Democrats Make Global Warming a Campaign Issue

Environment & Climate News > November 2010
Written By: James M. Taylor

Published In: Environment & Climate News > November 2010

Publication date: 10/04/2010

Publisher: The Heartland Institute



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With Obamacare, bailouts, and stimulus spending all working against Democratic candidates in the upcoming November elections, a faction within the Democratic Party is switching gears and seeking to make the upcoming elections a referendum on global warming.



The strategy has Republicans salivating at the prospect of their Democratic opponents doubling down on an issue that has already severely punished Democrats and suggests the some members of the party are out of touch with the public.



Feingold Criticizes Top Researchers

In Wisconsin, Republican U.S. Senate candidate Ron Johnson says he believes nature is more responsible than man for recent temperature fluctuations. Incumbent Democratic Senator Russ Feingold, egged on by activists in his party, has called Johnson’s views “bizarre” and “extreme.”



Feingold made these claims even though solar scientist Willie Soon of the prestigious Harvard-Smithsonian Center for Astrophysics has shown the earth’s recent temperature history almost exactly matches variations in solar output. Likewise, scientists from NASA, NOAA, Harvard, Princeton, Columbia, MIT, and other prestigious institutions have expressed doubt about a human-caused global warming crisis.



In an election year, of course, politicians answer to voters rather than scientists or party strategists, and voters are making it very clear they agree more with Johnson than Feingold.



Public Doubts Alarmists’ Claims

An August 1 Rasmussen poll of likely U.S. voters found only 34 percent believe human activity is the main cause of recent planetary warming. By contrast, 53 percent believe long-term planetary trends or other natural factors are the primary cause.



Only one in three voters agree with Feingold on this issue, and there is a 19 point “climate gap” between Feingold and Johnson. Even so, Feingold has been talking much about global warming, and Democratic Party supporters have been blogging extensively on Johnson’s global warming views. One imagines this Democratic messaging must be directed by the same people who came up with the idea of putting a grinning, effeminate-looking Michael Dukakis on top of an army tank. Meanwhile, as Feingold talks more and more about global warming, his poll numbers are trending more and more like the Dukakis trend line during 1988.



Given the poll numbers regarding global warming alarmism, the efforts of Democratic Party elites to make the 2010 elections a referendum on global warming seem likely to make for more certain and overwhelming Republican victories in November. It is no coincidence that Obama’s poll numbers began their remarkable tumble when he and the House Democratic leadership attempted to force the Waxman-Markey cap-and-trade bill through the Congress.



Despite the cap-and-trade bill narrowly passing the House, Senate Democrats have stayed away from a companion Senate bill, even as candidates such as Feingold emphasize their support for its assumptions.



Alaska Vote a Portent?

A similar situation to that in Wisconsin has already played out in Alaska. Global warming alarmists argue Alaska will see the negative impacts of global warming earlier and more forcefully than the lower 48 states. There, if anywhere, the strategy of making the 2010 elections a referendum on global warming should take its strongest toll on global warming skeptics.



Just the opposite has happened, however. Joe Miller’s upset of incumbent Senator Lisa Murkowski in the Republican primary sent shockwaves around the nation, and one of the major themes of Miller’s campaign was that Murkowski was not reliable enough in her opposition to global warming legislation.



Global warming activists may say Miller’s victory merely shows that one must tack right to win a Republican primary, but in the nation’s suggested ground zero for global warming, voters who have seen the alleged catastrophe for themselves sided with Miller’s resolute opposition to global warming alarmism and the proposed national laws based on it.



While entering the stretch run of the 2010 election season, Republicans are all too happy to see Democrats make the election a referendum on global warming. If the November election results reflect the poll numbers and previously “safe” Democrats such as Wisconsin’s Feingold fall to climate realist opponents, it will be interesting to hear how the left spins their defeats.



James M. Taylor (jtaylor@heartland.org) is managing editor of Environment & Climate News.

Book Review

Climate of Corruption Exposed



Written By: Jay Lehr

Published In: Environment & Climate News > November 2010

Publication date: 10/04/2010

Publisher: The Heartland Institute



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Advance review of Climate of Corruption, by Larry Bell (to be published by Greenleaf Book Group Press, 2011).



Climate of Corruption is amazing. Pestigious scientist Larry Bell’s research into how global warming alarmists use the issue to enrich themselves and gain power and influence is more detailed and thorough than any I have ever read.



The book reads like an investigative report of undercover operations proving beyond any reasonable doubt that scores of pieces of information presented as “facts” by alarmists are in fact deceitful lies with no supporting evidence.



Larry Bell is a professor of space architecture (as in orbiting satellites) at the University of Houston. There are few more famous space scientists than Bell, who has won every imaginable international award from space agencies, as well as many prestigious teaching awards. His entrepreneurial bent has led him to found a number of space-related companies that grew to thousands of employees.



During the course of his work regarding hostile environments on planetary bodies, Bell met the equally accomplished and prestigious scientist Fred Singer. Singer inspired Bell to research global warming, which led to Bell writing Climate of Corruption. We are all the better off for it, as Bell has placed the myriad facets of the global warming movement into a scholarly yet easily readable text recounting every aspect of this greatest of all earthly scams.



Identifies Beneficiaries of Scare

Climate of Corruption answers such questions as: Are global warming myths such as declining polar bear populations and more frequent hurricanes really happening? Why and how are some of the world’s most prestigious science institutions cashing in on the alarm? Who stands to benefit most by promoting public climate change alarmism? What true political and financial purposes are served by the vilification of carbon dioxide? How do climate deceptions promote grossly exaggerated claims for carbon-free alternative energy and advance blatant global wealth redistribution goals?



Climate of Corruption is the most important book you can read on the global warming scam. There have been many excellent books making the case for sound science and the facts that man has no real measurable control on his climate, but now Larry Bell has uncovered through outstanding investigative reporting why and how this scam has been so successful for nearly 20 years.



This is a great read for folks with an open mind. Climate realists are beginning to win the battle over global warming alarmism, and this book could gain us the final nine yards.



Jay Lehr, PhD. (lehr@heartland.org) is science director of The Heartland Institute.

The Monetary Breakdown of the West

from http://mises.org/


Mises Daily: Tuesday, October 05, 2010 by Murray N. Rothbard



[Excerpted from What Has Government Done to Our Money? An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]



To understand the current monetary chaos, it is necessary to trace briefly the international monetary developments of the 20th century, and to see how each set of unsound inflationist interventions has collapsed of its own inherent problems, only to set the stage for another round of interventions. The 20th-century history of the world monetary order can be divided into nine phases. Let us examine each in turn.



Phase I: The Classical Gold Standard, 1815–1914

We can look back upon the "classical" gold standard, the Western world of the 19th and early 20th centuries, as the literal and metaphorical Golden Age. With the exception of the troublesome problem of silver, the world was on a gold standard, which meant that each national currency (the dollar, pound, franc, etc.) was merely a name for a certain definite weight of gold. The "dollar," for example, was defined as 1/20 of a gold ounce, the pound sterling as slightly less than 1/4 of a gold ounce, and so on. This meant that the "exchange rates" between the various national currencies were fixed, not because they were arbitrarily controlled by government, but in the same way that one pound of weight is defined as being equal to sixteen ounces.



The international gold standard meant that the benefits of having one money medium were extended throughout the world. One of the reasons for the growth and prosperity of the United States has been the fact that we have enjoyed one money throughout the large area of the country. we have had a gold or at least a single dollar standard within the entire country, and did not have to suffer the chaos of each city and county issuing its own money, which would then fluctuate with respect to the moneys of all the other cities and counties. The 19th century saw the benefits of one money throughout the civilized world. One money facilitated freedom of trade, investment, and travel throughout that trading and monetary area, with the consequent growth of specialization and the international division of labor.



It must be emphasized that gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium. Above all, the supply and provision of gold was subject only to market forces, and not to the arbitrary printing press of the government.



The international gold standard provided an automatic market mechanism for checking the inflationary potential of government. It also provided an automatic mechanism for keeping the balance of payments of each country in equilibrium. As the philosopher and economist David Hume pointed out in the mid-18th century, if one nation, say France, inflates its supply of paper francs, its prices rise; the increasing incomes in paper francs stimulate imports from abroad, which are also spurred by the fact that prices of imports are now relatively cheaper than prices at home.



At the same time, the higher prices at home discourage exports abroad; the result is a deficit in the balance of payments, which must be paid for by foreign countries cashing in francs for gold. The gold outflow means that France must eventually contract its inflated paper francs in order to prevent a loss of all of its gold. If the inflation has taken the form of bank deposits, then the French banks have to contract their loans and deposits in order to avoid bankruptcy as foreigners call upon the French banks to redeem their deposits in gold. The contraction lowers prices at home, and generates an export surplus, thereby reversing the gold outflow until the price levels are equalized in France and in other countries as well.



It is true that the interventions of governments previous to the 19th century weakened the speed of this market mechanism, and allowed for a business cycle of inflation and recession within this gold-standard framework. These interventions were particularly: the governments' monopolizing of the mint, legal tender laws, the creation of paper money, and the development of inflationary banking propelled by each of the governments. But while these interventions slowed the adjustments of the market, these adjustments were still in ultimate control of the situation. So while the classical gold standard of the 19th century was not perfect, and allowed for relatively minor booms and busts, it still provided us with by far the best monetary order the world has ever known, an order which worked, which kept business cycles from getting out of hand, and which enabled the development of free international trade, exchange, and investment.[1]



Phase II: World War I and After

If the classical gold standard worked so well, why did it break down? It broke down because governments were entrusted with the task of keeping their monetary promises, of seeing to it that pounds, dollars, francs, etc., were always redeemable in gold as they and their controlled banking system had pledged. It was not gold that failed; it was the folly of trusting government to keep its promises. To wage the catastrophic war of World War I, each government had to inflate its own supply of paper and bank currency. So severe was this inflation that it was impossible for the warring governments to keep their pledges, and so they went "off the gold standard," i.e., declared their own bankruptcy, shortly after entering the war. All except the United States, which entered the war late, and did not inflate the supply of dollars enough to endanger redeemability.



