Liberty Maven

by Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0: How to Profit from the Economic Collapse

As the unemployment rate crossed the double digit barrier for the first time since Michael Jackson learned to moonwalk, President Obama announced that he will convene a “jobs summit” to finally bring the problem under control. Using all the analytic skill that his administration can muster, the President is determined to figure out why so many people are losing their jobs and then formulate a solution. That’s a relief; for a while there, I thought we were in real trouble! In fact, the absolute last thing our economy needs is more federal government interference. If Obama really wants to know what’s behind entrenched joblessness, he should start by looking at the man in the mirror.

Obama is pursuing, with unprecedented vigor, the same policies that have for decades undermined our industrial base and yoked us to an unsustainable consumer/credit driven economy. This doubling down on Washington’s past failures is destroying jobs at an alarming rate. Today we learned that the September trade deficit surged by 18.2%, the largest gain in ten years. Much of the deficit resulted from Americans spending Cash-for-Clunkers stimulus money on imported cars – or “American” cars loaded to the sunroof with imported parts. In exchange for more domestic debt, we have succeeded only in creating foreign jobs.

An article in this week’s New York Times by veteran writer Louis Uchitelle confirmed a fact that I have been alleging for years. Uchitelle pointed out that foreign outsourcing of component manufacturing has led to consistent overstatement of U.S. GDP and productivity. The connection goes a long way to explain why we keep losing jobs even as GDP is apparently expanding.

As our economy becomes less competitive due to higher taxes, burdensome and uncertain regulations, and capital flight, more manufacturing and services will be outsourced to foreign firms. However, the flaw in GDP calculation allows the output of those foreign workers to be included in our domestic tally. Since we count the output but not the worker responsible for it, government statisticians attribute the gains to rising labor productivity. To them, it looks like companies are producing more goods with fewer workers.

The reality is that we are producing less with fewer workers. The added “productivity” comes from higher unemployment and larger trade deficits. This is a toxic formula that will have lethal economic consequences.

Read More »

D o w n s i z e r – D i s p a t c h

Ron Paul took his anti-Fed, anti-regulatory, pro-transparency message to the CNBC Squawk Box crew today. This is another winning appearance from Ron Paul. He outlines his views fairly well and makes extremely good arguments for his side of the Fed transparency debate.

His appearance was so positive that they end up telling him that he should come on the show as a special guest (as they have from time to time) for the full 2 hours of the show. Paul makes a joke in response. Check it out below.

We hear stories so often about how secret back-room deals are struck in order “secure” votes for a particular piece of legislation that the following is hardly news.  But if you’re even slightly masochistic, read on.  It certainly made me sick:

Rep. Dennis Cardoza just couldn’t take yes for an answer.

Democratic leaders thought they knew how to lock in his vote. They’d add a last-minute provision authorizing up to $500 million to create medical centers that could benefit a college in Cardoza’s California district.

He’d vote for the health reform bill.

Usually that’s enough: Give a lawmaker his “ask,” and get his vote. But according to several sources familiar with the situation, Cardoza wanted more — a guarantee that the program would actually be funded — before he would agree to cast a “yes.”

He spent much of Friday and Saturday on the phone with Rob Nabors, the No. 2 man in the White House budget office, and a good portion of Saturday holed up in House Speaker Nancy Pelosi’s office.

Nabors, Pelosi and countless other administration and congressional officials worked to seal the deal. Cardoza voted for the bill and issued a Saturday press release proclaiming his victory for the local community.

The article continues on politico.com.

by John Browne – Senior Market Strategist, Euro Pacific Capital

Last week, the Fed extended its emergency economic powers, which include lending to the money center banks at zero interest. A few days later, the Fed’s plan was reinforced by similar announcements from the rest of the G-20. The road map the authorities are providing for the near-term global economy can’t be much clearer. There will be no cessation of the seemingly endless supply of cheap dollars being pumped into the financial system. With the world apparently in complete accord on the need for ever more liquidity, stock markets are staging an easy-money rally. The main line media is almost euphoric. But what should investors make of this seemingly good news?

This time last year, the world faced a meltdown of its financial systems and a potential depression. Fed Chairman Ben Bernanke, a renowned expert on the Great Depression, coordinated an international rescue of the toxic financial system. Although the bill for these operations has yet to come due, almost all agree it will prove costly to present and future generations. For now at least, the most significant impact of these policies has been the creation of a liquidity bubble in stocks and a surge in commodities.

