks.”

As. Mr. Loomis explains, Secretary of State Hillary Clinton sees Global Warming as a national security threat and, during her campaign, advocated for strong carbon cutting measures. Steven Chu, as Secretary of Energy, has expressed great distaste for oil, dislikes nuclear power for the waste it generates, and refers to coal as, “my worst nightmare.” Solar, wind, and natural gas power and natural gas fuel seem to be his preferences. Carol Browner, the “Energy Czar,” comes to us from the EPA, where she argued that California should be granted a waiver from the Clean Air Act to allow it to more strictly regulate carbon emissions. Lisa Jackson, the EPA Administrator, pushed a moratorium on new coal plants as the EPA head for New Jersey. Then there is Ken Salazar as Secretary of the Interior who, while not joining the rest in his hatred of coal, is strongly opposed to expanding oil drilling whether on land or off shore.

From this list, Mr. Loomis is correct to fear some sort of cap and trade mechanism being forced on the U.S. by executive order. And herein lies the real danger of Global Warming. In his January 24th broadcast of “the Big Picture,” Jim Puplava warns that the U.S. will have a difficult time convincing the rest of the world to join in such an initiative during this economic crisis. Europe especially will be disinclined to rely more on natural gas when Putin has consistently demonstrated his willingness to use the gas supply as political leverage. Thus, the U.S. will be forced to pursue carbon reduction policy alone. The high energy costs of such a policy would put the U.S. at a competitive disadvantage to Europe, China, and our other major trading partners. This is especially worrisome at a time when tax revenues are declining and government spending is increasing, and Mr. Puplava is right to wonder how much more of our debt the world will continue to finance when other nations are beset with their own economic problems.

Then there is peak oil. The recent IEA World Energy Outlook reports a 9.1% annual depletion rate in the world’s oil reserves. All major oil fields are in decline, virtually no new discoveries are being made, and oil demand continues to rise across the world—despite the economic crisis—especially in China, India, and oil producing nations developing their own economies. We are set for an oil supply crisis to hit between 2012-2015. Our own oil reserves are not sufficient to avert this problem, but they can help buy more time for us. However, as developing an oil field takes anywhere from 4-6 years, we would need to start investing today. Instead, low oil prices, and the refusal of the Obama administration to expand drilling while it considers actually raising taxes on oil produces has all but killed capital investment in this vital field.
Natural gas fuel is also a viable stop gap measure while we search for something to more permanently replace oil. However, it is not unlimited, and if we insist on squandering it to supply our electricity, it will not be of much help to us when we face the coming oil supply crisis.

As I have said before, Global Warming is something science is still vigorously debating as it attempts to fully understand the causes of climate change. However, to the Obama administration, the debate is over. In the midst of an economic crisis, it is willing to tax coal and nuclear power into extinction—despite an already overburdened grid. It is willing to put our nation’s entire economy in peril of the worst oil supply crisis ever seen and squander the natural gas resources that could help protect us. And it is willing to do all of this solely on the basis of its faith in human caused Global Warming. Whether climate change is a real problem caused by humans is still up for debate. However, the dangers of policy change based on that premise are very real and imminent.

The Rise of Gold and Fall of The Dollar

By Julian Dunraven, J.D., M.P.A.

Honorable friends:

Last month I wrote that the bailout total, which has now reached more than $8.5 trillion, with another $850 billion stimulus to come this year, will eventually force us into dangerous levels of inflation. I thank the Bangor Daily News and Bridget Johnson at The Rocky Mountain News for picking up on that post. Since then, although the Fed printing presses have been running at a frantic pace, nearly doubling the money base, much of it has not yet reached the money supply. That is about to change.

As the credit crisis hit and companies began to deleverage in earnest, selling anything they could to obtain dollars and pay down debt, U.S. treasury bonds sold very well. Our people, seeing the credit crunch and falling prices, began to fear a deflationary trend and flocked to treasury bonds as well. Truly markets are psychologically driven—and often insane. More rational heads have reminded us that real deflation requires a contraction in the money supply—which the Fed’s printing has made all but impossible. It seems, however, that reason is beginning to reassert itself.

U.S. treasuries are now selling at almost zero percent interest rates. As a result, $1 million invested into a one month treasury bill, rolled over each month, will earn you only a meager $100 annual interest. A one year treasury bill for $1 million will earn you only $4,300. No one can live off such pathetic returns, certainly not our retirees. As for other governments, such returns offer little incentive to continue financing our debt, which increasingly looks to be utterly unmanageable. As a result U.S. Treasury sales are beginning to decline.

As the Ludwig von Mises Institute points out, our biggest creditor nations are unlikely to increase their investment. Japan has been a net seller of U.S. Treasuries and it has its own problems to deal with from demand destruction affecting its exports. OPEC nations are suffering from falling oil prices and their own resulting economic woes render them unable to finance more of our debt. The Caribbean banks are suffering from the credit crunch forcing liquidity and in no position to offer help. That leaves China, which is passing its own $585 billion stimulus, of which the government is providing only $170 billion, leaving the rest to be financed out of its foreign exchange reserves—such as U.S. treasuries.

To further complicate the matter, Chuck Butler’s Daily Pfenning yesterday picked up on news that Chinese officials are now contemplating selling U.S. Treasuries in part out of retaliation that the U.S. government has cast blame on China for the global financial crisis. Yu Yongding, a former member of the People's Bank of China's policy board, also warned that “supply of Treasuries may far exceed demand in the future.”

Thus, as the Fed finds itself unable to sell sufficient treasury bonds to finance all the government spending, it will have no choice but to begin quantitative easing, a polite term for printing money and injecting it directly into the money supply. In other words: massive inflation.

As part of their efforts to accomplish this enormous monetary expansion and devaluation in a vain effort to stimulate the economy, the Ludwig von Mises Institute points out that the central banks have finally abandoned their attempts to artificially suppress the price of gold through naked short selling and dumping. Slapstick Politics discussed this inevitability back in October.

As I predicted last month, the result of all of this has been a drop in the value of the dollar and a precipitous rise in the price of gold as people try to find a way to preserve their wealth. The other major fiat currencies of the world are no better, as James Turk of Gold Money illustrates. The central banks of the world have all embarked on this strategy of bailouts and spending together, and they are all devaluing their currencies together. That trend is likely to continue for some time, and gold remains the best protection against it.

For those of you who still have yet to purchase gold and are cringing at its current price surge to around $900 per ounce, there are some hopeful signs to watch for. Although I do not think the bailouts and stimulus packages will be at all effective at solving the financial crisis in the long run (a topic Slapstick Politics will continue to address), I do expect them to produce a short term boost in confidence in the near future. The strange aura of hope that the Obama administration has coming into office will assist this as well. There may also be another period of deleveraging in the near future. In either scenario, several investment specialists speculate that the price of gold could plummet back down to $650-700 per ounce. If that happens, it would be a wonderful time to purchase. Before the central banks have completed their efforts at quantitative easing, most gold investment experts are estimating the price of gold could rise to anywhere from $1,500-5,000 per ounce. The Ludwig von Mises Institute goes quite a bit further, speculating that gold could climb to almost $10,000 per ounce. While I tend to lean toward the more conservative estimates, gold continues to provide the best possible protection against the inflation and devaluation the central banks of the world are now foisting upon us in what is perhaps the greatest theft of wealth in history.

Barack Obama’s Fashion Faux Pas: Whatever It Was, It Was Not White Tie

By Julian Dunraven, J.D., M.P.A.

Honorable friends:

The magical aura of change and hope that seemed to bewitch the nation today was not quite strong enough to ensorcell Wall Street, which continued its consistent, if volatile, fear driven trend downward. But today, I am told, is not about policy or economics; rather it is about fun and fashion. Fair enough. It is rare that I get to talk about etiquette in politics, so I will take advantage of the opportunity. Besides, while I am sure that virtually all fashion editors will be critiquing Michelle Obama’s evening gown, however lovely the rest of us may think it, and ignoring her husband entirely, someone needs to say something about that ghastly conglomeration Barack Obama tried to pass off as white tie attire.

I suppose I need to give him credit for at least attempting white tie, which is the strictest type of formal evening wear, and something few of our overly casual citizenry, including presidents, even try anymore. Because of that unfamiliarity though, few will ever realize how badly he botched his effort and wound up looking more like an inexperienced prom king than a president, an appearance only reinforced by his pathetic attempts at dancing. One would think America’s first couple could be bothered to learn at least a simple waltz before the inaugural balls. Nonetheless, for those gentlemen who perhaps aspire to wear white tie correctly one day, allow me to point out our new President’s faux pas.

