Thursday, April 30, 2009

Republicans as a Minor Party and the Need for Due Diligence

There are roughly 142 million registered voters. According to USA Today, there are 55 million registered Republicans and 72 million registered Democrats. Not long ago Republicans were ahead.

Arlen Specter's decision to become a Democrat coupled with Al Franken's conversion of the Minnesota Senate seat gives the Democrats a 60-40 Senate seat lead. In the House, there are only 177 Republicans, or about 41% of the total. Thus, in January the "stimulus" bill passed in the House without a single Republican vote.

On April 27, pollster Scott Rasmussen asked the million dollar question in an article: "Is the Beltway GOP Irrelevant?". Rasmussen argues that Republicans are on the path to irrelevance because they lack formal power and because people are not interested in following them. Rasmussen argues that the decline began with the first Bush, but I contend that the real reason for the decline is attributable to Ronald Reagan, even though he remains sacrosanct in most conservatives' minds.

Reagan was elected on a platform of reducing government and ending inflation. He made some small cuts in government early in his administration, but the supply siders won the debate within his administration. Their argument was to spend heavily as taxes were cut. This contributed to the high interest rates in the early 1980s. But the effect was to encourage the Fed to re-inflate. Thus, the legacy of the Reagan administration was a confirmation of Richard M. Nixon's claim that "we are all Keynesians now." In effect, successive Republican administrations reversed the monetarist approach that Paul Volker had adopted under Democratic President Jimmy Carter. While monetarism may have failed, monetary policy was not tight through the past thirty years. The result is the current sub-prime meltdown.

Credit expansions inevitably result in collapses. This is because wasteful investment is made due to loose money. The 1980s and 1990s saw one financial bubble after the next, and the waste accumulated. Perhaps the modicum of economic deregulation that occurred during the Carter and Reagan years coupled with the Carter-imposed monetary conservatism of 1979-1983 was able to absorb the following two decades of economic mismanagement.

In any case, the Republican revolution of 1980 was supposed to have been against big government, inflation, and regulation. But the Republicans, starting with Reagan, have not been interested in any of these strategies.

The failure of the Reagan model is not allowed to be discussed in Republican circles. In fact, I have not heard a single talk radio personality mention monetary issues. I have not heard Sean Hannity mention monetary issues. I have not heard Rush Limbaugh mention monetary issues. I have not heard Mark Levin mention monetary issues. Yet a party that rode to power on concerns about inflation in 1980 might consider that monetary issues have some importance.

The Republicans' failures go further. The federal budget has mushroomed since 1980 and the Republicans are largely to blame. In 2008 federal outlays were $2.9 trillion. In 1980 outlays were $591 billion. Prices from 1980 to 2009 increased by 158%. The federal budget increased by 391%. Much of that increase occurred during Republican administrations and Congresses. Certainly there were no cuts during those years. The absurd bailouts and stimulus bills that have been passed under George W. Bush and Barack H. Obama were as much a Republican as a Democratic response. So matters have gone from the fire into the nuclear blast.

Rasmussen is correct that there has been a disconnect between the Republican grass roots and Republicans inside the Beltway. But it is worse than that. In order to win an election, the Republicans must rely on moral or religious conservatives, who have become as much as 36% of the electorate. But Republicans cannot get to 50% without economic conservatives.

Donald J. Devine of Conservative Battleline notes:

"Even the broadest classifications of voter types do not find a majority supporting any single one. Political scientist par excellence, Aaron Wildavsky, identified four very broad political types: so called individualists, deferentials, egalitarians and fatalists. Based upon the Time Warner data, the first (which corresponds to economic conservatives) represented 34 percent of the population, the second (social conservatives) equaled 22 percent, egalitarians (liberals) were 27 percent and fatalists 17 percent. On the basis of this division, Wildavsky concluded that all politics must be coalition politics, with no single one able to mold a reliable majority."

