---
It would be nice if it did not always take a shark attack to make swimmers aware of the dangers of swimming in shark infested waters and it would be even nicer if it did not take Obama's attitude and policies towards Israel to get Liberal Jews to wake up and smell the roses but at least the political tectonic plates are stirring as I felt they would.
For those who actually read these memos they know it is my view the Jewish vote, which was 78% for Obama, should drop to around 50% and because it is concentrated in large urban cities it can have magnified results. Also, I suspect Jewish campaign contributions will be substantially curtailed.
This was drawn from a report about an elderly Jewish woman in New York voting in the Sept. special election to replace their disgraced Representative Anthony Weiner. Her district has voted for Democrats for 100 years. She is holding her nose and voting Republican - my characterization - because of Obama's treatment of Israel.
The district may go Republican and the candidate is a Christian.
If this happens it would be the equivalent of Harlem dumping their beloved and slickly corrupt Charlie Rangel.
---
Israelis applaud when they hear magnificent symphonic music even when the players are members of the Israeli and Palestinian Youth Orchestra. However, Palestinians protest when they hear beautiful sounds from Israeli philharmonists.
Animals will be animals and they often bark and bite when there is no reason or provocation. However, it has become bad form to muzzle a dog if it is of Palestinian origin. (See 1 below.)
---
After three years, Obama tries to address the nation's unemployed situation so he is going to make another big 'I' speech before Congress. Let's look at three things his administration is currently doing in that regard and what Progressives in California are doing as well.
a) The administration is telling Boeing it cannot build a new plant in South Carolina.
b) The administration is suing banks on behalf of Fannie Mae and Freddie Mac for bad loans when in fact Fannie and Freddie and their Democrat friends in Congress encouraged these very loans. These are the same banks the administration said needed their capital shored and now what they are doing will impair bank capital positions so the Obama Administration can off load. (See 2 below.)
c) The NLRB, which Obama appointees control, is imposing rules and regulations that make it easier for unions to unionize businesses and thus, impose higher operating costs.
d) And now now lets hear it for Progressives from California. (See 2a below.)
Uncertainty is paralyzing the nation and making business owners and managers unwilling to spend capital they cannot even borrow from banks who are acting niggardly in making loans.
Democrats successfully fought to raise the minimum wage which resulted in less employment. Obama's new labor advisor believes the minimum wage is not high enough. If that is the case why not raise the minimum wage to a level that makes young kids millionaires overnight? Then Obama could tax them and transfer their wealth back to the poor, if there were any left.
Needing more money is always the Progressive 's solution to solve their every failed idea. They are political nymphomaniacs and Obama is the biggest whore of all and a lying one at that.
---
And yes, we still have a free press - but one that has morphed into a' free press' that distorts and is prone to convince the uninformed and growing numbers incapable of independent reasoning: "Tim Groseclose, a distinguished political scientist, Professor of American Politics at UCLA, author of the new book 'Left Turn: How Liberal Media Bias Distorts the American Mind.'"
Another prime example of how the press and media mavens shift and distort is revealed by Paul Gigot's review of Dick Cheney's new book: "In My Time." which I have ordered and yet to read. They attacked Cheney after he became GW's V.P. but prior to that time adored him. Then they used his association with Halliburton to raise questions about his ethics and to trash him in the eyes of the public etc.
Go against The Washington Establishment and the intellectual effete at your peril. Yet, history constantly reminds us, it is they who have done the greatest disservice to our nation and its citizenry. (See 3 below.)
---
Steve Forbes says one of the economic tragedies of our time occurred when Nixon took us off the gold standard and Porter Stansberry concurs. Porter lays out a compelling case why, as long as we were on a gold standard, we enjoyed the benefits of capital formation growth and when we left we laid the foundation for what we now suffer from - consumption growth and all the distortions, pain and suffering that brings.
Gold serves as an anchor against the ballooning tendencies of political spending and ineptitude. (See 4 below.)
---
The ever wonderful PJTV.Com entertains with these new videos: "Front Page: Run, Hillary, Run? Will Hillary Challenge Obama in the Democratic Primary?
The economy adds zero jobs in August, and Obama's approval rating continues to slip. Is there a primary challenge in Obama's future? Alex Bratty of Public Opinion Strategies thinks it's possible.
and
ZoNation: Maxine Waters & the CBC New World Order: Blame the Tea Party, Not Democrats
Maxine Waters and her friends at the Congressional Black Caucus rolled into Los Angeles this week for a townhall focused on the economy and jobs. Alfonzo Rachel attended the event and reports back in a new ZoNation. Who do Democrats blame for the bad economy? Find out.
and
Klavan & Whittle: Come On, Pull Your Pants Up! (Members Only)
E Pluribus Unum. We see these Latin words on our currency, but what do they mean, and what can we learn from these words as a culture? Find out." (Members Only.)
---
I have just begun reading David Mamet's: "The Secret Knowledge." Mamet is a gifted and controversial force in theatre and film and a convert from Liberalism. His conversion was noted in an op-ed for The Village Voice entitled "Why I am No Longer A Brain Dead Liberal."
Mamet equates Liberalism with the Stockholm Syndrome, ie "...the captives, unable to bear the anxiety occasioned by their powerlessness, suppress it by identifying with their captors." He writes: '...the essence of Leftist thought is a devolution from reason to belief in an effort to stave off a feeling of powerlessness and thus if government is good more government is better."
After reading Mamet's book I will try to do it justice and review it for you.
The above reminds me of a sentence in an op-ed I recently read about Greens and energy. I went something like this: 'Greens are for all kind of energy saving programs until they find one that works.'
---
A Scotsman got his dander up over Israel being branded a apartheid nation.
Well here is one good Scotsman willing to show his balls under his kilt. (See 5 below.)
