Quote of the Day: “There is no worse tyranny than to force a man to pay for what he does not want merely because you think it would be good for him.” — Robert A. Heinlein (1907-1988) American writer
Should you be forced, at the point of a tax-collector’s gun, to fund . . .
* political candidates you dislike?
* the communication of political beliefs you oppose?
by John Browne, Senior Market Strategist at Euro Pacific Capital
While the markets have known for almost three months that the 2010 election delivered the House of Representatives to the tea-infused Republican Party, I did expect a greater reaction on Wall Street to the formalities of the opening sessions of Congress yesterday.
If the Republicans make good on their campaign promises, we will see cuts in government spending and an end to fiscal stimulus. Given that short-term stock market performance is very much dependent on such government assistance, the current rally is hard to fathom. Meanwhile, gold and silver have experienced a counterintuitive correction (although to be honest, pundits are making much more of this 4% pullback than the size of the move merits). Could it be that the markets now believe that fiscal restraint in Washington is the best pathway to growth? Can a leopard really change his spots?
Not likely, I say. Rather, I believe that we are simply seeing some short-term momentum. Speculators tend to buy and sell on momentum, while investors tend to accumulate on dips and sell on fundamental changes. Anyone with a pragmatic view of Washington must realize that real change is unlikely.
The fix is in. That’s right, and by “fix” I really mean dreadfully broken. Check out the latest effort from the Institute for Justice:
Imagine if Nancy Pelosi wanted to run for governor. If she decided to run as a “Clean Elections” candidate, every time her opponent would raise a certain amount of money from private donors, she would receive the same amount from taxpayers. That’s right, publicly funded elections.
This allows the government-subsidized candidate to “match” the spending—and thus the speech—of the independent group or privately funded candidate opposing him or her. The harder an independent group or traditionally financed candidate works, the more the government-subsidized candidate benefits. The system curbs speech, discourages participation and limits what voters will hear about politics.
In reading local newspapers and channel surfing through TV political commentary programs, it is quite apparent that the Mainstream Media has taken on the Herculean task of trying to discredit the Tea Party movement. With the results of the recent national election in hand, media pundits try to claim every Republican loss as attributable to their meddling and every Democrat win a repudiation of their beliefs. Tea Party-supported victors are seen as an anomaly.
But nowhere is this new crusade more evident than in the Mainstream Media’s newly-concocted premise that the Tea Party was responsible for Republican losses in the Senate. Christine O’Donnell, Sharon Angle, and Ken Buck were all puppets of the Tea Party and all losers at the ballot box, so they got theirs. Ha-ha!
Nevertheless, if one swallows the Mainstream Media’s thinking, it must then follow that the Mainstream Media itself was responsible for the Democrat losses in the House. While Tea Party miscalculations might have contributed to Republican defeats, it appears that Keith Olberman’s secret Democrat donations, Chris Matthew’s thrill up his leg, and the open bias seen in the body language of news anchors of the Top Three television networks all worked together to defeat the Democrats pulling Nancy Pelosi’s rickshaw.
But what a spectacle America was treated to in the days before November 2nd and what a comparison between these two competing titans: if the Tea Party was strident, the Mainstream Media was shrill; if the Tea Party was energized, the Mainstream Media was dour; if the Tea Party looked away from the establishment, the Mainstream Media was the establishment; if the Tea Party labored for free, the Mainstream Media feasted off campaign advertising revenue; and if the Tea Party fought for the freedom inherent in capitalism and democracy, the Mainstream Media worked to enforce the enslavement built into big government and socialism.
The Tea Party represented the spirit of independence that wrested this country from wilderness and brutality, the Mainstream Media represented the sloth and oppressiveness of the British Monarchy.
Given the choice, was it really the Tea Party which lost in this election or the Mainstream Media?
Rand Paul was interviewed on ABC’s “This Week” by Christiane Amanpour. I thought it was a good interview, but of course, I’m a bit biased. One item that Paul reiterated from his campaign was that we have “to look everything” for cutting government spending. Check it out below.
In one of the several interviews Liberty Maven did with Rand Paul I asked a question about strategy that I believe is the main reason Rand Paul won and is now Senator-elect Rand Paul. Here is that question and Rand’s excellent response again:
LM: Your recent op-ed in USA Today discussing libertarianism and conservatism where you deemed yourself “not quite” a libertarian seemed to be another (rather successful in my view) effort to unite conservatives and libertarians by focusing on where there are agreements. Is one of your fundamental campaign strategies to foster agreement between these groups?
Rand Paul: Yes, it is. The views that unite many conservatives and libertarians are grounded in deference to the Constitution and its principles, and a belief in limited government. These ideals have not been acted upon by many in Washington recently, and that’s why I’m running. It’s also why the Tea Parties exist – frustration with a lack of accountability on spending and the size of government.
These ideals – and the joining of all limited government advocates — form the basis for my campaign this year, one that has struck a chord with Republicans, independents, libertarians, and Tea Party activists. For the country’s sake I hope we can keep these groups in agreement and united against those who do not hold the same respect for those Constitutional principles.
