Are Cops Constitutional?

I didn't start out thinking this way, but over the years I have become an ardent critic of American law enforcement. As Acton observed, power corrupts, and it is no longer debatable that our cops have too much power. Over the years the ranks of all departments have swollen, and it is clear - crystal clear - that police forces have become highly militarized.

By numbers and disposition, the police now constitute a standing army.

I've no doubt the Founders would share my alarm and moral outrage at these developments. I've done what I can, largely with anecdotes, to wake people up. Now comes a fascinating and scholarly examination of law enforcement at the time of the Founding. Turns out that this was another thing the people did for themselves, and, as usual, did quite well. Much better, in fact, than it's done today, and with far more checks and balances. The notion of government paid cops was quite simply unthinkable at the time, as it should be today.

Here's the abstract: "Police work is often lionized by jurists and scholars who claim to employ "textualist" and "originalist" methods of constitutional interpretation. Yet professional police were unknown to the United States in 1789, and first appeared in America almost a half-century after the Constitution's ratification. The Framers contemplated law enforcement as the duty of mostly private citizens, along with a few constables and sheriffs who could be called upon when necessary. This article marshals extensive historical and legal evidence to show that modern policing is in many ways inconsistent with the original intent of America's founding documents. The author argues that the growth of modern policing has substantially empowered the state in a way the Framers would regard as abhorrent to their foremost principles."

And an excerpt: "Law enforcement in the Founders' time was a duty of every citizen.32 Citizens were expected to be armed and equipped to chase suspects on foot, on horse, or with wagon whenever summoned. And when called upon to enforce the laws of the state, citizens were to respond "not faintly and with lagging steps, but honestly and bravely and with whatever implements and facilities [were] convenient and at hand."33 Any person could act in the capacity of a constable without being one,34 and when summoned by a law enforcement officer, a private person became a temporary member of the police department.35 The law also presumed that any person acting in his public capacity as an officer was rightfully appointed.36

Laws in virtually every state still require citizens to aid in capturing escaped prisoners, arresting criminal suspects, and executing legal process. The duty of citizens to enforce the law was and is a constitutional one. Many early state constitutions purported to bind citizens into a universal obligation to perform law enforcement functions, yet evinced no mention of any state power to carry out those same functions.37 But the law enforcement duties of the citizenry are now a long-forgotten remnant of the Framers' era. By the 1960s, only twelve percent of the public claimed to have ever personally acted to combat crime.38

The Founders could not have envisioned 'police' officers as we know them today. The term "police" had a slightly different meaning at the time of the Founding.39 It was generally used as a verb and meant to watch over or monitor the public health and safety.40 In Louisiana, "police juries" were local governing bodies similar to county boards in other states.41 Only in the mid-nineteenth century did the term 'police' begin to take on the persona of a uniformed state law enforcer.42 The term first crept into Supreme Court jurisprudence even later.43

Prior to the 1850s, rugged individualism and self-reliance were the touchstones of American law, culture, and industry. Although a puritan cultural and legal ethic pervaded their society, Americans had great toleration for victimless misconduct.44 Traffic disputes were resolved through personal negotiation and common law tort principles, rather than driver licenses and armed police patrol.45 Agents of the state did not exist for the protection of the individual citizen. The night watch of early American cities concerned itself primarily with the danger of fire, and watchmen were often afraid to enter some of the most notorious neighborhoods of cities like Boston.46

At the time of Tocqueville's observations (in the 1830s), "the means available to the authorities for the discovery of crimes and arrest of criminals [were] few,"47 yet Tocqueville doubted "whether in any other country crime so seldom escapes punishment."48 Citizens handled most crimes informally, forming committees to catch criminals and hand them over to the courts.49 Private mobs in early America dealt with larger threats to public safety and welfare, such as houses of ill fame.50 Nothing struck a European traveler in America, wrote Tocqueville, more than the absence of government in the streets"

I debated editing out those annoying footnote numbers, but decided to leave them in to show how well the author documented this work. This is the kind of research it will take to force cops back into a respectable place in society, if it's possible at this late date. Here's the whole thing, well worth reading and passing around: Are Cops Constitutional?

H/T to Pete at WRSA, linked in my blogroll.

Astounding...

in my blog list I refer to Wm. Grigg's blog, but this article needed to be permanently linked.