Under George W. Bush, and more gradually since the Reagan years, the Republicans have increasingly acted as though they aim to reject economic conservatism. In doing so they have created additional problems for themselves of an ethical nature. George W. Bush and other leading Republicans never publicly renounced economic conservatism. Rather, Bush spoke in code, referring to "compassionate conservatism". This sleight of hand has led, at least in my mind and probably others', to the feeling that the Republicans lack a moral core. A Republican who says he favors economic conservatism might as well be "compassionate" about it as not--and why should he let on how compassionate he or she is? So why should I believe him? Just because a talk show host says so? But where was the talk show host in '04 and '00?

Talk Radio poses a viable organizing tool, and the audiences are large. Rush Limbaugh draws 13 million listeners, more than any network or cable news broadcasts. But many of his listeners are not Republicans and not voters. Moreover, there is far from perfect overlap with the economic conservative segment among those who are Republican voters. Hence although talk radio can influence results at the margin, it cannot overcome serious alienation of large numbers of voters.

Many voters actually have concluded that Barack Obama is more conservative economically than any of the Republican candidates.

It appears that the Republicans are damaged goods. They have not fulfilled public expectations about their performance and, have been, in a word, dishonest. A coalition of economic conservatives and religious conservatives can present a winning coalition. But there needs to be documentation and evidence so that economic conservatives can do due diligence. Without the possibility of due diligence, there is no hope for the Republicans. Alternative strategies will be necessary.

What do I mean by due diligence? There needs to be a fixed program. The candidate needs to have a track record of implementing similar programs. But are there candidates among the Republicans who fit this profile? I doubt it.

The Republicans might well become a third party or be overtaken by a new second party, just as they overtook the Whigs in the 1850s. Given current patterns, there is reason for both religious and economic conservatives to consider that the Republican leadership demonstrably lacks common sense and has a track record of deception and implementation of government bloat.

Wednesday, April 29, 2009

Exchange with Doug Ross Re Minor Parties

In response to my post regarding Phil Orenstein's blog on tea parties legendary blogger Doug Ross writes:

>As Mark Levin and Hugh Hewitt have stated on a number of occasions, any attempt at forming a third party would be disastrous: it would simply split the conservative vote when, even united, the job ahead will be monumentally difficult.

We must not and can not endorse the formation of a third party. It represents suicide for the conservative movement. We must instead reshape the Republican Party behind the aegis of Liberty vs. Tyranny.

Best Regards,

Doug Ross
Doug Ross @ Journal

My response:

I disagree with Hewitt and Levin as to the lack of viability of third parties. Third parties do not win but they influence future elections. There have been quite a few examples. One was the Anti-Masonic Party which never won but was instrumental in the formation of the Whig Party, and the Whig Party (a second party) was instrumental in the formation of the Republicans. Another was the Populists, which never won but succeeded in seeing the nomination of William Jennings Bryan. Although Bryan lost in 1896, his ideas were ultimately adopted via Franklin Roosevelt. This pattern also occurred via the Progressive Party in 1912. Although the Progressive Theodore Roosevelt lost, his socialist ideas, which were similar to Bryan's, ultimately won in 1932. Thus, there is typically a multi-step process involving third parties. They do not win but the major parties adopt their ideas.

This multi-step process has to be the case with a within-party insurgency as well. The reason is that there are no Republicans capable of leading a Lockean insurgency, and the party infrastructure is missing. Either way (insurgency or third party) there will have to be a multi-year process. An in-party insurgency will require several election cycles. The Goldwater election of 1964 was an insurgency that paved the way for Reagan in 1980. Similarly, the Bourbon Democrats, the pro-gold conservative Democrats, were around after the Civil War and saw their candidate, Grover Cleveland, win in 1884.

Messers. Levin and Hewittt overstate the distinction between an in-party insurgency and a third party. Either way (insurgency or third party) Lockean Republicans have little chance in the next two presidential cycles.

Additionally, I suspect that any Republican Presidential candidate who is put up to run in '12 will be just another big government type masquerading as a small government type unless there is a radical ideological cleansing of the entire Republican Party now. But I don't see how that could happen. So in a word, the Republicans serious about ideas ought not to think about winning an election in '12. If they do, they will just get more garbage. It is better to work on two things: building a new party and destabilizing the Democrats.

