Michael Jackson never moonwalked better than Harvard law professor Laurence Tribe. The National Review reported this week that Prof. Tribe in March 2009 urged Pres. Obama on the down low not to nominate Sonia Sotomayor to a seat on the Supreme Court. According to blogger Ed Whelan, the good professor told the president that now-Justice Sotomayor wasn't all that bright, could be "a bully" and might antagonize and further polarize the Court's four conservatives.
According to Whelan, Tribe's purpose in contacting the president was to promote the cause of Solicitor General and former colleague Elena Kagan for the Court vacancy. In order to do that, Tribe put the beatdown on Justice Sotomayor's Court quals. Pres. Obama later nominated, and the Senate confirmed, Elena Kagan for the Court seat vacated by Justice John Paul Stevens.
And what of Tribe, whose law students have included the president himself, Chief Justice John Roberts, and Justice Kagan? To his credit he fessed up to contacting the president, but then backpeddled across history's stage more deftly than Michael Jackson every moonwalked to Billy Jean.
In an email he wrote that Justice Sotomayor's performance in her first year on the Court, as well as a second reading by Tribe of her record "amply refuted" his earlier take that she was dumb, a bully and could be a pain in the ass. Huh?
Who says academics can't bust a move now and again?
Just thought you might like to know.
Friday, October 29, 2010
Thursday, October 28, 2010
Gold as Gold
If you've been around long enough to think the dollar doesn't go as far as it used to, you'd be right. I remember as a kid my parents buying a slick new Ford that cost $3,600. That same car today would cost about $30,000.
The questions are why and what does that have to do with today's woeful economy?
The answer to the first question is that a dollar now buys a sixth of what it did 40 years ago because of misguided monetary policy. So says Charles Kadlec of the American Principles Project. Up until 1971 the value of the dollar was pegged to the price of gold--a stable medium of exchange for thousands of years.
From the years immediately following World War II to the years leading up to 1971 when the U.S. cut the ties between the dollar and gold, the U.S. economy ran pretty well. During this 30-year period:
The purpose of devaluing the dollar was supposed to be to help American exports. Kadlec points out that since the time Pres. Nixon pulled the plug on the gold standard the dollar has lost 75% of its value compared to the Japanese yen. Nevertheless, during that period the U.S. has compiled a massive trade deficit.
Kadlec doesn't venture a guess why the economy worked so well when the dollar was pegged to gold. But it's clear that life was a lot better before the black-cloaked wizards at the Fed started crystal balling the value of a dollar.
The15th century Spanish conquistador Hernando Cortes famously said that his fellow Spanish explorers "suffer from a disease that only gold can cure." One could say the same thing about 21st century Americans.
Just thought you might like to know.
The questions are why and what does that have to do with today's woeful economy?
The answer to the first question is that a dollar now buys a sixth of what it did 40 years ago because of misguided monetary policy. So says Charles Kadlec of the American Principles Project. Up until 1971 the value of the dollar was pegged to the price of gold--a stable medium of exchange for thousands of years.
From the years immediately following World War II to the years leading up to 1971 when the U.S. cut the ties between the dollar and gold, the U.S. economy ran pretty well. During this 30-year period:
- Employment averaged only 4.7% (for three decades) and never went higher than 7%
- Real growth averaged 4% a year
- Inflation, checked by low unemployment and high growth, averaged less than 2% a year
- Interest rates were stable--moving in a 4%-6% range for 30 years
- Since 1972 unemployment has averaged 6.2%, a point and a half higher than the average for the previous 30 years
- Real growth has fallen to less than 3%
- We've had the three worse recessions since the end of World War II (in 1975, 1982 and 2008)
- Consumer prices have risen at an astounding average of 4.4.% a year ever since the monetary swamis at the Fed replaced an ounce of gold in deciding what a dollar was worth
- Interest rates have been extremely volatile, with corporate bonds never falling below 6% in the period, and averaging 8% during this time
The purpose of devaluing the dollar was supposed to be to help American exports. Kadlec points out that since the time Pres. Nixon pulled the plug on the gold standard the dollar has lost 75% of its value compared to the Japanese yen. Nevertheless, during that period the U.S. has compiled a massive trade deficit.
Kadlec doesn't venture a guess why the economy worked so well when the dollar was pegged to gold. But it's clear that life was a lot better before the black-cloaked wizards at the Fed started crystal balling the value of a dollar.
