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Ron Paul, and why reality is immune to human fantasy

December 21st, 2011 2:51 am | by Marc Gallagher | Published in Constitution, Election, government spending, Maven Commentary, Politics, Ron Paul, Taxes | 1202721 Responses2011-12-21+07%3A51%3A07Marc+Gallagher

Conservative/Libertarian radio talk show host (in Baltimore) Ron Smith passed away this week from pancreatic cancer. He was an outspoken supporter of Ron Paul. The article announcing his death included some audio excerpts, including one on the 4 year anniversary of 9-11. In it he quotes Vernon Howard:

Reality is immune to human fantasy

This truism is no more prevalent than now as we witness Ron Paul’s rise in the polls in both Iowa and New Hampshire to front runner status. All of the usual pundits in the usual media outlets are attempting to discredit a potential Paul victory in Iowa by calling it meaningless. This is irritating and predictable; however, it gets worse. The governor of Iowa has now joined in on this fantasy. From Politico:

Leading Republicans, looking to put the best possible frame on a Paul victory, are already testing out a message for what they’ll say if the 76-year-old Texas congressman is triumphant.

The short version: Ignore him.

“People are going to look at who comes in second and who comes in third,” said Gov. Terry Branstad. “If [Mitt] Romney comes in a strong second, it definitely helps him going into New Hampshire and the other states.”

What country do we live in again? This ain’t America…. not even the America I was taught about in public school. Discrediting an election (caucus) merely because you disagree with the results is something Hugo Chavez does. It is not something we do in America. At least I thought we didn’t. Do these Ron Paul detractors really believe this behavior is acceptable? If the majority (or plurality) of people in your state vote for someone you don’t like how can you say it doesn’t count?

This effort at undermining their own process by making these comments has more danger of discrediting the election than Ron Paul winning. Hopefully Iowans and others see through this poppycock and vote without its influence.

The reality of Ron Paul should be no match for those naysayers living in fantasy land calling him an anti-semite, racist, and worse. It seems to me that once your foes start calling you names rather than debate you on your positions then you’ve already won.

During Paul’s 2008 campaign I wrote that I didn’t think America was quite ready for Ron Paul. Here in 2012, America just might be ready for him and the harsh reality he brings. We are going broke. We need to cut spending. We need to cut taxes. We need to bring our troops home from overseas to defend this country. We need to end all foreign aid. Yes, including Israel. Give them back their sovereignty.

If you fear a Ron Paul presidency just take a deep breath, calm down, and read the Constitution. That’s his platform. If you still think he’s too extreme then realize that there are 2 other branches of government that will be operating to limit his extremism. That’s a major reason we have the judiciary and legislature, checks and balances. If any other candidate wins, nothing will change. We’ll keep going down the spending death-spiral to our own demise. I’m not a big fan of demise. I’m voting for Ron Paul. Are you?

RIP Ron Smith.

Obama Gets Real

December 9th, 2011 8:04 pm | by Mike Miller | Published in Economics, government spending, Market Regulation, Obama, Peter Schiff | 119301Obama+Gets+Real2011-12-10+01%3A04%3A16Mike+Miller

by Peter Schiff, CEO of Euro Pacific Capital and host of the nationally syndicated Peter Schiff Show, broadcasting live from 10am to noon ET every weekday, and streaming at www.schiffradio.com

For most of his time as a national political figure, Barack Obama has been careful to cloak his core socialist leanings behind a veil of pro-capitalist rhetoric. This makes strategic sense, as Americans still largely identify as pro-capitalist. However, based on his recent speech in Osawatomie, Kansas, the President appears to have reassessed the political landscape in advance of the 2012 elections. Based on the growth of the Occupy Wall Street movement, and the recent defeat of Republicans in special elections, he has perhaps sensed a surge of left-leaning sentiment; and, as a result, he finally dropped the pretense.

According to our President’s new view of history, capitalism is a theory that has “never worked.” He argues that its appeal can’t be justified by results, but its popularity is based on Americans’ preference for an economic ideology that “fits well on a bumper sticker.” He feels that capitalism speaks to the flaws in the American DNA, those deeply rooted creation myths that elevate the achievements of individuals and cast unwarranted skepticism on the benefits of government. He argues that this pre-disposition has been exploited by the rich to popularize policies that benefit themselves at the expense of the poor and middle class.

But Obama’s knowledge of history is limited to what is written on his teleprompter. And his selection of the same location that Teddy Roosevelt used to chart an abrupt departure into populist politics is deeply symbolic in the opposite way to that which he intended. It is not by some genetic fluke that Americans distrust government. It is an integral and essential part of our heritage. The United States was founded by people who distrusted government intensely and was subsequently settled, over successive generations, by people fleeing the ravages of government oppression. These Americans relied on capitalism to quickly build the greatest economic power the world had ever seen – from nothing.