To give you an idea of how bad the Bush administration was, I went to Washington in 2005 to protest the accreditation of the National Council on Accreditation of Teacher Education (NCATE), a left wing extremist body that has taken control of accrediting education schools. Rather than abolish the Department of Education, the Bush administration used the DOE as a patronage plum. But who received the patronage? Left wing extremists who supported NCATE---Many of the appointees on the board before which I spoke argued with me in favor of NCATE. So Bush appointed Lockean Republicans' enemies. It was more important to him to be able to do this than to abolish the DOE. That's how incompetent and stupid the incumbent Republicans are.

Do you really think a perpetuation of the current Republican Party is crucial? One of two things must occur in order to change: a third party or a serious insurgency. Otherwise, we will keep running around in circles forever.

Phil Orenstein on the Tea Parties

Phil Orenstein, a seminal blogger and activist who introduced the Academic Bill of Rights to New York State and is active in the Queens (NYC) Republican Party, has written an important blog on the recent "tea parties". I am gratified that hundreds of thousands of Americans have begun to stand up to the collectivism of the Bush-Obama years and have started to reject the failed two-party system. Contrary to multi-millionaire Nancy Pelosi's self-serving claim that the tea party participants are wealthy people, I know better and you know better. These are hard working Americans for whom government does not work. It does not work because it oppresses the public; imposes excessive, tyrannical taxes; regulates business to death; creates economic instability via the advice of quack, university-based economists like Paul Krugman; and imposes secular humanist values on those who do not share such views.

Millionairess Pelosi's reaction to the tea parties is indicative. Like any tyrant, Pelosi blames the victims of her tyranny. Imagine if 100,000 people demonstrated against a private firm, say Toyota or Hewlett Packard. Would the managements of those firms say: "Oh these are all millionaires who were put up to it by the competition. Their views do not count." No, only in government, where tyrannical bigots enjoy power without responsibility and do not need to concern themselves with the effects of their decisions are such opinions possible.

Phil notes that hundreds of thousands gathered on April 15 to protest excessive government, taxes and subsidies to incompetent big businesses of which Ms. Pelosi and Mr. Krugman have long been affiliated. These big businesses on the Democratic and Republican Gravy Train do not create value but rather loot the public with the full support of Barack Obama, Republicans and Democrats.

Obama, probably the most divisive president in American history, has achieved the support of Congressional Republicans, who no longer represent their constituents. Obama is a president who has "signed a pork laden stimulus package of $787 billion". Calling this legislation "stimulus" is a joke along the lines of calling the medieval ideology of today's mercantilists "progressive". The Bush-Obama legislation does not help the economy. It transfers wealth from poor to rich. It is the most divisive legislation in American history, signed by the investment bankers' water boy, Barack Obama and his assistant, Millionairess Pelosi.

Orenstein observes that "Days before the Tea Parties, Janet Napolitano released an alarming Department of Homeland Security (DHS) report on 'Rightwing Extremism' targeting War Veterans returning from Iraq and Afghanistan and ordinary Americans holding conservative viewpoints as potential terrorist suspects." Thus, the divisive Obama administration takes its cues from the early days of Mussolini. It is rather pathetic that Obama's followers think that the nation can unite behind this totalitarian thug and his half witted appointees, tax cheat Timothy Geithner and Black Shirt Wannabe Janet Napolitano.

Phil attacks the opinions of investment banker shill Paul Krugman, who has spent his journalism career saying how he dislikes income inequality but fights as hard as he can to create as much income inequality as possible, specifically through transfers to his former students and Princeton donors on Wall Street. It is Krugman who has worked tirelessly for Ken Lay at Enron and the Ochs Sulzbergers, and who aggressively argues for ever greater subsidies to Goldman Sachs's clients. Then, he suggests that taxes be increased on working people who work two or three jobs and take home $100K.

The Democratic Party has been a cancer on American working people since 1896. The fact that so many are bamboozled by apologists for the super-rich like Krugman and Pelosi is a testimony to the weakness of democracy: You can fool all of the people some of the time.