---
Finally, something to be aware of: "Mark your calendar: On September 7, 2011 - only a few short days from now - world financial markets could implode.
On that day, Germany's highest court will decide if it's constitutionally legal for the German government to fork over billions in bailout money to Greece.
If the answer is no... then it's almost certain that the entire Eurozone will collapse like a deck of cards... The result? A massive financial crisis that would make the 2008 market meltdown look like child's play in comparison."
---
Have a great Labor Day!
---
Dick
-------------------------------------------------------------------------------------------------------------------------
1)) BBC Proms: Shaham, Israel Philharmonic Orchestra, Mehta
By Igor Toronyi-Lalic
Police. Placards. Protests. And bag checks. It meant only one thing. Jews were performing at the Proms. Here we were in the Royal Albert Hall in London in 2011 witnessing a stage of musicians being barracked and abused for having the gall to be Jewish. Last year, four more Jewish musicians, the Jerusalem Quartet, had the cheek to perform and broadcast a recital at the Wigmore Hall. They were again heckled and hounded off air. No, not a portrait of Europe in the early 20th century, but Britain in the 21st. I wonder. In a few years, will Jews be able to make music publicly in Britain at all?
If it wasn't all so depressingly shameful, it might have been amusing, such was the pathetic absurdity of the protests. The evening certainly started with comedy. A small bedraggled bunch of Palestinian protesters (all white, middle class and bearded of course) were scowling by a side entrance of the Royal Albert Hall. Opposite them an Irish Zionist, sporting the tricolour of Eire and the star of David, was goading them with an Irish jig. That was where the whole farce that is the Palestinian Solidarity Campaign's (PSC) boycott of the Israel Philharmonic Orchestra should have remained: in the realms of risibility.
'The Bruch achieved a level of meaning and fury that no one will ever witness the like of again'
But it didn't stop there. A few minutes into a fuzzily luxuriant performance (even the triangle was being vibbed) of Webern's Passacaglia, Op 1, a bunch of protesters in the choir stands got to their feet and began to barrack. To the strains of Beethoven's Ode to Joy, they sang their anti-Israeli chants. I imagine a few of the audience and orchestral members would have been familiar with this sort of public abuse, from when they were children in mainland Europe.
They made it difficult to concentrate on the Webern, though Mehta made sure some of their fortissimos sliced through the taunts. They returned to dog the start of the Bruch Violin Concerto in G minor. Zubin Mehta, the Israel Philharmonic and Gil Shaham (pictured right) stood still, silent and calm, while the ushers and security swept out the protest. Amid this maelstrom, Mehta and Shaham, their patience wearing thin, tore into the opening bars. The work achieved a level of meaning and fury that no one will ever witness the like of again.
But while it was all sparks and springs in the outer movements, in the slow, both soloist and orchestra bowed to the softest, gentlest, most tender sound imaginable, as if they were reaching down to plant a kiss on a baby's crown. Not even the Neanderthals dared break this spell. Nor dared they interrupt Shaham's elegantly sculpted performance of the Preludio from Bach's Third Partita.
The BBC had by now switched off their live Radio 3 broadcast after the audience began barracking the barrackers at the beginning of the Bruch. It was understandable - no point giving the protesters publicity - but disappointing, considering that, if the listeners had been given an opportunity to hear the whole Prom, they would have heard the Prommers shouting down the protests, and the Israeli Phil ploughing on valiantly through their programme, to repeated standing ovations. That is, they would have heard us win.
'Two whiskery old men started to hound the orchestra from a box, while a lady next door hooked one of their necks with her walking stick'
Was it because of the feeling that the BBC had deserted him and his orchestra that Mehta and his musicians came out on stage looking deflated? The continued protests must have demoralised them. It did me. They never quite recovered the responsive vim of the first half. There was another moment of comedy among the PSC disrupters - before the depressingly repetitive boredom of it all set in - as two whiskery old men started to hound the orchestra from a box and a lady next door hooked one of their necks with her walking stick.
In these circumstances, who can blame the orchestra for not delivering the top form that they are capable of? Albeniz's Iberia was neither brawny nor colourful enough to make headway in this hall. And though Rimsky-Korsakov's Capriccio Espagnol had its moments, particularly when the melody was lobbed from strings to winds, leaving the violins and percussion underwater-pedalling virtuosically, the lack of synchronisation between the sections meant there was no chance of anyone generating any threatening Spanish heat.
There was no bite either in the encore, the Death of Tybalt scene from Prokofiev's Romeo and Juliet. The wind had been taken out of their sails. The strength it took to sit silently and wait out the taunts was a big enough battle won. They had no fight left in them. Still, we cheered them to the rafters. They were guests in our country. And they had been rudely abused. It was the least we could do.
For some, something else had also been violated last night: the freedom of artistic expression. With qualifications, I am with them. I am not one of these people who thinks politics is above art. If people insist art and artists have the power to change lives for the better (and, boy, do music marketing people, with one eye on dwindling funds, keep insisting on this), they must also admit that they have the ability to change lives for the worse. Art, artists and musicians are, therefore, not sacrosanct. Break the law, rape a girl (yes, that's you I'm talking about, Polanski) and you should not be given a free ride simply because you are endowed with creative talent.
'One thing, we do know: the Israel Phil won't be coming back to these shores in a hurry. And that's where things start becoming very troubling'
Cultural boycotts have their place. One cannot have anything but sympathy with the Holocaust survivors who set up pickets outside concert halls in 1950s America, demonstrating against the visit of Herbert von Karajan, a man who had joined the Nazi party not once, but twice. I bow to the rights of the PSC to protest peacefully outside the Royal Albert Hall. I bow to their right to try to convince us that the Israeli Phil is evil. Of course, one could legitimately ask, why, if they felt so keenly about human rights and democracy, they have never protested to the frequent visits by the Venezuelan Youth Orchestra, who perform clothed in the symbols of an authoritarian state, or the East-Western Divan, whose Arab members proudly represent some of the most vile dictatorships on earth.