White tie, properly speaking, involves a plain fronted, stiff white shirt with French cuffs and a wing-tip collar. Mr. Obama’s collar was full, quite improper for the occasion. The coat for white tie must be black, have tails, and satin peak or shawl lapels. Mr. Obama’s jacket lacked tails entirely, and notched lapels, while barely passable for black tie, are far too similar to the daily business suit to ever be appropriate for the ultra formal white tie style. The pants for white tie must be black with a braid down the sides. Mr. Obama’s trousers had only a satin stripe. Naturally, white tie also requires a white piqué waistcoat and bow tie, and gold and or mother of pearl cuff links and button studs. The President got that much right at least.

In contrast, the less formal black tie tuxedo, used for private entertaining such as weddings rather than public occasions and balls, consists of a white shirt with a pleated front, French cuffs and full fold-down collar. The jacket should not have tails and may have shawl, peak, or notch satin lapels. In the summer, the jacket—and only the jacket—may be white. That is as exciting as is permissible. The black pants must have a satin stripe down the sides. As the name suggests, it requires a black bow tie with a black waistcoat or cummerbund with black and silver cuff links and button studs. Colors are never permitted, no matter what a gentleman’s date is wearing, unless he wishes to look like an organ grinder.

Both white and black tie have daytime equivalents as well. However, I won’t complicate things further with those. It suffices to say that the president managed only a bizarre and awkward amalgamation of the two styles, though I am glad he did not go so far as to include colors or the tacky variation of ties cheap haberdashers so carelessly foist upon us these days. I have only one further suggestion for the well groomed man: visit a barber or stylist before putting on formal evening wear. Sideburns should either be present on both sides of the head or not at all.

If today really was about fun and fashion, and if Wall Street was paying attention, perhaps it explains the decline. How can a gentleman be expected to manage the nation’s economy if he cannot even manage to properly dress himself?

Sen. Inhofe Asks the People to Help Fight Second TARP Bailout

By Julian Dunraven, J.D., M.P.A.

Honorable friends:

From what I have been reading, I doubt there are many people left in this nation, outside the District of Columbia, who still believe that the TARP bailout was a good idea. Despite this, only a few members of the Senate have shown courage in representing the people against this horrendous and immoral plundering of our country’s wealth. Sen. James Inhofe (R-OK), along with Senators Barasso (R-Wyo.), Wicker (R-Miss.), DeMint (R-S.C.), Lincoln (D-Ark.) and Enzi (R-Wyo.), have cosponsored legislation that would halt the second installment of the $350 billion bailout.

They face tough opposition, however. Obama, backed by House Speaker Nancy Pelosi and Senate Leader Harry Reid, has demanded that Congress release the money to the incoming administration. Obama has threatened to veto any attempt Congress makes to withhold the money.

The U.S. Senate is due to vote on the issue this afternoon. Many people have told me that they feel helpless to prevent what seems to them to be inevitable. It is not. Sen. Inhofe and his allies are committed to fight it, but Inhofe has asked for the help of the people. All it takes is a few moments to find your senator’s web page, type a quick objection to the bailout, and e-mail the message. The Senate needs our help to stand up against this pressure, but it can be done.

Already, CNN reports that Republican senators, anticipating that Obama will get the money, are asking his administration to promise that he will only use it on the financial industry, and not alter the purpose—for the auto industry for instance—as the Bush administration did. There was a time when such a request would have been silly. The Constitution, after all, prevents a president from altering legislation to his whim—he is charged merely with enforcing it. Yet, today, Congress must beg the president to even follow the laws they pass. As Sen. Inhofe has stated before, and I have echoed, our Republic is in dire straits.

If we are unhappy with this state of affairs, then it is up to us, the people, to correct the government which should be answerable to us. It is our responsibility to defend the Constitution and to make our will known to the spineless and feckless fools currently sitting in Congress that we do not want more money to go to these bailouts. It is not hard, and requires only a few moments, and a few clicks of the mouse. I hope you will all join me in answering Sen. Inhofe’s call to contact our senators, and to send them all but one powerful word: “NO!”

Just War: Why Christians Should Not Falter in Support of Israel

By Julian Dunraven, J.D., M.P.A.

Honorable friends:

The Holy See permanent observer to the United Nations has quoted Pope Benedict XVI as saying of the conflict in Gaza “that the military options are no solution and that violence, wherever it comes from and whatever form it takes, must be firmly condemned.” Naturally, I would expect the pontiff to be praying for peace. However, I am surprised that the former head of the Congregation for the Doctrine of the Faith would make such a careless comment so wildly out of line with the Church’s teachings. Such slips only encourage the type of behavior I saw this weekend from a few guests at a wedding who, though totally uneducated on the subject, pronounced their condemnation of both Israel and Palestine while piously declaring that war is always wrong. Such statements are as contemptible as they are intellectually lazy, and I grow weary of listening to them.

While Christianity has perhaps lamented that war is always tragic and unfortunate, it has never declared that war is always wrong. To the best of my knowledge there is not a single mainstream Christian Church so foolish as to make such a declaration. Certainly, Israel’s actions in Gaza cannot be called wrong by any rational observer. To fully understand how incredibly imbalanced the ethics of this conflict are in favor of Israel, there is no better teacher than Charles Krauthammer in his last two columns, “Excruciating Moral Clarity,” and, “Ending Hamas Rule.”

However, for those of you who, like me, have an assortment of Christian friends who refuse to sanction any war no matter how powerful the justification or how clear the moral reasoning, I suggest you refer them to the Christian Just War Doctrine. Going all the way back to Saint Augustine of Hippo, it predates all the schisms and is a part of every mainstream form of Christianity.

The Just War Doctrine, codified in the Catechism of the Catholic Church, states in §2308 that, “as long as the danger of war persists and there is no international authority with the necessary competence and power, governments cannot be denied the right of lawful self-defense, once all peace efforts have failed.” Section 2309 goes on to list the conditions under which a just war may be prosecuted:
· the damage inflicted by the aggressor on the nation or community of nations must be lasting, grave, and certain;
· all other means of putting an end to it must have been shown to be impractical or ineffective;
· there must be serious prospects of success;
· the use of arms must not produce evils and disorders graver than the evil to be eliminated. The power of modem means of destruction weighs very heavily in evaluating this condition.

Considering what we know of Gaza, despite all international effort over the past several decades, no authority has been successful at persuading the Palestinian militants to desist from launching rockets into Israel. As Mr. Krauthammer points out, rocket fire on the Israeli population has continued unabated even after Israel withdrew all settlers and military, and ceded governmental control to the Palestinian Authority in 2005—effectively doing everything the Palestinians had demanded for an end to hostilities. Negotiations have gone on for decades, yet only Israel attempts to abide by any of the agreements reached. There is nothing more Israel can offer save its own annihilation. Thus, I would say negotiation has proved most ineffective.

Israel does have a good chance of permanently ending this conflict, though, if its assault can topple Hamas’ control and demonstrate that Islamic militants will succeed only in bringing greater hardship down on Palestinian people. The hardship endured by the Palestinian people is indeed unfortunate, but Hamas has deliberately orchestrated that hardship by using its own civilian population and humanitarian centers as shields against Israeli counterstrikes. The U.S. Conference of Catholic Bishops (USCCB) acknowledges that the problem of proportionality is “aggravated if one side deliberately positions military targets in the midst of a civilian population.” Though Israel is doing all it can to minimize civilian casualties, they are inevitable. Nonetheless, after so many decades of failed negotiations, if Israel can succeed in destroying Hamas utterly, the permanent peace to follow will be worth the terrible price.

As the Catechism states in §2304, the peace Israel fights for is “not merely the absence of war, and it is not limited to maintaining a balance of powers between adversaries. Peace cannot be attained on earth without safeguarding the goods of persons, free communication among men, respect for the dignity of persons and peoples, and the assiduous practice of fraternity. Peace is ‘the tranquility of order.’ Peace is the work of justice and the effect of charity.” According to Pope John Paul II in his World Day of Peace Message of 1982, “Unconditional and effective respect for each one's unprescriptable and inalienable rights is the necessary condition in order that peace may reign in a society.” Currently, only Israel offers such respect—going so far as to offer warnings and aid to enemy noncombatants in its quest for peace. Hamas, on the other hand, is dedicated to the complete destruction of Israel. Unless it is clearly defeated, that ideology of hate will remain as an impenetrable barrier to peace for yet more decades to come.