Phil notes:

"The Tea Party participants utterly reject the Republican Party and its pathetic leadership, in their eyes. Not only do they believe Republicans are part of the problem for the past eight years of big government spending, but also that the McCain campaign purposely threw away the 2008 election...They are even more disgusted with the performance of the GOP today..."

I think this movement will amount to something only if (a) it creates an insurgency within the current Republican Party and throws out all past leadership, from Gingrich on down or (b) it starts a third party. Any association with the past 20 years of Republican leadership is poison. The current Republicans are equal to the Democrats. That is the worst insult I can think of. As Phil points out, the New York Republicans are the worst of all.

Phil's post is excellent and should be read in full here.


Howard S. Katz showed me a confidential e-mail from Bart Kitner, president of Kitco, who has invited Katz back to the site as a contributor. Kitco's Daniela Carbone, likely a product of politically correct educational systems, banned Katz from writing for Kitco's gold commentaries for saying on his personal blog that he opposes gay marriage. Katz is a longtime gold investor (dating back to the '60s--I first met him in 1978) and he has a lot to offer in the way of advice about gold and commodity investing. He has beaten the S&P indexes since '99 when he started keeping track. Kitco is a fine gold site and has corrected its inadvertent misstep.

The public outcry in response to my blog and Katz's articles on some of the other gold sites was gratifying. Several of my friends, associates and readers called Kitco, as did several of Katz's readers.

This illustrates the growing power of the Net to confront the gay-dominated easy money community. Homosexual investment bankers will no longer silence gold investors.

As well, this illustrates the potential public power that can be awakened by the "tea parties" that have recently sprung up. I believe that true Americans have lain dormant for too long, seeing their country stolen by rapacious government, special interest looters, big business crooks and homosexual investment bankers who have manipulated the state so that hard working Americans have to pay 50% of their incomes to incompetent government tyrannies.

Tuesday, April 28, 2009

Ayn Rand on the Future Tyranny of President Barack Hussein Obama

"The 'common good' of a collective--a race, a class, a state--was the claim and justification of every tyranny ever established over men. Every major horror of history was committed in the name of an altruistic motive. Has any act of selfishness ever equaled the carnage perpetrated by the disciples of altruism? Does the fault lie in men's hypocrisy or in the nature of the principle? The most dreadful butchers were the most sincere. They believed in the perfect society reached through the guillotine and the firing squad. Nobody questioned their right to murder since they were murdering for an altruistic purpose. It was accepted that man must be sacrificed for other men. Actors change, but the course of the tragedy remains the same. A humanitarian who starts with declarations of love for mankind and ends with a sea of blood. It goes on and will go on so long as men believe that an action is good if it is unselfish. That permits the altruist to act and forces his victims to bear it. The leaders of collectivist movements ask nothing for themselves. But observe the results."

---Ayn Rand, The Fountainhead. 1943. From Howard Roark's defense, p. 683, Signet edition.

Ayn Rand herself was an atheist. But let us pray for the freedom of the United States.

New Evidence of Dis-United States: Pro-Obama Brownshirts Attack Orly Taitz

As I have previously blogged, the Obama cult aims to claim that Americans have united behind their hero. But the nation has never been less united. New evidence arises from pro-Obama brownshirts who have been attacking Dr. Orly Taitz because of her efforts to discover the facts concerning Mr. Obama's place of birth. Taitz writes via e-mail:

"In the attachment is a letter from the Supreme Court verifying that I am licensed as an attorney with the Supreme Court of the United States, the highest court in the land. This is appalling that Obama thugs keep attacking me personally, including postings on the blogs, describing me nearly as a prostitute, just to hurt my children and my family, even though I am a married woman, mother to 3 sons, a licensed Dr. and ESQ, with a record of being a devoted member of the community and a PTA volunteer for over 10 years, a former board member of the South Orange County School for the Arts at Dana Point and a former vice-president of my community home owners association. Obama and his thugs need to address the real problems: massive fraud and obfuscation of records perpetrated by him, as well as expert opinions of forgery in his documents, perjury, numerous social security numbers attached to 100 of his addresses and 130 current job positions that were uncovered in reputable National databases. Each and every member of our law enforcement and judiciary has a duty to uphold our constitution and investigate and prosecute these suspected crimes