Yes. I believe that about sums up why Rand Paul was successful. He united all flavors of voters. The Republicans, libertarians, independents, conservatives, and tea partiers joined together to support him. He also united progressives pretty well too. They were downright venomous for some reason. I guess that’s the way they roll when they disagree with someone.
A little less than a year ago I posted an article entitled, “Why Rand Paul Will Win“. I listed three reasons: public sentiment, fund raising, and the “it” factor. In retrospect it was mostly public sentiment that turned the tide in his favor in both the primary and general.
Also of note, Rand Paul’s father Ron, won his race. There’s a slight chance Ron Paul could be in line for a committee or sub-committee chairmanship now that the House is changing control to the GOP. It’s likely we’ll all be seeing more of the always-entertaining hearing sessions with Ben Bernanke tap dancing around Ron Paul’s questions. I also believe it to be quite likely we’ll see Ron Paul running for president in 2012 given the results and public opinion. Fox News even threw some love Ron’s way by mentioning him as the catalyst for his son’s and the tea party’s victories. Prepare your bank account for an onslaught of money bombs next year and in 2012.
Admittedly, I’m conflicted on this particular election eve. I’m excited at the potential for actual change if many of these so-called “tea party” candidates get elected. That potential is based upon hope more than expectation. If I decide to vote, I’ll vote for the Libertarian candidate in my district. I’m glad I have that choice since I can’t stand the GOP candidate (30 year incumbent Frank Wolf) nor can I stand the Democrat (Obamacare supporter).
That being said I have some questions. Most won’t be answered in the near term, but will be answered within the next 2 years.
Will Rand Paul win in another “Randslide”?
If Sharon Angle defeats Harry Reid will Chuck Schumer become the leader of the Senate?
Should Rand Paul win, will he lose the support of the Tea Party during his term as Senator?
Will Ron Paul’s supporters be happy with the way Rand Paul votes on foreign policy?
If the GOP takes control of the House will Ron Paul become the Chairman of the Financial Services Committee?
Will the Republicans be able to repeal Obamacare?
Are the Republicans going to to water down the Tea Party message by playing the same old political game?
Will Sarah Palin become the GOP nominee in 2012 due to her perceived influence on the Tea Party candidates winning in 2010?
When will Ron Paul announce he is running for President in 2012 (My guess is sometime in January of 2011)?
When Republicans gain control of the House and nothing changes will a Third Party option become truly viable in 2012?
Those are the main questions I have. Do you have any to add?
Quote of the Day: “If elections really changed things they would be illegal.” — Emma Goldman
I will start with a confession . . .
* I cheered in 2006 and 2008 when the voters body-slammed the Republicans
* And I will cheer again next week when the Democrats too get slammed
Both the Republicans and the Democrats have thoroughly deserved their repudiations. I think our political parties are so bad that it’s almost always appropriate for incumbents to lose, and for the majority party to revert to minority status. But that doesn’t mean that such changes really improve things.
Did things improve in 2008 when Obama’s Democrats gained control? I think the answer is no. Obama has continued, or worsened, nearly all of Bush’s policies, and with the Democratic Congress has managed to outspend the profligate Republicans. Should we really expect the Republicans to be different this time?
If you hold out hope, prepare to have it crushed, starting here . . .
John Browne, Senior Market Strategist at Euro Pacific Capital
Last weekend, the G-20 finance ministers met in South Korea to find areas of agreement in preparation for the main G-20 gathering in November. The Chinese rebuffed renewed American pleas for them to revalue their yuan. They rejected Secretary Geithner’s suggestion of a four percent cap on current account surpluses. However, in return for accepting America’s continued dollar debasement, the Chinese did agree to “look into” a revaluation of the yuan and the management of trade surpluses. They also agreed to an international self-policing regime to curb currency manipulation. This ‘one-sided’ compromise was hailed in the Western media as a triumph for Mr. Geithner. The US stock markets and dollar rallied. All looked good for the election season in November.
Unfortunately, compromises are never one-sided; they are only construed as such. Though the reporting failed to emphasize it, Mr. Geithner actually agreed to a massive shift of monetary power in exchange for China’s empty concessions. The shareholdings and board composition of the huge and powerful International Monetary Fund (IMF) have now been shifted. China will now become the third largest shareholder of the IMF and the developing economies will get a six percent larger voting share. Two European states will lose their seats on the IMF’s board in favor of developing countries.
Meanwhile, China, supported by Russia, India, and even Brazil, continued to lobby hard for the US dollar’s privileged role as the international reserve currency to be replaced by a wide basket of currencies and gold. To this end, the IMF has recently been given additional “emergency” lending facilities. These could be used in a coming sovereign default crisis to ‘bail out’ Western countries, at which point they would be unable to resist global economic governance under the guise of the reformed IMF.
In short, Secretary Geithner’s “victory” at the G-20 was one only King Pyrrhus could love.
But the blame cannot be laid entirely with Mr. Geithner. The fact that he left the meeting at least saving a bit of face for his delegation is a monumental achievement, considering the dismal condition of the US economy.
Liberty Maven
by John Browne, Senior Market Strategist at Euro Pacific Capital
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