As the USCCB states, “This is why Christians, even as they strive to resist and prevent every form of warfare, have no hesitation in recalling that, in the name of an elementary requirement of justice, peoples have a right and even a duty to protect their existence and freedom by proportionate means against an unjust aggressor.”

Rather than making foolish statements about how all war is evil, if Christendom truly wants to see an end to conflict in the Middle East, they would do well to bring real pressure to bear on Hamas, Palestine, and their Arab allies to prevent the continual flow of weapons and armaments into Gaza, and to enforce real consequences for mortar attacks beyond occasional dispatching another diplomat for talks while the militants rearm. The USCCB reminds us that a true “Christian has no choice but to defend peace, properly understood, against aggression. This is an inalienable obligation.”

Berg v. Obama Denied Certiorari

By Julian Dunraven, J.D., M.P.A..

(For earlier posts on this case click here.)

Honorable Friends:

The U.S. Supreme Court has declined to hear Berg v. Obama. Despite this denial, there is still a chance it may be heard by the Third Circuit Court of Appeals, where it is still pending. Berg reports that his brief is due by 20 January 2009. Ironically, that is inauguration day. Though it saddens me to say so, as this case will not even be heard, much less resolved, by the time Obama is sworn into office, I cannot imagine any court would presume to review the qualifications of a sitting president. Thus, I do not expect that there will be any further developments in this case. As such, the question of Obama’s constitutional qualifications falls to the U.S. Senate. The Senate has accepted Obama as fully qualified for office, and he will thus become the next President of the United States on January 20th.

Begin the New Year with a Laugh: We Can All Cry Soon Enough

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

Happy Twelfth Night! This is the last day of Christmas. Tomorrow is the Epiphany and, as the Magi commence their visit, the holidays will sadly draw to a close. Before I get back to commenting on the New Year, though, which is quickly filling up with many mad events (El Presidente has already pounced on the insane appointment of Sen. Who), I thought I would share a few light hearted reflections on 2008.

This first video comes from Jib Jab. Their annual, “Year in Review” series of videos never fails to entertain, and the “2008 Year in Review,” is no exception.

The second video recap of 2008 comes from “Uncle Jay Explains the News.” Uncle Jay seems to be quite an entertaining and sensible fellow, and his other news briefings are worth a glance or two as well.

I hope you enjoy the levity. Tomorrow the Dunraven will be back to his usual raucous squawking.

How Bernanke Stole Christmas

By Julian Dunraven, J.D., M.P.A. (With Apologies to Dr. Seuss)
December 2008


Every Who Down in Who-ville Liked Christmas a lot
But Bernanke, who lived just north of Who-ville, thought it might be for naught.

Bernanke feared for Christmas, and the whole shopping season.
Now, please don’t ask why. No one quite knows the reason.
It could be that interest rates weren’t adjusted just right.
It could be, perhaps, that banks were leveraged too tight.
But I think that the most likely reason of all,
May have been that his brain was under Keynesian thrall.

But whichever of these reasons you may choose,
He stood there on Christmas Eve, fretting for Whos,
Staring down from the Fed with a sour, Bernanke frown,
At the warm lighted windows below in their town.
For he knew every Who down in Who-ville beneath,
Was busy now, hanging a mistletoe wreath.

“And they’re hanging their stockings! He snarled with a sneer,
“Tomorrow is Christmas! It’s practically here!”
Then he growled, with his Fed fingers nervously drumming,
“I MUST find some way to keep Christmas cash coming!”

For tomorrow, he knew, all the Who girls and boys,
Would wake bright and early and rush for their toys!
And finding none there—Oh the Noise! Noise! Noise! Noise!
That’s one thing he hated! The Noise! Noise! Noise! Noise!

Then the Whos, young and old, would expect a great feast.
And they’d feast! And they’d feast!
And they’d feast! Feast! Feast! Feast!
But this year there would be no Who-pudding, and no rare Who-roast beast.
Which was a thought poor Bernanke couldn’t stand in the least!

And then they’d do something he liked least of all!
Every Who down in Who-ville, the tall and the small,
Would stand close together, with Christmas bells tinkling
They’d stand hand-in-hand. And the Whos would start thinking.

They’d march and they’d protest!
And they’d chant! Chant! Chant! Chant!
And the more Bernanke thought of this Who Christmas Chanting
The more Bernanke thought, “I must stop this Who ranting!
“Why for 45 years we’ve made fiat work now!
I Must keep Christmas cash flowing!
. . . But how?

Then he got an idea!
An awful idea!
Bernanke
Got a wonderful, awful idea!

“I know just what to do!” Bernanke laughed in his throat.
And he made a quick Santy Claus hat and a coat.
And he chuckled, and clucked, “What a great Fed-ish trick!
“With this coat and this hat, I’ll look just like Saint Nick!”

“All I need is a reindeer . . .”
Bernanke looked around.
But since reindeer are scarce, there was none to be found.
Did that stop old Ben?
No! Bernanke simply said,
“If I can’t find a reindeer, I’ll make one instead!”
So he called his friend Hank. Then he took some red thread
And he tied a big horn on top of his head.

Then he fired up the printing presses.
He had lots of money to make,
Loaded the sleigh with excesses
And he hitched up old Hank.

Then Bernanke said, “Giddyap!”
And the sleigh started down
Toward the homes where the Whos
Lay a-snooze in their town.

All their windows were dark. Quiet snow filled the air.
The Whos were all dreaming sweet dreams without care
When he came to the first failing bank in the square.
“This is stop number one,” The old Bernanke Claus hissed
And he climbed to the roof, bloated bags in his fist.

Then he slid down the chimney. It looked rather grimy.
But if Santa could do it, then so could Bernanke.
He got stuck only once, for a moment or two.
Then he stuck his head out of the fireplace flue
Where bad mortgage backed debt all sat in a row.
“These derivatives,” he grinned, “are the first things to go!”

Then he slithered and slunk, with a smile most like a snake,
Around the whole town, and financed each big bank’s mistakes.
Fannie and Freddie, Bear Sterns, and Citi
TARP, AIG, GE and more Citi.
To bad business he gave billions, oh very nimbly,
But as for good business, they didn’t get any.

To get the money flowing he was bound to inflate,
So he even brought treasuries down to negative interest rates.
Printing money by trillions he nearly doubled the cash.
Just think of Zimbabwe; it wouldn’t be rash.

Then he stuffed all the money down the chimneys with gusto
“And NOW!” grinned Bernanke, “I’ll fix up the Autos.”

And then Bernanke flew to Detroit, with more money to drop
When he heard a small sound say “The Senate said ‘Stop.’”
He turned around fast, and he saw to his gall
Congressman Ron Paul, who was ready to brawl.

Bernanke had been caught by this noble Who master
Who’d got out of bed to see what was the clatter.
He stared at Bernanke and said, “Santy Claus, why,
“Why are you devaluing our dollar and savings? Why?”

But, you know that Bernanke was so smart and so slick
He thought up a lie, and he thought it up quick!
“Inflation’s not bad,” the fake Santy Claus lied,
“It’s just that this level has never been tried.
“So I’ll inflate until we can create a new bubble.
“Then our economy will be back to boom on the double.”

But his fib fooled no one. Then he grabbed Paul by the head
And he trussed him and gagged him and tossed him back in bed.
And when Paul was disposed of, with his Constitution too,
He turned back to Detroit and forced the money through.

But inflation burned through the Whos’ savings like fire.
They were poorer, not richer, as he left, the old liar.
Working longer and harder before they could retire.

And the only speck of money
Left to the average Who house
Were accounts that were even too small to buy food for a mouse.

Then the same thing befell all the Whos’ houses
Leaving accounts much too small to feed the other Whos’ mouses.

It was a quarter past dawn . . .
All the Whos, still a-bed
All the Whos, still a-snooze
When he packed up his sled,
Packed it up with their final stimulus package! The checks! All indebting!
For the poor! And the Middle Class! For Change! What trappings!

80 trillion feet up! Up the side of Mount Debt-it,
He rode to overlook Who-ville, on their heads to dump it.
“Hal-loo to the Whos!” he was Fed-ishly humming.
“They’re finding out now that Christmas cash is coming!
“They’re just waking up! I know just what they’ll do!
“Their mouth will hang open a minute or two
“Then all the Whos down in Who-vill will all cry YOO-HOO!”

