Margin Call: Truth is Stranger than Fiction

I just watched a recently released to DVD movie entitled "Margin Call."   It was about the beginnings of the crash of the housing bubble and the associated financial fallout.    In spite of what follows, I give the movie a "two thumbs up."   It's a very thoughtful film.    Still, it is a film about recent history and to some extent it attempts to re-write that history in a very unusual way.

I am used to Hollywood demonizing big business of all sorts, often in a ham-fisted fashion.   The corporations are very often the bad guys in movie land.   They can be in real life too of course.  Incorporation confers no special virtue on human nature. Indeed, removing personal liability for the actions of a company from its owners and officers might reasonably be expected to reduce their incentive for ethical behavior towards the general populace.  

Still, Hollywood sometimes goes over the top in its depiction of corporate malice.   "Margin Call" did the opposite.   It went "under the top."    That is to say, the questionable ethical behavior exhibited by the financiers in the film did not hold a candle to the amoral and predatory behavior exhibited by their real-life counterparts.

There are some mild spoilers ahead which I think will not greatly detract from the movie, but if you are sensitive to such things and plan to see it, you may wish to stop reading here.

In the film, the firm which is the centerpiece of this story discovers buys mortgages and bundles them into mortgage backed securities and resells them.   It also buys such bundles from other firms and re-packages and sells them.   There is a lag time between the time they acquire these instruments and the moment they offload them to someone else.   What they begin to realize is that these "assets" may be next to worthless and if they are caught with too many of them on the books when the world realizes that, then the firm will be insolvent.   So far, that matches what happened in recent history.

In the film, the moral conflict revolves around how to extricate themselves from this dangerous financial position.    One option is to quit buying and sell all such assets off quickly for whatever you can get for them.   Such a strategy would involve losses, as "fire sales" often do, but those who sell first would take less of a hit than those left holding the toxic "securities."    The sense is that everyone trading these instruments has a vague idea that these things are not worth what they are being traded for, but no firm wants to be the first to end a lucrative business of trading possibly worthless pieces of paper back and forth.    A vulture-like Jeremy Irons plays the suave yet repulsive head of the firm who will make the final call.

I only wish that the worst thing that the high-flying financiers did in all this mess was sell their junk to other willing buyers in the industry at a loss.   The truth is that this action, portrayed as so dark an option in the film, was the picture of innocence compared to what their real-life counterparts did.   Hollywood simply cannot demonize the financial elites.   It lacks the imagination necessary to go beyond their actual villainy.   The film actually humanized them and greatly soft-peddled what actually went down.

The history is that firms like Goldman Sachs sold their toxic assets not just to other firms like themselves, but to their own clients.   And while one part of the operation was selling these things to their clients as a good investment, another part of the firm was making bets that those investments would fail.    Then, when they failed to offload their junk on willing buyers in time, they used their pull with the politicians to make you and me unwilling buyers of those assets through various forms of bank bailouts.  We, via the Federal Reserve and/or the Treasury, now hold a lot of the trash they could not convince anyone else to buy.

Watch the film, and know that the most objectionable and immoral act of even the most unsympathetic character in that movie was nothing at all compared to their real-life counterparts.

Media and Government Corruption Alleged in Saline County

BENTON COURIER REFUSED TO PUBLISH THIS...THOSE WHO LIVE IN SALINE COUNTY SHOULD READ THIS LETTER;

Mr. Burks,

My name is David Cannon. I am the attorney who represented Tammy McLain in the case discussed in your article. There are several facts that were left out of your article on Saturday, January 7, 2012.

