Bernanke's Bountiful Basket of Bull

      This Wednesday, the Federal Reserve chairman Ben Bernanke spewed out some of the most financially illiterate ignorance I have seen from a public figure since the President's last public speech. This is not a surprise coming from a man who has never held a job in the real economy and is firmly ensconced in the  economic theory of academia, which has very little relationship to the real economy.
     The market responded positively to the Chairman's remarks, and why wouldn't they. For the last 3 years they have been the jonesing crack addicts to Big Ben's quantitative easing fix. In recent bond auctions, which is how the government borrows money to fund all the things they shouldn't be doing, the Federal reserve has bought 90 percent of all the government's debt. It's not the Chinese that Americans have to worry about, it's the Federal reserve monetizing our debt to levels which have ballooned its balance sheet to over 7 trillion dollars. Anyone with a grade school education realizes that this situation can't continue indefinitely. Eventually the U.S. currency will collapse and our credit worthiness will be in dumper.
     In 2010, tax-cheat Timothy Geithner (Treasury Secretary) went to China and told officials there that the U.S. was not monetizing its debt. The Chinese called him on it by letting him know that they have kept track of our money supply and that we were most definitely monetizing our debt. Since then the Chinese have been divesting themselves of U.S. debt. Which is why the Federal Reserve has had to buy the debt themselves, further exacerbating the monetizing problem. Of the 5 trillion dollars in new debt created by the Obama administration, over sixty percent has been purchased by the Federal Reserve. They have done this by simply printing money and using it to buy the Federal government's debt, which is going to hurt pension funds which invest in long term bonds.
     If all this wasn't enough to scare the b-Jesus out of you, Big Ben made a comment during his remarks that made me pop a blood vessel in my brain. He said that the government had to reduce incentives for companies to grow. Evidently this is to avoid the myth of too-big-to-fail that this administration has used to cut the legs out from under capitalism. The administration has done a good job of doing just that, which is why we have the longest period of unemployment over 8 percent since the Great Depression of the 1930s. It has been this intense meddling in the economy by people like Ben Bernanke, who don't understand it, that has lead to a lack of confidence in the markets to stand on their own, anemic GDP growth and chronically high unemployment. November's election can't come quick enough and with it a change in leadership at all levels of government.

The Cowardice of Rock

     Over the last 3 years, Gibson guitar has been, in the words of CEO Henry Juszkiewicz, stalked by the Department of Justice. The basic gist of the DOJ case is that Gibson illegally imported ebony and rosewood, used in the fingerboards of their guitars. But this is based on the DOJs wild misinterpretation of Indian law, where the wood originates. The Indian government approved the transfer of the wood and the United States Customs department did as well. The importation of the wood was also approved by Forest Stewardship Council, which has the final word on these matters. The entire process used by Gibson in securing the wood was completely legal and followed the laws of both countries. The process, by the way, is the same one used by other guitar manufactures, who for some reason have escaped the DOJs attention. Gibson, to date, has not been officially charged with a crime but has had a half million dollars worth of their product confiscated by the U.S. government as well as losing one million dollars in productivity.
     The reason for this selective prosecution (or what some may call persecution) of Gibson guitar might be found in the political realm rather than the legal. Gibson guitar is a non-union shop and has donated money to conservative causes. This wouldn't be the first time the Obama administration has used the power of government to silence its political opponents. It started after the administration took control of GM and closed profitable car dealerships owned by Republicans. It continued when the administration tried to ban Fox News from White House press briefings. This move was roundly criticized, even by the left-leaning mainstream media and the administration was forced to reconsider its decision.
     It seems to me that no matter what the reason for the DOJs selective prosecution of Gibson guitar, there is a blatant injustice in it. I'm wondering when we will hear from the rock stars who claim to abhor injustice. Country music stars have come out in support of Gibson, but as of the date of this post, the only rock musician to come to Gibson's defense has been Ted Nugent. It seems as though his fellow rockers, like Bruce Springsteen, Bon Jovi, et. al., don't have the courage to stand up for injustice when it conflicts with their politics. Their courage only extends to causes for which their Allys on the left won't criticize them. The cowardice of these rockers is defined by their unwillingness to stand with true justice against the slings and arrows of an out-of-control administration and its sycophants in the mainstream media.

Fidel Is Smiling

     Florida Marlin's manager, Ozzy Guillen, recently said that he loved Fidel Castro. The comment was made while he was being interviewed for Time magazine. The incident sparked a firestorm which resulted in Mr. Guillen's suspension from baseball for five games. Let me state for the record that I think Fidel Castro is a murdering tyrant and is not worthy of love, except maybe by God, in whom he doesn't believe. But I am also a big supporter of free speech, even when that speech is misguided and offensive to some people. Mr. Guillen's comments can be characterized as misguided and most certainly should be offensive to anyone who believes in justice and liberty. These concepts have been absent from Cuba for the 50 plus years that Fidel Castro has ruled.
     I have to wonder why Mr. Guillen's comments are any more offensive than the useful idiots in Hollywood and elsewhere who wear Che Guevara tee-shirts and elevate him to some sort of heroic status. After all, Che Guevara was a murdering coward who ran away from the only battle in which he was ever involved. When the Bolivian military found him hiding like the Coward he was, he begged for his life saying he was the great Che Guevara and was worth more to them alive than dead. He was very brave when he was slaughtering unarmed and innocent men, women and children. It was a different story when he faced armed military personnel.
     I also wonder why Mr. Guillen's comments would be any more offensive than Anita Dunn saying that Chairman Mao was one of her heroes. She made the comment while delivering  a speech to high school students. At the time Ms. Dunn was President Obama's press secretary. Mao murdered 100 million of his own countrymen and tortured untold millions more. Just the kind of a guy you'd want administration officials to lionize. And while we are on the subject of Mao, I take much more umbrage with the President and first lady hanging a Mao ornament on the White House Christmas tree their first year in office than I do with Ozzy Guillen's remarks. I also find the strict adherence to politically correct speech the left has placed on public discourse to be more offensive than a comment made by a baseball manager. Let's not forget that there are many people on the left in this country, some of whom are in our government, who have expressed admiration for Fidel Castro and the wonderful things he has done for the Cuban people. Some of these people are bound and determined to impose the Cuban-style of healthcare on the U.S. Now that I find that much more offensive than Ozzy Guillen's comments.
    Ozzy Guillen's remarks were stupid and misguided, but don't rise to the level of offense that our government officials utter almost on a daily basis. Freedom of speech has no filter that strains out stupidity, people are free to make fools of themselves. I think the reaction by Major League baseball and others to Ozzy Guillen's remarks were somewhat disproportional. I have to think that in some corner of Cuba Fidel Castro is watching the limits we are placing on our own free speech, and Fidel is smiling.