“That’s a noise,” grinned Bernanke,
“That I simply must hear!”
So he paused. And Bernanke put a hand to his ear.
And he did hear a sound rising over the snow.
It started in low. Then it started to grow . . .

But the sound wasn’t happy!
Why, this sound sounded angry!
It couldn’t be so!
But it WAS angry, VERY!

He stared down at Who-ville!
Bernanke popped his eyes!
Then he shook!
What he saw was a shocking surprise!

Every Who down in Who-ville, through distortions great and small,
Was chanting! Not one had any presents at all!
He HADN’T kept Christmas cash flowing!
IT FROZE
Somehow or other, it froze, though how, he did not know.

And Bernanke, with his Fed-feet ice-cold in the snow,
Stood puzzling and puzzling: “How could it be so?
“It froze despite nationalizing! It froze despite rate cutting!
“It froze despite bailouts, quantitative easing, and printing!”
And he puzzled for hours, ‘till his puzzler was sore.
Then Bernanke thought of something he hadn’t before!
“Maybe our economy,” he thought, “doesn’t come from just a store.
“Maybe the economy . . . perhaps . . . means a little bit more!”

And what happened then?
Well, in Who-ville they say
That Bernanke read von Misses and Hayek that day!
And the minute he saw true capitalism’s light,
He whizzed back to town to set all to right.
He stopped all the bailouts and ended fiat money!
And he, he himself, Bernanke, restored a land of milk and honey.

Bush Blasted for Usurping Congress on Auto Bailout: Sen. Inhofe Defends the Republic as a Modern Cicero

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

Heeding the overwhelming will of the people-- and perhaps at last developing a bit of good sense-- the U.S. Senate has rejected the idea of a bailout for the Detroit automakers. If we were still following that dusty old parchment called the U.S. Constitution, the matter would have ended there, at least until the next president takes office. As we have been ignoring the Constitution for a while though, the story continues.

President Bush declared that the Senate, far from rejecting the bailout, simply failed to act. On that flimsy pretext, he will use $15 billion of the $700 billion bank bailout to aid Chrysler, GM, and Ford. Although Congress authorized that money only for the financial services industry, there has been no oversight, and the Bush administration has already altered the implementation of the bailout several times without consequence. Thus, despite the fact that such actions completely usurp the Legislative branch and represent a total betrayal of our Constitution, the Bush administration is proceeding without hesitation.

At least one of our senators, though, is refusing to retreat quietly into irrelevancy. Sen. James Inhofe (R-OK), one of the most staunchly conservative members of the Senate, is fighting back on behalf of our republic and the Constitution. Like a modern day Cicero, he issued a philippic against Treasury Secretary Henry Paulson and the Bush administration declaring:

"As the Bush administration changes course once again, it is becoming clear to me that Washington, D.C. might be completely out of control.

"How have we come to a point that Congress--the institution that represents the will of the American people--has handed over so much money and authority to the Treasury Secretary that, if the democratic process fails to achieve a certain desired outcome, the outcome is simply ignored? The stated purpose of $700 billion bank bailout was to rescue us from a catastrophic breakdown of the financial system. Now we're told that the money might be used to bailout the auto companies because legislating their multi-billion dollar gift from the U.S. taxpayer might come with conditions that were too inconvenient for interested parties. I've been a U.S. Senator for some time, and I have never seen anything like this.”

Sen. Inhofe is correct. Congress has been lax in its duties and handed over far too much authority to the executive branch, which is now running roughshod over our republic and tearing the Constitution to shreds, while claiming that it is all justified because we face an emergency situation. Yet, that sort of justification is precisely what our Constitution and its processes were created to guard against in the first place.

It has gone on too long. When we suffered a terrorist attack and faced two wars, Congress handed the President unprecedented powers, both domestically and militarily, which the Supreme Court is still trying to cut back to constitutional levels. Congress sat by while the President made use of torture, suspended the Writ of Habeas Corpus, spied on our own people without warrants, and otherwise made a mockery of our Bill of Rights—because it was an emergency. When the financial crisis hit, Congress again handed the president such sweeping power over our financial system that the U.S. government overnight gained more control over private industry than is exercised by the socialist government of Hugo Chavez's Venezuela. Our money printing has ballooned to a level not seen in the world since the French Revolution—increasing the money base almost 80%--over 40% in the last month alone. Now, the President even presumes to ignore express will of the first branch of government entirely—because it is an emergency.

Our republic is in grave danger. Though I may disagree with Sen. Inhofe occasionally on social issues, I cannot deny that he has both integrity and honor. Already, he has had my respect through the financial crisis because of his determined and reasoned opposition to the woefully irresponsible and ill planned bailouts. Now, though perhaps already too late, he is trying to defend the Constitutional process that defines this nation. For that he has my utmost admiration. I only hope he has more success than Cicero himself, and that his colleagues, and we the people, have enough courage and conviction to join and support him in his opposition to this madness which, as he states, “will not only be futile, but will also move this country further from those first principles that have made us the great nation we are today."

S·P·Q·A
Senatus Populusque Americanus
For The Senate and People of America

More Than 650 Scientists Dissent over UN Global Warming Report

By Julian Dunraven, J.D., M.P.A.

Honorable Friends,

Whenever any religion seeks to turn dogma into law, society should be wary. Inevitably, when dogma becomes law, liberty, reason, and true scientific inquiry all suffer. It is not hard to find examples. Just look at the disasters which befell the Catholic Church with Copernicus and Galileo. The Catholic Church learned its lesson though. It has since formed the Pontifical Academy of Sciences to ensure that the Church is never again on the wrong side of the facts. The academy is more interested in truth than in dogma, and thus does not require its members to be Catholic. As a result, its membership roster includes some of the greatest minds of our time, such as Nobel laureate Dr. Steven Hawking, a man who believes more in mathematics than in the common conception of a creator being.

Contrast this with the nations under the sway of Islam. There, any scientific finding that does not fit with the Muslim dogma is either discarded or, worse, condemned. It is a common complaint among the expatriates of Islamic nations that, in order to conduct decent scientific research, they must first leave their native countries. To these people, the West has been a safe haven. However, when it comes to the issue of global warming, the West has its own problems.

In 2003, Michael Crichton famously criticized environmentalism as shifting from genuine scientific concern into the religious preference of urban atheists. In 2005, he continued his criticism of the zealous absolute faith our people seem to place in the idea of global warming, despite a great deal of uncertainty in the data. Certainly, the U.N. Intergovernmental Panel on Climate Change (IPCC) displayed a dogmatic commitment to global warming worthy of any Islamic nation when it issued its recent report on climate change in June of 2008. It claimed to represent a consensus of scientific thought and pronounced that the debate over global warming had ended. They should have said that the debate over global warming would no longer be tolerated.

It seems someone forgot to inform the bureaucrats and politicians who assembled the IPCC report that “consensus” and “compromise” are words from the world of politics which have no place in the world of science. While useful for crafting policy, incontrovertible facts do not compromise no matter how much political pressure they may be under or how many people dislike them. Yet, since the publication of the report, we have learned that it was indeed policy—not proofs—which the UN and IPCC were expressing. Any study which did not confirm or support the conclusion that Global Warming was a real problem caused by human action was systematically excluded from the report. It is fiat science.

Fortunately, the Republican minority of the U.S. Senate Committee on Environment and Public Works, led by Sen. James Inhofe (R-OK), has sought to correct this egregious misrepresentation of scientific fact. The Committee’s Minority Report cites over 650 scientists who dispute the claims made in the IPCC report, which was authored by a mere 52 scientists. Among its 231 pages, you will find links to peer reviewed studies which claim that the sun’s increasing activity may be responsible for the warming we have recorded on earth, along with many other theories that did not fit into the agenda of the global warming advocates at the U.N..

The studies cited should make it abundantly clear that the debate over global warming is far from finished. The topic of climate change is still filled with a great deal of uncertainty and deserves far more study before we commit to climate policies which could damage both our liberty and economy without giving any guarantee of helping our environment. In the meantime, we should be wary of what to believe on faith alone. Though waiting on the scientific method may be tedious, history shows us the disastrous consequences of putting our faith in the wrong place. The modern Islamic world gives us a very good picture of what dogmatic science can do to a society. More to the point, though, if we cannot trust our own government to manage even basic fiscal policy responsibly, why should we trust an organization of many governments to issue scientific findings by political decree on something as complex and uncertain as the climate? I should think the current financial crisis would be more than enough reason to keep them away from anything more complex than acknowledging that the sky is, indeed, blue.