Despite an extensive investigation by the Saline County Prosecutor's office, the Saline County Sheriff's office, and the Bureau of Legislative Audit, spanning 15 months, the only money that was found missing was $5.00. The missing $5.00 was used by Ms. Perkins and the current director of Saline County CASA, Kerry Oreck to buy coffee. The allegations of theft were made by Ms. Oreck after she was fired from Saline County CASA. After being fired Ms. Oreck went to her friend Stephanie Casady, the wife of prosecuting attorney Ken Casady, and got this investigation started. How nice it must be for a disgruntled former employee to be friends with the prosecutor's wife. Ms. Oreck made allegations of large scale thefts but only $5.00 was determined to be stolen. That same $5.00 that Ms. Oreck was complicit in spending. Ms. Oreck not only received her job back but was promoted to Ms. Perkins' former position. It is nice to be friends with the prosecutor's wife. Especially when the prosecutor makes such bold statements as "no other CASA volunteers or employees were part of the illegal activities". The prosecutor's office was made aware of Ms. Oreck's involvement during the course of the investigation, but has chosen not to prosecute Ms. Oreck. I can only surmise this is because she is friends with the prosecutor's wife.

The records of both Saline County CASA and Perimeter club were very well organized and the funds properly separated. So much so that the owners of said funds were easily determined and the funds are being returned to their owners. The majority of the funds seized by Saline County Deputies are being returned to Ms. McLain and Ms. Perkins.

Ms. McLain pled guilty to operating the bingo hall after Perimeter Club's license had expired. Operating a bingo hall with an expired license is a violation, which is less serious than operating a vehicle with an expired driver's license, which is a misdemeanor. Perimeter Club had a pending application for renewal. The license was to be reissued until the Saline County Sheriff's Department raided the establishment.

Sheriff Pennington's statement that no money had ever been donated to Saline County CASA is a complete and total falsehood. The records reviewed by Sheriff Pennington's department, the Saline County Prosecutor's office, and Bureau of Legislative Audit clearly show money being donated to Saline County CASA and another charity which ministered to and educated deaf Hondurans.

I am disappointed that you failed to request comment from all sides and sought to act not as a journalist but rather a propagandist for the Saline County Sheriff's office, the Saline County Prosecutor's Office, and Ken Casady. I am willing and have permission to speak with you regarding this matter if you are so inclined.

I also wish to question why the Benton Courier has not published an article regarding Stephanie Casady's campaign for Saline County District Judge. Residents of Saline County should know the conflict of interest that having a judge and prosecutor as husband and wife creates. As a criminal defense attorney I would immediately move to disqualify Mrs. Casady from sitting on any criminal case which her husband's office prosecutes. I would also move to suppress every search warrant signed by Ms. Casady because it was not issued by a neutral and detached magistrate as required by the Constitution. This scenario would create backlog for the other district judge and also the circuit judges when I appeal every district court case due to impropriety.

I understand that Mr. and Mrs. Casady think the taint their marriage casts over criminal proceedings could be removed by simply hiring independent contractors to prosecute criminal cases before Ms. Casady. I must then ask myself, "Why should the residents of Saline County be asked to pay additional tax dollars for independent contractors to prosecute cases when they are already paying for full-time prosecutors to do that? Why should the residents of Saline County be faced with higher taxes so that one family can receive two government salaries? Will the Saline County Prosecuting Attorney's office fire the prosecutor's currently prosecuting in district court? Will the Saline County Prosecuting Attorney's office agree to reduce its annual operating budget to cover the costs fo the independent contractors?" 

Is the Courier going to look into this or is it going to remain silent and shirk its journalistic duties? I look forward to hearing from.

Sincerely,

David R. Cannon
The Cannon Law Firm, PLC
425 W. Broadway, Suite A
North Little Rock, AR 7211

FOX Covers for Monsanto on Cancer-causing Chemical in Milk

Fair and balanced?  We report, you decide?   These reporters' supervisor told them "we decide what the news is".     In this case, that they would not tell America that a chemical found in much of America's milk supply may cause cancer.   The drug in question is already banned in Europe and Canada.

Big media needs ad dollars from other big corporations.    They are not going to lose giant accounts just to tell you the truth.   The government is worse.  There is a revolving door between the FDA and giant corporate food entities like Monsanto.  Just as certain big banks have captured government financial regulators, certain giant food corporations have captured the regulatory agencies in their industry.

The end result is that a regulatory agency whose nominal purpose is to protect you from them winds up covering for them.    Even worse, they are actually making it harder for smaller companies who wish to protect you from doing so.  Their new function appears to be covering for the big boys and inventing new regulations designed to drive small competitors and local alternatives out of business.

