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.

All That Glitters Is Not Gold: Our Government’s Lies and Manipulations in the Gold Market

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

Honorable friends,

We have all heard the old adage that when the market is down, gold is up. Well, the market is most assuredly down . . . but so are gold prices. Yet, strangely, demand for gold and other precious metals is skyrocketing, while supply is so low that people are being told they may have to wait six months or more for delivery. Even stranger, on eBay, prices for gold and silver coins and bars are well above the price they are being traded at on the commodities exchange in New York. So what is going on? That is the question some of my clients wanted answered as they fretted about their hedge investments. To answer quite simply, our government is actively working to suppress the gold market, and defrauding investors in the process. Now I will tell you why and how.

In the 1930s, we abolished the gold standard. Instead, we now have a fiat currency where money has value only because we say so. This allows the Federal Reserve to adjust the money supply without regard to a set amount of gold. Unfortunately, the Fed abused its power. Thus, every time we faced an economic hurdle, rather than allowing for market corrections, the Fed simply cut interest rates, printed more money, and inflated the problem away. It worked as long as people had faith in the currency.

As this behavior repeated itself over time, the central bank managed to encourage the unrestrained spending and overleveraging that has caused the economic crisis we face today. This time, though, the problem is not going away.

We are facing the accumulation of years of bad policy. People are beginning to see that the nation is so deeply in debt that the only way out is massive inflation and devaluation of the dollar. In an effort to preserve their wealth and hedge against this inflation, they turn to gold. This causes problems for the Fed and the other central banks.

Although our money is no longer backed by gold, the Fed cannot ignore gold entirely. If the value of the dollar drops too fast against gold, people begin to lose faith in the system. They buy gold instead of treasury bonds and the Fed and other central banks would be forced to stop their meddling in the markets and allow the money supply to readjust to the level it should be at. Thus, the Fed and other central banks have coordinated their efforts to prevent this.

First, as gold begins to rise, they release some of their own gold reserves into the market. The flood of new supply pushes down prices and allows them to continue with their operations. Of course, there is a danger. If they do this too often or too openly, people begin to see the manipulation and lose faith in the system. In recent years, as the increasing activity of the central banks has required more extensive manipulation of gold, the central banks have kept their hands clean by turning to private bullion banks. They have actually started paying these banks to lease gold and then sell it short on the market to keep the price down. Naturally, as an attempt to manipulate the currency, this is illegal for private entities — yet it is happening every day at the expense of investors.

Obviously, even the central banks do not have unlimited supplies of gold and cannot keep this up forever. The U.S. government, though, keeps its gold reserves a closely guarded secret and Fort Knox has not been audited since Eisenhower’s time. Yet, given the long waits for delivery and the high price of physical gold on eBay, we know that physical supply is short. So how do they continue to keep the price of gold futures contracts down on COMEX? They use naked short selling.

Few people ever demand delivery while trading on COMEX. Thus, it is remarkably easy to sell off more paper contracts than there is gold to back it. As long as few people demand delivery, the deception works. This, too, is criminal, but the law has not been enforced. We may see that begin to shift soon though. The manipulations have become so extensive that the difference in price between paper trading on COMEX and physical trading on eBay is becoming severe. People are beginning to notice. As early as December, we may see people demanding delivery on their COMEX contracts. When delivery cannot be met, this house of cards the Fed and other central banks have created will crash down.

So the government has fed us gilded lies while poisoning our market and actively undermining our hedge protections against inflation they created. Angry? You should be. But it will continue until we demand that it stop. Do so. First educate yourself. There is no better place to start than with the people at GATA. Then vote with both your money and your ballot. When you buy gold or silver, demand delivery. When you cast your ballot, vote against candidates who have fostered these manipulations and promised more. Vote against candidates who have benefited from the corruption through huge donations from the perpetrators. Vote against Barack Obama.

The Honor Of John McCain

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

Several years ago, while on a training mission in the Arizona desert, one of our apache helicopters suffered a malfunction and crashed, killing both pilots, and creating two new widows. One of those widows was part of my family, and we rushed south to support both of them as best we could. Every politician in the state sent letters of condolence; John McCain sent a member of his staff. While others sent sympathy, John McCain’s man asked what he could do to help. We thanked him for the offer, but sent him on his way. The letters stopped coming but John McCain’s man did not. He came to each of the memorial services. He checked in every week. During one of his visits, he heard that these women were having a bit of trouble collecting the benefits from the government. John McCain immediately intervened to solve the problem for these women. They never asked him for the help; he simply gave it. He never asked for thanks or recognition, but they could not be more grateful. This is the honor of John McCain.