But that's by the by. They had a right to stand outside and propagate their views. And they were granted that right. But then they went beyond this right. They imposed their protest on us to the extent that we were restricted in our freedom to do what we wanted. This is exactly the form of authoritarianism that the PSC claim to be attempting to end.
What do we do now? What can we do now? The protesters have all now walked free to hound some more Jews. The recorded concert - what's left of it - will be salvaged and aired next week. One thing, we do know: the Israel Phil won't be coming back to these shores in a hurry. And that's where things start becoming troubling. When we get into a position where programmers and arts organisations are forced to think twice about giving a platform to certain nationalities and races lest they incur the wrath of hooligans, we are in real danger of no longer being able to call ourselves civilised. The protesters didn't win last night. But they certainly did raise the stakes.
-------------------------------------------------------------------------------------------------------------------------
2)Feds Sue Biggest US Banks Over Risky Mortgages
In a sweeping move, the government on Friday sued 17 financial firms, including the largest U.S. banks, for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.
Among the 17 targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.
The lawsuits were filed Friday by the Federal Housing Finance Agency which oversees Fannie and Freddie, the two agencies that buy mortgages loans and mortgage securities issued by the lenders.
Economist Warns: 50% unemployment, 90% stock market drop, 100% inflation.
See the Evidence. Click Here to Watch the Aftershock Survival Summit Now.
The total price tag for the securities bought by Fannie and Freddie affected by the lawsuits: $196 billion.
The government didn't provide a dollar amount of how much it seeks in damages. It said that it wants to have the purchases of the securities canceled, be compensated for lost principal and interest payments as well as attorney fees and costs. The lawsuits allege the financial firms broke federal and state laws with the sales.
Home mortgage-backed securities were risky investments that collapsed after the real-estate bust and helped fuel the financial crisis in late 2008.
In the lawsuits that were filed in federal or state court in New York and the federal court in Connecticut, the government said the securities were sold with registration statements and prospectuses that "contained materially false or misleading statements and omissions."
The Federal agency said the banks and mortgage lenders also falsely represented that the mortgage loans in the securities complied with underwriting guidelines and standards. They also included representations "that significantly overstated the ability of the borrower to repay their mortgage loans."
The 17 institutions are Ally Financial Inc., formerly known GMAC LLC, Bank of America Corp., Barclays Bank PLC, Citigroup Inc., Countrywide Financial Corp., Credit Suisse Holdings Inc., Deutsche Bank AG, First Horizon National Corp., General Electric Co., Goldman Sachs & Co., HSBC North America Holdings Inc., JPMorgan Chase & Co., Merrill Lynch & Co. and its unit First Franklin Financial Corp., Morgan Stanley, Nomura Holding America Inc., The Royal Bank of Scotland Group PLC, and Societe Generale.
2a)Calif. Assembly passes ridiculous babysitting bill
By Thomas Lifson
The nanny state impulse runs strong in the Golden State, where the State Assembly has passed a bill that would virtually regulate babysitting out of business. After 2 hours of babysitting, a mandatory 15 minute break must be give, meaning that a stand-by babysitter must be present. Then there are the paperwork requirements, and the severe penalties that kick in for any parents who fail to dot the i's and cross the t's. State Senator Doug LaMalfa writes:
The bill has already passed the Assembly and is quickly moving through the Senate with blanket support from the Democrat members that control both houses of the Legislature - and without the support of a single Republican member. Assuming the bill will easily clear its last couple of legislative hurdles, AB 889 will soon be on its way to the Governor's desk.
Under AB 889, household "employers" (aka "parents") who hire a babysitter on a Friday night will be legally obligated to pay at least minimum wage to any sitter over the age of 18 (unless it is a family member), provide a substitute caregiver every two hours to cover rest and meal breaks, in addition to workers' compensation coverage, overtime pay, and a meticulously calculated timecard/paycheck.
Failure to abide by any of these provisions may result in a legal cause of action against the employer including cumulative penalties, attorneys' fees, legal costs and expenses associated with hiring expert witnesses, an unprecedented measure of legal recourse provided no other class of workers - from agricultural laborers to garment manufacturers. (On the bright side, language requiring an hour of paid vacation time for every 30 hours worked was amended out of the bill in the Senate.)
Unfortunately, the unreasonable costs and risks contained in this bill will discourage folks from hiring housekeepers, nannies and babysitters and increase the use of institutionalized care rather than allowing children, the sick or elderly to be cared for in their homes. I can't help but wonder if that is the goal of AB 889 - a terrible bill that needs to be stopped.
Meanwhile, he nanny state impulse flourishes elsewhere around the world. The latest fantasy analogizes obesity to smoking, and invents the concept "passive eating." No the link is not to The Onion, it is to the UK Guardian.
------------------------------------------------------------------------------------------------------------------------
3)Mission Accomplished
Dick Cheney was relentless and unapologetic in pursuit of his policy goals—and Americans are safer for it.
By PAUL A. GIGOT
It's hard to believe now, but Dick Cheney was once a favorite of the Washington establishment. As a young chief of staff to President Gerald Ford and then for 10 years a member of Congress, he was deemed by the town's political arbiters to be a sensible conservative, not a Reaganite or Bible-thumping crazy. The media loved him. When George H.W. Bush nominated him to be defense secretary after John Tower was rejected, he was confirmed unanimously in seven days.
Then came the George W. Bush administration, 9/11, the wars on terror and in Iraq, and Cheney the Reasonable became—pick your Dowdian cliché—Darth Vader, Dr. Strangelove, torturer in chief, Rasputin, the mad bomber.