However, any efforts to reduce these stimuli will result in an immediate correction toward our previous depressionary trajectory. Acceptance of this uncomfortable truth is a political third rail. Therefore, it is highly unlikely that any major government will change course. Rather, the change will be thrust upon them.

It could have been argued that some of the actions taken last year were worth the cost if they had corrected the dangerous deficiencies in the financial system. But after a year, what has changed? The same behemoth banks remain, but even larger and yet more demanding of federal salvation. That particular risk has been increased rather than reduced.

Read More »

Each time a new member of the U.S. House Representatives is sworn into office, he or she is administered the following oath:

I, (name of Member), do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign or domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.

Similarly, each new Senator must submit the following oath:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.

Despite this, almost none of the 535 members of Congress take this oath seriously.  Either they are atheists who do not care about the religious and humanistic consequences of violating these oaths, or they have subscribed to the faulty notion that the Supreme Court’s misinterpretation of the Constitution somehow trumps the words of the Constitution itself — which of course is impossible because it’s the Constitution that gives the various parts of government, including the Supreme Court, its powers, not to mention the fact that this governing document declares itself the Supreme Law of the Land.  Indeed, Article VI of the Constitution explicitly states:

This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

So given the clear fact that the Constitution, as written, is the ultimate rulebook, and members of Congress swear to “support and defend” the Constitution, it certainly gives a rational person pause when the Speaker of the U.S. House of Representatives not only pushes a blatantly unconstitutional bill (in the form of health care “reform”) but virtually laughs in the face of a reporter who asks “Where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?” Without blinking, Pelosi’s immediate reply was an incredulous, “Are you serious?”

Walter E. Williams explores this exchange in his latest commentary entitled, “A Minority View: Constitutional Contempt”:

…Later on, Pelosi’s press spokesman Nadeam Elshami told CNSNews.com about its question regarding constitutional authority mandating that individual Americans buy health insurance. “You can put this on the record. That is not a serious question. That is not a serious question.”

Suppose Congress was debating a mandate outlawing tea-party-type protests and other large gatherings criticizing Congress. A news reporter asks Nancy Pelosi where specifically does the Constitution grant Congress the authority to outlaw peaceable assembly. How would you feel if she answered, “Are you serious? Are you serious?” and ignored the question. And what if, later on, someone from her office sent you a press release, as was sent to CNS News, saying that Congress has “broad power to regulate activities that have an effect on interstate commerce,” pointing out that demonstrations cause traffic jams and therefore interferes with interstate commerce?

Continue reading Walter E. Williams’ article here.

“Soldiers’ supreme wish is to avoid war, for the costs are inevitably paid with their blood and brains.“ – Jake Towne

November 11, 2009 11:11 AM

Today, many Americans take a moment to remember the veterans that have fulfilled their oaths to “support and defend the Constitution of the United States, against all enemies foreign and domestic.”  All too many have paid the ultimate price, many defending their fellow soldiers, and many believing they were defending their countrymen.  I am sure that this year the all-too-fresh Fort Hood tragedy will be on the minds of all veterans.  As I stated in the campaign’s veterans plank:

“Service members shoulder a heavy burden when they volunteer to risk their lives in defense of our country. They perform a necessary function in our society and for their service veterans receive deserved benefits and gratitude. However, the greatest way to honor them is to keep them out of unnecessary conflict. The only just war is one carried out in self-defense, as a non-aggressor, and as a last resort.

“It’s important that we have a strong military to deter attacks against the our country and protect it when attacked. However, asking our young men and women to participate in unjust war is a moral abyss that we as a country should never leap into. If we aspire to be a just nation ruled by laws we must resolve to never ask our military men and women to engage in unconstitutional warfare and nation-building missions.”

Honor our soldiers abroad by bringing them home to protect our borders.  Never EVER accept the shipping their bodies and brains to a war zone without a constitutional declaration of war.  Read More »

Ron Paul’s bill to audit the Federal Reserve (HR.1207) has over 300 cosponsors, well above 2/3rds of the House, including every single House Republican. A few days ago an opinion piece appeared in the Wall Street Journal arguing that the Federal Reserve is already transparent enough and that a full audit would be overkill and dangerous. They write:

Economic theory and massive amounts of empirical evidence make a strong case for maintaining the Fed’s independence. When central banks are subjected to political pressure, authorities often pursue excessively expansionary monetary policy in order to lower unemployment in the short run. This produces higher inflation and higher interest rates without lowering unemployment in the long term. This has happened over and over again in the past, not only in the United States but in many other countries throughout the world.