It's later than you think in America

Acton was spot on.

An Earlier Take on Muslims

"How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in a dog, there is this fearful fatalistic apathy.

The effects are apparent in many countries. Improvident habits, slovenly systems of agriculture, sluggish methods of commerce, and insecurity of property exist wherever the followers of the Prophet rule or live.

A degraded sensualism deprives this life of its grace and refinement; the next of its dignity and sanctity. The fact that in Mohammedan law every woman must belong to some man as his absolute property, either as a child, a wife, or a concubine, must delay the final extinction of slavery until the faith of Islam has ceased to be a great power among men.

Individual Moslems may show splendid qualities, but the influence of the religion paralyses the social development of those who follow it.

No stronger retrograde force exists in the world. Far from being moribund, Mohammedanism is a militant and proselytizing faith. It has already spread throughout Central Africa, raising fearless warriors at every step; and were it not that Christianity is sheltered in the strong arms of science, the science against which it had vainly struggled, the civilization of modern Europe might fall, as fell the civilization of ancient Rome."

- - Winston Churchill, 1899

(Let's see them issue a fatwa against Churchill!)

More on the Police State

We've all grown weary of the old saw that America has 5% of the world's population but uses 25% of the world's energy.

But how about this: America has 5% of the world's population, but 25% of the world's prisoners!

Lying cops. Fabricated evidence. Asinine drug laws. Unreliable witnesses. Blackmailing prosecutors. Mandatory sentences. Corrupt judges. Wrongful convictions.

A must read from Paul Craig Roberts via Lew Rockwell.

Letter to NASCAR

Sent just now, by e-mail:

To whom it SHOULD concern:

I just watched the replay of the Atlanta race and the Carl Edwards incident on Speed. Based on your "boys, have at it" policy it's likely this is the last NASCAR race I'll ever watch.

If NASCAR is going to descend to an NBA level of thuggery, you should spell it "boyz" just to be honest. Seriously. Perhaps you could change your name to Cirque du NASCAR or (if that's too elitist) simply ASSCAR.

I'm 51 years old, and have been a racing fan since age 9. I have personally raced everything from motorcycles to go-karts to cars. I've also crewed and spent plenty of time in hot pits at levels as high as Champcar. I cannot recall an example of such dangerous behavior that went not just unpunished but was, upon consideration, encouraged with a wink. I've watched and participated in examples of both highly gracious sportsmanship and adrenaline fueled red mist. Bad behavior comes with the territory, but it cannot be encouraged. Ever.

When, not if, a spectator, driver, crewman or NASCAR employee is injured or killed by this sanctioned dumbassery you will be sued. It's your policy to allow behavior that goes beyond dangerous to stupid, which voids any waiver of any kind. You've sanctioned reckless endangerment, and the result is foreseeable. You'll lose in court, and you deserve to. I hope it costs you tens of millions, and no one their life. (Should someone actually die as a result of this quest for viewers, it wouldn't disappoint me to see you charged criminally as well. Sad? Yes. Disappointed? No.)

This is more free legal advice than you deserve. If you don't have an attorney on staff, it's time to hire one. If you DO have an attorney, it's still time to hire one. I'd be fascinated to hear back from Mike Helton on this. Do you have the guts to show him this letter??

In utter disgust,

----

PS - It's never too late to admit a mistake and do the right thing. A lot of folks are watching, and not all of us are stupid...

Edit: A reply! "First and foremost, we want to thank you for your interest in NASCAR. You can be assured that we take your feedback seriously. Everyone at NASCAR understands that the success of our sport depends on the support of the fans.

We read every e-mail we receive from our fans and respond to as many as possible. Thanks again, and we hope you enjoy the rest of the season."

Toyota Trouble

Anyone who's an automotive enthusiast (and who wasn't born last night - me, on both counts!) recalls the ruckus over "unintended acceleration" in Audi cars a while back. Those accusations were eventually discredited and Audi was cleared, but not before the company took a tremendous hit in sales and prestige. The current situation with Toyota Motor Company and the gas pedal recall sounds strikingly similar, and one wonders if it will end up similarly credible...

