Liberty Maven

D o w n s i z e r - D i s p a t c h

Quote of the Day: “Under democracy, one party always devotes its chief energies to trying to prove that the other party is unfit to rule - and both commonly succeed, and are right.” Source: “Minority Report” (The Johns Hopkins University Press, 1997 [1956]), p. 222

Subject: A state of permanent preparedness for impeachment

It’s Election Day. What should we say about it? We’re tempted to declare it a day of mourning, but instead, we’re going to argue that today is the day to adopt a state of permanent preparedness for impeachment.

As of yet, neither a Democrat nor a Republican has been elected President. That outcome will be revealed later today. But before that happens, we should commit ourselves to closely monitor the actions of the new President, and to be ready to call for his impeachment, should that become warranted.

We should be prepared to do this regardless of partisan loyalties.

What warrants impeachment? Different people will have different standards. We plan to maintain a running “bill of impeachment,” listing broken laws, Constitutional violations, and abuses of power. It will be up to you to agree or disagree with the items we choose to list, and to decide whether or not any one item or group of items justifies impeachment.

It’s possible, given your level of sensitivity, that the new President could do something on his first day that would immediately warrant impeachment in your eyes, or that he will never do enough bad things to justify such an action.

The call will be yours.

Some people reasonably object that impeachment is too vulnerable to partisan ax grinding. There are also many things for which a president could be impeached of which the impeachers themselves will be guilty. It is precisely these concerns that prevented us from advocating the impeachment of President Bush. But . . .
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D o w n s i z e r - D i s p a t c h

Quotes of the Day:

“If the court grants our request … then if any law enforcement officer sees a Mongol wearing his patch, he will be authorized to stop that gang member and literally take the jacket right off his back.” - U.S. Attorney Thomas O’Brien

“The government can’t ban confederate flags, swastikas, or klan robes, and it sure as hell can’t ban the display of the Mongols’ logo.” - Marc J. Randazza

“What if the government had decided that, because of the Watergate scandal, nobody could use the word Republican again? - Zeichner Ellman

Subject: Federal hordes pillage Mongol property

The Justice Department indicted 79 members of the Mongol Nation Motorcycle club for racketeering on October 21. The indictment included federal seizure of the “Mongols” trademarked name.

The case hasn’t even gone to trial yet , but U.S. District Judge Florence-Marie Cooper has authorized the seizure of the defendants’ . . .

* Clothing, motorcycles, and other property bearing the Mongols trademark.
* Any similar property bearing the trademark that belongs to the defendants’ “agents, servants, employees, family members, and those persons in active concert or participation with them.”

In other words, many people who weren’t even indicted will have their property seized.

This ruling has serious problems . . .

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D o w n s i z e r - D i s p a t c h

Quote of the Day: “When I was young American politics were fairly straightforward: conservatives let you keep all your money in return for telling you how to live your life, while liberals let you live as you pleased in return for all your money. Now the only difference is whether they want your money or your life first.” — D.A. Ridgely

Subject: Overcoming the “Charlie Brown Syndrome”

When people learn I’m working to downsize DC they assume I care about the coming election. They say things like, “This must be your busy season!” Actually, it’s our slow season. Our growth statistics tend to drop during elections.

People are distracted by the sport of the contest, and by the hope that things will be different this time. But this is like thinking Lucy will finally let Charlie Brown kick the football. You’ve got to hand it to Charlie; he’s not a quitter.

But given the evidence, maybe he should be.

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D o w n s i z e r - D i s p a t c h

Quote of the Day: “Bad ideas can only bear the weight of reality for so long.” — Greg Jesson

Today we’ll compare the cases of Alan Greenspan, Ron Paul, and John Stossel, beginning with this . . .

If you oppose fiat currency and centralized government banking, and would like to abolish the Federal Reserve and legal tender laws in favor of free market banking and free market money . . .

And you think the best way to achieve these things is to put the right people — people who believe as you do — in positions of power, then . . .

It would have been reasonable to assume, prior to seeing him in action, that Alan Greenspan was the “right person” to head the Federal Reserve.