The Fed’s independence is critical to its credibility. During the financial crisis, this credibility allowed the Fed to take extraordinary action to prevent a possible depression without triggering inflation. But eventually the Fed will have to scale back its unprecedented monetary accommodation. When it does move to tighten monetary conditions, it must be allowed to do so without political interference.

This is a tired argument at this point. The bottom line, once again, is that the Fed cannot “maintain its independence” when it is not independent to begin with. It is politicized already and it is plainly obvious to most observers without an axe to grind. The fact that this opinion piece appears in the WSJ at all is evidence in itself of this. It’s always important to consider the sources. The authors of the piece are both “in bed with the Fed”, so to speak.

Anil Kashyup was “an economist for the Board of Governors for the Federal Reserve System. He currently works as a consultant for the Federal Reserve Bank of Chicago, and serves as a member of the Economic Advisory Panel of the Federal Reserve Bank of New York, and as a Research Associate for the National Bureau of Economic Research (NBER).” His faculty bio page is here.

Frederic Mishkin is a former member of the board of governors of the Federal Reserve (2006-2008). Perhaps more telling is the following juicy bit:

In 2006, Mishkin co-authored a report called “Financial Stability in Iceland”. The report maintained that Iceland’s economic fundamentals were strong. The report was commissioned by the Icelandic Chamber of Commerce in response to critical coverage of the Icelandic economy and certain Icelandic companies in the international business media.

Iceland subsequently experienced a spectacular collapse within a year of Mishkin’s good report.

So, considering the sources, this WSJ opinion piece should be ignored and ostracized as the comments on the article are already showing.

Many people just assumed that Rand Paul would be an afterthought going into the Kentucky GOP Primary against establishment favorite Trey Grayson. Many people were wrong.

Following the gigantic shift in poll numbers, showing that Paul now has a slim lead over Grayson in the contest, Dr. Paul is getting serious. He’s going to break some bread with the establishment. He’s going to meet with Senator Mitch McConnell.

(WHAS11) – The surprise candidate in Kentucky’s Republican U.S. Senate primary tells WHAS11 News he is reaching out to senior Senator, Mitch McConnell.

Rand Paul is a Bowling Green eye surgeon. His campaign’s poll numbers and fundraising success have stunned party leaders and it is early in the game.

So who is he and does he have a chance?

Most Kentucky political observers expected the democrats to duke it out in the senate primary while Republican Trey Grayson sat back and prepared for the fall campaign.

But Rand Paul and the sudden uprising of fiscal conservatism in the tea party movement appears to have changed all that.

Some people who have supported Rand Paul’s father, Ron Paul, had concerns that Rand would abandon his principles once (or if) he get to DC. Truth be told, it must be extremely difficult to resist doing so. But the younger Paul has the blood of his father coursing through his veins. He’s given no indication thus far that any liberty-loving principles will be abandoned. I expect that to continue right on through his coming 12 years in the Senate.

At this point no one except Paul and McConnell know what will be discussed at their meeting. Is Paul trying to win over the establishment to his anti-establishment ways? Was the meeting set up by McConnell to twist Paul’s arm toward the “center”, politically?

In any case, the meeting is an encouraging sign for Paul. If Paul didn’t raise over a million and follow it up with a jump in the polls this meeting would probably not be taking place. The bottom line is that Rand Paul has an “it” factor that many do not have. He’s likable. He’s pragmatic. He articulates his positions in a manner that would make his father jealous. He has the potential to take the cause of liberty to new levels of popularity.

With Ron Paul I was hoping against hope he would be our next President. With Rand Paul I am not merely hoping, I’m expecting him to win.

Check him out at RandPaul2010.com.

Judge Andrew Napolitano was the guest host on the Glenn Beck show again today, and he really knocked it out of the park with his introductory monologue.

Directly following his monologue he talks with authors, Tom Woods and Kevin Gutzman regarding the Constitution, enumerated powers, and nullification. This show is a must-see for all of us.

Watch the entire show below, but if you don’t have time then take 10 and watch the first segment. It makes me happy that Beck has obviously given the Judge near free reign about what guests appear on the show and the topics that are discussed.

When the Judge is host of the Glenn Beck show, the show is no longer the Glenn Beck show. It becomes Freedom Watch, the Judge’s current online only show.

Part 2 | Part 3 | Part 4 | Part 5 | Part 6