John McCain’s support for our men and women in uniform is without peer, and he shares their love of and commitment to this nation. He knows what it is to serve and to suffer. He has done so himself and at great cost. Our service men and women know they can count on John McCain as well. When Bush managed to bungle Iraq, and many talked of pulling back in defeat, our officers and service members spoke to John McCain. Armed only with knowledge of foreign affairs few could rival and his commitment to our troops and this country, he went to Bush with Gen. Petraeus to demand the surge strategy. Bush yielded, the surge has worked, and we are well on the way to victory. This is John McCain.

Though no one person could possibly be a perfect fit for the vast responsibility of the oval office, the President has only two exclusive responsibilities which really matter: foreign policy and the military. In these two areas, there could not be a more perfect candidate than John McCain. He understands foreign affairs as few others do. He is someone committed to supporting and strengthening our nation and its allies — and our allies know they can count on him. He is committed to keeping our military in the very best shape he can manage because he knows, as few others do, the depth of the sacrifice we ask of our troops, and how precious their lives are for their willingness to make it. He will not fail them or fail to defend this nation which they love enough to commit their lives to. That is John McCain.

John McCain has done much to help my family, and indeed this nation, without ever being asked, and with no expectation of reward. I now feel compelled to help him. I know John McCain. I have seen the love he has for this country and its people – not merely in what he says on the campaign or for the cameras – but in what he actually does when few people are watching. He is a man of impeccable honor and honesty. Because of this, I trust him. The power of the executive branch is growing so large that it threatens to overwhelm our Constitution; and our people, fearful of hardship and the economic crisis, seem all too willing to let this happen. Yet, I trust John McCain. I trust that John McCain has such love for this nation that he will defend our rights even when we will not, and even at the expense of his own authority. He has served this country for too long, and through too much suffering for him to consent to anything less. Such is the honor of John McCain.

Donate to the McCain Campaign here.

The Worst Is Yet To Come: Blame Congress--And Obama

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

Honorable Friends,

I hope you did not get too excited by the rise in the market yesterday. Our system is nowhere near stable, and even further from recovery. We have not even begun to address the fundamental problems that have come together in this crisis. What we have heard about is a large number of bad mortgage backed securities which created a strain on credit in the banks and spurred Congress to pass the foolish $850 billion bailout. The problem has now bled into the financial paper market, though. Without the financial paper market, and the short term loans it provides institutionally, credit in this country dries up entirely. Thus, the Fed is injecting an additional $1 trillion directly into the commercial paper market to try to keep things flowing. What you have not heard, is how terrifyingly extensive the disease actually is. Just listen to Bud Burrell’s interview to get a good idea.

We now have banks that are hugely overleveraged, often at a rate of more than 40:1 debt to assets. Freddie Mac and Fannie Mae actually reached levels of almost 100:1. They also became hugely tied up with bad mortgage backed securities and other credit default swaps of derivatives, as did countless others. As we know, the consequences of this sort of behavior have been severe. However, the damage is much worse than the $850 billion bailout, or even the $1 trillion Fed remedy can handle. Over $58 trillion in derivatives liabilities has already been reported—and that covers only 10% of entities who engage in such trades. We have no idea how deep the poison really goes in the remaining 90%.

On top of this, we also have naked short selling (NSS) running through our ailing market like a fatal cancer. Short selling is where someone leases a security expecting its value to fall. He then sells the security to another. At the end of the lease, he repurchases the security, hopefully at a lesser price than it sold for originally, and returns it to the owner. NSS is similar, except that the seller sells the security before he is sure he can even lease it. As a result, people may pay for a security that cannot be delivered. This practice is illegal, but has not been enforced by the Securities and Exchange Commission.

This loathsome practice has contributed to the demise of Bear Stearns, Merrill Lynch, Washington Mutual, IndyMac, Lehman Brothers, and AIG. Its practitioners presume to sell stock in these companies without ever obtaining that stock. They then drive down the stock price, often without ever delivering a single stock certificate. The companies collapse -- not from any balance sheet problems -- but from these phantom trades of non-existent stock. It is even happening in commodities such as gold and precious metals, where people are selling ownership certificates without ever having the gold to back it, and the buyer is none the wiser unless he tries to claim the actual gold. As these problems converge now, they have the very real potential of utterly obliterating our economy and the value of the dollar itself.