But, apart from the United States, the world suffered what some economists now hail as the Nirvana of freely-fluctuating exchange rates (now called "dirty floats"), competitive devaluations, warring currency blocs, exchange controls, tariffs and quotas, and the breakdown of international trade and investment. The inflated pounds, francs, marks, etc., depreciated in relation to gold and the dollar; monetary chaos abounded throughout the world.



In those days there were, happily, very few economists to hail this situation as the monetary ideal. It was generally recognized that phase II was the threshold to international disaster, and politicians and economists looked around for ways to restore the stability and freedom of the classical gold standard.



Phase III: The Gold-Exchange Standard (Britain and the United States) 1926–1931

How to return to the Golden Age? The sensible thing to do would have been to recognize the facts of reality, the fact of the depreciated pound, franc, mark, etc., and to return to the gold standard at a redefined rate: a rate that would recognize the existing supply of money and price levels. The British pound, for example, had been traditionally defined at a weight which made it equal to $4.86. But by the end of World War I, the inflation in Britain had brought the pound down to approximately $3.50 on the free foreign-exchange market. Other currencies were similarly depreciated. The sensible policy would have been for Britain to return to gold at approximately $3.50, and for the other inflated countries to do the same. Phase I could have been smoothly and rapidly restored. Instead, the British made the fateful decision to return to gold at the old par of $4.86.[2]



They did so for reasons of British national "prestige," and in a vain attempt to reestablish London as the "hard money" financial center of the world. To succeed at this piece of heroic folly, Britain would have had to deflate severely its money supply and its price levels, for at a $4.86 pound British export prices were far too high to be competitive in the world markets. But deflation was now politically out of the question, for the growth of trade unions, buttressed by a nationwide system of unemployment insurance, had made wage rates rigid downward; in order to deflate, the British government would have had to reverse the growth of its welfare state. In fact, the British wished to continue to inflate money and prices. As a result of combining inflation with a return to an overvalued par, British exports were depressed all during the 1920s and unemployment was severe all during the period when most of the world was experiencing an economic boom.



How could the British try to have their cake and eat it at the same time? By establishing a new international monetary order which would induce or coerce other governments into inflating or into going back to gold at overvalued pars for their own currencies, thus crippling their own exports and subsidizing imports from Britain. This is precisely what Britain did, as it led the way, at the Genoa Conference of 1922, in creating a new international monetary order, the gold-exchange standard.



The gold-exchange standard worked as follows: The United States remained on the classical gold standard, redeeming dollars in gold. Britain and the other countries of the West, however, returned to a pseudo-gold standard, Britain in 1926 and the other countries around the same time. British pounds and other currencies were not payable in gold coins, but only in large-sized bars, suitable only for international transactions. This prevented the ordinary citizens of Britain and other European countries from using gold in their daily life, and thus permitted a wider degree of paper and bank inflation. But furthermore, Britain redeemed pounds not merely in gold, but also in dollars; while the other countries redeemed their currencies not in gold, but in pounds. And most of these countries were induced by Britain to return to gold at overvalued parities. The result was a pyramiding of United States on gold, of British pounds on dollars, and of other European currencies on pounds — the "gold-exchange standard," with the dollar and the pound as the two "key currencies."



Now when Britain inflated, and experienced a deficit in its balance of payments, the gold-standard mechanism did not work to quickly restrict British inflation. For instead of other countries redeeming their pounds for gold, they kept the pounds and inflated on top of them. Hence Britain and Europe were permitted to inflate unchecked, and British deficits could pile up unrestrained by the market discipline of the gold standard. As for the United States, Britain was able to induce the United States to inflate dollars so as not to lose many dollar reserves or gold to the United States.



The point of the gold-exchange standard is that it cannot last; the piper must eventually be paid, but only in a disastrous reaction to the lengthy inflationary boom. As sterling balances piled up in France, the United States, and elsewhere, the slightest loss of confidence in the increasingly shaky and jerry-built inflationary structure was bound to lead to general collapse. This is precisely what happened in 1931; the failure of inflated banks throughout Europe, and the attempt of "hard money" France to cash in its sterling balances for gold, led Britain to go off the gold standard completely. Britain was soon followed by the other countries of Europe.



Phase IV: Fluctuating Fiat Currencies, 1931–1945

The world was now back to the monetary chaos of World War I, except that now there seemed to be little hope for a restoration of gold. The international economic order had disintegrated into the chaos of clean and dirty floating exchange rates, competing devaluations, exchange controls, and trade barriers; international economic and monetary warfare raged between currencies and currency blocs. International trade and investment came to a virtual standstill; and trade was conducted through barter agreements conducted by governments competing and conflicting with one another. Secretary of State Cordell Hull repeatedly pointed out that these monetary and economic conflicts of the 1930s were the major cause of World War II.[3]



The United States remained on the gold standard for two years, and then, in 1933–1934, went off the classical gold standard in a vain attempt to get out of the depression. American citizens could no longer redeem dollars in gold, and were even prohibited from owning any gold, either here or abroad. But the United States remained, after 1934, on a peculiar new form of gold standard, in which the dollar, now redefined to 1/35 of a gold ounce, was redeemable in gold to foreign governments and central banks. A lingering tie to gold remained. Furthermore, the monetary chaos in Europe led to gold flowing into the only relatively safe monetary haven, the United States.



The chaos and the unbridled economic warfare of the 1930s points up an important lesson: the grievous political flaw (apart from the economic problems) in the Milton Friedman-Chicago School monetary scheme for freely-fluctuating fiat currencies. For what the Friedmanites would do — in the name of the free market — is to cut all ties to gold completely, leave the absolute control of each national currency in the hands of its central government issuing fiat paper as legal tender — and then advise each government to allow its currency to fluctuate freely with respect to all other fiat currencies, as well as to refrain from inflating its currency too outrageously. The grave political flaw is to hand total control of the money supply to the Nation-State, and then to hope and expect that the State will refrain from using that power. And since power always tends to be used, including the power to counterfeit legally, the naivete, as well as the statist nature, of this type of program should be starkly evident.



And so, the disastrous experience of phase IV, the 1930s world of fiat paper and economic warfare, led the US authorities to adopt as their major economic war aim of World War II the restoration of a viable international monetary order, an order on which could be built a renaissance of world trade and the fruits of the international division of labor.



Phase V: Bretton Woods and the New Gold-Exchange Standard (the United States) 1945–1968

The new international monetary order was conceived and then driven through by the United States at an international monetary conference at Bretton Woods, New Hampshire, in mid-1944, and ratified by the Congress in July, 1945. While the Bretton Woods system worked far better than the disaster of the 1930s, it worked only as another inflationary recrudescence of the gold-exchange standard of the 1920s and — like the 1920s — the system lived only on borrowed time.



The new system was essentially the gold-exchange standard of the 1920s but with the dollar rudely displacing the British pound as one of the "key currencies." Now the dollar, valued at 1/35 of a gold ounce, was to be the only key currency. The other difference from the 1920s was that the dollar was no longer redeemable in gold to American citizens; instead, the 1930's system was continued, with the dollar redeemable in gold only to foreign governments and their central banks. No private individuals, only governments, were to be allowed the privilege of redeeming dollars in the world gold currency.



In the Bretton Woods system, the United States pyramided dollars (in paper money and in bank deposits) on top of gold, in which dollars could be redeemed by foreign governments; while all other governments held dollars as their basic reserve and pyramided their currency on top of dollars. And since the United States began the postwar world with a huge stock of gold (approximately $25 billion) there was plenty of play for pyramiding dollar claims on top of it. Furthermore, the system could "work" for a while because all the world's currencies returned to the new system at their pre-World War II pars, most of which were highly overvalued in terms of their inflated and depreciated currencies. The inflated pound sterling, for example, returned at $4.86, even though it was worth far less than that in terms of purchasing power on the market. Since the dollar was artificially undervalued and most other currencies overvalued in 1945, the dollar was made scarce, and the world suffered from a so-called dollar shortage, which the American taxpayer was supposed to be obligated to make up by foreign aid. In short, the export surplus enjoyed by the undervalued American dollar was to be partly financed by the hapless American taxpayer in the form of foreign aid.



"Since 1971, the market price of gold has never been below the old fixed price of $35 an ounce."There being plenty of room for inflation before retribution could set in, the US government embarked on its postwar policy of continual monetary inflation, a policy it has pursued merrily ever since. By the early 1950s, the continuing American inflation began to turn the tide of international trade. For while the United States was inflating and expanding money and credit, the major European governments, many of them influenced by "Austrian" monetary advisers, pursued a relatively "hard money" policy (e.g., West Germany, Switzerland, France, Italy). Steeply inflationist Britain was compelled by its outflow of dollars to devalue the pound to more realistic levels (for a while it was approximately $2.40).