You could have justifiably assumed, based on Greenspan’s previous writings and statements, that he would use his position to not only control the damage done by the Fed, but also to argue for its abolition.

None of these things happened. Instead, the opposite happened. Greenspan betrayed every economic principle he had previously professed. Putting a presumed “right person” in a position of power did not have the right result.

To contrast with this example we can compare the case of Ron Paul. Ron Paul has always said the right things, and done the right things too.

Two different “right people” have produced two different results. What are we to conclude from this?

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D o w n s i z e r - D i s p a t c h

Quote of the Day:
“Power tends to corrupt, and absolute power corrupts absolutely.”
– Lord Acton

Subject: Greenspan’s Final Betrayal

In 1967 Alan Greenspan wrote an essay titled “Gold and Economic Freedom.”

If you read the essay you’ll see in the intro that he once told a Senate committee he favored an end to the Federal Reserve and a return to gold money.

When Greenspan gained the power to run the Federal Reserve he changed his tune. He stopped singing the sound-money song, though when pressed in interviews he would still say that gold was the most stable money system.

If you accept what Greenspan said in interviews, then he still believed in sound-money and he still opposed centralized banking. But his actions betrayed his professed beliefs. He was now the Counterfeiter-in-Chief, and he played the role with gusto. He inflated and deflated the money supply, doing exactly what he had criticized before. As a result . . .

Alan Greenspan was one of the many contributors to the boom and bust cycle in general, and to the current boom and bust in particular. Greenspan clearly knew better, so what are we to conclude from his actions other than that . . .

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D o w n s i z e r - D i s p a t c h

Quote of the Day:

“…the House of Representatives will, within a single century, consist of more than six hundred members.”

– Founding Father James Wilson, November 30, 1787

Subject: Are you being represented?

Look what’s happened to representative government . . .

* There were 105 House seats in the 1790’s – one for every 39,000 citizens

* House seats were limited to 435 in 1912 — one for every 215,000 citizens

* Today, House districts represent over 700,000 people

* House districts are now 18 times larger than they were in 1790

Many voting restrictions have been removed, but are we better represented now than in the 1790’s? House districts are now so large that . . .

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D o w n s i z e r - D i s p a t c h

Downsize DC President Jim Babka will be doing radio interviews tonight and tomorrow. For more information, see the P.S. section.

Quote of the Day:
“There are 10^11 stars in the galaxy. That used to be a huge number. But it’s only a hundred billion. It’s less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.”
~Richard Feynman, physicist, Nobel laureate (1918-1988)

. . . or better yet, government numbers!

Subject: Will the government repudiate its debt?

The government caused the housing bubble. Even the editorial page of the Washington Post agrees.

But when the bubble burst, something strange happened. People fled for safety to . . .

The arms of the government.

Investors took out hundreds of billions of dollars from the stock market and re-invested it in government securities. This flight to Treasuries was so pronounced that the yield became negative, when adjusted for inflation!

People are actually paying the government to borrow their money, because of a government-caused problem!

Of all the absurdities of the current mess this is perhaps the most symbolic.

We’ve said it before, we’ll say it again: This is how government works. It causes disasters and then benefits from those disasters. Governments thrive on failure, and invest in it heavily. Government is the Failure Sector of our economy.

Here’s how bad it is . . .

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D o w n s i z e r - D i s p a t c h

Quote of the Day:
” … the problem with the U.S. economy, more than lack of regulation, has been government’s failure to control systemic risks that government itself helped to create. We are not witnessing a crisis of the free market but a crisis of distorted markets.”
– from an editorial in (surprise) the Washington Post

Subject: Too much is never enough for Congress

We’ve been hammering on the Republicans for years. They’ve richly deserved it. Soon it will be the Democrats turn, and they too will richly deserve it. We’re beginning to see what Democratic control will look like. It will look a lot like Republican control. Meet the new boss, same as the old boss.

The first evidence for this is the new “stimulus” package being pushed by the Democratic leadership, with sideline cheer-leading from America’s Counterfeiter-in-Chief, Fed Chairman Ben Bernanke.

Economic stimulus, in the mind of the politician, means taking money away from productive purposes and spending it in ways that benefit politicians. They call it stimulus. We call it robbery.