It is my position that such capture is inevitable when you have corporations that big and a regulatory agency that specialized and centralized.  If and when the United States gets a re-boot, we should remember this principle and design a new system based on other, decentralized and less specialized, criteria. Taking these subjects away from regular judges of common law and entrusting them to a specialized regulatory agency is something that the big companies want.    For now the takeaway is that you are actually less likely to get the truth from big media than you are independent internet sources that have a history of reliability.    Quit listening to them, whether it is letting them pick your candidates for you with slanted coverage/non-coverage or what food products you and your family consume.

NDAA: The Text of the Law (part 3)

Griffin Misleading You on NDAA as shown here ( part 2) and here (part 1)

I have already written about how the NDAA does seriously violate your due process rights and replaces them with something that is an elaborate but empty façade of such rights.   You can look at those articles here and here.    In this one, I want to show the actual text of the bill itself so that you can see that, yes, it is as bad as we feared it would be, and no, assurances from Congressman like Tim Griffin do not mitigate the awfulness of this bill.  Rather they are attempts to conceal its awfulness.   The bill is a far more serious violation of your constitutional rights than even the most offensive provisions of Obamacare.

Almost all the trouble with the NDAA rests in section 1021 of that abominable act.   Griffin and others have tried to use the fact that section 1022 does have an exemption for citizens of the United States as a reason that we should not be concerned about the act.   This is misleading in the extreme.   He and other defenders like Allen West go on and on about how section 1022 specifically exempts U.S. citizens in the United States from its provisions, but section 1021 has almost identical provisions and U.S. citizens are not exempted from it!    

The protections for U.S. citizens in section 1022 do nothing to protect us from the nearly identical provisions in section 1021, from which we are not exempted.    Imagine the level of duplicity involved in such a deception!   “Look over here at section 1022 folks!  See, we are not taking your rights away, we are just taking away the rights of those nasty old terrorists (or people we say are terrorists).”  Meanwhile, section 1021 authorizes almost identical treatment for you and your neighbor.

Since it is not that long, I would like to present section 1021 in its entirety, with some commentary to bring home the real meaning of the legalese with things I’d like to focus on highlighted…

SEC. 1021. AFFIRMATION OF AUTHORITY OF THE ARMED FORCES OF

THE UNITED STATES TO DETAIN COVERED PERSONS

PURSUANT TO THE AUTHORIZATION FOR USE OF MILITARY FORCE.

(a) IN GENERAL.—Congress affirms that the authority of the

President to use all necessary and appropriate force pursuant to

the Authorization for Use of Military Force (Public Law 107–40;

50 U.S.C. 1541 note) includes the authority for the Armed Forces

of the United States to detain covered persons (as defined in subsection (b)) pending disposition under the law of war.

“Pending disposition under the law of war” means that you will be treated as a POW rather than a U.S. citizen.     You would be handled under the same rules that we used on captured Nazis in WWII.  Remember though, that under the laws of war uniformed troops captured in battle are eligible for much better treatment than are “spies” and “saboteurs” or “terrorist supporters” as most people would be accused of under this act. 

Other things you don’t get: the right to face your accusers, protection against hearsay evidence, the right to your attorney, the burden of proof being placed on the government to prove you should be locked up, the ability to notify your kin what happened to you etc….

(b) COVERED PERSONS.—A covered person under this section

is any person as follows:

(1) A person who planned, authorized, committed, or aided

the terrorist attacks that occurred on September 11, 2001,

or harbored those responsible for those attacks.

(2) A person who was a part of or substantially supported

al-Qaeda, the Taliban, or associated forces that are engaged

in hostilities against the United States or its coalition partners,

including any person who has committed a belligerent act or

has directly supported such hostilities in aid of such enemy

forces.