All this, combined with the increasing productivity of Europe, and later Japan, led to continuing balance-of-payments deficits with the United States. As the 1950s and 1960s wore on, the United States became more and more inflationist, both absolutely and relatively to Japan and Western Europe. But the classical gold-standard check on inflation — especially American inflation — was gone. For the rules of the Bretton Woods game provided that the West European countries had to keep piling up their reserve, and even use these dollars as a base to inflate their own currency and credit.



But as the 1950s and 1960s continued, the harder-money countries of West Europe (and Japan) became restless at being forced to pile up dollars that were now increasingly overvalued instead of undervalued. As the purchasing power and hence the true value of dollars fell, they became increasingly unwanted by foreign governments. But they were locked into a system that was more and more of a nightmare. The American reaction to the European complaints, headed by France and DeGaulle's major monetary adviser, the classical gold-standard economist Jacques Rueff, was merely scorn and brusque dismissal. American politicians and economists simply declared that Europe was forced to use the dollar as its currency, that it could do nothing about its growing problems, and therefore the United States could keep blithely inflating while pursuing a policy of "benign neglect" toward the international monetary consequences of its own actions.



But Europe did have the legal option of redeeming dollars in gold at $35 an ounce. And as the dollar became increasingly overvalued in terms of hard money currencies and gold, European governments began more and more to exercise that option. The gold-standard check was coming into use; hence gold flowed steadily out of the United States for two decades after the early 1950s, until the US gold stock dwindled over this period from over $20 billion to $9 billion. As dollars kept inflating upon a dwindling gold base, how could the United States keep redeeming foreign dollars in gold — the cornerstone of the Bretton Woods system?



These problems did not slow down continued US inflation of dollars and prices, nor the United States policy of "benign neglect," which resulted by the late 1960s in an accelerated pileup of no less than $80 billion in unwanted dollars in Europe (known as Eurodollars). To try to stop European redemption of dollars into gold, the United States exerted intense political pressure on the European governments, similar but on a far larger scale to the British cajoling of France not to redeem its heavy sterling balances until 1931. But economic law has a way, at long last, of catching up with governments, and this is what happened to the inflation-happy US government by the end of the 1960s. The gold-exchange system of Bretton Woods — hailed by the US political and economic establishment as permanent and impregnable — began to unravel rapidly in 1968.



Phase VI: The Unraveling of Bretton Woods, 1968–1971

As dollars piled up abroad and gold continued to flow outward, the United States found it increasingly difficult to maintain the price of gold at $35 an ounce in the free gold markets at London and Zurich. Thirty-five dollars an ounce was the keystone of the system, and while American citizens have been barred since 1934 from owning gold anywhere in the world, other citizens have enjoyed the freedom to own gold bullion and coin. Hence, one way for individual Europeans to redeem their dollars in gold was to sell their dollars for gold at $35 an ounce in the free gold market. As the dollar kept inflating and depreciating, and as American balance-of-payments deficits continued, Europeans and other private citizens began to accelerate their sales of dollars into gold. In order to keep the dollar at $35 an ounce, the US government was forced to leak out gold from its dwindling stock to support the $35 price at London and Zurich.



A crisis of confidence in the dollar on the free gold markets led the United States to effect a fundamental change in the monetary system in March 1968. The idea was to stop the pesky free gold market from ever again endangering the Bretton Woods arrangement. Hence was born the "two-tier gold market." The idea was that the free gold market could go to blazes; it would be strictly insulated from the real monetary action in the central banks and governments of the world. The United States would no longer try to keep the free-market gold price at $35; it would ignore the free gold market, and it and all the other governments agreed to keep the value of the dollar at $35 an ounce forevermore.



"The two-tier system moved rapidly toward crisis — and to the final dissolution of Bretton Woods."The governments and central banks of the world would henceforth buy no more gold from the "outside" market and would sell no more gold to that market; from now on gold would simply move as counters from one central bank to another, and new gold supplies, free gold market, or private demand for gold would take their own course completely separated from the monetary arrangements of the world.



Along with this, the United States pushed hard for the new launching of a new kind of world paper reserve, Special Drawing Rights (SDRs), which it was hoped would eventually replace gold altogether and serve as a new world paper currency to be issued by a future World Reserve Bank; if such a system were ever established, then the United States could inflate unchecked forevermore, in collaboration with other world governments (the only limit would then be the disastrous one of a worldwide runaway inflation and the crackup of the world paper currency). But the SDRs, combatted intensely as they have been by Western Europe and the "hard-money" countries, have so far been only a small supplement to American and other currency reserves.



All pro-paper economists, from Keynesians to Friedmanites, were now confident that gold would disappear from the international monetary system; cut off from its "support" by the dollar, these economists all confidently predicted, the free-market gold price would soon fall below $35 an ounce, and even down to the estimated "industrial" nonmonetary gold price of $10 an ounce. Instead, the free price of gold, never below $35, had been steadily above $35, and by early 1973 had climbed to around $125 an ounce, a figure that no pro-paper economist would have thought possible as recently as a year earlier.



Far from establishing a permanent new monetary system, the two-tier gold market only bought a few years of time; American inflation and deficits continued. Eurodollars accumulated rapidly, gold continued to flow outward, and the higher free-market price of gold simply revealed the accelerated loss of world confidence in the dollar. The two-tier system moved rapidly toward crisis — and to the final dissolution of Bretton Woods.[4]



Phase VII: The End of Bretton Woods: Fluctuating Fiat Currencies, August–December 1971

On August 15, 1971, at the same time that President Nixon imposed a price-wage freeze in a vain attempt to check bounding inflation, Mr. Nixon also brought the postwar Bretton Woods system to a crashing end. As European central banks at last threatened to redeem much of their swollen stock of dollars for gold, President Nixon went totally off gold. For the first time in American history, the dollar was totally fiat, totally without backing in gold. Even the tenuous link with gold maintained since 1933 was now severed. The world was plunged into the fiat system of the 1930s — and worse, since now even the dollar was no longer linked to gold. Ahead loomed the dread spectre of currency blocs, competing devaluations, economic warfare, and the breakdown of international trade and investment, with the worldwide depression that would then ensue.



What to do? Attempting to restore an international monetary order lacking a link to gold, the United States led the world into the Smithsonian Agreement on December 18, 1971.



Phase VIII: The Smithsonian Agreement, December 1971–February 1973

The Smithsonian Agreement, hailed by President Nixon as the "greatest monetary agreement in the history of the world," was even more shaky and unsound than the gold-exchange standard of the 1920s or than Bretton Woods. For once again, the countries of the world pledged to maintain fixed exchange rates, but this time with no gold or world money to give any currency backing. Furthermore, many European currencies were fixed at undervalued parities in relation to the dollar; the only US concession was a puny devaluation of the official dollar rate to $38 an ounce. But while much too little and too late, this devaluation was significant in violating an endless round of official American pronouncements, which had pledged to maintain the $35 rate forevermore. Now at last the $35 price was implicitly acknowledged as not graven on tablets of stone.



It was inevitable that fixed exchange rates, even with wider agreed zones of fluctuation, but lacking a world medium of exchange, were doomed to rapid defeat. This was especially true since American inflation of money and prices, the decline of the dollar, and balance-of-payments deficits continued unchecked.



The swollen supply of Eurodollars, combined with the continued inflation and the removal of gold backing, drove the free-market gold price up to $215 an ounce. And as the overvaluation of the dollar and the undervaluation of European and Japanese hard money became increasingly evident, the dollar finally broke apart on the world markets in the panic months of February–March 1973. It became impossible for West Germany, Switzerland, France and the other hard money countries to continue to buy dollars in order to support the dollar at an overvalued rate. In little over a year, the Smithsonian system of fixed exchange rates without gold had smashed apart on the rocks of economic reality.



Phase IX: Fluctuating Fiat Currencies, March 1973–?

With the dollar breaking apart, the world shifted again, to a system of fluctuating fiat currencies. Within the West European bloc, exchange rates were tied to one another, and the United States again devalued the official dollar rate by a token amount to $42 an ounce. As the dollar plunged in foreign exchange from day to day, and the West German mark, the Swiss franc, and the Japanese yen hurtled upward, the American authorities, backed by the Friedmanite economists, began to think that this was the monetary ideal. It is true that dollar surpluses and sudden balance-of-payments crises do not plague the world under fluctuating exchange rates. Furthermore, American export firms began to chortle that falling dollar rates made American goods cheaper abroad, and therefore benefitted exports. It is true that governments persisted in interfering with exchange fluctuations ("dirty" instead of "clean" floats), but overall it seemed that the international monetary order had sundered into a Friedmanite utopia.



But it became clear all too soon that all is far from well in the current international monetary system. The long-run problem is that the hard-money countries will not sit by forever and watch their currencies become more expensive and their exports hurt for the benefit of their American competitors. If American inflation and dollar depreciation continues, they will soon shift to the competing devaluation, exchange controls, currency blocs, and economic warfare of the 1930s.



But more immediate is the other side of the coin: the fact that depreciating dollars means that American imports are far more expensive, American tourists suffer abroad, and cheap exports are snapped up by foreign countries so rapidly as to raise prices of exports at home (e.g., the American wheat-and-meat price inflation). So that American exporters might indeed benefit, but only at the expense of the inflation-ridden American consumer. The crippling uncertainty of rapid exchange-rate fluctuations was brought starkly home to Americans with the rapid plunge of the dollar in foreign-exchange markets in July 1973.



Since the United States went completely off gold in August 1971 and established the Friedmanite fluctuating fiat system in March 1973, the United States and the world have suffered the most intense and most sustained bout of peacetime inflation in the history of the world. It should be clear by now that this is scarcely a coincidence. Before the dollar was cut loose from gold, Keynesians and Friedmanites, each in their own way devoted to fiat paper money, confidently predicted that when fiat money was established, the market price of gold would fall promptly to its nonmonetary level, then estimated at about $8 an ounce.