The15th century Spanish conquistador Hernando Cortes famously said that his fellow Spanish explorers "suffer from a disease that only gold can cure." One could say the same thing about 21st century Americans.
Just thought you might like to know.
Tuesday, October 26, 2010
Making Sense Out of Nonsense
The mid-term elections are a week away. It appears as if the Democrats will lose control of the House of Representatives; loss of the Senate to the Republicans is not as clear. But will it make any difference?
While Pres. Obama may tout his legislative accomplishments, the truth is that even with huge majorities in Congress, he struggled with his two main domestic goals: healthcare reform and punishing the American people for climate change. It took months of rancorous debate for him to pass healthcare and then by only a wafer-thin margin. His plan to tax American business for their productivity and success, euphemistically called cap-and-trade, couldn't get out of the Senate. If, holding large majorities in Congress, he couldn't rally the nation, it's hard to see him doing worse without them.
So in the next Congress it appears now that he will lose his majority in the House, and, while retaining the Senate, he will lose his ability to shut off debate in the upper chamber on proposed legislation. Expect Democratic party discipline to go out the window after the president and speaker Pelosi lead the troops over a cliff next Tuesday. The weak in politics are killed and eaten. Pres. Obama will be a weakened president.
That leaves him with two options. The first is to continue pressing his left-leaning agenda, despite the fact that poll upon poll shows the American people thinking that this is taking the country in the wrong direction. He's already said he'd rather be a one-term president (one can only hope) than compromise his principles. So the threat of his continuing to march into hell for a heavenly cause, becoming the Harold Stassen of left-wing domestic policy, is real.
On the other hand he could steal a play from Bill Clinton's playbook, work with the Republican and position himself, as he did during his presidential run, as a centrist. The question is whether anyone will buy that the second time around.
However, George Friedman writes today in Stratfor that there is a third choice: shift his focus from the domestic agenda and make his case for a second term in foreign policy. As Mr. Friedman points out, "The founders created a system in which the president is inherently weak in domestic policy and able to take action only when his position in Congress is extremely strong. This was how the founders sought to avoid the tyranny of narrow majorities."
Foreign policy is another matter, with our system giving the president, in his role as commander-in-chief and head of state, pretty decent leeway without congressional interference. Ronald Reagan took advantage of this following his midterm election reversals in 1982 by basing Pershing missiles in Europe to blunt any Soviet thoughts of expansion. He also played party pooper with Libya's Colonel Ghaddafi, dropping a cruise missile in his tent in 1986. These acts energized his base and made him a stronger president.
But on this third rail Pres. Obama will also struggle, notes Friedman. Despite plenty of opportunities to show his chops in Iraq, North Korea, Afghanistan and with Iran, the president's M.O. up to this point has been conciliation, not confrontation. So it's as hard to see him blowing up Ahmadinejad's nuke plants as it is to see him extending the Bush tax cuts.
Second, the American public has settled into a war weariness--nine years in Afghanistan, seven in Iraq, and almost constant deployments throughout the equitorial hot spots of the world. The American public's focus isn't abroad--it's on our ailing economy. And unless that improves nothing else matters. Like everything else in this world, it comes down to money.
Just thought you might like to know.
While Pres. Obama may tout his legislative accomplishments, the truth is that even with huge majorities in Congress, he struggled with his two main domestic goals: healthcare reform and punishing the American people for climate change. It took months of rancorous debate for him to pass healthcare and then by only a wafer-thin margin. His plan to tax American business for their productivity and success, euphemistically called cap-and-trade, couldn't get out of the Senate. If, holding large majorities in Congress, he couldn't rally the nation, it's hard to see him doing worse without them.
So in the next Congress it appears now that he will lose his majority in the House, and, while retaining the Senate, he will lose his ability to shut off debate in the upper chamber on proposed legislation. Expect Democratic party discipline to go out the window after the president and speaker Pelosi lead the troops over a cliff next Tuesday. The weak in politics are killed and eaten. Pres. Obama will be a weakened president.
That leaves him with two options. The first is to continue pressing his left-leaning agenda, despite the fact that poll upon poll shows the American people thinking that this is taking the country in the wrong direction. He's already said he'd rather be a one-term president (one can only hope) than compromise his principles. So the threat of his continuing to march into hell for a heavenly cause, becoming the Harold Stassen of left-wing domestic policy, is real.
On the other hand he could steal a play from Bill Clinton's playbook, work with the Republican and position himself, as he did during his presidential run, as a centrist. The question is whether anyone will buy that the second time around.