But according to Obama’s revisionist version of American history, we tried capitalism only briefly during our history. First, during the Robber Barron period of the late 19th Century, the result of which was child labor and unprecedented lower-class poverty. These ravages were supposedly only corrected by the progressive policies of Teddy Roosevelt and Woodrow Wilson. We tried capitalism again in the 1920s, according to Obama, and the result was the Great Depression. This time, it allegedly took FDR’s New Deal to finally slay that capitalist monster. Then, the account only gets more farcical. Apparently, we tried capitalism again under George W. Bush, and the result was the housing bubble, financial crisis, and ensuing Great Recession. Obama now argues that government is needed once again to save the day.

This view is complete fiction and proves that Obama is not qualified to teach elementary school civics, let alone serve as President of the United States. I wonder what other economic system he believes we followed prior to the 1890s and 1920s (and during the 1950s and 1960s) that that he now seeks to restore? Capitalism did not start with J.P. Morgan in 1890s or John D. Rockefeller in the 1920s as the President suggests. In fact, it was about that time that capitalism came under attack by the progressives. We were born and prospered under capitalism. The Great Depression did not result from unbridled capitalism, but from the monetary policy of the newly created Federal Reserve and the interventionist economic policies of both Hoover and Roosevelt – policies that were decidedly un-capitalist.

The prosperity enjoyed during mid-20th century actually resulted from the incredible progress produced by years of capitalism. Contrary to Obama’s belief, the New Deal and Great Society did not create the middle class; it was, in fact, a direct result of the capitalist industrial revolution. The socialist programs of which Obama is so fond are the reasons why the middle class has been shrinking. America’s economic descent began in the 1960s, when we abandoned capitalism in favor of a mixed economy. By mixing capitalism with socialism, we undermined economic growth, and reversed much of the progress years of laissez-faire had bestowed on average Americans. The back of the middle class is being broken by the weight of government and the enormous burden taxes and regulation place on the economy.

America’s first experiment with socialism, the Plymouth Bay Colony, ended in failure, and our most successful colonies – New York, Virginia, Massachusetts – were begun primarily as commercial enterprises. When the founding fathers gathered to write the Constitution, they represented capitalist states and granted the federal government severely limited powers.

Apparently, Obama thinks our founders’ mistrust of government was delusional, and that we were fortunate that far wiser groups of leaders eventually corrected those mistakes. The danger, as Obama sees it, is that some Republicans actually want to reverse course and adopt the failed ideas espoused by great American fools like George Washington, Thomas Jefferson, John Adams, and Benjamin Franklin.

The President unknowingly illustrated his own contradictory thinking with the importance he now places on extending the temporary payroll tax cuts. If all that stands between middle-class families and abject poverty is a small tax cut, imagine how much damage the far more massive existing tax burden already inflicts on those very households! If Obama really wants to relieve middle-class taxpayers of this burden, he needs to reduce the cost of government by cutting spending. After all, there is no way to pay for all the government programs Obama wants by simply by taxing the rich.

History has proven time-and-again that capitalism works and socialism does not. Taking money from the rich and redistributing it to the poor does not grow the economy. On the contrary, it reduces the incentives of both parties. It lowers savings, destroys capital, limits economic growth, and lowers living standards. Maybe Obama should take his eyes off the teleprompter long enough to read some American history. In fact, he could start by reading the Constitution that he swore an oath to uphold.

New Special Report: For an in-depth look at the prospects of international currencies, download Peter Schiff’s and Axel Merk’s Five Favorite Currencies for the Next Five Years.

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September 13th, 2011 8:22 pm | by Mike Miller | Published in Bailouts, Banking, congress, Debt, Economics, Federal Reserve, government spending, inflation, jobs, Money, national debt, Peter Schiff, Taxes | 1186302011-09-14+00%3A22%3A46Mike+Miller

On Tuesday, September 13, Peter Schiff, the CEO of Euro Pacific Capital, www.europac.net will testify before the House of Representatives Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending. The hearing entitled, “Take Two: The President’s Proposal to Stimulate the Economy and Create Jobs” will examine federal job creation efforts. Mr. Schiff, author of many best-selling books including “How an Economy Grows and Why it Crashes” is well known for his views on how federal regulatory activism and irresponsible monetary and fiscal policy is actively destroying jobs in America. The following statement from Mr. Schiff will be read into the Congressional Record this morning. Within a few days, video of the hearings will be available on the Committee’s website. Please feel free to excerpt or repost with the proper attribution and all links included.