In their scorn of gold, both groups maintained that it was the mighty dollar that was propping up the price of gold, and not vice versa. Since 1971, the market price of gold has never been below the old fixed price of $35 an ounce, and has almost always been enormously higher. When, during the 1950s and 1960s, economists such as Jacques Rueff were calling for a gold standard at a price of $70 an ounce, the price was considered absurdly high. It is now even more absurdly low. The far higher gold price is an indication of the calamitous deterioration of the dollar since "modern" economists had their way and all gold backing was removed.



It is now all too clear that the world has become fed up with the unprecedented inflation, in the United States and throughout the world, that has been sparked by the fluctuating fiat currency era inaugurated in 1973. We are also weary of the extreme volatility and unpredictability of currency exchange rates. This volatility is the consequence of the national fiat-money system, which fragmented the world's money and added artificial political instability to the natural uncertainty in the free-market price system. The Friedmanite dream of fluctuating fiat money lies in ashes, and there is an understandable yearning to return to an international money with fixed exchange rates.



Unfortunately, the classical gold standard lies forgotten, and the ultimate goal of most American and world leaders is the old Keynesian vision of a one-world fiat paper standard, a new currency unit issued by a World Reserve Bank (WRB). Whether the new currency be termed "the bancor" (offered by Keynes), the "unita" (proposed by World War II US Treasury official Harry Dexter White), or the "phoenix" (suggested by The Economist) is unimportant. The vital point is that such an international paper currency, while indeed free of balance-of-payments crises (since the WRB could issue as much bancors as it wished and supply them to its country of choice), would provide for an open channel for unlimited world-wide inflation, unchecked by either balance-of-payments crises or by declines in exchange rates.



The WRB would then be the all-powerful determinant of the world's money supply and its national distribution. The WRB could and would subject the world to what it believes will be a wisely-controlled inflation. Unfortunately, there would then be nothing standing in the way of the unimaginably catastrophic economic holocaust of world-wide runaway inflation, nothing, that is, except the dubious capacity of the WRB to fine-tune the world economy.



While a world-wide paper unit and central bank remain the ultimate goal of world's Keynesian-oriented leaders, the more realistic and proximate goal is a return to a glorified Bretton Woods scheme, except this time without the check of any backing in gold. Already the world's major central banks are attempting to "coordinate" monetary and economic policies, harmonize rates of inflation, and fix exchange rates. The militant drive for a European paper currency issued by a European central bank seems on the verge of success. This goal is being sold to the gullible public by the fallacious claim that a free-trade European Economic Community (EEC) necessarily requires an overarching European bureaucracy, a uniformity of taxation throughout the EEC, and, in particular, a European central bank and paper unit. Once that is achieved, closer coordination with the Federal Reserve and other major central banks will follow immediately. And then, could a World Central Bank be far behind? Short of that ultimate goal, however, we may soon be plunged into yet another Bretton Woods, with all the attendant crises of the balance of payments and Gresham's Law that follow from fixed exchange rates in a world of fiat moneys.


As we face the future, the prognosis for the dollar and for the international monetary system is grim indeed. Until and unless we return to the classical gold standard at a realistic gold price, the international money system is fated to shift back and forth between fixed and fluctuating exchange rates with each system posing unsolved problems, working badly, and finally disintegrating. And fueling this disintegration will be the continued inflation of the supply of dollars and hence of American prices which show no sign of abating. The prospect for the future is accelerating and eventually runaway inflation at home, accompanied by monetary breakdown and economic warfare abroad. This prognosis can only be changed by a drastic alteration of the American and world monetary system: by the return to a free market commodity money such as gold, and by removing government totally from the monetary scene.

Alasdair Macleod: Where can we find 20,000 tonnes of gold?

from GATA


Submitted by cpowell on Fri, 2010-10-22 17:58. Section: Daily Dispatches

1:53p ET Friday, October 22, 2010



Dear Friend of GATA and Gold:



In new commentary, the economist and former banker Alasdair Macleod examines the fractional-reserve nature of the London gold market and estimates that the major bullion banks have sold about 20,000 tonnes more gold than they have, the imaginary metal residing in "unallocated" accounts. As central banks undertake their currency war and investors are only starting to realize what the Bank for International Settlements knows -- that gold's true value is far above its nominal price -- Macleod asks: "Where can we find 20,000 tonnes of gold?" That's the headline on his commentary and you can find it at his Internet site, Finance and Economics, here:

Republican Hypocrisy on Obamacare

by Laurence M. Vance
Campaign for Liberty



One of the Republicans' main selling points in the congressional elections this year is their promise to repeal the Democratic health care reform bill, the Patient Protection and Affordable Care Act, otherwise known as Obamacare. The fact that they didn't repeal anything after they gained control of the Congress in the 1994 election is a long-forgotten thing to most Americans. And no one salivating to vote Republican in the upcoming election seems to remember that nothing was repealed during the Bush years either – even when Republicans controlled the presidency and both houses of Congress.



The simple truth is that once in power Republicans not only never reverse the legislative damage done by Democrats, they add to it.



Although I applaud any attempt by anyone in any party to repeal the monstrosity that is Obamacare, Republican hypocrisy on this issue is equally as reprehensible.





Republicans are good at opposing socialized medicine when it is Hillarycare or Obamacare, but not very good when it is Bushcare or Republicancare.



The State Children's Health Insurance Program (SCHIP) provides federally-funded health insurance to children in families with incomes too high to qualify for Medicaid. It was created by a Republican-controlled Congress in 1997. Opposition to the program was slight, and negligible when it was up for reauthorization under President Bush. It is only under the Obama administration that some Republicans have suddenly voiced opposition to this income transfer program.



Then there is the Medicare Prescription Drug, Improvement, and Modernization Act. This was instituted by a Republican-controlled Congress in 2003 and signed into law by a Republican president. This expansion of the welfare state was opposed by Democrats in far greater numbers than SCHIP was ever opposed by any Republicans. The overwhelming majority of Republicans in the House and Senate now who were also in Congress in 2003 voted for the Republican version of health care reform even though they opposed Obamacare and now call for its repeal.



And who can forget the rationing and criminalization of over-the-counter allergy-relief products like Sudafed because they contain pseudoephedrine. This is due to the Combat Methamphetamine Epidemic Act, which is title VII of the USA PATRIOT Improvement and Reauthorization Act of 2005. The justification for this ridiculous legislation is that pseudoephedrine may be used in the illegal manufacture of methamphetamine. This is ultimately due to the liberty-depriving, life-destroying war on drugs, which was instituted by a Republican president, Nixon, who boldly claimed that within five years he would "stamp out drugs and declare the war won." The Combat Methamphetamine Epidemic Act imposes tremendous restrictions on buyers and merchants. Yet, it was passed overwhelmingly by a Republican-controlled Congress (unanimously in the Senate) and signed into law by a Republican president.





In the recent Republican "Pledge to America," there are two more examples of Republican hypocrisy on Obamacare.



The House Republican plan in their Pledge "to repeal the job killing health care law and put in place real reform" includes this surprising statement:



Health care should be accessible for all, regardless of pre-existing conditions or past illnesses. We will expand state high-risk pools, reinsurance programs and reduce the cost of coverage. We will make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition, eliminate annual and lifetime spending caps, and prevent insurers from dropping your coverage just because you get sick.



This sounds like something from the DNC. Since when does "real reform" by those who call Obamacare socialism include such massive government intervention in the market?





Senate Republicans are just as bad. Former GOP senator and medical doctor Bill Frist, after railing against President Obama, Senate Majority Leader Reid, and House Speaker Pelosi for not believing in "markets, incentives and the power of hundreds of millions of people to make smart choices about their health," shows that he doesn't believe in markets, incentives, and individual power either when he also says he favors "the elimination of pre-existing conditions as exclusionary criteria for health insurance." And yes, this is the same Bill Frist who supported the Medicare Prescription Drug, Improvement, and Modernization Act when he was in the Senate.



There is no greater example of medical socialism than Medicare. Yet, in the "Pledge to America," Republicans, no doubt to get the votes of seniors, propose to "support Medicare for seniors," and "protect our entitlement programs for today's seniors and future generations." The Republicans even criticize Obamacare for cutting Medicare and forcing millions of seniors "off their current Medicare coverage." But I thought Republicans were against welfare, income transfer programs, and government interference in the marketplace?



Despite their libertarian rhetoric when the Democrats are in power, Republicans don't support a free market in medical care, medical treatment, medical devices, medical drugs, medical licensing, medical education, medical insurance, medical facilities, medical records, medical research, or alternative medicine.



Democrats, liberals, progressives, socialists, moderates, and yes, Republicans and conservatives – they are all peas in the same pod. It is loyalty to an uncompromising philosophy of liberty instead of to a movement or party or pledge that is the first step toward "fixing" health care.



Reprinted with permission from Campaign for Liberty.

Doug Casey on Presidents: The Good, the Bad, and the Ugly

Interviewed by Louis James, Editor, International Speculator


L: Doug, we spoke about holidays in general last time, but I've heard you say, specifically, that you find Presidents' Day particularly objectionable. I know that's not just you being a gadfly, but a comment driven by your study of history and your thinking on psychology, sociology, and economics. It seems worth following up on.