Most of you probably don’t think like an evil lawyer, therefore you read the above paragraph and think “well this law only applies to al-Queda or the Taliban.”    But evil lawyers look at that and see loopholes a mile wide, and plenty of evil lawyers work for the system.   What does "substantial" support for forces "associated" with al-Quaeda or the Taliban mean?   How is it determined that this standard is met?  The answer can only be that the President alone determines who is "substantially" supporting a group that he alone can determine is "associated" with "al-Quaeda or the Taliban".   

Is blogging that America should get out of Afghanistan giving "substantial" support to the Taliban?  Is passing on Taliban claims about massacres committed by American forces providing such support?  Is organizing protests against the policies of "the Commander and Chief" a "belligerent act"?     If the President says so, it could be under this act.  That's the whole point.  The executive branch alone gets to decide which citizens might be detained indefinitely.

There are no checks and balances.  There is no judicial oversight.  You don't get your own lawyer and it does not matter if the government makes a mistake.   All the President has to do to make you go away is say that he decided you were giving substantial support to a group associated with the Taliban.  He does not have to present any evidence to that effect.  He does not need any evidence to that effect.  These powers are dictatorial in nature.

The CIA and the U. S. military itself provided substantial support (as in weapons and information) to both Al-Quaeda and the Taliban back in the 1990s when the Soviet Union occupied Afghanistan.   Since I was a member of the U.S. Military, I was a member of a group “associated” with the Taliban which gave “substantial support” to the Taliban.  Thus, even under an honest literal reading of the language of the act, I am already eligible for indefinite detention without trial, as would be the military personnel arresting me.

But there is no reason to believe that administration officials will limit themselves to an honest reading of the act.     The definition of “terrorism” is constantly being expanded by the government so that you don’t have to actually do violence, or even contemplate violence, to be labeled a terrorist.  For example, the founder of the Liberty Mint only tried to mint coins that were made of gold and silver.  This act alone got him imprisoned, his property confiscated, and his actions labeled “domestic terrorism" by a U.S. Attorney in the case.   

I find it very probable that in the near future any citizens who vigorously but peacefully protest the misrule of the two-party cabal currently looting the nation will be classified as “potential domestic terrorists.”   As such they will be subject to indefinite detention just for exercising their constitutional right to assemble and protest.  Indeed even before the NDAA became law, the military used a predator drone to assist a local sheriff arrest an anti-government family for the crime of failing to report that some cows had wandered onto their 3,000 acre ranch.

The bottom line is that the definition is filled with loopholes, and even if it were not, there are no checks and no balances against even the most trumped up of charges being used against political opponents.

(c) DISPOSITION UNDER LAW OF WAR.—The disposition of a

person under the law of war as described in subsection (a) may

include the following:

(1) Detention under the law of war without trial until

the end of the hostilities authorized by the Authorization for

Use of Military Force.

When will the “end of hostilities” be for the war on “terror”?  Will it be, as comedian Jon Stewart suggests, “when terror surrenders and is no longer available as a human emotion?”    Terror is a tactic, not a government.     You can’t defeat a tactic, you can only defeat enemies which use a tactic.  The war on terror is a forever-war, being used to justify the de-facto imposition of martial law on the people of the United States.     Until the trap is completely shut, they want to assure you that this is not being done, even as they do it right in front of you.  Detention until the end of “hostilities” is the same as detention for life, unless there is a revolution.

(2) Trial under chapter 47A of title 10, United States

Code (as amended by the Military Commissions Act of 2009

(title XVIII of Public Law 111–84)).

You can be given a trial under this military law or…

(3) Transfer for trial by an alternative court or competent

tribunal having lawful jurisdiction.

If an actual trial, even a military one, using fixed rules in advance is too inconvenient for them, they can throw up some ad hoc “tribunal” to decide your fate.   Needless to say, the rules we are used to being afforded as U.S. citizens will not apply.     They can make up the rules as they go along.

(4) Transfer to the custody or control of the person’s country

of origin, any other foreign country, or any other foreign entity.

Notice that the language allows U.S. citizens to be sent to foreign nations for detention, and presumably “interrogation.”   It’s not just foreigners being sent to their country of origin, but anyone can be sent to any country.

(d) CONSTRUCTION.—Nothing in this section is intended to limit

or expand the authority of the President or the scope of the

Authorization for Use of Military Force.