The Bailout Total: $8.5 trillion-- Inflation To Come

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

In prior posts, I have made my disdain for the economic bailouts abundantly clear. Thus, I have not been at all surprised that the bailouts have failed so miserably to solve the financial crisis over these past several weeks of extreme volatility. What has surprised me a bit is the amount of money the government is willing to gamble in a desperate attempt to force the bailouts to work.

“Helicopter” Ben Bernanke, earned his moniker by once promising to drop helicopter loads of money on to a financial crisis if needed. This was the lesson he gleaned from years spent studying the Great Depression of the 1930s. Mr. Bernanke determined that had we simply thrown enough money at it, we could have ended the Great Depression much earlier. The Austrian School would say that he is exactly wrong, but he is now putting his theory to the test in our current financial crisis. As the helicopters continue to swarm, I think it only prudent that we occasionally glance at how much we are spending to test his theory. Jim Puplava, investment advisor and CEO of Puplava Financial Services, Inc., has provided a quick accounting of the helicopter drops and so far:

· For commercial paper, we have allocated $1.8 trillion;
· The Term Auction Facility, which provides negotiated rate for banks to borrow from the FED, has allocated $900 billion;
· Other assets have $606 billion;
· Finance company debt purchases, like the Fannie and Freddie bailouts, have received $600 billion;
· Money Market Facilities have $540 billion;
· The Citigroup bailout cost $291 billion;
· Term Security Lending has $250 billion;
· Term Asset Backed Loan Facilities (TALF), designed to help credit cards and business loans, has $200 billion;
· The bailout for AIG cost us $123 billion;
· Discount Window Borrowings has been allocated $92 billion;
· Commercial Program Number 2, which helps banks buy commercial paper from mutual funds, received $62 billion;
· Discount Window Number 2 has $50 billion;
· The Bear Stearns bailout cost $29 billion;
· Overnight loans have received $10 billion;
· Secondary credit is at $118 billion;
· Federal Deposit Insurance Commitments (FDIC) which guarantees loans, has received $1.4 trillion;
· Guarantees on GE Capital are at $139 billion;
· Citigroup’s second bailout took another $10 billion infusion;
· The Troubled Assets Relief Program (TARP) we heard so much about has $700 billion;
· The earlier stimulus package this year cost $168 billion;
· Treasury Exchange Stabilization Fund took $50 billion;
· Tax breaks for banks are at $29 billion;
· And Hope for Homeowners devoured $300 billion

Thus, the total amount we are spending on the bailout so far is $8.5 trillion.

Early next year, we can look forward to another $700 billion bailout directly to the people (which will include even those who do not pay taxes) as promised by Obama and Pelosi. There will also be some form of bailout to the Detroit automakers, and the bailout for the various states is still to come as California has already begun to issue IOUs. For more detailed information, check out Mr. Puplava’s Financial Sense Newshour, “The Big Picture” for December 6, 2008.

Currently, our GDP is only $10-13 trillion depending on how generously you want to calculate it. Either way, spending 60-80% of our GDP on bailouts should outrage you. So where is this unimaginably vast amount of money coming from? As I have said before, we are simply printing most of it. As you might imagine, such frantic money printing should massively increase inflation. Just examine the money base chart below.

This massive increase has not yet hit the money supply (See chart of M2 below) as the banks are busy trying to recapitalize and deleverage rather than giving out new loans. We used to call that prudent, but prudence is not what our government wants right now. Many of the above programs have been created to allow the government to bypass the banks, injecting cash directly into the economy in an attempt to spur spending, create new bubbles, and stagger along to the next distortion created crash. If it doesn’t work, we can look forward to a large devaluation of the dollar.

This impending inflation and devaluation should explain why investors like Warren Buffett have totally divested themselves of the dollar. Yet, even faced with this evidence, people are still flocking to treasury bonds despite the abysmally low or even negative returns on them right now. A wiser investor would seek stocks of companies which consistently pay dividends, have increased their dividends, and are likely to continue doing so. The precious metals also continue to look appealing as a hedge against the inflation our inept government is trying to ram down our throats.

With the election behind us, countering the political forces pushing the bailout—and the resulting inflation—has become much more difficult, but remains vitally important. Making our own displeasure with these bailouts known and holding politicians accountable for their actions are the only defenses we have against the continued financial mismanagement coming from our government.

Interior Permits Guns in the National Parks

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

In its waning days, the Bush administration has at last given us something to celebrate. And no, I am not simply referring to its imminent departure. Today, the Assistant Secretary of the Interior for Fish, Wildlife and Parks, Lyle Laverty, announced new regulations recognizing an individual’s right to bear arms in the national parks and wildlife refuges.

According to the announcement, the new rule, “would allow an individual to carry a concealed weapon in national parks and wildlife refuges if, and only if, the individual is authorized to carry a concealed weapon under state law in the state in which the national park or refuge is located.” Congratulations Coloradans; all you need to do to carry a concealed handgun in the national parks here is to obtain a concealed carry permit recognized in Colorado. Just don’t try it in states which refuse to recognize our permits—such as the entire Left Coast.

This is a rather major development. Previously, possession of a loaded firearm in a national park or wildlife refuge was strictly forbidden by law since 1983. The former regulations demanded that any firearm be kept unloaded, in a locked case, in some inaccessible part of your vehicle, such as the trunk, in order to enter a national park with it at all.

The new changes came about as Interior Secretary Dirk Kempthorne responded to letters from 51 Senators (Letter 1 / Letter 2) of both parties who pointed out that 48 states now have concealed carry laws and our federal regulations should be updated to reflect that change. Occasionally, even Senators do manage to say something sensible, and it seems Secretary Kempthone agreed.

Naturally, this change in the rules did not come without substantial opposition and, in the published rule, the Department of Interior took the opportunity to respond to many of the concerns raised during the lengthy 90 day comment period. For instance, environmentalists will be pleased to know that most studies conclude that the vast majority of concealed weapons permit holders are not, in fact, poachers. Rather, they tend to carry their weapons for purposes of self defense, and are well aware that any improper use of a firearm is still a punishable offense. The Interior goes on to admit that violent crime is on the rise in national parks, especially near the border and in remote areas, with 8 murders, 43 rapes, 57 robberies, and 274 instances of aggravated assault in 2007. The Department also warns that the mere 3000 officers it has patrolling the millions of remote acres in our national parks cannot possibly guarantee safety. Thus, having a weapon of self defense may not be such a bad idea.

The year 2008 has been good for gun rights and the Second Amendment. First, Justice Scalia gave us the highly entertaining opinion in the District of Columbia v. Heller, in which the Supreme Court affirmed an individual right to keep and bear arms, overturning the D.C. handgun ban. Now we have the Interior opening the national parks to concealed carry permit holders. If you are still looking for stocking stuffers, I cannot think of any better way to commemorate this remarkable year than purchasing handgun training courses for you and your loved ones in preparation for the concealed carry permit application. What better way to ensure a ‘safe’ and happy holiday season?

Facebook: Killing Privacy and the English Language

By Julian Dunraven, J.D., M.P.A.

Honorable Friends,

This Thanksgiving, I had the pleasure of running into quite a few old friends I had not heard from in many years. Several complained to me that my email is too difficult to obtain because I was not on Facebook. It seems they did not even think to run a Google search of my name to find this blog and, apparently, it is now an incredible bother to have to ask a single other person for my contact information. Whatever. In response, I set up a very spartan Facebook entry, complete with an acerbic warning that I will only respond to emails, and will not tolerate any wretched page postings. In only a few days, though, it has been a horrifying experience.

Facebook is ghastly. I cannot believe how invasive it becomes. Did anyone else read the privacy policy? Horrid. It has taken far too long for me to slice off most of the more grasping tentacles, but I think I am content for a while now that my wall is forever fortified and my friend list is blinded. Good gods, though, I am being contacted by people I don't even know in person yet. Do they think this nonsense builds anything resembling a true relationship? They should not have access to all this information people put out there so blithely. It is dangerous! With almost no difficulty, I can chart a person's entire week just from the postings of their friends alone. It is a wretched business I say. Simply wretched.