Toyota has a great reputation, and deservedly so. Their product lines - including the luxury brand Lexus - are well engineered, well made and notably reliable. This has led to industry-leading resale values and tremendous customer loyalty. Toyota has also done well in several forms of auto racing, which is arguably the most severe test of an auto company. As a constructor they finished fifth (just behind Ferrari!) in the Formula One World Championship last year!

This current debacle points out one more reason (as if we needed another!) that the US Government has NO business bailing out private companies - they are now in the position of regulating their own biggest competitor in the auto industry. Talk about a conflict of interest!!! I'm wondering what really motivates the timing and aggressiveness of these recalls and am particularly curious about that little "slip of the tongue" saying people should park their Toyotas until they are repaired.

Toyota recently surpassed GM as the world's highest volume automaker and was doing pretty well despite the economic meltdown. The Camry, Corolla, Prius and Rav4 were solidly entrenched in the top 15 best selling vehicles in America. Since the recall Toyota stock is down nearly 20%. (This would be a great buy if the market itself was at all healthy.) Toyota car and truck sales have likewise fallen off the bottom of the charts.

The timing is curious. All considered, it's difficult to envision any move that would be more beneficial to GM and Chrysler at this moment in history. Just another happy coincidence, I'm sure...

Haiti

The earthquakes in Haiti have brought that little island hell-hole into the limelight (and at a VERY convenient moment when TPTB want you focused on anything except our own government). The resulting frenzied coverage of this third-world cesspool rekindled my long-standing concern and frustration with how too many Americans dispense charity.

Haiti's in the Western Hemisphere, but their "government" is essentially an African tribal kleptocracy. To the extent that anyone governs anything down there, it is done purely for personal gain. Too much of the aid we naively send down there ends up in the offshore accounts of corrupt ministers. By any honest measure, it ranks as one of the most corrupt governments on earth.

A great illustration of this is found in a comparison of Haiti's per capita annual GDP with that of the Dominican Republic (which occupies the balance of the island): Dominican Republic: $7400, Haiti: $1300. If the final score of a high school basketball game was 74 to 13 and your team scored 13, you'd be looking for a new coach, not flying him dinner.

Before the earthquake hit, there were already over ten thousand organizations from around the world giving aid to Haiti. This for a population of only nine million (more like 8.8 million now, I suppose). Many if not most of these aid groups are church-based. In my own tiny rural county, I personally know several people who have traveled there to try to help, and several more who gave money and supplies for the trip. (I applaud their intentions, but am at a loss to see where the populace of Haiti has significantly benefited from all the effort. Would the outcome of the earthquake be any different if we had done nothing for the last 20 years???)

This is a staggering number of people giving aid. Counting all the church members abroad, there are probably millions more people helping than there are to be helped. The sad state of the country prior to the earthquake proves that the problems down there are deeply rooted in very dark areas of human nature. Food, medicine and clothes clearly won't produce a Haiti that is any different next year than last. We're just 1) enabling the corruption, and 2) keeping the peasants alive to suffer under it.

With all the outside "aid" over the years the Haitian people themselves have developed a handout expectation/dependence that borders on repulsive. (I would expect my goats to bleat for food, but an entire nation of humans should know better.) We've been all too eager to accommodate, so I surmise that very few of the people trying to help have looked at the whole mess very critically. Since we've also ignored their real problem for decades, the Haitians themselves have no expectation of change. Waiting around for the next handout is actually rational behavior under the circumstances, and I don't blame them for it at all. I blame us.

To me, this boils down to the difference between teaching a man to fish and merely feeding him a meal. This earthquake produced a teachable moment of gargantuan proportions. We already have troops down there. The government, such as it was, is now nonexistent. We can't be accused of overthrowing anything, since there's nothing to overthrow.

Why not make all aid for rebuilding contingent on adoption of the International Building Code? (Given the "culture" down there some of the remedies in the Code of Hammurabi could be folded in for good measure, and you need to google this if you don't know what I'm talking about...)

Rather than rebuild anything FOR them, we should hire American construction workers (a few of whom just happen to be looking for work right now) to train and supervise Haitians, who will be paid in food. (Aid should be contingent on effort. You only get fed after you work! This is a perfectly fair pay scale, since these very people are presently engaged in begging or subsistence farming anyway.)