Does it surprise you that this corruption has grown so large? It should not. Congress has done nothing but encourage it. Congress repealed of the Glass-Steagall Act in 1999, which allowed for the sale of mortgage backed securities and blurred the line between lenders and investors. They passed Sarbanes-Oxley in 2001, along with mark to market accounting. The hastily crafted Act required hugely expensive accounting processes that did little but drive small business out of public trading while doing nothing to curtail corruption in larger institutions. Mark to market accounting also forced assets to be valued at the last sale of similar type whether or not that sale was representative of the asset in hand, thus skewing valuation. Our government then lifted the leverage rules in 2004. Previously, banks were limited to a ratio of 12:1 debts to assets. With the lifted rules, they ballooned into 40:1 ratios or higher. Next, despite Regulation SHO prohibiting naked short selling the SEC has never enforced it, and even gone so far as to falsify reports playing down the dangers of the practice. Finally, let us not forget all the inflationary tinkering the Fed did to prevent any real adjustment in the market that could have purged these problems before they became behemoths.

The real root of the mortgage problem, though, began with the Community Reinvestment Act of the Carter administration in 1977 and amplified by Clinton in 1995. This encouraged loans to people with no money down, no assets, and no income. It also created the Community Development Financial Institutions Fund, which has been abused to support the activities of ACORN and its fraudulent voter registration drives. Incidentally, ACORN was also Obama’s first employer. Freddie and Fannie, operating under the goals of this Act, hid their losses through massive corruption. As they cooked the books, they funneled large donations into Congress to fend off oversight and reforms attempted by Bush in 2001 and 2003, and later by McCain in 2005. The second largest recipient of those corrupt donations was Barack Obama, and after only three years in office.

As Burrell notes, the legal system the Congress has created is one ideally designed for organized crime—not free markets. It has created a perfect economic storm that threatens to engulf the whole world. Those responsible for leading us here, especially Sen. Obama, who now presumes to lead us as president, should be held accountable for their reckless and irresponsible actions.

Getting the Government We Deserve: What The Government Should Do And Which Candidate Will Do It

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

Honorable friends,

Yesterday, I was chatting about the state of our nation with a friend of mine serving as an Army Captain in Iraq. When I asked how he thought the elections would turn out, he made an ominous statement: "People generally get the government they deserve." Goodness help us if that is true. Just look at what our government is doing right now!

To perhaps no one's surprise save Congress and the Fed, the market sank still further yesterday and today. The Fed has begun to authorize up to $1 trillion to be used to help 'stabilize' the commercial paper markets and short term loans. Money Morning's Shah Gilani has a good explanation of this problem. He also has a bit to say on why the new rate cut won't be effective. Meanwhile, Speaker Nancy Pelosi is now trying to push another $150 billion dollar 'stimulus' spending package. This bailout, she says, would be sent to help individual taxpayers. Do not expect it to stop there, though. AIG has already spent its way through almost all of its bailout money, and as we have already pointed out, the latest $850 billion bailout was nowhere near enough to cover all the bad debt sitting on the market, so we can expect another massive bailout package, this time probably including a citizen's stimulus check, sometime shortly after the elections. Much as the Speaker, Congress, and the President seem to think this is helpful, though, nothing could be further from the truth.

After my last few posts deriding the bailout, I received several letters asking what I thought the government should be doing to help. After all, these problems are severe and the collapse of the commercial paper market sounds especially dangerous. Isn't it good that the government is propping it up as a last resort? No, and it won't work. As I have stated before, this massive spending, none of which we actually have, just drives up inflation and devalues the dollar. It also massively increases our debt. That debt is already so large, though, that it is becoming clear that the only way we can pay it off may be to inflate it away. That reality is weighing heavily on our lenders, and they are far less willing to lend to us at all. Of course, that means inflation (money printing) is the only alternative we have to pay for these expenditures.

We are already dangerously close to collapsing the value of the dollar through inflation. Lower interest rates much more and that is exactly what will happen. Raise interest rates, though, and we will cripple the financial markets as the costs of doing business climb. Yet, we have to do one of the two in order to continue making these bailouts and propping up failed institutions. Of course, that also continues to lock up our capital in poisonous systems. By pouring money into these institutions, we prolong their existence and prevent their assets from being sold off, allowing them, over time, to slowly try to remove the poisonous assets (derivatives and other bad mortgage backed securities) from their books. Naturally, that means we often have to wait years, and continue to spend trillions, to facilitate that unnatural process. We then have to spend more years recovering from the inflationary damage we have done. There is an alternative though.