One of my friends, laughing at my discomfort, reminded me that small towns often know everyone else’s business as well. Having come from a small town, though, I can say that small towns guard their privacy jealously. They also look out for one another, and censure the bad behavior of others through ostracism. None of that is present in Facebook. It is a gold mine of information that requires nothing in exchange. It worries me that our people, and especially the younger generations, have become so trusting that they are willing to give open access to their entire lives. Who needs domestic spying warrants when one has only to search through Facebook, MySpace, Friendster, or another such social networking sites? Perhaps more than its obliterating effect on privacy, though, I simply cannot tolerate how insipid it is.

"Oh it's so cool!" they tell me, "Look, I can throw a polar bear at you!" A polar bear, yet I was still in outraged shock over the foul idea of emoticons. Now I have to contend with flying polar bears. Perhaps they figure that if they create enough ridiculous gadgets, they will eliminate the need for any tone or meaning in writing altogether. May the gods save the English language. It is the greatest, most adaptable language in the world, yet our people and our incompetent educators are doing their utmost to mutilate it into the inarticulate grunting of savages.

Do you disagree? Just look at it. There are supposed 'friends' out there who post such scintillating updates as, "I am eating a bag of chips." When you find yourself unable to articulate a reply to these riveting observations, they toss a bloody polar bear at you. I tell you, this is nothing more than a technologically advanced version of an inanely screeching monkey chucking its own poo at its fellows.

No my honorable friends, I'll have none of it. Personal letters are dangerous enough, but at least they have substance. Phone calls are uncertain, but the connection is undeniable. Still, though, I prefer the now all but lost art of social calling: a visit in the parlor or garden over tea and scones while offering genteel conversation which does not simply make noise, but challenges and enlightens. Though the modern world has offered many improvements over my former life in the Victorian Era, Facebook is most assuredly not one of them. It provides a point of contact which can be easily found. That is all the credit I will give it.

Bailouts Continue to Multiply Using Money From Your Accounts

By Julian Dunraven, J.D., M.P.A.

Honorable Friends:

We are now past the election, but I cannot stop thinking of Disney’s Alice in Wonderland and the Dodo’s jolly caucus race. Do you recall the scene? The Dodo perches atop a pillar of rock on a beach, presiding over a crowd of critters running endlessly around his pillar in an attempt to get dry while the tide continues to crash over their heads. The Dodo instructs them that they must all run with the others if they want to get dry, all the while singing his ridiculous song:

'Round and 'round and 'round we go
Until forevermore
For once we were behind
But now we find we are be-

Forward, backward, inward, outward
Come and join the chase
Nothing could be drier
Than a jolly caucus race!

Certainly, everyone has been running together in our own caucus race. Both parties and both presidential candidates decided to run with the bailouts, and the bailouts continue to multiply and grow.

Yesterday morning the AP announced that AIG’s bailout has grown to more than $150 billion. Of this, $40 billion buys preferred stock for public ownership. The original $85 billion loan has been reduced to $60 billion and another $37.8 billion loan has been transformed into a $52.5 billion aid package.

We also have GM and Ford with their hands out for bailout money according to The Ludwig von Mises Institute. Have no doubt that they will get what they seek. They will get a bailout or two despite the fact that other automobile makers are doing just fine. They will get it despite the fact that, as the Institute points out, Ford has fewer employees than Abercrombie and Fitch and GM has far fewer employees than Target, Wal-Mart, or McDonalds, yet these companies would be laughed at if they demanded a bailout.

Goldman Sachs and Fannie and Freddie also are showing losses. Facing a third quarter net loss of over $29 billion, and a total outstanding debt of $880 billion as of October 31^st, Fannie has warned that its $100 billion bailout may not be enough.

So where is all the requested bailout money coming from? Well, $40 billion of AIG’s money is coming from the $850 billion bailout package Congress just passed. The rest is being printed by the Fed. But let us be honest: all the bailout money has been printed. We were running a deficit long before we ever made even the first bailout.

Understand that, by printing money, the government pays for these bailouts by taking value out of the savings accounts of private citizens. As the money supply is increased through inflation, and by printing more than $2 trillion in the last few weeks we have increased the money supply by almost 50%, the money we hold in savings is devalued. Thus, we must all work harder and longer in order to save less. It is a very subtle form of theft, but make no mistake—it is theft. The citizens of this country are all having their accounts raided, through inflation, to pay for the failed policies of these companies.

Now look at who is running things. Michael Alix has been named as senior vice president of the bank supervision group of the New York Fed. Formerly, he was the chief risk officer at Bear Sterns, which went under back in March from its derivative investments. Former officials of Goldman Sachs can be found throughout the Treasury Department and Fed. I suppose if Goldman continues to suffer, its management can always find new employment with government. Don’t you feel safe?

So this is the state of affairs. The whole country is drowning in debt and asking for bailouts. Our government dodos, who happen to be the same fools who got us into such debt in the first place, are now busy pouring even more debt through inflation upon us to facilitate the requested bailouts. But keep running, they say, and eventually you will get dry. Pay no attention to the rising waves.

Honorable friends, we have fallen down the rabbit hole, but isn’t it entertaining?

'Round and 'round and 'round we go
Until forevermore
For once we were behind
But now we find we are . . . still behind

Recovering from the Election and Preparing the Republican Party for the Future

Recovering from the Election and Preparing the Republican Party for the Future

By Julian Dunraven, J.D., M.P.A.

Honorable friends,

This year, as I handed out candy to trick-or-treaters for Samhain/Halloween, I received a terrible cold in exchange. I spent the last few days sniffling and moaning in bed. At some point, I recall watching a somewhat blurry talking head announce that Barack Obama had just won the election. That set off a wave of coughing I thought might kill me. Cursing cold medication induced hallucinations, I promptly poured myself more cough syrup and tried to return to sleep.

The next day, the irritating headlines refused to disappear, even when I refused any medication at all. The morbidly depressed phone calls that began to pour in confirmed that I was not hallucinating, however much I may have wanted to. Stupidity had finally achieved a majority of votes.

I have also heard from the other side, and I am astounded at what they are saying. Consider this email that invaded my inbox this morning:

“As you read the lovely quote below, which speaks volumes, listen to the ‘Yes We Can’ song one more time. Our future is looking brighter everyday and history has been made.
‘It is said that Rosa [Parks] sat so that Martin [Luther King Jr.] could walk. And Martin walked so that Obama could run. And Obama ran so that we could fly. It’s time to take wing.’”

Now, maybe it is because I am ill, but my breakfast was the only thing threatening to take wing after I read that. One had only to see the enraptured expressions of adulation on the faces of the crowd at Obama’s victory speech to know that this woman is not alone in her sentiment, though. They haven’t simply elected a president; a new messiah has risen to save the nation and the world. I, however, will not be among the worshipers of our new god-president.

As a devotee of the Old Religion of Ireland and a student of history, I know of countless examples where a man has claimed power along with semi-divine status. In each case, the new divinity ended up looking just like old-fashioned tyranny. Only once has the title of messiah ever stuck. But in that case, the man who claimed it never seized power or commanded armies. Rather, he presented a simple message of love that rose to preeminence through persuasion—not state power. To my knowledge, many Christians are still pretty happy with him, though it appears that some have found a replacement.

That replacement had best be up to the task. As the storm clouds gather, the silver lining for Republicans is that, with Democrats in control of both houses of Congress and the White House, they will not be able to blame us for anything anymore. Whatever happens from here will be up to them. I have no doubt whatsoever that if they implement even half of the economic plans they have proposed, they will make things much worse. What will happen when their god-president fails?

Republicans need to be taking advantage of this time to regroup. First, though, we must acknowledge that, by abandoning the fiscal responsibility that had been a fundamental principle of the party for decades, the party set itself up for the rise of this false messiah of socialism. The people have every right to doubt Republican commitment to free markets and spending cuts after the hideous displays they have witnessed during the Bush administration.

Expecting the party to reform on its own, however, seems ridiculous. If Republican leaders failed to uphold their principles, we the people also failed to hold them accountable. If we want to take back the Republican Party, reform it, and hope to have any chance of success, we all have to increase our involvement with the party, as well as make our demands very clear. Congress and our Party leaders have shown that they are utterly unprepared for and confused by the massive economic issues that broadsided the campaigns this year. If you find yourself to be just as clueless and confused by these issues as Congress is, though, you cannot hope to help set them on the correct path. So start by educating yourself.