Doug: Yes, that's true. For one thing, as we discussed in our conversation on anarchy, political power tends to attract the worst of people, the four percent of any society that's sociopathic. So declaring holidays to honor these people is a tragic mistake in and of itself. It, like so many things are in our world, is completely perverse, as people celebrate and reward mass murderers, industrial-scale thugs, and con-men who fleece entire societies.



Who is studied and idolized in the history books? Is it people like Edison, the Wright Brothers, Leonardo, Newton, Ford, or Pasteur? Not really; they just get a passing nod. The ones who get statues built to them and are engraved on the collective memory are conquerors and mass murderers – Alexander, Caesar, Genghis Khan, Napoleon, and a whole bunch of U.S. presidents.



L: Do you ever get to thinking that perhaps people get the government they deserve?



Doug: I do indeed. People who vote for free lunches – knowing full well that someone needs to pay for them, and they are fine with that as long as the someone is someone besides themselves – deserve to become tax slaves for those who view them as milk cows. If economically ignorant, greedy, and shortsighted people vote for bad government, they should start by looking in the mirror when they wonder what went wrong. But few people are that introspective. Further, most people apparently lack a real center, an ego in the good sense. That's why they create these false gods to worship; by becoming part of a group, they think they gain worth. Pity the poor fools…



There's no doubt in my mind that the U.S. has devolved to that level. Something like 43 million people get their food from the government, about half of workers pay no income taxes (although I wish no one did, of course), about half are significant net recipients of government funds… and many millions more are employed directly by the state. It's why I no longer refer to "America" when discussing the U.S. – America was a wonderful idea, which unfortunately no longer exists.



A bad leader can bring out the worst in people, making them think the government is a cornucopia; and then the people demand more of the same from future leaders. It's a downward spiral – never, for some reason, an upward spiral. It's why, after Augustus, Rome never returned to being a republic, even though they pretended – just like the U.S. does today. My conclusion is that people basically get the kind of government they deserve. Which is a sad testimony to the degraded state of the average person today.



L: Okay, but as far as presidents go, and as much as I wish everyone valued freedom more than (imagined) guaranteed comfort, the fact seems to be that most people need leaders to prod them along into at least somewhat effective action. I don't know why – perhaps it stems from childhood needs for heroes who show us that the world can be tamed and life secured. Whether it be a company CEO or a club president, people often seem to work more effectively in groups with hierarchical structures and strong leadership at the top.



Doug: Well, first, it may seem that way simply because that's the way it is now. But I don't have a problem with hierarchies per se; it depends on the kind of hierarchy.



I'm not opposed to leaders or leadership. Leaders are an organic part of society; all mammals that live in groups appear to have them. They're essential for group effort. Natural leaders arise because of their competence, intelligence, wisdom and virtues. I am only opposed to coercive leadership – the kind where you must follow orders or be punished. I prefer a society where peer pressure, moral opprobrium, and social approbation get people to do things – not laws and penalties. A formalized political structure doesn't draw natural or benign leaders so much as thugs who are interested in controlling other people.



L: And once an establishment gets in place, they try to cement themselves there with laws…



Doug: Exactly; they don't want their rice bowls broken. But more than that, the way most people raise kids in an authoritarian family structure with the father at the top, educate their children, with teachers who must be obeyed and powerful figures like school principals at the top, and send them off to work for hierarchically organized companies with, as you say, presidents and CEOs at the top, it's no surprise that most people think the world must be organized into hierarchies with some ultimate authority at the top.



But as you know first hand, there are ways of parenting that don't revolve around a family structure that's a mini-dictatorship. As we discussed in our conversation on education, there are ways to teach young people that don't involve submerging their impressionable egos in rigid, bureaucratic, authoritarian "school systems." And there are ways of organizing companies and other very effective organizations that have very little hierarchy.



L: Casey Research, for one. You never tell me what to do, just ask me for results. And I taught my kids reading, writing, and arithmetic without relying on punishment. These things are not just theories to me, but ways I live my life.



Doug: And of course, I believe there are ways of organizing effective societies that don't revolve around a central authority structure or leader. Personal responsibility is what it's really all about. Such freer societies centered on cooperation – through markets, rather than coercively through the state – would be much healthier, richer, more just and moral societies to live in.



So, of course, I object to anything that tends to prop up authoritarian ways of organizing society. Celebrating presidents – even the less stupid, evil, and destructive ones – is counterproductive to the direction I'd like to see society evolve, and incidentally, the direction I think it is evolving. President's Day is one holiday that deserves to be abolished absolutely.



L: Understood. But we don't have to rehash the conversation on anarchy. Hm. I'm sure you've got a long list of evil, stupid, and destructive U.S. presidents – probably most of them, in one way or another – but what about the good ones? Or the less bad ones – who's your favorite president and why?



Doug: Well, start with the caveat that they were all flawed. Plato's ridiculous notion of the Philosopher King is an illusion – that type of person wouldn't dream of being a president, because he'd realize that you shouldn't control other people. That said, I like guys like Chester A. Arthur, John Tyler, Calvin Coolidge, and Grover Cleveland.



But we should define what constitutes a good president. In my view, it would be one whose actions resulted in peace, prosperity, and liberty for the country. Peace means no foreign wars; war is the health of the state. War is the meat that feeds the beast. Prosperity means extremely low taxes and regulation, and a peaceful environment where enterprise can flourish. And liberty means being able to do what you wish, as long as you don't violate other persons or property.



Perhaps my favorite ought really be Benjamin Harrison, because he only ruled 40 days before he was assassinated. He had no time to do any damage and had to have given the next guy second thoughts – however fleeting – about the prudence of being elected.



L: [Chuckles] I'd bet most Americans don't even remember that there was a president by that name – the true mark of a great president.



Doug: What about you, Lobo, who's your favorite president?



L: I can't quite bring myself to believe that any man could win the ultimate pandering contest and be an individual of real integrity, so none are heroes in my eyes. That said, I do find myself persuaded by the argument Larry Reed used to make back when he ran the Mackinac Center for Public Policy, that Grover Cleveland might have been the best of the lot. He was a sound-money advocate, generally pro-market, and had both the personal ethics and the backbone to face down Congress and the powerful interests behind the annexation of Hawaii.



The conquest of Hawaii, in my opinion, was one of the most shameful episodes in U.S. history, because of the massive level of fraud and deceit involved, which was quite different from the relatively simpler xenophobic extermination of other natives. Grover Cleveland basically said that Hawaii would never be annexed while he was president, and that's exactly what happened.



Doug: I remember that story.



L: I also have to give credit to George Washington, in spite of the major turn down the wrong road he took for the whole country when he suppressed the Whiskey Rebellion by force, because he could have set himself up as king after the first American Revolution – and he didn't.



Doug: He had the army, was very popular, and he could have done it – I agree, he could have made himself king, or been reelected until his death. But I can't forgive him for crushing the Whiskey Rebellion; that set the precedent for federal taxation and power that eventually led to the Civil War and the bloated monster in Washington that has now burst almost all of its chains.



L: So, who was the worst president?



Doug: That's a really tough question to answer, because there are so many deserving candidates for that title. A short list would have to include McKinley, Teddy Roosevelt, Wilson, Hoover, FDR, Truman, Johnson, Baby Bush, and Obama. But I'd have to say Lincoln was by far the worst. He plunged the country into a totally unnecessary and immensely devastating war, and violated every important part of the Constitution. But he was such a great rhetorician that he made Americans feel good about all the horrors he brought about, setting a doubly bad precedent.



L: I think I know what you'll say, but for our readers who are used to hearing Lincoln described as some sort of saint, and probably America's greatest president, can you expand on that? He preserved the union and freed the slaves…



Doug: The union was not preserved. A union of free and sovereign states was cemented into a single super-state, in which each individual state became nothing more than an administrative region. Who's to say that a bigger U.S. was a better one anyway? This Civil War was really the Second American Revolution. Anyway, it wasn't a civil war, which is technically a contest for the control of a single government; it was a war of secession, like that of 1776. I'm no fan of the Confederacy, but the wrong side won, overthrowing the federal organization that restrained national power, maximizing political and economic freedom.



L: Not for the slaves.



Doug: No, not for the slaves. But slavery was an uneconomic institution that was on its way out anyway – the Industrial Revolution was about to put an end to it in the U.S., just as it did most everywhere else around the world. Brazil was the last major country to be done with it, in 1850, and its abolition was peaceable everywhere but in the Land of Lincoln. And Lincoln was not an abolitionist – he didn't give a fig for the plight of the slaves. His "emancipation proclamation" freed the slaves only in the south. Its real purpose was to incite the slaves to rebellion in the south and weaken his enemies, and to enlist the support of the abolitionist movement in support of his disastrously expensive and unpopular war.



L: Lincoln, the great emancipator, was also the first president to institute the draft, impose a federal income tax, and to smash opposition press (literally, sending soldiers to break their printing presses into kindling).



Doug: That's all true, although George Bush Jr. arguably had the potential to be an even worse president. At least Lincoln was intelligent and articulate. Baby Bush was stupid, evil, pig-headed, thoughtless, and hugely destructive.



L: So, was Bush Jr. worse than, say, Obama?



Doug: I'm not sure – Obama could be worse. He's smart and persuasive, like Lincoln, which makes him very dangerous, because his ideas are totally destructive. He's not just doing all the wrong things, but exactly the opposite of the right things – and not just economically, but in every field. Obama could well be the president who pushes the U.S. over the edge.