We also have a golden opportunity to do away with the self-defeating expectation of perpetual corruption down there. At the same time we're teaching them how to physically rebuild, most of the organizations who are already engaged in aiding Haiti should refocus their efforts on education. (The medical guys should stick to their guns, but most of the rest should help Haiti shake off it's third world voodoo mentality.) Teaching the basics will do - ethics, reading, ethics, logic, ethics, writing, ethics, math, ethics, Austrian Economics, ethics - all with an emphasis on ethics. (Did I make my point yet?) In other words, we would specifically set out to destroy the practices of voodoo and kleptocracy with ethics and logic.

We'd likely have to keep this up for a generation or three, but since we're now poised to assist them in perpetuity this is actually an attractive alternative.

(These ideas presuppose that everyone offering aid has honest intentions. The ethics part is particularly far fetched, since the globalists running America are hell-bent on destroying OUR constitution. It's a real leap to believe that they would tolerate individual liberty springing up anywhere else in the world. The whole idea is actually preposterous, and I offer it more as commentary than in expectation of results.)

This brings me to my last point on aiding those in need, which goes directly to our priorities: There are now unemployed people living in at least three tent cities within a 50 mile radius of where I live (and I live in out in the country!). I'm aware of several individuals and a whole family living nearby in cars and/or vans as well. It's high time all the "helpful" people in America turned their attention to their own nation and (preferably) their own neighborhood.

Yes, I know it's far easier to care passionately about a problem that's three thousand miles away than about a problem down at the other end of your own block. You can write a few checks, perhaps take an exotic vacation and you'll feel great about yourself. Unlike helping your neighbor, there's no chance the helpless needy bastard will ring your doorbell sometime next week looking for even more help.

If you know more about some Haitian family than your elderly or jobless neighbor, I'm talking to you. If you'd gladly send a $1000 check to Haiti but wouldn't help a neighbor catch up on his house payment or buy food, I'm talking to you. If you'd travel to Haiti to build an orphanage but wouldn't paint and caulk a little old lady's house in your own hometown, I'm talking to you.

We (as a nation) need to figure out what went wrong here at home, and we need to do so PDQ. We need to pull together, clean house and then help our own countrymen back to their feet. Along the road to an American renaissance we'll rediscover what actually betters peoples lives, which will make any future foreign aid far more moral and thus more effective.

Time is short. Get with it...

Who, indeed?

"Who could impose such socialistic confiscatory rates?" -- Senator William E. Borah, Idaho, shilling for the income tax and deriding the possibility that income tax rates could someday reach as much as 20%. Here's the rest of the quote: "and how could Congress, the Representatives of the American People, be so lacking in fairness, justice and patriotism?"

How, indeed. Borah, a "progressive" Republican, was all too comfortable with socialism and knew well what the outcome would be. Later in his Senate career, as Chairman of the Foreign Relations Committee, he gained notoriety for his pro-Soviet stance and his many informal dealings with the communist government that America didn't yet recognize.

More evidence that for a very long time the left wing and the right wing belong to the same bird - a carnivorous totalitarian bird that craps all over the people!

Keyes: Obama is a Radical Communist

Alan Keyes again, weighing in on President Obama, the law of the land and the destruction thereof:

End Game

Here's a great post from Karl Denninger by way of WRSA, which is linked from here. I've written about different parts of this financial mess but here's the best (and hardest hitting) summary I've ever seen.

Denninger: The Challenge Before America

From Karl Denninger:

***
Thursday night, readers of The Ticker are aware, I gave a speech while receiving the AIM 2009 Grassroots award in which I dealt with "The Bezzle" within our modern finance system.

I wish to spend today's Ticker focusing on that concept - what it means for the broader economy - and why it is absolutely critical that our government and regulators put a stop to it - right here and now.

First, some facts - some 2/3rds of all capital in the marketplace, whether in the form of credit or cash, is private. Some of it is owned by people like you and I, some by sovereign funds (e.g. Saudi Princes) and some by large foreign and domestic institutional interests (e.g. Pension funds.)

All of this capital has one thing in common: It cannot be forced to enter or stay in any particular market. It is, in fact, entirely possible for that capital to decide to head straight for "the mattress" (that is, to remain in cash) at any point in time, or to allocate itself in any particular asset class it so chooses.

Policymakers are incapable of replacing this capital with public funds (e.g. "new reserves", TARP or other such silliness.) To put this in proper perspective some numbers are in order - with some $50 trillion in total private and public debt outstanding in the United States the debt base alone involved here is roughly $30 trillion in private capital.