This image transformation says far more about Washington's partisan warfare than it does about Mr. Cheney, who emerges in "In My Time" as the same man I've observed for more than 20 years—measured, more discreet than a journalist would prefer, conservative with a pragmatic streak but also relentless and unapologetic in pursuing his policy goals. Readers looking for a memoir with the strategic sweep of Dean Acheson's or Henry Kissinger's will be disappointed. The book nonetheless makes a contribution to history by showing how the Bush administration worked, and why it often didn't.
The book's early chapters recount Mr. Cheney's Wyoming upbringing, his two-time failure at Yale and his early years in government. They serve to humanize Lord Vader and also show the vagaries of fate in political life. As a young staffer in the Nixon White House, Mr. Cheney was invited to join the Committee to Re-Elect the President. His career might have ended early if he had accepted.
The book's latter half is devoted to his vice-presidential years and especially to the war on terror. About the policies he and Mr. Bush pursued, the veep is unapologetic. On Guantánamo, interrogations, the wars in Iraq and Afghanistan, wiretapping without a warrant, and the rest of the Bush antiterror architecture, he marshals familiar arguments and claims vindication.
He has a strong case, aided in no small part by the Obama administration. One virtue of Barack Obama's victory in 2008 is that it has put a Democratic stamp on the war on terror. In every particular except for interrogations, Mr. Obama has either embraced or been forced to accept substantially the policies that the Bush administration devised.
In this sense, the Bush-Cheney war on terror resembles Harry Truman's containment strategy in the early years of the Cold War. Republicans fiercely resisted NATO and other international entanglements, only to have them accepted in large part by the Eisenhower administration and later GOP presidents. Mr. Obama may not want to admit it, but his success against al Qaeda owes more to Dick Cheney than it does to his own campaign agenda.
On the many internal fights in the Bush administration, Mr. Cheney has been accused of score-settling and "cheap shots," notably by former Secretaries of State Colin Powell and Condoleezza Rice. This is overwrought. Mr. Cheney recounts their disputes, but his criticisms aren't personal. They are strictly policy business. My impression from the reaction is that Mr. Cheney has told too much of the truth, and it stings.
In eight years as vice president, he said very little in his own defense despite being pounded from inside and outside the administration. His aides were equally tight-lipped. Mr. Cheney writes that this was deliberate, in order not to undermine President Bush by drawing attention to his own role. Even for journalists who shared his views, he was a lousy source. This memoir is his first extended attempt to tell his side of these policy fights, and his account is well worth the time.
Especially instructive is Mr. Cheney's chapter on the 2007 Iraq surge and what a controversial and close-run decision it was inside the administration. Ms. Rice and her State Department were opposed. So were many of the joint chiefs of staff, the commanders in Iraq and some of the White House staff. Mr. Cheney led what amounted to a policy insurgency, including Gens. David Petraeus and Raymond Odierno, a passel of colonels at the Pentagon, deputy NSC adviser J.D. Crouch, and retired Gen. Jack Keane and Frederick Kagan of the American Enterprise Institute. In one scene, Mr. Cheney brings Gen. Keane into the White House to see Mr. Bush privately and make a case that the president wasn't getting from his own government.
Mr. Bush deserves ultimate credit for endorsing the surge, but Mr. Cheney recounts how the White House staff and even the president himself were hedging their bets. News stories based on highly placed administration sources doubted the surge's success deep into the summer of 2007. After Mr. Cheney complained about one story in an Oval Office meeting, NSC adviser Stephen Hadley admitted that he had been the leaker—at the behest of Mr. Bush. This was even as Gens. Petraeus and Odierno were well on their way to defeating the Sunni and Shiite killers.
Mr. Cheney won that policy battle, to the country's great benefit, but he also recounts several fights that he lost. When Syria was caught building a nuclear weapons facility, Mr. Cheney wanted the U.S. to bomb it and predicted that Israel would do so if the U.S. didn't. Others said that bombing could lead to a wider Middle East war and Ms. Rice predicted that Israel wouldn't risk its own attack. Israel did bomb the site, Syria knew it had been caught red-handed and kept quiet, and nothing much else happened except that the region was spared one more WMD threat.
Ms. Rice's memoir is set to come out later this year, and it will be fascinating to see how she responds to Mr. Cheney's dissection. His chapter on North Korea is especially devastating, recounting the State Department's persistent mistakes and even duplicities in hapless pursuit of a pledge from Pyongyang to end its nuclear weapons program. Mr. Cheney says Ms. Rice's assurances to Mr. Bush about an agreement with North Korea on verification were "utterly misleading," and despite her efforts North Korea still walked away.
Ms. Rice this week denied misleading Mr. Bush, but her strategic misjudgments are arguably more embarrassing. Combined with Donald Rumsfeld's critical account of Ms. Rice's inability as NSC adviser to broker policy disputes, Mr. Cheney's account suggests that she was the source of many of the Bush administration's dysfunctions. She clearly dominated foreign policy in the Bush second term, to little good policy result.
One major mistake was her decision—and Mr. Hadley's—to apologize for the 16 words in the 2003 State of Union address mentioning Iraq's attempt to acquire uranium ore in Niger. This was the basis for Joseph Wilson's accusation that the Bush administration had "lied" about WMD in Iraq. Mr. Cheney says that he opposed an apology, not least because the claim was "well-founded," as a British intelligence review later concluded. Ms. Rice was attempting to appease the Iraq critics, which of course only set them baying more loudly. Thus began the long hunt for heads, culminating in a special prosecutor who indicted Mr. Cheney's chief of staff, Scooter Libby, for lying about who leaked the name of Mr. Wilson's wife, CIA official Valerie Plame.