The issues we will be facing are indeed immense. For most people, it has been many years since they last sat in an economics classroom, if they ever did at all. Fortunately, one of my honorable friends managed to find a site that provides a very simple but comprehensive summary of all the issues we face. I invite you to check out Chris Martenson’s free Crash Course in the Economy. His short lessons will leave you in a much better position to understand exactly how we got here and what we are facing. It will also give you a very good idea of what to demand from the Republican candidates we will soon have to send out to clean up the disasters Obama and the Democrats will inevitably wreak in our society.

Military Guest Commentary: Why I Will Vote Republican

* * * This insightful essay comes from a U.S. officer serving in Iraq. I quite enjoyed it, and hope you all will as well. Julian Dunraven, J.D., M.P.A. * * *

By CPT. Hunter Hawke

The upcoming election is extremely important to everyone, but perhaps especially to members of the military. Thus, as a member of the military, drawing on the sum of my experiences, please allow me to explain why I will be voting Republican.

First, I believe the Democrats’ approach to foreign policy is both naïve and dangerous. Second, I simply do not believe the Democrats can do what they’re promising. They cannot continue to provide for a strong military, pay for their proposed entitlement programs, and not increase taxes. Third, they have not proved that they are capable of managing the military and our foreign policy competently.

To address my first point, I believe that a pragmatic approach to defense and foreign policy is the only reasonable one. My experiences in the military and Iraq specifically have left me doubting the good nature of man. I believe that the nature of man is not inherently good and the world is far more Hobbesian than most people would like to believe. Tribalism, corruption, cronyism, brutality and most every other vice known to man are prevalent throughout large portions of the world. You can see the symptoms of these base instincts in many other countries in the way they treat minority groups, woman, wealth distribution, elections, human rights, the press, the judiciary and so on. The governments of these countries are not equal partners with us, nor do they share the moral high ground. So when I hear the Democratic party in general and Senator Barrack Obama in particular talk about how we need to redefine our foreign policy by reaching out to these governments and people without these things in mind, it makes me ill.

The Democrats cite our standing in the court of world public opinion as evidence of the Bush administration’s disastrous handling of foreign policy. I think what they fail to understand is that the world is full of countries that would love nothing more than to see the end of American hegemony, be it economically, politically, or militarily. Some of their motives are not nefarious but rather that of a competitor. But what of those states who wish something else, something more sinister? An expansive Russia, a nuclear Iran, a radical Pakistan? Even today Zimbabwe, Sudan, North Korea, Venezuela, and countless others would love nothing more than to see an end to American hegemony. And who would suffer? Maybe we won’t, at least in the near term. But minority populations would suffer. Political dissenters would suffer. And American values such as woman’s rights, freedom of the press, an independent judiciary, and countless other values we hold dear would suffer. So to say that we are unpopular and use this as reasoning to fundamentally change our foreign policy is ridiculous. The question should be: are we doing what is morally correct?

What the Republicans have done and I strongly support is to undertake a program of aggressive engagement in foreign policy. Our military assistance abroad is a perfect example. Isolationism is no longer an option because power and influence have become a zero sum game. If we are not exerting influence or spreading American values, someone else is spreading theirs and it is to our collective detriment. We exert our influence, not to pander to our enemies, but to influence other countries to become something else, something better.

For example, over the last several years, we’ve undertaken a massive effort to combat AIDS in Africa and we’ve established an independent African military command to bolster the security of that continent. What we’ve done in Columbia is another example. I know a couple of guys who’ve spent years in Columbia training their Special Forces and intelligence organizations. What is underpublicized is the fact that the FARC, the strongest, most well equipped and well financed terrorist revolutionary organization in the western hemisphere, is now on the verge of total collapse. We didn’t negotiate with them; we defeated them.

A more specific example would be the rescue of Ingrid Betancourt as one of the culminating efforts of years of military assistance in Columbia. All of the resolutions in the parliaments of Europe, declarations of solidarity, and high level negotiations yielded nothing. She was rescued because the United States had aggressively supported the Columbian government for years. Now the Bush administration is trying to use Columbia as a template for the rest of South America and Africa. So it comes as no surprise that the countries most fearful and vocal about American power, like Venezuela, are also the ones who stand to lose.

That these countries stand up in the United Nations and decry our efforts around the globe is not only unsurprising but a testament of the great things we’re doing. Will we choose to ignore the world’s problems until they come knocking on our door? And what about the rest of the world? What are we going to do to ensure the security and prosperity of our allies and the innocent? Will we abandon them to appease our critics?

The Democrats offer the idea of soft power and negotiation as a means to accomplish our goals. But I would argue that soft power in a globalized world is largely a fraud because economic interdependence has made it increasingly difficult to employ. The Europeans refuse to stand up to Russia over the conflict with Georgia because Russia supplies most of their oil and natural gas. The Chinese oppose any intervention in the Sudan on the part of the United Nations because Sudan is one of their key trading partners. Are we going to abandon our allies and allow innocent people to be butchered because soft power is insufficient?

Europe, the center of soft power, is great at exercising their rhetorical skills, but what have they done for the people in Afghanistan, Columbia, Georgia, Darfur, and countless other countries? They can’t even send their own soldiers and humanitarian aid around the world unless it’s on board a US Navy destroyer or in an American C-130. The Europeans obviously lack the intestinal fortitude to do anything more than talk about their high ideals. That these same Europeans fall all over themselves to hear Sen. Obama speak should cast some doubt on their overwhelming support for him. Additionally, few of our allies have the resources or the commitment to do what we can. So it is left to the United States.

The Democrats say that we’re being too aggressive, but what’s the alternative? Certainly they offer nothing beyond soft power, rhetoric, and action in the United Nations. There are quite a few nations who stand to lose if we continue on our current path but I don’t believe we have another choice. These issues are too important and the consequences too grave to leave to a party that lacks the courage to do the right thing.

This leads me to the inevitable conclusion that the Democrats seemingly have no foreign policy goals beyond increasing our popularity abroad and maintaining some form of rudimentary security for the United States. This allows them to focus all of their efforts on their socialist domestic agenda but that’s another topic. The Democrats try to make their point by using Iraq as an example to show the failure of the republican approach. But they have neither a better approach to foreign policy nor a better plan for achieving our strategic goals.

President Bush was right to depose Saddam, but he went about reaching that objective with disastrous incompetence. Sen. Obama was wrong about the validity of deposing Saddam, in that it was deserving of our efforts, and even more wrong about the surge. If we had pulled out when he wanted and as he vigorously advocated, it would have resulted not only with Iraq being thrown into chaos, but the entire region may have erupted into a more widespread conflict. It also would have been tantamount to the betrayal of all the American service members who fought and died there.

Obama is trying to bolster his credentials to be commander in chief by saying that we’ve been distracted from our primary objective in Afghanistan. I remain unconvinced that he fully intends to follow through with the action plan his rhetoric has endorsed. Afghanistan is a tougher conflict than Iraq and will require additional years to sort out. I very much doubt that he has the spine for a protracted counterinsurgency and, even if he does, I doubt that his party does. At the end of the day, the fundamental difference between the foreign policy approaches of the two parties is that Democrats want to negotiate with our enemies while Republicans want to defeat them.

To address my second point, I have heard nothing from Sen. Obama about the importance he places on supporting the military beyond the opportunities he has to attack Sen. McCain on the topic. Furthermore, I’ve seen the effects of the Clinton administration on the military and I hope to God that it doesn’t happen again. During the Clinton years, budgets dwindled and manpower was slashed. Equipment was refurbished but no new equipment was procured. He took the Army that defeated the fifth largest standing army at the time in 100 hours and gutted it. He used the rational that the peace dividend brought about by winning the cold war more than justified the drawdown. Never mind the increasingly factitious and dangerous world that the fall of the iron curtain left behind.

Clinton and the Democratic Party, past and present, have never paid more than lip service to keeping a strong military. Their base demands expensive entitlement programs and the money has to come from somewhere. They can only raise taxes so much before the consequences, both political and economic, become too great. So the money comes from the most expensive government program that just so happens to be the most politically inconsequential for the Democrats. And since a strong military is not necessary to meet the Democratic foreign policy agenda, the temptation to slash military budgets is simply too great and the military’s ability to meet the enemies of our country suffers as a result.