How the Government Can Create Jobs

Testimony by Peter D. Schiff

Offered to the House Sub-Committee on Government Reform and Stimulus Oversight

September 13, 2011

Mr. Chairman, Mr. Ranking member, and all distinguished members of this panel. Thank you for inviting me here today to offer my opinions as to how the government can help the American economy recover from the worst crisis in living memory.

Despite the understandable human tendency to help others, government spending cannot be a net creator of jobs. Indeed many efforts currently under consideration by the Administration and Congress will actively destroy jobs. These initiatives must stop. While it is easy to see how a deficit-financed government program can lead to the creation of a specific job, it is much harder to see how other jobs are destroyed by the diversion of capital and resources. It is also difficult to see how the bigger budget deficits sap the economy of vitality, destroying jobs in the process.

In a free market jobs are created by profit seeking businesses with access to capital. Unfortunately Government taxes and regulation diminish profits, and deficit spending and artificially low interest rates inhibit capital formation. As a result unemployment remains high, and will likely continue to rise until policies are reversed.

Ignore the Constitution – It Just Gets in the Way

September 9th, 2011 1:48 am | by Marc Gallagher | Published in Commentary, Constitution, Debt, government spending | 1185002011-09-09+05%3A48%3A31Marc+Gallagher

By Craig Hensler

This evening President Obama presented his latest plan to “stimulate” the United States economy; this time, to the tune of $447 billion. This stimulus is to be completely paid for by undefined savings at a future, undetermined date. By now, as a nation, we’re all probably quite numb to this and a proposal of this nature doesn’t elicit the same level of anxiety and fear that it once may have. However, what should really frighten each of us is the outrageous question posed by Mr. Obama in defense of his proposal:

“What kind of country would this be if this Chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do?“

Indeed, what kind of a country would this be if government felt constrained by the Constitution and if unpayable and unimaginable debts had not been created as the result of unkeepable promises and political escapades designed to curry favor.

Maybe it’s time to remind Mr. Obama and our elected representatives that they each took an oath, “to uphold and to defend the Constitution.” Or, were those simply empty promises or political expediencies?

If not now, when?

Ron Paul talks with Lou Dobbs on Fox Business

August 25th, 2011 1:51 am | by Marc Gallagher | Published in Big Government, Debt, Economics, government spending, national debt, Ron Paul | 1181612011-08-25+05%3A51%3A18Marc+Gallagher

Ron Paul appeared for a friendly interview with Lou Dobbs last night on Fox Business. They discuss economics and the debt. At the end Dobbs seems to begin to say.. ‘that’s why we need you… [as POTUS]‘, then half-way through realizes he is supposed to be unbiased and changes it up a bit though the implication is still there.

Nice interview, though I wish Paul would choose more optimistic words when he speaks. All of this “I’m afraid there will be people in the streets like we’ve seen in other countries” talk is worrying Grandma and Grandpa voter out there. It reminds me of my penchant for jokingly yelling “WE ARE ALL GOING TO DIE!” at the top of my lungs while going over the first big drop on a roller-coaster. You know, just for fun. Of course, Ron Paul is being serious and he’s right. I just don’t know if that is earning him the kind of votes he needs to rise even further in the polls.

How Warren Buffett Is Wrong

August 23rd, 2011 8:24 pm | by Mike Miller | Published in congress, DownsizeDC.org, government spending, Taxes | 118121How+Warren+Buffett+Is+Wrong2011-08-24+00%3A24%3A59Mike+Miller

The following essay is presented as an educational service of the Downsize DC Foundation …

By Jim Babka, Perry Willis, and James Wilson

On Monday, August 15, billionaire Warren Buffett argued in an op-ed for the The New York Times that his taxes should be raised. He claimed that giving the Federal State more of his money would be a good thing.

We disagree. We think Mr. Buffett’s investments do more social good than his taxes do. Here’s why…

None of Mr. Buffett’s companies use force to compel people to do business with them, but everything The States does relies on coercion. This automatically makes Mr. Buffett’s investments better than his tax payments. In addition….

Mr. Buffett’s companies must serve their customers, or go bankrupt. By contrast, Statist programs almost always receive increased budgets when they fail. Thus, businesses have an incentive to use resources wisely, while The State has incentives to waste resources. This is why money spent by The Coercive Sector (The State) tends to have less social utility than money spent by The Voluntary Sector (businesses and charities).

In short, businesses tend to be pro-social because they serve society, while The State tends to be anti-social, because it’s wasteful and coercive.

Paper Currencies Finally Redeemed for Gold

August 20th, 2011 10:50 pm | by Mike Miller | Published in Debt, Economics, Federal Reserve, gold, government spending, inflation, Money, national debt, Taxes | 1180502011-08-21+02%3A50%3A16Mike+Miller

by John Browne, Senior Market Strategist at Euro Pacific Capital

The basic unwillingness of politicians to face economic and financial realities has caused the United States and European Union to face currency collapse. The politicians are content literally to paper over the problem with massive amounts of newly printed currency. This means that savvy investors, facing major real losses, are turning increasingly to gold. In essence, even though currencies are no longer on a gold standard, they are increasingly being “redeemed” for gold in the marketplace.