Mr. Cheney defends Mr. Libby as unjustly accused, as well he should, but one wishes he were more critical of those who ran for cover, including his boss. He does nail Mr. Powell and his deputy, Richard Armitage, the man who did leak Ms. Plame's name to Robert Novak. Both men never told the public or Mr. Bush the truth, even as Mr. Powell sat next to Mr. Bush at a photo opportunity when reporters asked the president if he knew who had leaked. Mr. Powell's behavior was a shameful betrayal of colleagues, and Mr. Cheney's account is notable for its restraint.
Also restrained is his account of Mr. Bush's failure to give Mr. Libby a full pardon, despite Mr. Cheney's importunings. "George Bush made courageous decisions as president," he writes, "and to this day I wish that pardoning Scooter Libby had been one of them." This understates Mr. Bush's abdication by a good measure. In justifying his refusal, the president hid behind White House lawyers who said that they had looked at the trial transcript and concluded that Mr. Libby had lied. The reality is that the case boiled down to two different recollections, Mr. Libby's and the late Tim Russert's, of their telephone conversation. Mr. Libby was targeted because he worked for Mr. Cheney, and the former vice president is too forgiving of Mr. Bush for letting a loyal aide hang.
As for Mr. Powell, Mr. Cheney makes clear how much the secretary of state was at odds with Mr. Bush's policies. Mr. Powell opposed the U.S. withdrawal from the ABM Treaty on grounds that the move would alienate Moscow, but there was no backlash. Mr. Powell pursued Yasser Arafat as a Middle East peace partner, to hopeless avail. Before the Iraq war, Mr. Powell opposed dealing with the opposition figures in exile, which after the war extended the U.S. occupation. Those exiles are now running Iraq after winning elections.
Such differences occur often in government, but in the Bush administration they persisted and became all but open warfare. Mr. Cheney doesn't say this directly, but it's clear that this failure to settle disputes contributed greatly to the post-invasion troubles in Iraq. Mr. Bush was too loyal for too long to too many aides who gave him bad advice and even worked against his own policies.
On that point, one of the oddities of this book is the degree to which Mr. Bush is a figure offstage. Mr. Cheney praises the president often and thanks him for honoring his pledge to let him participate in governing. Yet Mr. Bush remains a distant figure. We rarely see Mr. Bush as a participant in debates, or learn how or why he decided as he did. This opacity may be out of deference to the presidency or a belief that Mr. Cheney shouldn't betray his private conversations with Mr. Bush. But the omission diminishes the memoir and, perhaps unintentionally, Mr. Bush as well. This reader would have liked a fuller assessment akin to Acheson's of Truman.
There are other disappointments. Mr. Cheney's discussion of economic policy is cursory, though in the end it is the financial panic, not the war on terror, that may do the most harm to Mr. Bush's legacy. It certainly did the most damage to Republicans in 2008. The vice president does hint at some of the problems when he notes that economic policy was run from the White House, not the Treasury. Note to GOP candidates: Pick a strong Treasury secretary.
He also suggests the insider role that Alan Greenspan played in administration councils as chairman of the Federal Reserve. Mr. Greenspan endorsed Mr. Cheney's misguided advice to Mr. Bush to select Paul O'Neill as his first Treasury chief. Such closeness to the White House may explain why no one in the administration noticed that the Fed's easy money policy was producing a credit mania that led to surging oil prices, the housing bubble and ultimately to financial panic. Second note to GOP candidates: Keep your Fed chiefs at a prudent political distance.
Of course, none of this was Mr. Cheney's main brief. That was national security and the Herculean effort to prevent another attack on the U.S. homeland. On that overarching mission, the evidence 10 years after 9/11 is that he succeeded. Americans are safer because Dick Cheney was willing to be hated by all the right people.
—Mr. Gigot is the Journal's editorial page editor.
-------------------------------------------------------------------------------------------------------------------------4)Weekend Edition
Porter Stansberry: The most important weapon for your economic freedom
Saturday, September 3, 2011
I can't believe how many inane comments I've heard about gold and the gold standard recently…
When the mainstream media begins to discuss gold as an alternative to paper money, it's a sign we're either in the midst of a massive devaluation or at a top in gold prices – or both. It's certainly a worrisome sign to see so much discussion on Fox News and CNBC about gold. Even worse, the pinheads on TV know nothing about gold, so they repeat the lies they've been told by their producers. They have no idea how stupid they sound because they've never thought about gold or studied it. I'm sure you've heard this nonsense, too…
"Gold is just another fiat currency"… "The gold standard didn't work because it limits economic growth to the availability of additional gold"… "We could never return to the gold standard because our economy is too big and there's not enough gold."
I want to dispel these falsehoods and show you why the common man should greatly prefer gold-backed money. I can imagine the groans… and envision the number of people closing this e-mail.
But I hope some of you will read this and think deeply about these ideas. I want you to know why bankers hate gold, why the government hates gold, why the mainstream media hates gold… and why you should treasure gold as your most important weapon for economic freedom.
Let's begin as Buffett's longtime partner Charlie Munger typically suggests, by "inverting" the question. Rather than starting with gold, let's start with the opposite of the gold standard – paper, fiat currencies. Let's look at how our economy and our fellow citizens have fared during the paper standard of the last 40 years. Since I spend most of my days looking at this kind of data, allow me to give you a preview…
The U.S. paper dollar standard has worked about as well as can be expected, which is to say, it has permitted debts to soar, the dollar's purchasing power to be gutted, and real wages to decline. It has left our economy with debts that can only be financed via even more inflation.
Below, you'll find a chart of the CRB index going back to the 1950s. The CRB index is a mix of basic commodities – things like base metals, oil, and food. It's not a perfect gauge of all consumer prices… But at least it's consistent over time, unlike government indexes, which are constantly "massaged" and adjusted.