One major problem is that people conflate a president's style and personality with his quality as a leader. An example of that is Teddy Roosevelt. He was athletic, personally brave, a great outdoorsman, a prolific writer, something of an intellectual – the kind of guy who would make for an altogether amusing dinner guest. But he was also a militarist, an imperialist, and a complete economic fascist. Teddy the Trust-Buster, popularized the idea that business is evil from his "bully pulpit." He gets an A+ for charisma and style, but an F– if you value peace, prosperity, and liberty.



There's a lot of similarity with his relative, FDR, who was a total and complete disaster on absolutely every front. Of course one can argue FDR was just a man of his time – his contemporaries were Hitler, Stalin, Tojo, Mussolini, Chiang Kai-shek, Mao, Peron, and Franco, among others. All of them, and other world leaders at the time, were cut from basically the same socialist/fascist cloth. FDR just cloaked most of his depravations in traditional American rhetoric – "reforming" capitalism in order to "save" it and similar nonsense.



Reagan was a fairly good president in terms of his rhetoric – but like Roosevelt, one can argue he was also a man of his time, because all over the world, in the UK with Thatcher, China with Deng, Argentina with Menem – everywhere really – there was a lot of free-marketization and reduction in taxes. But Reagan also started putting deficits and increases in the military into hyper-drive. And those are trends that will prove nearly as disastrous as some of those started by Roosevelt. Reagan is a bit like Jefferson – he talked the talk, but didn't walk the walk.



What about you – who would you pick for the worst U.S. president of all time?



L: Well, I have to say I have an abiding dislike for Bill Clinton, who, among other crimes, used tax money stolen from me to bomb friends of mine in Serbia – civilians. But I think that after Lincoln, whom you've already discussed, FDR was probably one of the worst. The New Deal was almost a Third American Revolution, a sweeping wave of socialism that changed America forever, both attacking and undermining the individualism and independence of the American people as well as setting the country on a path to economic self-destruction, the endgame of which I believe we are now entering into.



Doug: I'd have to agree with you there, FDR was perhaps the second worst. Wilson was perhaps the third worst, for getting the U.S. into a totally pointless world war that he promised to keep the U.S. out of, and thereby both greatly increasing the scope of the destruction, and also setting the world on the path to WWII. It was also on his watch that the Federal Reserve was set up and the income tax initiated. And when the money started bearing the images of dead presidents – starting with the Lincoln penny in 1913.



And, going back to Jefferson, he set up a terrible precedent for socialized education in Virginia with the University of Virginia and made the unconstitutional Louisiana Purchase. Great writer and thinker, but he turned into Mr. Hyde once in office – there's much more that was bad about him that made him a mediocre president, at best.



L: On the other hand, he did free his slaves upon his death, when he would no longer be around to make sure they were treated well. And I have to admit, I admire him for all of his inventions.



Doug: That was a pretty courageous thing to do at that time – but it would have been even more courageous to free his slaves while he lived and then protect them.



L: Can't argue that. What about today, see any candidates out there who don't seem stupid, evil, or destructive to you?



Doug: No. I'd like to say Rand Paul, but although he's riding on his father's coat-tails, he appears to be just another weakly principled Republican, who seems to think "supporting our troops," promoting "traditional values," and thumping the Bible will somehow restore peace, prosperity, and liberty to the U.S. I hope that's an unfair assessment of the guy, but I think not, because the longer people spend in Washington, the more corrupt and conventional they tend to become. As a lone voice, his father was a breath of fresh, more principled air, but he didn't change anything at all that I can see; the U.S. has continued headlong for the economic and social cliff he saw as clearly as I did.



L: A pity.



Doug: Maybe, or maybe not. If he'd made more of a difference, it might have encouraged other good people to enter politics, instead of doing something useful with their lives –might have helped prolong the false belief that anything good can come from politics. At this point, I don't think we're going to see any meaningful constructive change until the U.S. government itself implodes. Which is very likely to happen this decade. The problem is what comes next… We're in for truly interesting times.



L: I should have known you would say that. Okay – investment implications.



Doug: The track records of the best and worst presidents in America's history might seem irrelevant to today's problems, but you know what they say: those who ignore history are doomed to repeat it.



L: [Chuckles] Or, even if history doesn't actually repeat, it often rhymes.

Frederic Bastiat, an excerpt from "The Law"

The Law Defends Plunder




But it does not always do this. Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame, danger, and scruple which their acts would otherwise involve. Sometimes the law places the whole apparatus of judges, police, prisons, and gendarmes at the service of the plunderers, and treats the victim — when he defends himself — as a criminal. In short, there is a legal plunder, and it is of this, no doubt, that Mr. de Montalembert speaks.



This legal plunder may be only an isolated stain among the legislative measures of the people. If so, it is best to wipe it out with a minimum of speeches and denunciations — and in spite of the uproar of the vested interests.



How to Identify Legal Plunder



But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.



Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.



The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.



Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.



Legal Plunder Has Many Names



Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism.



Now, since under this definition socialism is a body of doctrine, what attack can be made against it other than a war of doctrine? If you find this socialistic doctrine to be false, absurd, and evil, then refute it. And the more false, the more absurd, and the more evil it is, the easier it will be to refute. Above all, if you wish to be strong, begin by rooting out every particle of socialism that may have crept into your legislation. This will be no light task.



Socialism Is Legal Plunder



Mr. de Montalembert has been accused of desiring to fight socialism by the use of brute force. He ought to be exonerated from this accusation, for he has plainly said: "The war that we must fight against socialism must be in harmony with law, honor, and justice."



But why does not Mr. de Montalembert see that he has placed himself in a vicious circle? You would use the law to oppose socialism? But it is upon the law that socialism itself relies. Socialists desire to practice legal plunder, not illegal plunder. Socialists, like all other monopolists, desire to make the law their own weapon. And when once the law is on the side of socialism, how can it be used against socialism? For when plunder is abetted by the law, it does not fear your courts, your gendarmes, and your prisons. Rather, it may call upon them for help.



To prevent this, you would exclude socialism from entering into the making of laws? You would prevent socialists from entering the Legislative Palace? You shall not succeed, I predict, so long as legal plunder continues to be the main business of the legislature. It is illogical — in fact, absurd — to assume otherwise.



The Choice Before Us



This question of legal plunder must be settled once and for all, and there are only three ways to settle it:





The few plunder the many. Everybody plunders everybody. Nobody plunders anybody.



We must make our choice among limited plunder, universal plunder, and no plunder. The law can follow only one of these three.



Limited legal plunder: This system prevailed when the right to vote was restricted. One would turn back to this system to prevent the invasion of socialism.



Universal legal plunder: We have been threatened with this system since the franchise was made universal. The newly enfranchised majority has decided to formulate law on the same principle of legal plunder that was used by their predecessors when the vote was limited.



No legal plunder: This is the principle of justice, peace, order, stability, harmony, and logic. Until the day of my death, I shall proclaim this principle with all the force of my lungs (which alas! is all too inadequate). [2]



The Proper Function of the Law



And, in all sincerity, can anything more than the absence of plunder be required of the law? Can the law — which necessarily requires the use of force — rationally be used for anything except protecting the rights of everyone? I defy anyone to extend it beyond this purpose without perverting it and, consequently, turning might against right. This is the most fatal and most illogical social perversion that can possibly be imagined. It must be admitted that the true solution — so long searched for in the area of social relationships — is contained in these simple words: Law is organized justice.



Now this must be said: When justice is organized by law — that is, by force — this excludes the idea of using law (force) to organize any human activity whatever, whether it be labor, charity, agriculture, commerce, industry, education, art, or religion. The organizing by law of any one of these would inevitably destroy the essential organization — justice. For truly, how can we imagine force being used against the liberty of citizens without it also being used against justice, and thus acting against its proper purpose?



The Seductive Lure of Socialism



Here I encounter the most popular fallacy of our times. It is not considered sufficient that the law should be just; it must be philanthropic. Nor is it sufficient that the law should guarantee to every citizen the free and inoffensive use of his faculties for physical, intellectual, and moral self-improvement. Instead, it is demanded that the law should directly extend welfare, education, and morality throughout the nation.



This is the seductive lure of socialism. And I repeat again: These two uses of the law are in direct contradiction to each other. We must choose between them. A citizen cannot at the same time be free and not free.

The Radical Agenda of HSUS

Proposition B is being pushed by an organization know as The Humane Society of the United States (HSUS). We all know the Humane Society from our local neighborhoods, but do not be fooled by the similar sounding name. There is no connection between HSUS and local animal shelters. HSUS is a radical animal rights organization which fundraises under the guise of helping animals while orchestrating devastating animal rights campaigns in over 40 states across the country. One of their recent successes includes California’s Prop 2 which has crippled agriculture in the state and raised egg prices over 60%.




Abolishing Animal Ownership: One Step at a Time… HSUS spends less than 0.5% of their revenue on the care of animals. The goal of their organization have been made clear by numerous statements by their President, Wayne Pacelle, a radical animal rights activist.



“We have no problem with the extinction of domestic animals.”

-Wayne Pacelle, President, HSUS



“In fact, I don’t want to see another dog or cat born.”

-Wayne Pacelle, President, HSUS



“Our goal is to get sport hunting in the same category as cock fighting and dog fighting. We are going to use the ballot box and the democratic process to stop all hunting in the United States.”

-Wayne Pacelle, President, HSUS



HSUS is misleading the public with its intentions on Prop B. The society seeks only to raise the cost of breeding dogs, making it ever-more difficult for middle-class American families to be dog-owners.

