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.
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.
Well, it was only a matter of time before this happened. Actions such as these are the reason the word “cynic” was created. Ron Paul’s HR.1207 (S.604 in the Senate) which would require a complete audit of the Federal Reserve has 303 cosponsors in the House and 30 in the Senate. Yesterday, a new bill was introduced by obviously bought and paid for lawmakers that is a “waterboarded” version of Ron Paul’s bill.
“The Federal Reserve Accountability Act” was introduced by Democrat Jeff Merkley and Republican Bob Corker yesterday. The bill takes the cake out of Paul’s bill and leaves nothing but the frosting.
The bill avoids review of the Fed’s regular lending programs, such as the longstanding discount window, and its interest-rate decisions.
So, it excludes the fundamentals, the very actions 75% of the American people say they want to know about. The attitude of these so-called representatives is reprehensible.
I’m willing to bet that Merkley and Corker have some large donors in the banking industry.
This may be expected, but it doesn’t mean those of us that support a full audit as outlined in Ron Paul’s bill should just lay down. If anything, the fight has just begun. Please call your representatives and make sure they understand the difference between the full audit and the waterboarded audit introduced yesterday. Tell them that you will not accept anything other than a full audit. It is time to take off the gloves and fight. It’s going to get dirty in DC. Well, more dirty than it already is.
This morning Ron Paul appeared for an interview on the state of the economy and the Goldman Sachs “bailout” on CNN “American Morning”.
As usual Dr. Paul defends the free market even when asked rather convoluted questions about “how much” the government should support the market. I found the interview a bit odd. In that both the host and Paul were trying to find some kind of middle ground between a government managed economy and a free market position. The common point implied that the government shouldn’t be bailing out these big Wall Street firms like Goldman Sachs yet they continue to use tax payer money to do so.
Check out the video below. NOTE: The audio/video sync appears to be off as is custom on some videos processed by Youtube.
BETHLEHEM, PA – US Congressional Candidate Jake Towne related Thursday to a group of Moravian College students that the government’s stimulus plan simply isn’t working in the Lehigh Valley. He also covered the basic economic reasons behind the failure and a better alternative.
While economic planners predict the end of downturn in Q4 2010 and the creation of 3.675 million jobs, Recovery.gov demonstrates that only 0.030 million jobs have been “created/saved” since the plan began in Q1 2009. Only 495.2 jobs are reported as “created/saved” in all of Pennsylvania. including zero Lehigh Valley jobs and $0 spent. Out of the $2.05 billion allotted to Pennsylvania, only 0.15% has been allotted to the Lehigh Valley, or $3.2 million.
To date, Recovery.gov reports zero Lehigh Valley jobs “created/saved” and $0 spent. The allotted funds for the $3.2 million are:
$154,817 allotted to Advanced Environmental Solutions for soil and groundwater contamination testing
$1,129,049 to the City of Allentown for Homelessness Prevention and Rapid Re-Housing
$737,917 allotted to the City of Allentown for Community Development Block Grant
$687,480 to the City of Bethlehem for Homelessness Prevention and Rapid Re-Housing
$449,326 to the City of Bethlehem for Community Development Block Grant. Funds allocated to provide lighting on 4th Street and a 12-foot pedestrian and bicycle path on a former railroad line.
“It has been argued that full disclosure of details of funding facilities like TALF and PDCF, that enabled massive bailouts of Wall Street, would damage the financial position of those firms and destabilize the economy. In other words, if the American people knew how rotten the books were at those banks and how terribly they messed up, they would never willingly invest in them, and they would fail. Failure is not an option for friends of the Fed. Therefore, the funds must be stolen from the people in the dark of night. This is not how a free country works. This is not how free markets work. That is crony corporatism and instead of being a force for economic stabilization, it totally undermines it.” — Congressman Ron Paul
The Federal Reserve has manufactured and spent hundreds of billions of dollars to bail out and prop-up irresponsible financial firms. These firms have received huge benefits at your expense, but . . .
You’re not allowed to know who got how much, and under what terms. This information was NOT heard at the hearings about the “Audit the Fed” bill. Therefore, the only way to learn the answers is to . . .
Use your personal comments to say something similar to what I’ve said in my own letter to Congress . . .
The “Audit the Fed” hearings proved that the Federal Reserve will not reveal its activities without an audit. A majority of the House has co-sponsored the Audit the Fed bill. This leads me to wonder what dark forces are keeping it from coming to a vote. I elected you to represent me, so please do your job. Force the leadership in the House and Senate to bring this bill to a vote! You must lead your “so-called” leaders. Make it happen! I URGE YOU TO DO IT NOW!