Now, gold's price isn't really a measure of the metal's intrinsic value (which is almost perfectly stable). It's actually a reflection of the dollar's fundamentals. The same thing is true about the CRB index. It's not really a measure of supply and demand for commodities – it's actually a measure of the purchasing power of our currency. If you simply imagine this chart upside down, you'll get the real picture: The value of the dollar is falling. So look at the chart and then take a guess when the U.S. left the gold standard.
As you can see, prices soared (aka the value of the dollar collapsed) in 1971 when we left the gold standard. But wait a minute, you say, it looks like commodity prices fell between 1981 and 2004. Why did that happen?
Commodity prices did fall during the Volcker and Greenspan periods (1981-2006) because both Fed chairmen targeted money supply, creating a de-facto gold standard. (Volcker did so openly and publicly. Greenspan did so while only uttering totally indecipherable explanations.) As you know, this monetary discipline was tossed out the window when Bernanke took over the Fed. Since then, the monetary base has nearly tripled. As a result, commodity prices are soaring again.
Some people (like yours truly) knew a massive inflation was inevitable because of the enormous amount of credit created in the banking system from 1990-2006 – roughly $45 trillion. There's no way to finance these debts with sound money, let alone repay them. But we'll get to this part of the discussion in a minute. Let's just deal with the inflationary reality of paper money for now.
How anyone can look at that chart and not see inflation is beyond me… But as you know, several well-known economists (and even a few analysts at Stansberry Research) continue to insist that there is no inflation. When I hear that kind of baloney, it makes me want to grab those guys by the backs of their necks and push their faces into this chart. If that's not inflation, what would you call it?!
Inflation has been so prevalent for so long, most people don't even know it's not part of a normal economic system. Data on consumer prices from 1596-1971 in Britain prove conclusively that during gold-standard periods, commodity prices remain level – even over hundreds of years, during periods of massive economic growth and soaring populations.
So as should be intuitively clear to even a sixth-grader… printing more money leads to higher prices, a monetary phenomenon we call inflation. Printing money does not create real wealth or help promote economic growth. In fact, I believe printing money tends to retard production, because it interferes with prices, forcing entrepreneurs to engage in speculation (hedging) to protect margins.
We can test this hypothesis because we have an almost real-time case study – the second round of quantitative easing (QE2). QE2 began a year ago when Bernanke pledged to begin buying long-dated Treasury bonds in an effort to stimulate the economy. The funds for these purchases were created out of thin air – printed up, so to speak.
What was accomplished by these measures, which added roughly $600 billion to the U.S. monetary base? The stated purpose was to drive interest rates lower and stimulate the economy. But interest rates actually rose as the bond market began to fear inflation. Yields on U.S. 10-year bonds went from 2.5% to more than 3%. So the government bond market actually saw a decline.
And whether you owned government bonds or not, almost everyone was made poorer by the resulting inflation. Producer prices rose by nearly 6% during QE2. Oil prices, in particular, soared… moving up to more than $100 per barrel.
On the plus side… the stock market rose slightly in nominal terms. Whether or not those gains will last is another question. Even assuming the gains are permanent, all those gains would have been more than offset by the fall of the U.S. dollar over the last year (down 15%). Consider the folly of debasing the value of all U.S. assets by 15% to finance a minor increase in stock prices. That's insane.
QE2 did accomplish one thing… It led to a massive amount of new junk-bond issuance as the Fed's buying of government debt crowded out private capital, forcing it into riskier bonds. This allowed total business-sector debt to continue expanding, along with total government debt. Ever-bigger debts means more and more political pressure for inflation, something we'll discuss below.
The great advantage of paper money is supposed to be its flexibility. You can, in theory, print more of it when you need it to facilitate economic growth or forestall a crisis. But it doesn't really work. Printing money doesn't create wealth or stimulate the economy. It simply provides incentives for going into debt as people realize the money they borrow today won't be worth as much in the future.
The most important test of paper money is whether it facilitates real, per-capita economic growth. And on that score, the evidence is overwhelmingly negative. Measured in ounces of gold, per-family income in the United States has declined since 1971, retreating back to 1950s levels, despite the advent of two-income families.
Measured another way (using the government's own consumer price index as the inflation adjustment), real per-family income is essentially unchanged since 1971, again despite the fact that far more households have two wage earners today. Household earnings, in real terms, have fallen 30%-50% since the gold standard was abandoned.
Paper money works great for the rich, who can hedge their exposure to the currency and whose access to fixed-rate credit allows huge asset purchases. But it is horrible for the middle class, whose wages do not keep pace with declines in purchasing power caused by inflation. If you want to know why there's so much discrepancy in incomes and per-capita wealth in the U.S., look no further than paper money.
So that's the gold standard inverted. We can prove that paper-money systems don't work. They lead to high levels of debt, gross income inequality, and horrific economic volatility, due to both high debt levels and inflation. But what about the gold standard? How does it work?
Nathan Lewis (whose book Gold: The Once and Future Money is required reading) recently outlined the gold standard's economic performance to Forbes…
In 1790, the population of the United States was 3.9 million, and there were 13 states with an economy based on subsistence farming. In 1970, the population was 203 million, with 50 states and the most advanced, wealthiest industrial economy the world has ever seen.
During that entire period, the U.S. was on some type of gold standard (with the notable exception of the greenback era during and immediately after the Civil War). So it's hard to take people seriously when they complain that a gold standard would hamper economic growth in America. The exact opposite is true. The gold standard helped America become the wealthiest nation in the world. Ever since we abandoned it, our debts have soared and our incomes have fallen.
How does a gold standard work? Let's go back to the greenback era after the Civil War to see how America returned to gold. Following the Civil War, it took 14 years of economic growth and steady reductions in the number of greenbacks in circulation to return the U.S. dollar to parity with gold, at the same price as before the war. By 1879, the U.S. government stood ready to exchange greenbacks for gold.