The Humane Society of the United States

by JOHN YATES - American Sporting Dog Alliance




WASHINGTON - The Humane Society of the United States is asking President Barack Obama and Congress to require everyone who raises dogs and cats to be regulated by the U.S. Department of Agriculture, documents show. HSUS also is asking for the creation of an animal protection division within the U.S. Department of Justice that is "similar to the Civil Rights Division, to ensure strong enforcement of federal animal protection laws," thus granting animals rights similar to humans. HSUS also calls for a new position of animal protection liaison in the White House.



A fourth provision calls for a ban on hunting on new public lands. Those are only three of the 100 recommendations that HSUS has sent to Obama in what is called a "change agenda for animals." The American Sporting Dog Alliance has obtained access to this document, which has been sent to animal protection organizations asking for their support. HSUS is a radical animal rights group. Despite its name, it does not operate a single animal shelter, but exists only as a political organization. The long-range goal of HSUS is to gradually eliminate all animal ownership and use, including their use as companion and food20animals, and to ban hunting. The 100 goals sent to Obama reflect many issues, but this report will concentrate on the issues that most directly affect dog owners, with added emphasis on the sporting breeds.



However, we urge our readers to read the full HSUS document, which includes a crackdown on alleged farm pollution, tough animal and poultry husbandry and slaughter rules, and many environmental and wildlife management measure. Here is a link the actual document: http://www.hsus.org/web-files/PDF/change-agenda-for-animals-1-14-09.pdf. Please read this document. In a letter to a New York horse owners' association that was made available to the American Sporting Dog Alliance, HSUS President Wayne Pacelle asks for support of the 100-point agenda.



"With the changing of the guard at the White House comes the prospect of new possibilities for moving our goals forward, and to mark his latest transfer of power, the HSUS and the Humane Society Legislative Fund (HSLF) are advancing a 100-point 'Change Agenda for Animals,'" Pacelle wrote. " Never before has the animal protection movement so carefully articulated a vast array of critical animal protection reforms in the domains of so many federal agencies-Agriculture , Interior, Commerce, Defense, Health and Human Services, State, and others."



Dog Breeding Regulation



A top priority of HSUS for several years has been to require federal regulation of everyone who raises dogs and cats. Under current law, only commercial breeders who sell=2 0puppies and kittens on a wholesale basis are federally regulated. Hobby breeders who sell puppies or kittens directly to the public are not required to be federally licensed or inspected. HSUS wants everyone who raises and sells puppies to be licensed and inspected by the USDA, and also wants to see much tougher regulations and standards for animal care. About four years ago, the HSUS-sanctioned Pet Animal Welfare Act (PAWS) was defeated in Congress by a narrow margin. PAWS would have imposed federal licensing and inspection on all hobby breeders. Last year, U.S. Sen. Dick Durbin of Illinois, who has very close personal and political ties to President Obama, introduced a bill he called PAWS 2, which echoed many of the provisions of its predecessor. When PAWS 2 stalled, Sen. Durbin attempted to attach it as an amendment to the 2008 Farm Bill, but failed to get enough support. Durbin came back with a similar bill in late 2008, dubbed "PUPS9 D or "Baby's Bill," which is formally called the Puppy Uniform Protection Act, but Congress adjourned without taking action.



These bills all originated from HSUS, and all of them clearly were aimed at hobby breeders. The 100-point agenda says HSUS wants to "require all dog and cat breeders to comply with AWA (federal Animal Welfare Act) requirements, including those who sell directly to=2 0the public."



It is PAWS all over again. Now, however, HSUS has a much stronger hand in Washington. In the November election, HSUS strongly endorsed President Obama and had a 95-percent success rate in re-electing the congressional candidates it endorsed. A questionnaire obtained by the American Sporting Dog Alliance showed that the President aggressively sought HSUS endorsement.



The American Sporting Dog Alliance continues to believe that President Obama and many members of Congress will listen to the concerns of dog owners, but only if we stand up in large numbers to defend ourselves and our rights, and take an active role in the political process. If we do not stand up and be counted in large numbers, we expect HSUS will get its way on most of the measures in the 100-point agenda. Dog owners will have no one to blame but themselves for being relegated to the legal status of second-class citizens. The Bill of Rights and personal freedom always are the first victims of HSUS policy. The American Sporting Dog Alliance will be working hard to defeat these HSUS20legislative proposals, but we need your help if we are to succeed in turning back these challenges. We urge all dog owners to join and support the organization of their choice, and also to support farmers, hunters and other allies in the fight against the HSUS version of a "brave new world."



The Rest Of The Story



Here are some other parts of the 100-point agenda that pertain to dog owners in general, and also owners of the sporting breeds in particular. HSUS is calling on President Obama and Congress to: Create an animal protection division in the Justice Department to act on behalf of animals by aggressive prosecution of people who violate laws about animals. In essence, this gives animals legal status, and the federal government will act as their advocate. HSUS likened it to the Civil Rights Division, which advocates for aggressive protection of human rights. Animals thus would be given the same legal s tatus as people in the Department of Justice. Create an animal protection liaison in the White House, which would mean that HSUS will have direct access to President Obama and his top advisors to advocate for animal rights groups on policy, regulatory and legislative issues. Immediately strengthen enforcement of USDA-regulated commercial kennels and other animal owners covered by the Animal Welfare Act. (AWA). Increase USDA budget and staffing for this purpose, and make fines and penalties more severe. Include all vertebrate species under the AWA. Completely implement the ban on importing dogs from other countries that HSUS succeeded in attaching to the 2008 Farm Bill. Focus on non-lethal methods to control wildlife populations, which means lessening the use of hunting as a management tool. Mandate the use of microchips for companion animals, and all other animals covered by the AWA. Do not open any new public land or national wildlife refuges to hunting. Transfer all wildlife programs away from the USDA, and put them under the jurisdiction of the Department of the Interior. Ban hunting on shooting preserves, which HSUS labels "canned hunts" and calls "cruel." Also ban so-called Internet hunting. Make it a crime to show anything that HSUS calls animal cruelty in films, on television, in books and magazine, or on the Internet. Require the Department of Justice to collect and analyze data on animal cruelty cases and create a separate crime database for this information. Require the U.S. Census Bureau and the Center for Disease Control to include questions about the animals people own when surveying the public, in order "to assess impacts on human health and well-being, develop more effective approaches to community animal control, and ensure appropriate disaster preparation." Allow foreign animal rights groups to have an official advisory role in the United States. Ban the mail shipment of any kind of birds or animals through the U.S. Postal Service, including for "agriculture and sport." Baby chicks were speifically mentioned, and this also would apply to gamebird chicks, adults and eggs that are used by sporting dog trainers and in field trials.



The American Sporting Dog Alliance represents owners, breeders and professionals who work with breeds of dogs that are used for hunting. We also welcome people who work with other breeds, as legislative issues affect all of us. We are a grassroots movement working to protect the rights of dog owners, and to assure that the traditional relationships between dogs and humans maintains its rightful place in Ame rican society and life. The American Sporting Dog Alliance also needs your help so that we can continue to work to protect the rights of dog owners. Your membership, participation and support are truly essential to the success of our mission.



We are funded solely by your donations in order to maintain strict independence. Please visit us on the web at http://www.american/ sportingdogalliance.org. Our email is asda@csonline.net

Vote no on prop B

http://www.thealliancefortruth.com/

If Prop. B passes, it will further harm the economy in Missouri.


Proposition B specifically targets those who are already licensed and inspected by the Missouri Department of Agriculture and who are in compliance with state and federal laws. It does nothing to address those who collect animals living in horrible conditions as long as the animals are not being bred to produce puppies for sale as pets. Proposition B is specifically aimed at eliminating the legal, licensed professional dog breeders in Missouri who produce healthy, happy puppies.

Prop B creates a class C misdemeanor crime of "cruelty" for ANY violation during an inspection of a kennel by the Missouri Department of Agriculture, including a drop of food in a water bowl, a cobweb in the corner of a building, a scratch on a painted surface, etc.

Stacked cage enclosures with trays below each for easy cleaning and sanitation would be a class C misdemeanor for a licensed breeder while veterinarians, shelters, humane societies and rescues could use the same enclosures and be totally exempt from the law. Show breeders with more than ten intact female dogs could not crate their dogs for any purpose while preparing for shows, grooming or keeping intact females separate from males.

Legal, licensed breeders could have NO MORE than 50 dogs, regardless of the excellent care they receive while anyone not breeding dogs could have unlimited numbers of dogs living in filthy conditions. Prop B creates the first step in HSUS and other animal rights groups dictating the number of animals one may own.

Prompt treatment for ANY illness or injury would be required by a licensed veterinarian, including something as simple as an upset stomach, torn toenail, cut on the nose, or any minor issue often treated by the breeder. Costs for veterinary care for minor issues would skyrocket, resulting in fewer purebred dogs available for public demand.

Prop B requires constant and unfettered access to an outside exercise area which will be deadly to newborn and non-weaned puppies that may crawl outside to follow their mothers and cannot find their way back inside. Babies will die of heat exhaustion and dehydration in the summer and hypothermia in the winter. Drafts of air created by required indoor/outdoor runs for mothers will ensure upper respiratory stress and pneumonia for babies, resulting in the deaths of many newborn puppies.

Breeders of hunting dogs are exempt from licensing unless even one of their dogs or puppies is sold as a pet or lives inside the home of the purchaser.

There is no scientific basis for eliminating tenderfoot flooringwhich allows for easy cleaning and sterilizing of enclosures.

Proposition B interferes with the working relationship between a breeder and his or her veterinarian on the health of their dogs and the frequency of breeding. The Department of Agriculture would be charged with determining the breeding frequency of dogs in licensed facilities.