This is why The Fed's and Treasury's "commitment" of some $10 trillion (thus far) in loan guarantees and direct spending has done nothing to stem this crisis - and they can't possibly come up with another $20 trillion without collapsing the bond market and destroying both The Fed and The Government.

Policymakers must realize that there is exactly one - and only one - way out of this mess.

"The Bezzle" must be eradicated.

I fully realize that this is extremely difficult politically, but let's face the facts here.

Every "private capital source" that has been enticed into this morass over the last two years has been destroyed, including Warren Buffett (Goldman Sachs and others) and The Saudis (Citigroup among others.)

Then you have Bernie Madoff and Stanford Financial, two alleged frauds that were "known" to the government more than ten years ago and yet were either not investigated or intentionally allowed to continue to operate, robbing people of literal billions of dollars.

Finally, you have AIG which reported a $61.66 billion loss, or $22.95 a share - for a stock trading under two bits. Stripping out capital losses and "accounting issues" you'd still have a loss of $37.9 billion, or $14.17/share. The government has "agreed" to provide another $30 billion to the firm in addition to the previous $150 billion that has been sucked into a black hole. Once again AIG has been deemed "a systemically significant failing institution" that has to be propped up, according to Treasury.

And who were the beneficiaries? Goldman, Merrill, and now overseas banks. Instead of putting the firm into receivership and running down its portfolio over time, forcing the losses to be netted and taken, we are instead rewarding "The Bezzle" by protecting those who did imprudent and even outrageous things with unlimited taxpayer dollars.

Every last one of those "investments" has been wrecked as a direct consequence of "The Bezzle" - that is, our government's refusal to uphold the law and force the truth to be disclosed both publicly and to investors. Our government and its agencies have gone so far as to intentionally mislead in many cases, including claims related to nationalization of banks and respect for capital structures just before people were wiped out in investments that should have had preference.

What's worse, in some cases such as AIGs, not only has "The Bezzle" ripped off private investors it is also ripping off the taxpayers - multiple times - with no indication that we're going to stop this course of action any time soon!

The market no longer sees these "rescues" as positive - it now sees them as what they in fact are: coverups for papering over raw fraud and abuse, and thus when each new "rescue" is announced the market tanks instead of stabilizing.

Fact is that intentional and willful misconduct by our government agencies, both as acts of omission and commission, has resulted in these firms, institutions and nations suffering crippling losses.

These acts of malfeasance and misfeasance in government agencies include (but are not limited to):

- "23A Exemption" letters
- Willful and improper classification of funds (IndyMac) which kept the FDIC from taking enforcement action in a timely fashion
- Willful removal of leverage limits (championed by and granted as a consequence of Henry Paulson's request before he joined Treasury; every one of the 5 firms that has blown up had 2x or more the formerly legal limit)
- Willful removal of bank leverage limits and reserve ratios by The Fed and Congress in permitting "sweeps" along with allowing The Fed authority to set reserve ratios wherever it would like, including to zero.
- Willful failure to police CDS margins and capital adequacy (e.g. AIG and others) thereby leading firms to be deeply insolvent yet continuing to operate as if nothing was wrong - until the cash ran out and we suddenly had a systemic crisis.
- Willful failure to enforce suitability regulations on mortgage lenders, along with intentional preemption of state predatory lending laws.
- Willful blindness related to the blatant and outrageous false statements made by both lenders and borrowers; the essence of "liar loans."
- Willful blindness related to both Madoff and Stanford Financial
- Willful blindness related to ratings agency conflicts of interest, "ratings shopping" and known-flawed ratings models.
- Willful blindness with regards to firms selling securities to customers which they were shorting at the same time - without disclosing this fact to the customer they were marketing to.
- Refusal to take action related to the false statements of executives on the health of their firms on national TV networks such as CNBC, when reliance on those statements led to complete wipeouts (Bear Stearns and Lehman)
- Misleading statements related to the health of Fannie and Freddie made by administration officials, leading to near-total losses for both common and preferred shareholders.
- Most recently, misleading statements related to the intended path for banks and capital adequacy, including Citibank.