That didn't mean the U.S. government had enough gold to exchange every greenback, it simply had enough gold in reserves and had access to enough gold to make the promise. The actual gold reserve fluctuated between 10% and 40%. What mattered was the government's legal commitment to exchange its currency for gold and its financial ability to do so. This limited the government's ability to increase the money supply. And it limited the banking system's ability to create credit.
What happened next? The 1880s saw the greatest increase in per-capita GDP in American history. Unemployment fell to 2.5%, despite high immigration. Real wages rose 23% between 1879 and 1889. The country boomed, led by heavy capital investment. The amount of rail track laid, for example, grew from 2,665 miles in 1878 to 11,568 miles in 1882. The value of building permits increased by 150% between 1878 and 1883.
And here's the most fascinating part of the story… prices steadily fell from the end of the Civil War until the early 1890s, when they finally stabilized. You'd be hard-pressed to find a working economist today on Wall Street who could explain why the greatest decades of economic growth in American history could have been achieved during a period of deflation.
Mainstream economists all believe prices ought to only fall during economic depressions because they've become so blinded by paper money. But I can explain what happened in the 1880s easily: With real money in place, investors were willing to make long-term investments.
The result was an economy led by capital investments – not consumption. It was an economy fueled by real savings – not foreign loans. There was no need for a central bank to set interest rate policies or to "safeguard" us from inflation because the gold standard insured parity and fairness between borrowers and lenders. This all led to big increases in productivity and production – and wealth for the entire economy, not just the rich.
And therein lies the secret to our story…
Any reasonable study of paper-money systems versus gold-backed monetary systems demonstrates the superiority of gold immediately. So… why does almost every modern government choose paper? The answer is because paper money allows the wealthy and powerful vested interests in our economy to manipulate interest rates, prices, the money supply, and credit to their exclusive advantage.
Think about this for a second. Imagine how much productivity in our economy has increased since 1971. There's been a complete revolution in technology that has caused massive increases to productivity. You can see it all around you. I'd estimate productivity has increased by 4%-6% per year since 1971.
Where did all that wealth go? It didn't end up boosting the value of our currency, as you'd normally expect. Prices never fell. Instead, all those productivity gains were consumed by the issuance of more and more money – by inflation. Therefore, average wages, in real terms, have declined. And all these productivity gains – all that wealth – was consumed by the financial sector, the government, debtors… all the people who benefit from inflation.
As a result, we've been left with a heavily indebted economy that's still led by consumption. Our system rewards debtors and punishes savers. It makes long-term capital investment nearly impossible because of economic volatility and financial risks caused by inflation. Worst of all, our system requires everyone become a speculator because there's no other way to safeguard savings.
You see, what the gold standard really does is ensure a level playing field for all economic actors – borrowers, lenders, and even governments. That's why bankers (who are always highly leveraged), media barons (who constantly borrow to buy more properties), and governments (which can never balance their budgets) all abhor gold. To maintain their power, they all need paper money. The system we have now and those who profit from it would not survive a transition back to the gold standard.
Here's just one example of how this all works out in practice, not just in theory. Take a look at Rupert Murdoch's balance sheet. News Corp. is totally a product of the paper-money system. Murdoch always has access to credit, thanks to his government connections. He can always borrow heavily to buy his media properties – and he always does. News Corp. currently has a debt-to-equity ratio of 53. (That's not a typo. You can check the number yourself here on the New Corp. website.)
Murdoch recently borrowed $60 billion to buy the Wall Street Journal. Under a gold standard, there's no way Rupert could finance these debts. News Corp. would go bankrupt if the dollar was sound.
So do you think the Wall Street Journal is going to come out publicly for gold? What about the U.S. government? Do you think it wants to give up the power it has today – the ability to legally print money to pay its debts? No way. It'll never happen – not willingly. And how do you bet Rupert's and the government's debts will be paid back? In sound money? Or through inflation? What do you think that inflation will do to the value of your wages?
Do you see how the game works now?
One more point… you'll frequently hear that we don't have enough gold to support a gold standard and other such nonsense. Those comments are ignorant. The U.S. is the world's largest holder of gold. We have plenty of domestic gold mines – Nevada is one of the richest gold-mining areas in the world. A return to gold is possible.
The timetable for doing so and the impact it would have on the world economy would depend on what price level was set for gold. Setting a target date in the future – say 10 years from now – would allow the market to reach the appropriate price level in an orderly fashion. There wouldn't need to be any real economic adjustment – except for folks who are currently heavily in debt. Sound money would make it much more difficult to refinance risky loans.
I'm sure there would have to be a significant restructuring of our existing debts. And that would mean the end of our debt-led financial system. But after those debts were restructured, the gold standard would lead to massive economic growth and ensure the benefits of that growth are spread equally across the economy.
The next time you hear someone in the media talking about the gold standard as though it's some kind of insane idea… listen carefully. You'll hear nothing but lies and propaganda. There's no legitimate reason to oppose the gold standard. It's the safest and most efficient way to run a monetary system, as has been proven time and time again. Paper, on the other hand, always fails.
Regards,
Porter Stansberry
-------------------------------------------------------------------------------------------------------------------------5) Interesting response to an action by the Edinburgh Student
Association to boycott Israel
A Scottish Professor Responds to Boycott on Campus
The Edinburgh Student's Ass'n made a motion to boycott all
things Israeli since they claim Israel is under an apartheid regime
Dr. Denis MacEoin (a non-Jew) is an expert in Middle Eastern affairs.
Here is his letter to those students. Received by e-mail from the author,
Denis MacEoin, a senior editor of the Middle East Quarterly,Addresses The
Committee Edinburgh University Student Association
The Committee Edinburgh University Student Association, May I be
permitted to say a few words to members of the EUSA?