Is this supposed to reassure us?  Given that the President has already determined that he has the authority to conduct secret assassinations of American citizens without trial or outside review it is hard to see how any grant of authority could expand that which he currently exercises.   Therefore the only affect a clause which says the legislation does not “limit or expand” that authority is to confirm that it is not limited in anyway by the legislation. 

The law gives congressional cover to the current extra-constitutional actions and powers being exercised by this President against U.S. citizens.   Perhaps the first citizen assassinated using this power was a bad person who deserved it, but what about the next one hundred such assassinations?  Since there is no accountability, we just can’t know.

This provision was added at Obama’s insistence because he claimed he already had authority (from the Authorization for Use of Military Force) to do everything this bill says he can do.

(e) AUTHORITIES.—Nothing in this section shall be construed

to affect existing law or authorities relating to the detention of

United States citizens, lawful resident aliens of the United States,

or any other persons who are captured or arrested in the United

States.

At first you might be tempted to think “we are off the hook, this is not to be construed to affect our constitutional rights!”    Unfortunately, that is not what they are talking about here.    Those are not the “laws or authorities” they have in mind.    A quick look at the Bill of Rights, in particular amendments four through seven, shows practically everything in this section is violating those protections. 

No, what they are talking about here, if it has any meaning at all other than fluff to pretend that the rest of the act is not doing what it is in fact doing, is to give a fig leaf of legal cover on prisoner treatment.  This should be understood in the context of Obama’s threat to veto the original bill because he claimed he already had the authority to indefinitely detain people.   He threatened to veto it, not because it gave him too much power, but rather because the original bill placed restrictions on him he did not wish to have. 

This was placed in there to reassure Obama that what he had already done was not going to be held against him later.   It is cover to the effect that they were only confirming he could do what he has already been doing so that he could not be sued for similar actions he took before the act was passed.

(f) REQUIREMENT FOR BRIEFINGS OF CONGRESS.—The Secretary

of Defense shall regularly brief Congress regarding the application

of the authority described in this section, including the organizations, entities, and individuals considered to be ‘‘covered persons’’

for purposes of subsection (b)(2).

Ah, so there is some accountability.   Congress gets briefed on who has been rounded up.  If you are generous enough in your donations to these public servants, perhaps they will condescend to tell you if your vanished love one is on the list.

The more sheepish among us will accept Griffin’s misinformation about this bill because the alternative would obligate them to do something beyond pull a lever for candidates from one of the two DC controlled political clubs which have imposed monstrosities like this upon us.  May God have mercy on our souls. 

Griffin Misleads on NDAA Part 2

Griffin: Telling it like it isn't on NDAA.
Part 3 Here

The NDAA is a grotesque and un-American piece of legislation which re-defines your rights into meaningless shadows of their former substance. This abomination degrades your rights under the fourth, fifth, sixth amendments, and possibly the seventh amendment as well, as rendering all but meaningless your former right to habeas corpus (the right to challenge your detention by the government). NDAA is the foundation for the police state. Democrats voted for it. Republicans voted for it. If you are for real Due Process you now have no political party in Washington D.C. to represent your interests. At least not for federal law enforcement.

They don’t want you to realize that of course. That’s why men like Republican Congressman Tim Griffin put out misinformation about the bill, all the while accusing those on the other side of doing so.  In my first analysis of his deceitful assurances, I focused on why his claim that the bill was OK because it only codified what the Supreme Court ruled in Hamdi vs. Rumsfeld was absurd.   Please read the article for more details, but in short the court gave mixed messages in Hamdi, the facts of the case were about a citizen caught on an actual foreign battlefield where the NDAA would apply similar standards over the entire United States, and Scalia was correct in his dissent.

  

Does “the right to petition for habeas corpus” still exist under the act as Griffin claims? Only in name, not in substance. In the new version, hearsay evidence is allowed and the government does not have the burden of proof, you do.  And you don’t get to stand in front of a real judge anymore, just an officer from a “military tribunal.” Paid government informants could give false second hand information about your supposed involvement in an “anti-government plot” and based on that you could be indefinitely detained. The government does not have to show that the hearsay evidence from the paid informants is true in order to keep you detained, rather you have to persuade whoever the executive branch picked to run your kangaroo court that it’s false.   