These private sources of capital have quite reasonably withdrawn from the marketplace. They will not return until they can be assured that losses they suffer will result only from their own poor investment decisions and not from willful concealment of losses and even fraud by those in whom they invest nor from changes in the rules imposed by fiat from Washington DC. These private capital sources also want to see indictments, prosecutions and imprisonment - along with ejection of the parties responsible in both private enterprise and our government.

This is a serious problem for our capital markets and economy generally as without this private capital we are doomed to a massive economic contraction. Conservatively speaking, assuming our government can actually fund the $9-10 trillion they've promised, which I believe is a pure fantasy (it would represent nearly a tripling of the public float of US Debt!) we would suffer a 30% contraction in GDP over the next 18-24 months.

If they cannot fund those commitments much beyond the $1 trillion already spent, the contraction would be more on the order of 50%.

This would take us back to roughly 1994 levels in GDP terms, looking at constant dollars, a setback of some 15 years.

The damage, however, would be much worse than it appears at first blush, because in conjunction with the expansion in GDP state and local governments, along with government spending, have expanded, expecting that "GDP never goes down" (doesn't that sound familiar to those who believe that "house prices never go down"?)

Were we to contract to a $7 trillion GDP, for example, our current federal budget would reach nearly half of GDP! This would be impossible to sustain as tax revenues would collapse under such a scenario.

We have exactly one opportunity to stop this, and that opportunity is now.

Government simply must stop "The Bezzle" in all parts of our economy and capital markets, and must do so right here, right now, today.

If we fail to demand this as Americans or our government fails to implement this across the board then we will suffer a Depression worse than the 1930s.

This is not conjecture.

It is not a prediction, nor drawn from how I "feel".

This is mathematics; it is a fact that we cannot possibly maintain anything close to our current standard of living unless private capital decides to re-enter our marketplace - a decision that government cannot force.

The consequences of an economic Depression of this magnitude are almost too serious to contemplate. They include unemployment topping 20%, an average annual income decrease for Americans of some 30% (for those who remain employed!), a 70-80% decrease in retirement accounts such as IRAs and 401ks and the decimation of both private and public pensions, resulting in a reduction in benefits of 50% or more.

Should government attempt to "replace" that private capital the result will be a bond market collapse. This too is inevitable; into an environment of falling tax receipts (down 15% already) foreign governments and investors would have to be insane to continue purchasing US Treasury debt.

THAT event, should it occur, would result in The Federal Government being forced to contract to 1/3rd of its current size almost literally overnight. The only way to accomplish this would be to entirely eliminate all Social Security, Medicare and Medicaid funding, cut Defense spending by 75%, and cut all remaining discretionary programs by 50%.

Needless to say such an event would be catastrophic for our society - far worse than a "mere" Depression. In fact, that latter outcome has a very high probability of destabilizing our government and political system entirely.

Let me be crystal clear: the very real possibility exists that our government could collapse.

The time to play games and fiddle hoping for a turn in the housing market or some other miracle has passed. Bernanke himself said if the financial system cannot be stabilized our economy will not recover.

He is correct - but our financial system, including both credit and stock markets, cannot stabilize (say much less recover) until and unless private capital re-enters the market.

That simply will not happen until "The Bezzle" is driven out.

We either act now or suffer the consequences - the utter destruction of our middle class, a collapsed stock market with the DOW headed to 3,000 or worse and the S&P 500headed into the 400 or lower range, unemployment topping 20% and GDP falling by 30% or more, complete destruction of both private and state-run pension systems, and a very real possibility that our nation collapses.

Your choice, America.

This is math - not politics.

Put the partisan political crap away - it is not only inappropriate but at this time in our nation's history it is insanely destructive - and instead do the right thing.
***

What if, just as a hypothetical, the objective actually is to destroy America as a prerequisite to establishing a collectivist Utopia?

Wouldn't the implementation of such a plan look very similar to what is happening as we speak?

Alea iacta est.

AIG Disaster

American Insurance Group has posted a record: the largest quarterly loss by any US company in history. $61.7 billion down the drain in Q4 '08.

Today the government pumped in another $30 billion to stave off collapse, bringing the total of the $85 billion bailout to $180 billion so far. Analysts say that a $250 billion total isn't unrealistic (which means 300 or 350 is a realistic total!) - and this for just one company!

This illustrates the profound danger of derivatives to our entire financial system - the total derivatives exposure is enough to wipe out the entire GDP of the industrialized world for the next several years.