I am an Edinburgh graduate (MA 1975), who studied Persian,
Arabic and Islamic History in Buccleuch Place under William Montgomery
Watt and Laurence Elwell Sutton, two of Britain's great Middle East
experts in their day. I later went on to do a PhD at Cambridge and to teach
Arabic and Islamic Studies at Newcastle University.
Naturally, I am the author of several books and hundreds of
articles in this field. I say all that to show that I am well informed in
Middle Eastern affairs and that, for that reason,I am shocked and
disheartened by the EUSA motion and vote.I am shocked for a simple
reason: there is not and has never been a system of apartheid in Israel.
That is not my opinion-that is fact that can be tested against reality by
any Edinburgh student,should he or she choose to visit Israel to see for
themselves.
Let me spell this out,since I have the impression that those
Member of EUSA who voted for this motion are absolutely clue-less in
matters concerning Israel, and that they are, in all likelihood, tHE
victims of extremely biased propaganda coming from the
anti-Israel lobby. Being anti-Israel is not in itself objectionable.
But I'm not talking about ordinary criticism of Israel.
I'm speaking of a hatred that permits itself no boundaries
in the lies and myths it pours out.Thus, Israel is repeatedly referred
to as a "Nazi" state.In what sense is this true, even as a metaphor?
Where are the Israeli concentration camps? The einzatzgruppen?
The SS? The Nuremberg Laws? ThE Final Solution? None of these things or
anything remotely resembling themexists in Israel,precisely because
thE Jews, more than anyone on earth, understand what Nazism stood for.
It is claimed that there has been an Israeli Holocaust in gaza
Where? When? No honest historian would treat that claim with anything
but the contempt it deserves.
But calling Jews 'Nazis'and saying they have committed a
Holocaust is as basic a way to subvert historical fact as anything I can
think of. Likewise apartheid.For apartheid to exist there would have to
be a situation that closely resembled things in South Africa under the
Apartheid regime.Unfortunately for those who believe this, a weekend in any
part of Israel would be enough to sho how ridiculous the claim is.
That a body of university students actually fell for this and voted on it
is a sad comment on the state of modern education.The most obvious focus
for apartheid would be the country's 20% Arab population.
Under Israeli law, Arab Israelis have exactly the same rights as Jews or anyone else; Muslims have the same rights as Jews or Christians; Baha'is, severely persecuted in Iran, flourish in Israel, where they have their world centre; Ahmadi Muslims, severel persecuted in Pakistan and elsewhere, are kept safe by Israel;
the holy places of all religions are protected under a specific Israeli law.
Arabs in Israel form 20% of the university population (an
exact echo of their percentage in the general population).
In Iran, the Baha'is (the largest religious minority) are forbidden to study in any university or to run their own
universities: why aren't your members boycotting Iran?
Arabs in Israel can go anywhere they want, unlike blacks
in Apartheid South Africa.They use public transport, they eat in
Restaurants, they go to swimming pools, they use libraries, and they go to
Cinemas alongside Jews;something no blacks could do in South Africa.
Israeli hospitals not only treat Jews and Arabs, they also treat Palestinians from Gaza or the West Bank. On the same wards, in the
same operating theatres.In Israel, women have the same rights as men: there is
no Gender-apartheid.
Gay men and women face no restrictions, and Palestinian gays often
escape into Israel, knowing they may be killed at home.It seems bizarre to me
that LGBT groups call for a boycott of Israel and say nothing about countries like Iran,where gay men are hanged or stoned to death. That illustrates a mindset that beggars belief.
Intelligent students thinking it's better to be silent about regimes that kill gay people, but good to condemn the only countryin the Middle East that rescues and protects gay people. Is that supposed to be a sick joke? University is supposed to be about learning to use your brain, To think rationally, to examine evidence, to reach conclusions based on solid evidence, to compare sources, to weigh up one view against one or more others.If the best Edinburgh can now produce are students who have no idea how to do any of these things, then the future is bleak.I do not object to well documented criticism of Israel.
I do object when supposedly intelligent people single the Jewish state out above states that are horrific in their treatment of their populations.We are going through the biggest upheaval in the Middle East since the 7th and 8th centuries, and it's clear that Arabs and Iranians are rebelling against terrifying regimes that fight back by killing their own citizens. Israeli citizens, Jews and Arabs alike, do not rebel (though they are free to protest). Yet, Edinburgh students mount no demonstrations and call for no boycotts against
Libya, Bahrain, Saudi Arabia, Yemen, and Iran.
They prefer to make false accusations against one of the world's freest countries,the only country in the Middle East that has taken in Darfur refugees, the only country in the Middle East that gives refuge to gay men and women, the only country in the Middle East that protects the Baha'is... Need I go on? The imbalance is perceptible, and it sheds no credit on anyone who voted for this boycott.
I ask you to show some common sense. Get information from the Israeli embassy. Ask for some speakers. Listen to more than one side. Do not make your minds up until you have given a fair hearing to both parties. You have a duty to your students, and that is to protect them from one-sided
argument.They are not at university to be propagandized.And they are, certainly, not there to be tricked into anti-Semitism by punishing one country among all the countries of the world,which happens to be the only Jewish state. If there had been a single Jewish state in the 1930s (which, sadly, there was not), don't you thinkAdolf Hitler would have decided to boycott it? Of course he would, and he would not have stopped there.
Your generation has a duty to ensure that the perennial racism of anti-Semitism never sets down roots among you. Today, however, there are clear signs that it has done so and is putting down more.
You have a chance to avert a very great evil, simply by using Reason and a sense of fair play.
Please tell me that this makes sense. I have given you some
of the evidence. It's up to you to find out more.
Your sincerely,
Dr. Denis MacEoin
No comments:
Post a Comment