Monday, April 27, 2009

The United States Is Irremediably Divided

Barack Obama's supporters would like to claim that Mr. Obama is uniting the nation. However, when their president's abilities are questioned, they become belligerent and refuse to countenance debate. The Obama cult does not permit questions. This is consistent with the monotone in the banker media, CNN, CSPAN, MSNBC, the Wall Street Journal, New York Times, Newsweek, NBC, and NPR. If the nation were united, a public debate would transpire. Where the press is not free, as it is not in the United States, virtually all media sources say the same thing. The election results were 52.7% versus 45.9%. Yet, virtually no questions are asked.

The absence of an American free press arises because of financial interests' control of virtually all media. The financial interests are the crux of the military industrial complex that in turn relies on Federal Reserve Bank funding and federal government regulation to retain control of credit and of economic development. The major corporations in the United States, especially the financial community, do not create value and are unsustainable except through violence (i.e., state support) and extraction of rents from the public. This violence is only viable through extensive propaganda via universities and the media. Thus, alternative views on key issues--the structure of the banking system for example, which was of paramount importance to Jefferson and the other Founding Fathers-- are barred.

In fact, Jefferson and the Founding Fathers would have found the current adoption of Federalist and Whig ideology to be a disgrace and a major failure. It is laughable that in the media and in universities elitist views that were scorned in Jefferson's day are called "progressive" and "new" and are the mainstay of the ideological propaganda. As well, journalists, television announcers and the like are so poorly educated that they do not understand what Americans have traditionally thought. The Progressive fixation on centralization and authoritarian solutions, alien to the American ethos, is the only currency of public discussion, ranging from right to left.

Nevertheless, enough of the Lockean impulse remains in rural America that the nation is irremediably divided between traditional Americans and Progressives. I do not think the nation's current centralized approach will permit a friendly reconciliation of the sharp differences of which Mr. Obama's election reminds us. Certainly the solutions he and the Democrats have on offer are ridiculous. Mr. Obama's election has divided, not united, the nation.

America Died while The New York Times Lied

I just wrote the following e-mail to my old friend, Richard, who sent me an e-mail on Facebook about universities.

>Dear Richard: Universities have failed but they are irredeemable. The problem is that government is a violent institution and I abhor violence. To end the violence we must end government, as Henry David Thoreau urged in the 1840s. The fraud that universities perpetrate on graduate students is but one more product of governmental compulsion. Without government, the university scam would not exist.

Universities' dysfunction goes back to 1810's when Nazism's earliest origins appeared in the German university via Fichte and the hep hep riots at the University of Berlin. It was only a matter of time before the reinvention of medieval communism under Bismarck would transform into racial categories and mass murder. The US chose to adopt the German form of university and ideology and so has been marching toward totalitarianism since the early 20th century. The outcome won't be as bad here because America has no history of tribal unity, although the advocacy of unity under Barack Obama is indeed reminiscent of the rise of Nazism--"change" in German was one of Hitler's slogans--"alles muss ander sein"-- and extension of universal health care was one of Hitler's chief platforms.

I am in favor of ending the cultural hegemony of higher education by ending the discriminatory practice of requiring advanced degrees for jobs that require a fourth grade education in fields ranging from human resource management to investment banking. Store managers in malls now have MBAs. Once universities are debunked as authoritarian shams, then we can move on to government.

The hue and cry for regulation is a subset of the greater effort to institutionalize the power of investment banks and the military industrial complex. The mouthpiece of this systemic effort by the Demopublican Party is of course the New York Times, including Krugman and all the rest of the Times's apologists for the bailout and state power on behalf of the Ochs Sulzbergers' cronies-- Goldman Sachs and its clients.