Ron Paul described in this week’s Texas Straight Talk column the recent hearing for HR1207 and the witnesses who testified on both sides of the issue. Here is part of it:
If the Fed gave its actual arguments against a full audit, they would not have mentioned anything about political independence or economic stability.Instead they would admit they don’t want to be audited because they enjoy their current situation too much.Under the guise of currency control, they are able to help out powerful allies on Wall Street, in exchange for lucrative jobs or who-knows-what favors later on.An audit would expose the Fed as a massive fraud perpetrated on this country, enriching a privileged few bankers at the top of our economic food chain, and leaving the rest of us with massively devalued dollars which we are forced to use by law.An audit would make people realize that, while Bernie Madoff defrauded a lot of investors for a lot of money, the Fed has defrauded every one of us by destroying the value of our money.An honest and full accounting of how the money system really works in this country would mean there is not much of a chance the American people would stand for it anymore.
Alan Grayson grilled Federal Reserve General Counsel relentlessly today during the Financial Services Committee’s hearing on Ron Paul’s bill to audit the Federal Reserve (HR.1207). I almost felt bad for the diminutive lawyer. I’m disappointed that Bernanke himself was not available for the hearing, but the testimony and questioning of Tom Woods was quite interesting and revealing.
More later, but for now watch Grayson hammer on the Fed lawyer. To see more highlights from the hearing see this article.
Michael Moore utilizes a word in the title of his new movie to elicit praise and respect from his Left-leaning fans and derision from his Right-leaning critics. Unfortunately for all of us, he uses the wrong word to describe his movie’s subject matter. It’s not capitalism, silly man; it’s corporatism. Therefore, I refuse to call his movie anything but what its true title should be: “Corporatism, A Love Story“.
Let’s head to Merriam-Webster to clear this up. Which one of the following best describes America today?
capitalism: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.
corporatism: the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction.
The correct answer is, of course, corporatism. A key phrase in the definition of capitalism is “by investments that are determined by private decision“. How do government bailouts of private industry reconcile with this definition? They don’t. And if you think this is a recent phenomenon then I urge you to consider the Savings and Loan bailouts back in the 80’s and 90’s.
Another assertion in the definition of capitalism that does not compute in America today is that the prices, production, and distribution of goods are supposed to be determined by a free market.
Each of Walter E. Williams’ weekly syndicated columns are fantastic, but the most recent one (entitled Lying Propaganda) is particularly worth your time. He refers to Michael Moore’s upcoming movie (”Capitalism: A Love Story”) and decides it’s a good idea to put out a bit of “defensive mental preparation“, as it puts it, in order nip in the bud the simple lie that we have a system of [pure] capitalism in this country and that such a system is the source of the world’s troubles.
There has never been a pure free market capitalistic system just as there has never been a pure communist or socialist system, where there is government ownership of the means of production and each individual has equal access to society’s resources. However, we can rank economies as to whether they are closer to capitalism or closer to communism or socialism. If one ranked countries according to whether they were closer to the capitalistic end of the spectrum or the socialistic or communistic end, then ranked countries according to per capita GDP and finally rank countries according to Freedom House’s “Map of Freedom in the World,” he would find a pattern that is by no means a coincidence. The people in those countries closer to the capitalist end of the economic spectrum have far greater income and enjoy greater human rights protections than those toward the socialist and communist end.
According to the London Telegraph article, Moore’s film features priests who say capitalism is anti-Christian by failing to protect the poor. This is pure nonsense and revealed as such by asking, “If you’re an unborn spirit, condemned by God to a life of poverty but allowed to choose the country in which to be poor, would you choose a country near the communist end of the economic spectrum or the capitalist end?” If you chose the United States, you’d find that according to the government surveys, the typical “poor” American has cable or satellite TV, two color TVs, and a DVD player or VCR. He has air conditioning, a car, a microwave, a refrigerator, a stove, and a clothes washer and dryer, and whether he has health insurance or not, he is able to obtain medical care when needed. Try to find that in Cuba, Russia, China or North Korea. If we buy into the nonsense of Moore’s priests, the world’s poor people are incredibly stupid. Whether fleeing legally or illegally, their destination country is likely to be closer to capitalism than their departure country.
Liberty Maven
by Peter Schiff, president of Euro Pacific Capital and author of Crash Proof 2.0: How to Profit from the Economic Collapse
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