HSUS has introduced Prop B as a means of eliminating the legal, licensed professional dog breeders in Missouri. According to the Department of Agriculture, no current licensed breeder can comply with the regulations put forth in Prop B, no matter how clean and well run the facility. Cost prohibitive space requirements coupled with misdemeanor crimes for the most minor of issues will eliminate the legalindustry in our state.

Only unlicensed, substandard breeders will be left to produce puppies while continuing to hide from state laws.

An interesting fact about October 2010:


This October has 5 Fridays, 5 Saturdays and 5 Sundays, all in one month. It happens once in 823 years.

Missouri Libertarian Party Passes Resolution on Statewide Ballot Initiatives

At its Executive Committee meeting on October 17th, the Missouri LP discussed the merits of the various initiatives on the statewide ballot for the Nov 2nd election and issues the following statement:


Constitutional Amendment 1: Oppose While it does not seem illogical, in principle, that counties with a charter form of government elect their county assessor, an amendment to the Constitution with language that exempts “counties with a population between 600,001-699,999” specifically to exempt Jackson County strikes us as absurd. What will happen when the population of Jackson County grows or shrinks to be outside this range, will the Constitution be amended again? We feel that Constitutional amendments should be broad based, not targeted to some specific group or locale.



Constitutional Amendment 2: Oppose This proposed amendment, which affects an extremely small number of people strikes us as blatant political pandering. Arguments can be made to exempt many less fortunate groups from property taxes, so why this one? We would prefer to see property taxes lowered or eliminated across the board, which would create real economic prosperity. Increased economic prosperity will create more opportunities and resources for the less fortunate citizens of Missouri.



Constitutional Amendment 3: Support We support any broad-based initiative to reduce or eliminate the tax burden or prohibit the imposition of new taxes.



Proposition A: Support We are opposed to earnings taxes and find them to be even more unjust when imposed without the people's vote. Although the governments of St. Louis and Kansas City are unfortunately, yet predictably, addicted to their respective earnings taxes, the 10-year phase out period should provide a more than adequate adjustment period. The negative economic consequences of taxes on income are well known, however the negative effects develop over time. Unfortunately, politicians generally lack the fiscal discipline to act in the best long term interest, particularly when there is the enticement of an immediate rush of revenue. Therefore, the explicit prohibition of new city earnings taxes will help protect the general welfare of the citizens of Missouri from greedy politicians.



Proposition B: Oppose Like most people, we find animal cruelty appalling. However, as Libertarians, we are opposed to the passage of ever more regulations that will have a broad-based and negative effect on legitimate businesses. There are already extensive laws on the books prohibiting animal cruelty. See http://www.showmedaily.org/2010/10/would-prop-b-really-help.html for a comparison of the language of the current law and Proposition B. We are also concerned that the real agenda is to eliminate dog breeding and ultimately animal agriculture, as these are stated objectives of some of the groups providing the money behind this initiative. Virtually all regulations sound good on their face, however, in reality they simply end up driving up the cost of business, through paperwork, bureaucracy and red tape, most of which accomplishes nothing toward the stated objective. This cost must ultimately be passed on to the consumer in the form of higher prices Meanwhile, the small minority of 'bad actors' continue to circumvent the laws.



Voters who are Fed Up! with bailouts, stimulus plans that only stimulate bigger government, government takeover of health care, rising unemployment, never-ending foreign wars, and a big brother police state will find common ground with the Libertarian Party. The Libertarian Party is America's third largest political party and has been fighting for smaller government since 1971. The Missouri Libertarian Party has been a recognized party in the State, with continuous ballot access since 1992. For further information visit www.lpmo.org or call 877-Vote-4-Us.









--

Cisse W. Spragins, Ph.D.

Chair, Missouri Libertarian Party

LPMO.org

FedUpinMO.com



"Necessity is the plea for every infringement of human freedom. It is the argument of tyrants, it is the creed of slaves." --William Pitt, speech to the House of Commons.

Nothing Is More American Than Working

from Whiskey & Gunpowder

By Bill Bonner

October 15, 2010

A disturbing bit of news emerged on the 29th of September. Meg Whitman’s campaign for governor of California was body-checked by a damaging news report just weeks before the election. It was alleged that she had someone in her employ who had not fully complied with all the laws of this great Republic...someone who toiled in her very household, in her home, near her hearth, in the very bosom of her vie familiale. Right under her nose, in other words. And it turns out this person was neither a card-carrying Democrat, nor card-carrying Republican. In fact, that was the problem. She had no card at all.

The Associated Press reports:

Whitman denounced the allegations as a “baseless smear attack” by Democratic challenger Jerry Brown in what has become a dead-heat race five weeks before the election.

The central issue is whether Whitman knew about a letter that the Social Security Administration sent her in 2003 that raised discrepancies about the housekeeper’s documents - a possible tip-off that she could be illegal.

The letter is the foundation for claims by former maid Nicky Diaz Santillan that Whitman and her husband knew for years she was in the US illegally, but kept her on the job regardless.

For two days, Whitman forcefully denied receiving any such letter and said she fired the $23-an-hour housekeeper last year immediately after learning she was illegal.

Revelations about the illegal housekeeper have also thrown Whitman’s carefully managed campaign completely off track and opened the door for Democrats to accuse her of hypocrisy.
“The essential fact remains the same,” said the husband, “neither Meg nor I believed there was a problem with Nicky’s legal status,” the husband said. “The facts of this matter are very clear: Ms. Diaz broke the law and lied to us and to the employment agency.”

Shame...shame...shame. What were they thinking? Were they thinking at all?

We don’t know if there’s been any progress in the case. But from what we know so far, it appears that the Whitmans had a woman in their employ who gave good and faithful service for nearly 10 years. Then, when they discovered that her papers were not in order they dropped her like a dirty dishrag.

It is illegal to knowingly employ an illegal immigrant. That is a shame too. On both counts. It’s a shame you need the permission of bureaucrats to travel, live and work where you please. It’s a shame the employer has been turned into an accomplice.

There are far too many greasy laws and far too many people ready to obey them. If the Whitmans had had any sense of integrity or loyalty they would have kept poor Nicky on the payroll. Then, when the scalawags in the press found out about it they could have answered honestly: so what?

But one after the other, the candidates, the governors, the preachers, the radio talk show hosts - the sinners confess their crimes, ask forgiveness, and claim rehabilitation. They sniffle. They cry. They admit their transgressions and misdemeanors. They whip themselves like penitents... Then, life goes on.

But what are the crimes? One falls from grace because he has fondled a stewardess on an airplane. Another has had a fling with an Argentine. One has wiggled his foot in a provocative manner in a public lavatory in Minnesota. Another has used drugs. And more than a few have slept with people other than their spouses.

What would you expect? They are only human. Barely. They are politicians and exhibitionists who enjoy making a public spectacle of themselves. They like their lofty positions in front of the media. They may enjoy their fall from grace even more, provided it keeps their names in the paper.

How we miss the old timers who had the courage of their predilections! To a politician from the great state of Louisiana the following story is attributed:

He called a press conference to reply to allegations that he was spotted consorting with a “known prostitute.”
Holding up the accusing newspaper, he said:

“It says here that I was seen coming out of the Central Hotel at 6 o’clock in the morning after sleeping with a known prostitute. Well, I can tell you that every word of this allegation is a lie.

“It wasn’t the Central Hotel, it was the Downtown Hotel. It wasn’t 6 o’clock in the morning; it was 7 o’clock. She wasn’t a known prostitute; I never laid eyes on her before in my life. And we didn’t sleep a wink.”

But the present generation of political figures is as spineless as the public itself. We live in a nation of sheep led by jackasses. We stand in line to be searched by airport goons, when we know perfectly well we have no intention of blowing up anything. We meekly fill in census forms...separate our garbage...and obey the speed limit even when there are no cops around.

Even so, turning out a trusted servant, merely because she has run afoul of the paper checkers is low and unforgivable. There must be some especially hot corner of Hell set aside for such people.

Besides, illegal immigrants are to be treasured. They are the last real Americans. Like the first ones, they brave hardship and danger to get here. The first immigrants crossed unforgiving seas in small barques. The last cross a hard border, patrolled by drug gangs and border police. Like Puritans, they come without passports...without work permits...with nothing more than the shirts on their backs and a desire to work. They worship their own gods, and otherwise ask only to be left alone. Do some turn to delinquency, felony and voting? Of course, they do...they’re only human too. But most get along passably well without the benefit of US social welfare legislation, democracy or larceny.

Most show up with no money in their pockets; instead, all they have is their scraps of paper or cheap cell phones...with the telephone number of a cousin in Houston or the address of a friend in Los Angeles - just like the immigrants who crowded into Baltimore, Philadelphia and New York in the 19th century. And like the first immigrants, they cannot sit their fat derrieres down in a cushy government job...nor even ask the assistance of welfare agencies, food stamps or other giveaways. Every contact with the white-skinned “gringos” is as dangerous and repulsive to them as contact with the red men was for the original settlers.

In Arizona, apparently, they can be stopped and asked for their papers at any moment, without cause or provocation. In other states, they need to be careful too...lest they be stopped for speeding and the secret gets out.

Nor can they claim minimum wage, race discrimination, disability, union scale, priority parking, unemployment compensation or any of the other chisels and hustles available to homegrown labor. The illegals have to earn their way.

So raise a glass. Raise a hat. Raise a voice. Say “gracias” to these...the last real Americanos.

Jerry Brown is right; Meg Whitman deserves to lose.