Finally, I’ll use the Clinton years again to demonstrate that I don’t believe the Democratic Party can properly manage the military or foreign policy. Even more disastrous than the lack of financial and moral support for the military was the effect left by having a weak commander in chief. Because of Clinton’s past and the politics of his party, he could not politically afford to suffer military casualties abroad. This infused in the military a zero tolerance policy on casualties which resulted in an irrational approach to combat. We fight to win, not to avoid casualties. In combat, the mission always comes first and there is no substitute for victory. It might sound cliché but it’s the truth.

It has taken us years to overcome the Clinton mentality, and the last thing I want to see is a democratic administration take us back to the place where they cannot politically afford casualties so we either don’t fight or we do so in a cowardly and inept manner. We retreated from the field of battle in Somalia. We allowed more than half a million people in Rwanda to be butchered. We launched an ineffective and short lived humanitarian mission to Haiti that accomplished nothing. We did nothing to confront the rising threat of Islamic fanaticism. We abdicated our role as the leader of the free world. I do not believe that what we did then was the right thing and I believe that a democratic administration would take us down that same path.

If I had to pick a candidate based on my opinions on the military and foreign policy, without doubt, I would pick John McCain. I voted for him in the 2000 primaries and I think that, as a party, we made a mistake in picking Bush over him. After McCain, I would pick every single other Republican candidate. And after that, I would pick Joe Lieberman. And if I could pick none of the above, I would look into moving to Montana to ride out the coming storm.

Polite Persuasion: What Each Of Us Should Be Doing For John McCain

By Julian Dunraven, J.D., M.P.A.

Honorable Friends,

A guest at tea informed me that she enjoys our visits because they are among the few chances she gets to discuss politics openly. It seems that she refrains from any mention of politics at work, and even at dinner parties if she is not close to the guests. This disturbs me. How can we expect to win if we refuse to discuss politics for fear of being rude? Can we really expect our liberal friends to understand decent policy on their own? Not when they nominate Barack Obama for president.

Now, do not misunderstand me. As a staunch defender of etiquette, I do not want conservatives out preaching to everyone they meet. That would indeed be rude. Nor do I endorse political conversation if it is likely that you will end up shouting about how stupid the other person is. That could well get you fired. However, it is certainly possible to slip good political information into workplace conversation and unfamiliar social scenes without being boorish. If we intend to win, I think we had best start doing so quickly. Here is how.

As you come into the office and begin settling your things, remark, “Did you see that the Fed has increased its balance sheet by $5 trillion? Inflation is ballooning and we have almost doubled our national debt. Now I hear that Sen. Obama is proposing another $4.3 trillion in spending. Goodness only knows how we are ever going to afford all of this.” Next, you sigh, shake your head, and simply walk off to your office. Inevitably someone will pop his head in to ask where you heard such things. Smile and tell them you will send them a quick email. Just send the URL to the articles and let them chew on the information by themselves.

Later, try remarking that the world leaders are convening a meeting on November 15th to reform the world’s financial markets with a new Bretton Woods Agreement and possibly begin discussing an entirely new currency to replace the dollar. Europe is calling this the death of American Capitalism and the triumph of European style socialism. They are overtly rejecting U.S. leadership and demanding oversight of even our markets. We had best hope whoever wins is able to stand up to this.

Russia, Iran and Qatar are forming a new gas cartel to gain control of energy imports into Europe. This would give these nations enormous control over European affairs, especially since it would be backed by Russia’s formidable military might. At the same time, we have Joe Biden saying that Obama will be immediately tested by our enemies. We had best hope he is up to that immense challenge.

No one needs to wait about to argue. Just walk away and let others come to you. When they do, don’t argue. Just provide information, politely, and with a smile. If the other person becomes testy, shrug and say, “I hope you are right,” then walk away. The point is not to turn our workplaces and social engagements into political debates. The point is just to get people thinking about issues beyond the mindless faith in Obama’s “hope.”

As every conservative knows, hope is not a defense of our interests, and faith alone will not restore our economy. Though we know that Barak Obama is an overt socialist who would weaken us internationally and militarily while redistributing our wealth domestically, we need to do better helping others understand this. Every citizen has a responsibility to this country. If we are not doing everything we can to ensure it is in the best position to face what we know is coming, then we have failed in our responsibility. If we do not speak out in support of the principles we believe in because we cannot figure out how to do so politely and professionally, then we have failed in our duty. If Barack Obama is elected because we conservatives expect someone else to campaign against the socialist nonsense he represents, then we have abdicated our individual responsibility as citizens. As I said, we do not need to preach. We do not even need to argue. We do need to speak up and speak out—every one of us. Time is running out.

Deflation Is Not The Problem: We Face Inflation And Currency Collapse

By Julian Dunraven, J.D., M.P.A.

Honorable friends,

The value of the dollar is up, gold is down, and so is oil; stock values have plummeted, and everywhere I hear fretting about deflation. Do not be deceived. It is not deflation, but inflation which has come to plague us. If people fail to understand this point and rely on the dollar, their wealth will be wiped out.

The credit crisis has forced a massive deleveraging process faster than anyone anticipated. As a result, entities are selling anything they can for dollars to pay down debts. This sell off includes gold holdings, which is helping to push the already manipulated prices down further. The deleveraging sales (along with naked short selling) have also crashed stock prices. This has caused speculators to fear deflation rather than inflation and seek dollars rather than assets, and so they have sold off oil, causing a drop in the price. Coupled with the recessionary fears, this has cut demand slightly and OPEC is cutting production. Keep watching. All of this is temporary.

Demand for oil is still growing, even if that growth has slowed somewhat. Even with demand expected down at 86 million barrels per day, that is still more than last year and less than we are expecting for next year. China alone still has an 8% growth rate. We still suffer a supply destruction of 5-8% per year and have no prospects of any major new fields. The value of oil will climb, and it will climb high.

As for our stocks, many are not overleveraged and are quite strong. They should recover nicely from the dumping this liquidation is forcing right now. They will also benefit as Sen. Charles Grassley (R-IA) has ordered the Justice Department to begin an investigation of the SEC. As a result, the SEC is starting to take action against naked short sellers who have been stealing trillions by selling non-existent stock on the markets. One investment advisor has reported to me that up to 50% of the stock of several major companies currently being traded simply does not exist. Congress is finally beginning to notice this and take aim at these criminal traders who have defrauded both the companies they trade and the investing public in what may be the biggest financial crime we have ever seen. Thus, certain sectors of our economy are still very strong, and with prices so low, it is a good opportunity to buy.

Be very clear about this point: inflation or deflation is determined by increasing or decreasing the money supply; they are not determined by rising or falling prices alone. We are not in deflation simply because of a few momentarily low prices. The Fed is the real worry. It has just added over $5 trillion to its balance sheet. Yes: $5 trillion. We have borrowing and inflation when we should have savings and capital. Our money supply is inflating as if there is no tomorrow. Such a thing has never before been seen in this country. We did see it in the Weimar Republic of Germany, in Argentina, and in the French Revolution, though. In each case, the government inflated the currency to the point of collapse. When the people began to starve, the French Queen was foolish enough to say “Let them eat cake.” She lost her head for it.

When the Fed manages to inject this cash into the market, we will begin to enter hyperinflation. Inflation will far surpass the interest rates for cash and bonds and any savings connected to the dollar will be wiped out. This is why we have seen savvy investors like Warren Buffett move all of their money into the equity of stocks, or into the safety of real money: gold and silver.

This is still a wonderful time for the purchase of gold and silver. The spot prices on COMEX have yet to realize the shortages we are facing. Yet, every dealer I talk to is desperately adding staff to try and keep up with the unprecedented demand. People are now waiting more than twenty minutes just to place an order and then being told they will have to wait anywhere from 3-5 months for delivery. Faced with such shortages, I have seen the price of a 1 oz. gold coin on eBay rise to over $1,500 while the spot price on COMEX lingers at $700 per ounce.

This will not continue. COMEX prices would lead you to believe there is a glut in supply. Yet it is becoming difficult to get gold and silver. It will shortly be even more difficult to get silver as it is a byproduct of lead and zinc mining and those metals are selling below cost, so mines are shutting down. People are beginning to realize that COMEX does not have physical metal to back up its paper contracts and they are demanding delivery. Many investment strategists expect COMEX to default by December. Once that happens, the dollar really does collapse as the price of gold may climb up to $5,000/oz., and silver may shoot to over $100/oz.. At that point, people will either have gold, silver, and stocks, or they will have worthless paper. We are facing inflation, and that is the simple fate awaiting our fiat currency system.