For decades, fiscally irresponsible US Administrations have gradually reduced the world’s richest nation, with a currency perceived as ‘good as gold,’ to the position of the largest global debtor, with a debased currency. Furthermore, US stock markets have offered little real return. Indeed, the Dow stands just below 11K, down over 3K points from its all-time high on October 9, 2009. Discounting for inflation shows a loss close to 4K points, or a fall of over 25 percent from its all-time high. Meanwhile, equities in emerging markets have often shown handsome returns.

The recent political wrangling in Washington has damaged the financial credibility of the United States, prompting a long overdue debt downgrade by ratings house Standard & Poor’s. This removes a fundamental pillar supporting the dollar as the global reserve asset of choice.

Krugman’s War Cry Won’t Avert Depression

August 16th, 2011 11:05 pm | by Mike Miller | Published in Economics, Federal Reserve, government spending, inflation, Money, War | 1178502011-08-17+03%3A05%3A58Mike+Miller

by Michael Pento, Senior Economist at Euro Pacific Capital (www.europac.net)

Paul Krugman sounded the war cry this Sunday on Fareed Zakaria’s program Global Public Square. After all, he asserted, only spending equivalent to another World War could lead us back to prosperity. That, and a healthy dose of inflation.

Krugman argued that inflation would address our debt problem by reducing our bill in current dollar terms and that the Second World War was a giant stimulus plan that actually worked. Thankfully, he added the refrain, “Hopefully we don’t need a world war to get there,” but I sensed a tinge of regret in his voice. After all, the Keynesian economist’s favorite pastime is seeing people waste their lives digging holes in the ground or sacrifice their lives in war. Both acts create economic growth according to the topsy-turvy logic of men like Krugman.

The truth is that wars are a miserable misallocation of capital and usually leave financial ruin in their wake. The US did not boom in the ’50s because we fought World War II, but because we resoundingly won. It was the byproduct of having an unscathed manufacturing base, solid infrastructure, an intact military, most of the world’s gold, and the only reserve currency.

The Center of Gravity Shifts Slowly

August 5th, 2011 10:38 pm | by Mike Miller | Published in Banking, Debt, Economics, government spending, inflation, Money, national debt | 117700The+Center+of+Gravity+Shifts+Slowly2011-08-06+02%3A38%3A50Mike+Miller

by Andrew Schiff, Director of Communications and Marketing at Euro Pacific Capital (www.europac.net)

To an extent not fully appreciated by the investing public, financial markets are influenced by human emotion just as much as they are by economic data, corporate earnings, and dividend yields. Of all human motivations, fear is perhaps the most powerful. When people get scared, the “fight or flight” instinct forces us to take action.

Simple dangers prompt simple responses. If we unexpectedly encounter a bear on our driveway, we immediately run into the house and call animal control (or, in the country, grab the shotgun). But it’s harder to know what to do when financial danger stalks the stock market. To be honest, most investors are clueless. Is that really a bear? Is it dangerous? What qualifies as a house?

Gold is the True Reserve Currency

August 4th, 2011 9:46 pm | by Mike Miller | Published in Debt, Economics, government spending, inflation, Money, national debt | 117681Gold+is+the+True+Reserve+Currency2011-08-05+01%3A46%3A27Mike+Miller

by Michael Pento, Senior Economist at Euro Pacific Capital (www.europac.net)

The reliance upon the U.S. dollar as the world’s reserve currency and “safe haven” asset has created a perverse, but deeply entrenched, mindset among global investors. In fact, many believe the major financial players have no alternatives to owning U.S. debt and dollars. They argue that the market for U.S. dollars and Treasuries is the only financial pool large enough to handle the massive liquidity that sloshes around the globe on a daily basis. This idea makes a mass exodus from U.S. debt holdings seem impossible. This provides a nice explanation why the U.S. Treasury bonds can rally even while the government openly flirts with default and ratings agencies issue downgrades. But just because an illogical event occurs habitually does not mean it is logical or tenable.

The sophomoric reasoning behind the dollar “exceptionalism” argument is like assuming a stock can never fall unless a significant portion of shareholders decide to sell. In reality, a buyers strike is all that is needed to puncture a market. If the U.S. experienced just one disastrous Treasury auction, prices could nose-dive and yields could skyrocket across the board on all U.S. debt.

But the problem doesn’t just lie with the United States. Investors around the world are finally beginning to understand that central bank’s thirst for creating inflation, in order to keep their banks and governments solvent, will never be quenched.