The government could do nothing at all. Faced with the unpleasant choice above, the government could simply stand back and let the market play out. Would there be widespread financial hardship as the market contracted? Absolutely. The failing entities would be torn apart, their good assets would be sold off to other, more stable and better run institutions while their bad assets were purged from the market. I stated in a prior post that money would be pulled back into savings and increase domestic capital. After some initial shocks and job losses, the market would readjust and begin to function far more healthily than it was before such a jolt. Best of all, this process could take as little as a few months. Thus, our economic recession could actually be reduced in duration and severity simply by doing nothing at all. The process of these recession and depression cycles, and what we can learn from them, are analyzed in depth by Murray N. Rothbard at the Ludwig von Mises Institute of Austrian School (free market) economics. Having seen how government actions actually worsened the crises in the Great Depression and other times of financial hardship, one would think Congress might start heeding the warnings of the Austrian School Economists. So far, though, they do not seem to be paying attention.

Our presidential candidates are not much better. However, there is some hope with McCain. According to Austrian School economics, if government wants to do anything at these tough times, it should work to reduce inflation, cut spending, and lower taxes to increase economic incentives for investment. McCain's proposals match those recommendations fairly well. He has called for a freeze on all unessential government spending. Though it is unlikely he will be able to classify much as 'unessential,' any success he has will be helpful. He has also called for an end to earmark spending, and would lower taxes across the board. This would also be helpful.

Obama's plans stand in stark contrast. He has called for spending for several new or expanded social programs, not one of which he has been willing to cut or drop. He voted against a bill prohibiting earmark spending during this last term in the senate. As for his tax plan, while he would lower taxes for most individuals, his hugely increased taxes (50%) on any business taking in over $250,000 per year in revenue (not profit) would be extraordinarily harmful to the economy as it would include more than 70% of all business. Compare the plans yourself at the Tax Policy Center.

Despite problems on both sides that leave me with little faith that either candidate would do much to actually help the economy, it is fairly clear to see which candidate would do the most damage to it. Barack Obama's commitment to increased spending and higher taxes, not to mention his dangerous rhetoric attacking free trade, makes him an economic nightmare for the United States. John McCain, on the other hand, by cutting spending and lowering taxes, may succeed in sparing us from a prolonged depression.

I know there are many who disagree, who would like to believe in Barack Obama's fine rhetoric and who feel that he is as inspiring as my recommendations are austere and dismal. I was told just yesterday that for the government to do nothing would be heartless, and that the people need to feel that their government is involved to protect them. Thus, to conclude, I quote Ayn Rand once more on the dangers of ignoring economic reality for what feels good:

"[W]hen we'll see men dying of starvation around us, your heart won't be of any earthly use to save them. And I'm heartless enough to say that when you'll scream, 'but I didn't know it!' - you will not be forgiven." Atlas Shrugged (New York: Signet, 1985), 385.

As my friend said, "People generally get the government they deserve."

Sarah Palin: A Change More Profound than Giving Speeches

By Julian Dunraven

If this election is really all about change, then November will offer voters a choice between candidates who like to talk about change, and candidates who live for change.

On the left, we have Sen. Barak Obama who, in his extremely short tenure in the U.S. Senate, has never once broken with his party's agenda to champion needed reforms. For his running mate, he has chosen Sen. Joe Biden, a bastion of the liberal establishment for the last 35 years.

On the right, we have Sen. John McCain, who has made a career of going against anyone he thought was wrong--even if that occasionally includes members of his own party. As his running mate, he has chosen Gov. Sarah Palin, who has already proven that she is a consummate and principled reformer. She took on some of the most powerful members of her own party--including Sen. Ted Stevens--to fight corruption and bring ethics and accountability back to government. She slashed budgets, cut taxes and even sold the governor's private jet on E-Bay to bring fiscal responsibility back to government. And unlike so many modern politicians who like to talk about values but rarely live by them, Gov. Palin doesn't just say she is pro life and pro-family--she chose to have her youngest baby even though she knew he would have Down Syndrome, and she has been incredibly supportive of her daughter, who is also choosing to have her baby--despite the difficulties of young motherhood.

Gov. Sarah Palin is a remarkable woman who somehow manages to impress both fiscal and social conservatives at the same time. I can't remember the last time Dr. James Dobson and I agreed on anything but the quality of the weather, yet we are both excited about Gov. Palin and I think the reasons for that are clear: she represents what the Republican Party, at its best, used to be, what it should be, and what it will be again.

Change is coming, but not with Obamamania. Long after that fever breaks and passes, the true reformers, John McCain and Sarah Palin, will be hard at work restoring the glory of this country which Congress and Bush have so badly tarnished.