In his defense of the NDAA, Griffin tries to reassure readers with these words: “I would never support legislation that granted the government authority to indefinitely detain U.S. citizens in the U.S. without the right to challenge the legality of any such detention through a petition for habeas corpus. Nor would any judge, court, or attorney in this nation uphold such an infringement of our rights.”  

This man is so slippery it is scary.  He parses better than Bill Clinton. Everything he claims he would never do and no judge would ever do has already been done in Justice Thomas’ dissent in Hamdi- the very case he cites as the legal foundation for the NDAA. In Hamdi, Justice Clarence Thomas wrote that the government did not have to provide due process rights to persons it alleged were “enemy combatants” even when they were U.S. citizens. 

When Griffin inserts the words “in the U.S.” to his statement above he sneaks around the fact that a Supreme Court Justice has already agreed that the government can do everything that Griffin claims that neither he nor they would ever agree to. The only difference is that the “battlefield” in that case was overseas.  But the NDAA makes no distinction in geography. The entire United States is now treated as “the battlefield” in a never ending “war on terror.” As Griffin himself says, the NDAA was codified Hamdi, and it applies the chaotic opinions in that case to the homeland. Notice that if they indefinitely detained you without due process in Guantanamo, or shipped you off to some other place that is not really U.S. soil then Griffin's statement would be technically true, but non-the-less unacceptable.

(continued on jump)

Griffin Misleads on NDAA (Part 1 of 3 on NDAA)

PART 2 here

Congressman Tim Griffin is a lawyer by trade, so he ought to know better than to make the claims he does about the NDAA.   This act is a far more serious violation of your rights than even the awful “Obamacare” requirement that you purchase health insurance. Let me say this again, the NDAA of 2012, which was supported by most Democrats and almost all Republicans, including our entire Arkansas federal delegation, is a far greater infringement of your rights than Obamacare. It represents a serious degradation of habeas corpus, and a violation of the fourth, fifth, and sixth amendments, as well as a defacto loss of the seventh.  

Our ruling class seems very nervous.  I suppose I would be too if I had allowed the Federal Reserve to create trillions of dollars out of thin air and essentially give it to multi-national banks and associated corporations while telling Joe Six-Pack that the new money is a debt he now owes and that he needs to sacrifice his Social Security, Medicare, Education, etc. to pay it back. I suspect that is what is coming as the magnitude of the looting becomes manifest. 

Fraud is an interesting crime. For a while, the perpetrators and the victims both think they have the money, and so everyone is happy. Bernie Madoff’s “clients” were happy even for years after Madoff stole their money, because they did not realize it was gone. Today’s political class has stolen our money, but like Madoff they are able to arrange things for a while to make it appear to us that the money is not gone.  Unlike Madoff, they are in position to make preparations so that once the fraud is discovered and people do become upset, they are not arrested for ripping us off, but rather we are to be arrested if we complain about it too strenuously.

But I digress.  I am going to give you the facts.  It is then up to you to determine which of us is more honest with you, me or Tim Griffin. One of us has to be feeding you misinformation. At the end of it, I invite you to decide whose credibility is lost, mine or his.

Griffin in his piece assures us that the law merely “codifies what the U.S. Supreme Court already said: The detainee provisions in the 2012 NDAA in no way undermine a U.S. citizen’s due process or habeas rights, as some have claimed.”     He is talking about the decision(s) in Hamdi v. Rumsfeld.

If the NDAA really did just “codify” “what the court already said” about habeas corpus in Hamdi, then among those “some” claiming it is an infringement would Supreme Court Justice Antonin Scalia (joined by liberal John Paul Stevens). 