Regulation is but a manifestation of state violence. All who advocate regulation advocate violence. Goldman Sachs and the banking system would end without government support, and America would become a free country for the first time since 1913.

The mainstream of popular opinion cannot avoid the consequences of a move toward greater regulation. The consequences are slowed intellectual and economic progress; declining living standards and increased suppression of ideas. America has become poorer because of regulation---especially the abolition of the gold standard in 1971 which allowed the commercial banking community unfettered power to transfer capital into its hands via the Federal Reserve Bank. This has been done at the expense of the productive sector of the economy. The investment banking community's favored candidate, Barack Obama, was elected to facilitate ever greater transfers of wealth into their hands. America died while the New York Times lied.

America has become increasingly divided and so must be broken up into parts. There is no longer a viable America. The country has turned into a United States of Goldman Sachs, a tyranny run by violent thugs in Washington and the state capitols.

The election of the bankers' marionette, Barack Obama, is but one more step toward institutionalization of totalitarianism here. Universities have done their job. But let us start with root causes, not with their ridiculous manifestation--universities.

Sunday, April 26, 2009

Chinese Buy Gold

The gold market had looked bearish for the past couple of weeks and gold seemed to be breaking through support, but Bloomberg reports that the more recent spurt of price increase is due to Chinese buying. In other words, the Chinese central bank aims to hold gold. It currently has almost $2 trillion in foreign currency reserves. If it follows Russia and builds a 10% reserve holding, gold will be the winner and the dollar will be the loser.

There could be longer term repercussions as to the Chinese acquisition of gold. Why stop at 10%? There is no reason to trust the Fed or the dollar, and the American republic is running out of steam. This is due to self indulgence and corruption among American elites. Wall Street will not permit slow monetary growth, and foreign dollar holders will lose. If the Chinese are smart, they will convert all of their dollar holdings into gold.

Americans should think in terms of pressuring their Congressmen to repeal the legal tender laws that were passed during the Civil War. There is no reason why Federal Reserve monopoly money should be mandatory or "legal tender". There should be a free market in money. The Fed does not represent the public. Why should the public be forced to accept their garbage notes?

Charisma in History

Charisma is sometimes suggested as a source of value. Great leadership can stimulate effort. Katz and Kahn argued that leadership can provide an increment of effort. But is charismatic leadership the true source of economic growth?

The answer is no. Economists recognize that technology and capital investment are critical sources of economic growth. Charisma existed throughout history. Ramses the Great claimed to have defeated the Hittites at Kadesh and Shakespeare commemorates Henry V's victory at Agincourt as he exhorts his outnumbered army:

"This story shall the good man teach his son;
And Crispin Crispian shall ne'er go by,
From this day to the ending of the world,
But we in it shall be remember'd;
We few, we happy few, we band of brothers;
For he to-day that sheds his blood with me
Shall be my brother; be he ne'er so vile,
This day shall gentle his condition:
And gentlemen in England now a-bed
Shall think themselves accursed they were not here,
And hold their manhoods cheap whiles any speaks
That fought with us upon Saint Crispin's day."

To what extent can charisma create economic value? It would seem incrementally. The major advances in economic history occurred because of innovation at the individual and firm levels. They occurred in the 19th and twentieth century, especially during the period of laissez-faire from the 19th to the early 20th century in England and America.

There were many examples of charisma throughout ancient and medieval history, but the economy did not progress. Fundamental progress is due to technological breakthrough, capital accumulation wisely administered and understanding of customer value. In countries where the state predominates, such as the Soviet Union, China, Cuba and Sweden, there has been little economic advance. Just like the medieval world (according to which it is conceptualized), socialism is an ideology of economic stagnation and decline. State capitalism is less socialistic and so sees less decline. The socialist economies that do function, such as Sweden's, do so in the context of globalized trading with market economies. Without globalization the Swedes would still be serfs in the bruks and communistic shared fields.

What is the role of charisma then? It provides interest, stimulation and incremental motivation. It is rarer in business than in the military or other walks of life. But there has been much more progress in business than in other institutions, except for science. And charisma is notably absent from scientific endeavor as well.