Voter ID Opposition Equals Citizen Disenfranchisment

     There has been quite a dust-up recently over the institution of voter ID laws various states. Democrats are opposed to these sensible laws because they say it disenfranchises blacks disproportionally because more inner-city blacks are likely not to have IDs than other segments of the population. The fact is that most states allow lower income residents to obtain state IDs free, and in some states they will even send a representative to a person's house to sign them up for an ID. Nothing could be easier than obtaining an ID, no matter in which state you live.  
      The most obvious reason for Democrat opposition to voter ID laws is corruption of the voting process. If one doesn't have to prove who they are, it allows for more deception in voting. This was recently illustrated by James O' Keefe, the now famous videographer who exposed the immoral and illegal tactics of President Obama's favorite community organizers, ACORN. Mr. O' Keefe strolled into the polling place in Attorney General Eric Holder's district, and without an ID, the poll worker was going to allow him to vote as Eric Holder. The poll worker actually said that as long as he was on the list and said he was who he claimed to be, no ID was necessary. The really frightening part is that Mr. O' Keefe never said he was Eric Holder, he only asked if they had a registration for Eric Holder. The poll worker eagerly volunteered to allow him to vote as Eric Holder.
     I think the opposition to voter ID goes much deeper than simple elections fraud. Without an ID it is very difficult for someone to fully participate in our society. An ID is needed to cash a check, obtain a credit card, board a plane and hundreds of other activities which allow a person to fully participate in the economy. We should be encouraging people to be responsible by securing an ID. But the political fortunes of Democrats depend on keeping people irresponsible and separated from participation in the economy. The more people become self-sufficient, the less they need Democrat politicians passing legislation to feed, clothe and house them. This has been outlined by President Obama in many speeches, most recently when he talked about the failure of the "on your own economy." The President would have people believe that they can't make it on their own and need government to intercede on their behalf. But what the President, and others who believe as he does, fail to recognize is that it is free market capitalism and the individual freedom it provides that created a nation that has advance the human condition more than any other in the history of the world. Freedom dictates that the individual takes the responsibility of proving who they say they are when it comes to our most precious right, the right to vote.

Another U.S. Downgrade

     On Thursday, April 5, 2012 the small credit rating agency of Egan-Jones downgraded the United States to AA from AA+. Egan-Jones foreshadowed the downgrade last Summer by S&P, when for the first time in history, the U.S. rating was downgraded from its pristine AAA rating. The reason cited for this downgrade is continued non-action on dealing with the burgeoning debt. For the first time since World War II, U.S. debt has exceeded 100% of our GDP. The Democrat-controlled Senate has not passed a budget in over 3 years and although the President has submitted two budgets in the last two years, no one in his own party, let alone any Republicans,  have voted for either one. The Republican-led House, behind the leadership of Paul Ryan, has passed budgets each year since they won control of the House in the 2010 mid-term elections. These budgets have only gained scorn from the President and his party. It's obvious that the President and the rest of the Democrats want to keep spending without the restraint of a budget.
     The Federal government is borrowing 40 cents of every dollar it spends. The Federal Reserve holds bond auctions to sell that debt to investors. As a result of quantitative easing programs, the Federal Reserve is now purchasing nearly 60% of the bonds it sells. There is also a waning desire for U.S. debt,  even from China, which has begun to divest itself of U.S. debt. All this buying of our own debt has expanded the Fed's balance sheet to a record level of over 7 trillion dollars. How long do you think you could sustain your finances if you were borrowing 40% of what you spend and 60% of that you were loaning to yourself by printing your own money and buying your own bonds? This, of course, is a recipe for disaster and it is only getting worse with each passing day.
     It's not too late to right the ship, but the Federal government has to divest itself of unnecessary spending. And this can't be achieved by taking money out of the private economy through higher taxes. There are literally thousands of government programs that can be cut that would not affect the health and welfare of the nation. Just look at the 10's of billions of taxpayer dollars that the President has given to "green energy" companies run by his cronies. Most people have heard of the bankrupt Solendra, which received half a billion dollars and then went bankrupt. But there have been at least half a dozen others, some of which received up to 2 billion dollars, that have gone bankrupt. Investing in companies run by the President's donors in an industry that doesn't yet exist, is not the role of the Federal government.
     If the adults don't get control of the Federal government's purse strings, we are headed for forced cuts which will make the Greek austerity look like high living. We have already seen a preview of the violent reaction that this type of austerity will cause, when this week in California students rioted over higher tuition. Get ready for more of this kind of behavior as the crack that is government spending is yanked away from an ever-increasingly dependant populace.