Scalia is revered by many as the most brilliant legal mind in this nation.   According to the Wiki article in his powerful dissent on the case “Scalia asserted that based on historical precedent, the government had only two options to detain Hamdi: either Congress must suspend the right to habeas corpus, or Hamdi must be tried under normal criminal law. Scalia wrote that the plurality, though well-meaning, had no basis in law for trying to establish new procedures that would be applicable in a challenge to Hamdi's detention—it was only the job of the Court to declare it unconstitutional and order his release or proper arrest, rather than to invent an acceptable process for detention.” 

I’m with Scalia on this one. They should not be in the business of crafting a “due-process lite” for these situations, which is exactly what they were trying to do. 

(continued on the jump)... 

Preachers Can't Seem to Pick 'Em

When I was a boy, before the term "Christian Right" was coined, my dad told me that when he saw a bunch of preachers get behind some guy with a business proposal, that I should run like the wind.    He said that most preachers did not know enough about business to avoid being taken in by scams and get rich quick schemes.     He said the guy doing the pitching would run rings around them.   His thought was that if the fellow running the pitch really had a good one, he could pitch it to ordinary investors.   He said that I should get out of there when the preachers start coming to you as a member of the congregation with such "investment" ideas.   As much credibility as they might have on theological matters, it did not carry over to good judgement about business.

Well, preachers have not tried to recruit me into a business proposal based on the fake promises of some huckster, but they have tried to do something very similar when it comes to politicians.    All my life I have considered myself a part of the "Christian Right."   Now at age 50, I realize that the leaders of the religious right have been "taken" by con artist politicians in the Republican Party, just as my dad warned me they would be by unscrupulous businessmen.  

The leaders of the Christian Right are men I greatly respect.   I am talking about men like James Dobson and Don Wildmon.  But I don't respect what they have done to our political system.   They have put us all in disrepute by helping Bush the Younger.   Not that the alternative was any better than him, but when they are so prominently in his corner, they "own" his record.     He did not give them anything they really wanted, but now much of America blames them and considers him an example of what a "Christian" President would govern like.

In their desire to remain relevant, to be "players" in the current system, they are now sifting through the grifters and corporate sellouts that are among the current GOP offerings in an attempt to find one who is willing to lie to them enough to garner their support.   It's sad.   Why not just say that none of these men are worthy?  Why not just say "here are the issues that are important to us and we will leave it to our congregants to decide who will really be best to work for these issues?"

I think they have some idea that as the priests and prophets of our day that they are supposed to "anoint" the king.   Maybe the priesthood is supposed to anoint the king, but the scripture teaches that all believers are now the priesthood.    There is no intermediary group of men between God and man other than Christ, and a bunch of Protestant ministers ought to know that.    It is the people as a whole that will "anoint" the king, not a select priestly caste.

I used to think that these fine men just needed to be replaced by others, but maybe the problem is deeper than that.   God may not want any select group of men to be the leader of the "Christian Right".    Certainly, He has not blessed their efforts in that realm as he has in many of the other ministries they have been involved in.   It is sad to see Don Wildmon stand shoulder to shoulder with globalist Newt Gingrich.    If they only endorsed issues and not men, they would not feel constrained to compromise their integrity when the men crossed the line and betrayed them on the issues.  Jesus said that we should not call any among us "leader" because we had but one leader- the Christ.   The efforts of these men to position themselves as "leaders" of the Christian right has brought discredit to the faith when their selected politicians turned out to be duds.

Martin Luther said that he would rather be ruled by a wise Turk than a foolish Christian.     That's pretty far to go, but I get the feeling that he would not be taken in by these politicians who have used Christians.  Today's Christian "leaders" have bought on the cheap with a little rhetoric and symbolic action while the nation slips further into fascism and globalism.

The Marginal Utility of Government Pump-Priming

What has happened over the last generation is the unraveling of the Keynesian economic model.   Sadly, the political class will be among the last to accept that it doesn't work anymore because it preached "the truth they wanted to hear."     I want to briefly describe here why it seemed to work for a time and why it increasingly will not work anymore.

The key feature of the system was government "pump priming."   That is, when the private sector was in an economic slowdown, the government would take up the slack by increasing spending in order to get the economy going again.   Off course, if they taxed this money and paid as they went, it would subtract money from the private economy and cancel out their efforts.   Under Keynesian ideals, you used debt to prime the pump during these lean times.