Today also marked the first day I've seen the word "Armageddon" in the mainstream press!

Arrrgh!

Class Envy...

...is sick. Envy is one of the least becoming human traits, and by way of intellectual laziness we have allowed it to become a sharp sword for the political left.

Fact is, there isn't a person out there who wouldn't be thrilled to strike it rich or to win the lottery and thereby join "the rich." Even those few who would reject the lifestyle would happily take the money for the good (or ill) they could do with it.

Wealth is morally neutral. Wealth is also one of the natural outcomes of Liberty and should be revered as such. Class envy - class baiting, if you will - is no more respectable than any other kind of baiting or envy. It's not bank balance but the content of one's character that should occupy us.

This is one of those things that embarrasses the left, when we bother to hold it up for honest examination. Let's do exactly that!

Nirvana Achieved in Our Time...

...including the cure for cancer, middle east peace, galactic free trade and oh yes, economic salvation!



Just add $9.95 (Trillion, that is...) for shipping and handling.

Here's the bold new plan: By spending more money we don't have on more pork we don't need we'll get more debt we can't service. As a result we'll glide smoothly down the road to serfdom lasting prosperity.

Seems unlikely, but it must be true. After all, the Obamessiah has spoken it. Head held high, basking in Himself, Benito Husseinolini Obama assures us: "We will rebuild. We will recover - and the United States of America will emerge stronger than before."

(He's actually telling the truth. His America IS the government, which WILL emerge stronger than before. We the people are just the fuel, and it's not his fault we don't know what he's talking about up there...)

Anyway, we get "a new lending fund that represents the largest effort ever to help provide auto loans, college loans and small business loans to the consumers and entrepreneurs who keep this economy running." (Bankers were bad enough, but now we have to go before the Feds to buy a car?!?! Hope you're current on your taxes...)

We get a new housing plan that will "help people facing foreclosure refinance their mortgages and lower their monthly payments." (Sounds expensive. Good thing it's free!)

We'll shovel even more money into the black hole our banking system, but with fresh promises of accountability. It was amusing to watch Nanny Pelosi, fresh off her junket to Italy, sit with eyes averted as Benito said of this bank aid "This time, CEO's won't be able to use taxpayer money to... ...disappear on a private jet. Those days are over." (Yep. Those days sure are over. Only our rulers get to jet around from here on out.)

Now the bad news obvious: "This plan will require significant resources from the Federal government - and yes, probably more than we've already set aside. But while the cost of action will be great, I can assure you that the cost of inaction will be far greater - for it could result in an economy that sputters along for not months or years but perhaps a decade" (Kind of like the last time we threw big money and government programs at a downturn - the Great Depression - and sputtered along for a decade? But this time will be different. He said so...)

"It's not about helping banks - it's about helping people" (What a crock. If that were true, he'd be giving that money to the people. But no - he's giving it to the banks. Forget the rhetoric - follow the money.)

"We're going to reform our outdated regulatory system" (More alphabet soup government, in other words.)

Speaking on the automobile industry's woes, he fantasized "...we are committed to the goal of a retooled and re-imagined auto industry that can compete and win" and then "I believe the nation that invented the automobile cannot walk away from it" This to thunderous applause. (Is it picking nits to inform the messiah that the nation that invented the automobile is Germany? Interesting choice of words, regardless - if the auto industry fails under the government's heavy hand, we will be walking away...)

Then we get to the collectivist wet dream of socialized medicine. Socialized medicine is an ugly term, so we calls it "health care reform" these days. In classic doublespeak, the first step (the recent government takeover of our medical records) will "reduce errors, bring down costs, ensure privacy and save lives." (Applying the descrambler, that's "Ensuring costs, reducing privacy, saving errors and bringing down lives." Yep - that's what the government's good at, all right.)

Somehow, this will even "launch a new effort to... ...seek a cure for cancer in our time" (Sure. Promise the moon; deliver Gilligan's Island! I wonder - is cancer considered "cured" if you simply don't live long enough to get it? Just a thought...)

At a Hitlerian fever pitch, He said "health care reform CANNOT wait, it MUST not wait, and it WILL not wait another year!" (More thunderous applause. Really thunderous. Precisely as I had feared, socialized medicine is on the fast track. The Anointed One is going to saddle our economy with this debacle on top of all our existing burdens. You've been warned.)

