Red State Rockers Rock Around the Bail-Outs!

This group contacted me and I like the music their playing, especially the words. Very catchy tune.

Revolt and Reaction: the Tax Day Tea Parties

Tea parties were held all over the country today. These "parties" are actually taxpayer demonstrations against the excesses of the Obama administration, namely his new trillions of dollars in debt, his higher taxes and his plans to substantially increase the size of government.

Reports coming in on the radio and internet indicate the tea parties were a raging success, with thousands of people attending.

Some observations:

1. The mainstream (Democrat) media has studiously ignored the tea parties, even though many have already been held throughout the nation. It is media bias in action, again. They can influence opinion not only by the spin on what they choose to report, but on what they refuse to report.

2. The now politicized Homeland Security Department announced a widespread, rightwing terrorist threat to the nation. They released the following information:

Rightwing extremism in the United States can be broadly divided into those
groups, movements, and adherents that are primarily hate-oriented (based on
hatred of particular religious, racial or ethnic groups), and those that are
mainly antigovernment, rejecting federal authority in favor of state or local
authority, or rejecting government authority entirely. It may include groups and
individuals that are dedicated to a single issue, such as opposition to abortion
or immigration.

Many rightwing extremists are antagonistic toward the new presidential administration and its perceived stance on a range of issues, including immigration and citizenship, the expansion of social programs to minorities, and restrictions on firearms ownership and use. Rightwing extremists are increasingly galvanized by these concerns and leverage them as drivers for recruitment.

Oh God, they're on to us!

This B.S. from Homeland Security is nothing but Democrat talking points; now they are coming from the federal government itself rather than from James Carville. Many conservatives believe this "terrorist alert" was issued the day before the tea parties in order to provide a false context to the tea party movement. John at Power Line stated: "It's hard to avoid the conclusion that this Homeland Security report is politically motivated, and reflects the authors' political prejudices more than an objective evaluation of a significant terrorist threat."

3. Texas Governor Rick Perry spoke at a tea party in Austin and supported Texan state sovereignty, stating (correctly) that Texas has a right to secede from the Union in the event the United States abandons its founding principles of limited government. Various states are now proposing or passing resolutions emphasizing their sovereign status and support of the 10th Amendment.

The spirit of REBELLION is alive and well and lives in the hearts of many Americans. We will not sit still for Obama's planned transformation of our country into a bankrupt, socialist tyranny.

"Meltdown" by Thomas Woods - My Thoughts

I finished Thomas Woods' book "Meltdown" yesterday and in the process became a believer in Austrian economics. Austrian economics are economic principles advanced by such notable thinkers as F.A. Hayek and Murray Rothbard. Hayek is best known for his book "The Road to Serfdom"; I have ordered that book and will read it next week.

Austrian economics advances the premise that it is government controlled money and credit that causes the business boom and bust cycle. The Federal Reserve is the most guilty agent in this phenomenon. In the free market, credit is just another commodity that is subject to supply and demand and interest rates should be left to float as dictated by market forces. It is when the Fed screws with those interest rates that things start to go wrong. Artificially depressed interest rates send erroneous signals though the ecomomy, resulting in bad decisions by businesses that in the long run come back to smack them in the kisser.

That's because low interest rates, in a free market, indicate more savings by the private sector, resulting in more money to lend by banks. In periods of naturally low interest rates, businesses undertake long-term projects that would not be feasible when interest rates are high. However, artificially low interest rates, as set by the Fed, cause businesses to undertake these projects without a sufficient savings pool to borrow from, resulting in aborted projects and wasted resources when the rates suddenly increase. That's because you can artificially lower the rates for a time, but not indefinitely.
Think of it as pressing a lid down over a boiling pot to prevent the steam from escaping. The pressure will build until it is no longer containable, resulting in a sudden and dramatic explosion. Artificial stimulation of the economy is like that -- repressing market forces now only results in sudden and more dramatic shifts down the line. That's why all such attempts at "stimulus" and "bail outs" have backfired in the past, e.g. in the Great Depression and more recently in Japan. Bail-outs make things worse.

Woods examines various depressions and recessions of the past and describes the money/credit problems that caused them. His explanations are clear and easy to follow, are logical and make sense. Further, he supports his analysis with facts from history that are highly analogous to today.

The solution to a crisis like we have now is to leave it alone and let the market sort it all out. That will result in the fastest route to recovery. Woods shows how the depression of 1921 (which preceded the Great Depression by eight years) was left alone -- there was no government intervention at all. The result was that the depression of '21 soon righted itself and prosperity returned quickly.

FDR's interventions into the Great Depression of 1929 was very damaging to the recovery. Two economists at UCLA conducted an extensive study of the Great Depression and concluded that FDR's intervention actually prolonged the Great Depression by six or seven years. So much for "stimulus" and bail-outs.

In similar fashion, the bail-out now underway will make the economy worse, by simply delaying the efforts of the market to end unprofitable businesses and reallocate their resources to more productive sectors of the economy. Further, it will saddle future generations with onerous amounts of debt, and for no good purpose: the bail-outs will fail because they make no economic sense whatsoever.

Woods argues, convincingly in my opinion, that we should return to a monetary system based on gold and silver. This will prevent the government from screwing with the money supply to steal our purchasing power through inflation, which is nothing more than an insidious form of taxation.

He also argues that the Federal Reserve should be abolished. I also agree to that, as the Fed causes the boom and bust cycle by manipulating the interest rates. It was a major factor in the current recession we are in today.