So the government borrows money and spends it to get the economy growing again.   And under the classical Keynesian view, it almost didn't matter what you spent it on:  Digging holes and re-filling them.  Building tanks only to see them blown up in war or sit in a depot to rust.  The end results were all the same.  The important thing is that money was injected into the economy.   Even if the government did not spend it efficiently, once that dollar was injected it was in the hands of the private sector and they would spend it effectively as it cycled through the economy.

To be fair to Keynes, politicians abused his actual concept.   The idea was that the government should borrow in bad times to prime the pump, and repay it in good times, thus smoothing out the business cycle.  What a charming naivety people must have had back then to think that politicians would use their term in office to insist people take a tax hike or cut down on services to pay down debt run up by their generational predecessors!   Instead, they borrowed in bad times and failed to repay in good times.

At first, it worked like a charm.   Eventually, the debt became a constant overhang on the economy.  This is because government spending does not actually "create jobs."   In the long run, it costs jobs because government spends less effectively than the private sector.   Of course those rascals pretend that they are "investing" in these government projects, and assume that their interventions in the economy somehow improve its efficiency rather than distort it.    

But the bottom line is that government spending via debt does not "create" jobs, it only borrows them from the future, minus the cost of interest and resource miss-allocations.   Politicians point to the jobs their spending brought, but we never see the future jobs lost as a result of the politicians over-riding the market and forcing dollars to be spent in one place when the free choices of the population would, if allowed to, spend them in other places.

So the politicians found a way to put off consequences into the future and they pursued that way with reckless abandon.   As each down turn in the business cycle was short circuited by a new infusion of government largess, the government's share of the total economy ballooned.   We are now at a point where increased Keynesian injections will not stop a fiscal catastrophe, they will only make deeper the hole in which we now find ourselves.  

Consider that when government spending was only one 50th of the economy, it did not matter so much that the money was mis-allocated compared to how it would be spent in the private sector, because the private sector was the one spending those injected dollars 49 times out of 50.   The drag on the economy from the government allocating that spending less effectively than the private sector would was dwarfed by the number of times those dollars would move through the private sector.

Even if the government wasted half the money over-building highways or purchased $100 hammers for the military, that represented only a 1% loss to the total economy (one 50th of all spending half wasted), and that loss was put off into the future.  Pump priming in those circumstances seems worth it at the time.

Fast forward to now.  The government is now one third of the economy, and they are driving much of the spending that occurs in the rest of it.     When one third of the dollars in your economy are not allocated on a free market basis you are going to have enormous miss allocation of resources.  The government spending will result in a massive destruction of wealth which will be all out of proportion to any good it does getting the remainder of the economy to create wealth.  One of every three dollars is miss-spent, not one out of fifty dollars.   This gigantic miss allocation of resources,  along with the debt required from past government pump-priming, have ruined the private economy.

The Keynesian experiment was always doomed to fail as long as it is true that dollars spent by government will be spent less productively than dollars spent by individual free choice (which is to say, the market).   Those politicians who refused to pay down the debt in the good times actually did us a favor in that they compressed the time it took for the failure of Keynesian-ism to become obvious.   They reduced the number of iterations of pump priming required for it to become clear that every time government primed the pump, it wasted water and thus increase the amount of water needed for the next priming.

We have some tough times ahead of us, due to the gross mismanagement and criminal corruption of our current ruling political class.   Their blindness is not restricted to moral blindness, but is total.  They are so immersed in the Keynesian view that they will be among the last to see that it has failed.   We must liquidate our bad debt and return to a free market economy with very little government overhead in order to return to prosperity.  

It is too bad that our current ruling class holds much of that bad debt and has gotten rich through their connections to a large interventionist government.    This will make reform difficult, because the old ruling class will have to suffer the consequences for their poor decisions both politically and financially.  In a worst case scenario, they are sociopathic and self-entitled enough that rather than accept these consequences, they will clamp down on the rest of us and double-down on their poor bets.



 

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