But wait - there's hope: "We've already identified $2 trillion in savings over the next 10 years." (Gee - the exact amount He spent in His first four weeks. Fancy that! Out of that ten years.,the last six are someone else's problem - wanna bet that's when the "savings" are found?)

Another messianic reassurance: "I will not allow terrorists to plot against the American people from safe havens halfway around the world." (Of course not - they're all welcome in DC these days! And why not - those caves can get rather chilly.)

The messiah also stated that he could " stand here tonight and say, without exception or equivocation, the United States of America does not torture." (Our enemies, anyway, and they will sleep well tonight. The American people are somewhat less fortunate.)

This exhausts me. There was much more on education, jobs, etc., etc. - all dripping with teleprompted loftiness. (Turns out that when the loftiness meter is pegged, you're at peak gagging as well.) There was also plenty of blame for the problems He's inherited, to more thunderous applause - which is rather cynical given that the problem He's inherited is the government He's expanding. When the Obamessiah got to the part about about our responsibilities to our children and gravely informed us of "the responsibility to ensure that we do not pass on them a debt they cannot pay" I couldn't take any more.

At least it was enlightening to see our genuflecting Congress get in a few knee bends! They've passed so much legislation without reading it lately that I'd begun to wonder if the staffers and the taxidermists were the only living creatures there! But no - they're alive! And all those knee bends - a foretaste, no doubt, of the New National Health Plan People's Daily Exercise Program - coming soon to a collective near you...

A Drop in the Bucket

Basking in Himself, Obama just christened a $50 billion mortgage bailout that is mathematically doomed at it's launch. The market is actually UP on the heels of this foolishness, at least for the moment.

This legislation largely rewards the folks who had the least business buying a house, and it does so primarily at the expense of those who never set a foot wrong. As bad as that is, it isn't even the biggest problem with this kind of thinking...

Fact is, each "breadwinner" laid off now in February translates into another foreclosure by this time next year. GM just announced 47,000 such layoffs and Chrysler brought it up to an even 50k. Parts suppliers will soon be joining the layoff extravaganza - rumors of 5,000 at Goodyear are an illustration of what awaits as this ripples through the industry. And that's just ONE day, in ONE industry.

Let's do some math: I'll assume each laid-off worker has a mortgage of $200,000. (This is slightly above the current median home value, but remember that many mortgages were written over the past few years at the height of the bubble and have much higher balances.) 50,000 layoffs times the average mortgage note equals $10 billion in future mortgage delinquencies that weren't even on the table when this plan was announced Tuesday morning!

One DAY worth of new layoffs has eaten up 20% of the money allocated in the bailout! Then subtract the "postage and handling" typical of government programs and viola - one third of the money's spent before the ink is dry!

I know this is a simplistic calculation. Fact is, some of these folks own their homes and may have no problem. Others have auto loans, credit card balances and student loans on top of their mortgages that will have to be added in to the looming defaults. (All in all, I suspect my math is on the conservative side of reality.) Simplistic though it is, it does show the magnitude of the problem. It handily demonstrates the fallacy that the government can save us from this mess. The Fed's printing howitzers are aimed directly at the deflationary pressure on asset values, yet the contraction continues as though the Fed weren't even there. Meanwhile, the money supply and public debt is growing like a cancer (which it is) and the specter of hyperinflation looms ever higher over the economic landscape.

We're addicted to economic delusions, and we're embracing Obama's latest "fix" with eyes closed and a warm rush of relief like the addicts we are. It would be far less expensive to acknowledge the delusional period just ended and allow asset values to sort themselves out on their own. This approach would have added the novelty of being honest - a sensation that would be very good for us as well! Instead, we are attempting to refinance the asset bubble into a grand "new and improved" public debt bubble.

And people wonder why I'm so cynical...

Keep Those Plates Spinnin'

Spending three trillion earlier this week must not have been enough to sate the appetites of the Washington Wizards, who announced the afternoon of the 12th that they will buy down the principal (not to be confused with principle, of which there is none in sight) on delinquent mortgages. This according to a means test yet to be devised.

Translated, this means that the folks who had little if any business buying a house will get the most help, and at our expense.

The market turned up at this news, as did my stomach.