The first “stimulus” package, earlier this year, was a classic example. The government borrowed billions of dollars that it then gave to taxpayers. The politicians got to look like Santa Claus. This was supposed to stimulate consumption. Perhaps it did. But the wave of consumption came and went, leaving taxpayers to pay the interest on the resulting debt.

Even worse, the money the politicians borrowed was no longer available to capitalize businesses, so now the politicians are doing that too. They’ve borrowed more money, upon which YOU will again pay the interest, and then invested it in major banks and auto makers.

Notice something about these “investments” — they’re mostly going to failed firms and losing propositions. Make no mistake — government is in The Failure Business.

Is this how you would invest your money? Wouldn’t you fire an investment adviser who did such a thing? Well, so much for prudence — most of the “investment advisers” in Congress are about to be rehired.

The result of this recent orgy of “political investing” has been the greatest expansion of the national debt in American history — all of it directed at rewarding failure at the expense of success. This is too much. But too much is never enough for the politicians. Now comes “Stimulus Package II.”

“Stimulus Package II” bears all the hallmarks of Democratic “investing.” Both parties tax and borrow to buy the support of major constituencies. You can tell whom these parties really represent by watching where the money goes. Look where the billions allocated in “Stimulus Package II” will go . . .

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D o w n s i z e r - D i s p a t c h

Quote of the Day:
George Kaufman, a finance professor at Loyola University Chicago, is skeptical. “The last refuge of a scoundrel regulator,” he says, “is to shout ’systemic risk.’” Usually, the alarm is false. He notes that aside from inter-bank lending, the credit markets were functioning tolerably well at the height of the crisis. Rates on 30-year mortgages actually dropped last week.
– from a column by Steve Chapman, September 25, 2008

Subject: Do you know who the “Primary Dealers” are?

There’s a lot of evidence that we’ve been scammed. Treasury Secretary Paulson and Federal Reserve Chairman Bernanke told us they needed to spend $700 billion of your money to buy supposedly toxic assets that were crippling major firms and for which there was no immediate market. This was a lie even when they said it, because . . .

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D o w n s i z e r - D i s p a t c h

Quotes of the Day:
“To better understand moral hazard, consider the case of a gambler going to a casino. If he bears the losses, his bets will be constrained by that risk. If someone were to guarantee him against loss, but allow him to keep the profits, the gambler would have an incentive to make the riskiest possible bets. He gains all the profits but bears none of the losses. One might designate such a system as “casino capitalism.” Current Fed policy has encouraged casino capitalism in the housing market.
– Gerald P. O’Driscoll Jr.

“When . . . moral hazard is present, credit flows rapidly into inelastically supplied assets, such as real estate. Rapid appreciation is the result, until the inevitable albeit belated regulatory crackdown stops the flow of credit and leads to an asset-price crash.”
– Ben Bernanke, Federal Reserve Chairman

Subject: The Fed is destroying your money, RIGHT NOW

In a continuing effort to rescue and reward those who made bad financial decisions, the Federal Reserve is making you pay yet again, in another way, on top of the Big Bailout.

Apparently, the $700 billion Big Bailout wasn’t a large enough payout to America’s poorly run companies. Still more of your hard earned money is needed. The federal government will take this new pound of flesh in the form of a massive inflation tax.

You pay an inflation tax whenever the Federal Reserve creates new dollars. This causes every dollar you hold to be worth less than it was before.

Those who get this new money first will become vastly richer, at your expense, because they’ll get to spend the money before it causes prices to rise.

Who gets the money first? The banking system — the very institutions that profited from the government policies that inflated the housing bubble. First they profited from the bubble, and now they’re going to profit from the bubble bursting too.

How many new dollars has the Fed created? Nearly half a trillion dollars in the space of just two weeks. This increase in the money supply is unprecedented.

The Federal Reserve is taking this action because the Big Bailout was constructed on an inherent contradiction. How could the government solve the supposed problem of tight credit by borrowing $700 billion to bailout the credit system? Money borrowed by the government cannot be borrowed by others, which must inevitably tighten credit in the private economy. Of course . . .

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