"Meltdown" is a lesson in sound economics. It isn't an ideological screed, putting forth bromides that are based on mere theory, faith or partisanship. It is a serious look at how government interacts with the economy in damaging ways and the steps and policies that are needed to restore the economy to health.

America: Regarding AIG - You're Full of It

My son, who works for AIG, came home from Los Angeles for the weekend. He knows all of the inner workings and facts about AIG and is heartily pissed off about the public brouhaha over the bonuses.

Some asshat in the media heard about some AIG executives getting paid 165 million dollars in bonuses and, oh, ain't it awful. Obviously, these greedy and irresponsible cigar-chomping, brandy-swizzling fatcats took their huge check from the government and immediately divided up the spoils. No doubt they twirled the ends of their Snidely Whiplash mustaches, snickered and said to America "Thanks Suckers! Ha ha ha ha ha haaaaa!"

Joe Sixpack and Harry Hardhat did an immediate boil-over; "kill those executives! Kill them we say!"

Only it didn't really happen that way. But why didn't the Democrats speak up and set the record straight? The answer is simple: when the people are mightily pissed off, you don't risk making it worse by telling them they're wrong. Even when they are.

Democrat politicians, being moral cowards who live and die by polls and the direction of political winds, immediately expressed faux moral outrage and planned retroactive tax legislation that would tax the bonuses at 90% (it's unconstitutional -- something known as ex post facto law). Instead of telling the American people they had it all wrong, the Dems merely went along, tossed hither and yon by the prevailing currents of public opinion. The safe thing would be to deny knowledge of the bonuses (they knew) or approval (they approved them). Better to fake moral outrage, surprise and anger.

The truth is, those executives had bonus contracts in place before the downturn and before the bail-out. They have as much of a legal right to their contractual payments as does any vendor -- the landlord who owns the office building, the employees who get the paychecks, the insurance producers who get the commissions. Without getting paid, talent disappears quite quickly. The public anger is born of ignorance and a false impression of what actually happened, reinforced by cowardly politicians who won't risk the backlash of telling an unpopular truth. So an American corporation is now the target of a smear campaign and intense negative publicity.

My son tells me that the AIG office building in Los Angeles is encircled now by unmarked police cars, to protect the executives. The bad publicity has resulted in AIG losing millions of dollars in business and revenues as companies and individuals take their business elsewhere.

So let's see -- billions of dollars in loans to save AIG from a terrible economy that was created by government (in the subprime mortgage imbroglio); and now falsely denouncing AIG and punishing it for honoring its contractual obligations, with the result that talented excutives will go elsewhere where they can get paid, and insurance business will go elsewhere to avoid fallout from the negative publicity. Now AIG may fail because of it. And those billions in loans will never be paid back at all.

Way to shoot yourself in the foot, America.

See a related article at The Other McCain: MSNBC Omits Facts on AIG Protests.

My Son Works for AIG and We're Not Giving Back the Damn Bonus

My youngest son works for AIG in Los Angeles. I have a nephew who works for AIG in San Francisco.

What can I get my son to buy me with his million dollar bonus? Well a sea chest of fine cigars would fit the bill. Also, I have my eye on a fully carved upright bass from Romania. A little red sports car would also be cool.

I have advised my son not to return the million dollar bonus, but to instead buy his dear old Pop a bunch of neat stuff.

Then he informed me that, since he's a recent college grad and only in first year at AIG, he didn't get a million dollar bonus. Or any bonus for that matter.

DAMN! What kind of a bail-out is that? Chris Dodd, you incompetent bastard. I can do without the red sportscar and the bass can wait, but I really need those cigars.

The Bail-Out: Watching the Barbarians Ransack Rome

It is truly horrifying, but a bit surreal, watching the Democrats dismantle the country and the economy. I imagine it's sort of like watching the barbarians ransack Rome. The mighty Roman army is no longer able to stop them.

The Democrats must feel like those barbarians. Carry off the gold and silver, ravage the women, drink the wine! There's no one to stop them. No accountability, no deterrance, no consequences.

Or, it's like watching one of those movie westerns where a band of bad guys ride into town where there's no sheriff and shoot the place up, ride their horses into the saloon, guzzle whiskey from stolen bottles, break windows while hollering "Yahoo!" Find a tinhorn and make him dance by firing bullets at his feet. We the audience are so P.O.ed watching this and can hardly wait til Clint Eastwood shows up to put the bastards in their place. Only we don't have a Clint Eastwood in our current drama.

Or, it's like watching the pandemonium on the Titanic as the passgeners realize, finally, that the ship really is sinking and there are only a few more lifeboats left. I remember one of the passengers in the film saying, "We've been dealt a bad hand." And so we have. The U.S.S. Economy has hit an iceberg and all the Democrats are below decks with hand drills, making new holes in the keel to let in more water. That'll save us.

I feel like the rich gentlemen passengers on the Titanic who saw the pandemonium and quickly surmised that they were doomed. They didn't scream and shout and run around in circles. They just stayed at their table in the smoking lounge, playing cards and smoking cigars. They figured: it's over so screw it. Let the damn ship sink.

I know how they felt.

Update: I think I just figured out why I feel like doing nothing in light of this unfolding disaster. While a train wreck is happening, you can't do much about it. You have to wait until until the wreckage stops moving before you can survey the damage and come up with a repair plan. Until it does all you can do is duck.