However, George Friedman writes today in Stratfor that there is a third choice: shift his focus from the domestic agenda and make his case for a second term in foreign policy. As Mr. Friedman points out, "The founders created a system in which the president is inherently weak in domestic policy and able to take action only when his position in Congress is extremely strong. This was how the founders sought to avoid the tyranny of narrow majorities."
Foreign policy is another matter, with our system giving the president, in his role as commander-in-chief and head of state, pretty decent leeway without congressional interference. Ronald Reagan took advantage of this following his midterm election reversals in 1982 by basing Pershing missiles in Europe to blunt any Soviet thoughts of expansion. He also played party pooper with Libya's Colonel Ghaddafi, dropping a cruise missile in his tent in 1986. These acts energized his base and made him a stronger president.
But on this third rail Pres. Obama will also struggle, notes Friedman. Despite plenty of opportunities to show his chops in Iraq, North Korea, Afghanistan and with Iran, the president's M.O. up to this point has been conciliation, not confrontation. So it's as hard to see him blowing up Ahmadinejad's nuke plants as it is to see him extending the Bush tax cuts.
Second, the American public has settled into a war weariness--nine years in Afghanistan, seven in Iraq, and almost constant deployments throughout the equitorial hot spots of the world. The American public's focus isn't abroad--it's on our ailing economy. And unless that improves nothing else matters. Like everything else in this world, it comes down to money.
Just thought you might like to know.
Monday, October 25, 2010
The Price of Free Speech
A recent political debate between Illinois Democratic Rep. Melissa Bean and her GOP challenger Joe Walsh provides a look at the intolerance of the socialist left and how their notion of free speech being free only if you agree with them is closer to the Castro brothers than the Founding Fathers.
Rep. Bean and her challenger squared off in a local high school in a debate moderated by league member Kathy Tate-Bradish. In evaluating her bona fides as an impartial moderator know please that Ms. Tate-Bradish is also a member of Organize for America, Pres. Obama's scam to register Democrat voters and have you and I pay for it.
Also note that Ms. Tate-Bradish is a former member of ACORN, the disgraced community organizing group with which Pres. Obama was formerly associated. To give her credit, she also teaches sex education at an AIDS clinic in Africa.
During her introductions of the candidates, someone from the local audience asked if they could begin by reciting the Pledge of Allegiance. Ms. Tate-Bradish said no. Click over to You Tube to see what happened next.
Ms. Tate-Bradish gave it the academic suede show act to try and lecture the audience about why they had erred by expressing their fidelity to their country and not being stifled by an academic hard core leftist. Somebody should have shown her a road map of her location-middle America.
Perhaps no incident in the last two weeks has shown the dichotomy in American than this. On one hand you have people like Ms. Tate-Bradish's audience. People who understand the greatness of this country, feel a debt to those who have gone before and created that country, and are unashamed to express their loyalty to it. On the other hand you have people like Ms. Tate-Bradish herself. People who believe that most Americans are stupid and need an elite class to think for them, who believe that reciting the Pledge or singing the national anthem are hopelessly outdated, and who look down on the rest of us who think the Pledge is as meaningful today as when it was first penned by Francis Bellamy. Frankly, I'm happy to be counted in the first group.
Just thought you might like to know.
Rep. Bean and her challenger squared off in a local high school in a debate moderated by league member Kathy Tate-Bradish. In evaluating her bona fides as an impartial moderator know please that Ms. Tate-Bradish is also a member of Organize for America, Pres. Obama's scam to register Democrat voters and have you and I pay for it.
Also note that Ms. Tate-Bradish is a former member of ACORN, the disgraced community organizing group with which Pres. Obama was formerly associated. To give her credit, she also teaches sex education at an AIDS clinic in Africa.
During her introductions of the candidates, someone from the local audience asked if they could begin by reciting the Pledge of Allegiance. Ms. Tate-Bradish said no. Click over to You Tube to see what happened next.
Ms. Tate-Bradish gave it the academic suede show act to try and lecture the audience about why they had erred by expressing their fidelity to their country and not being stifled by an academic hard core leftist. Somebody should have shown her a road map of her location-middle America.
Perhaps no incident in the last two weeks has shown the dichotomy in American than this. On one hand you have people like Ms. Tate-Bradish's audience. People who understand the greatness of this country, feel a debt to those who have gone before and created that country, and are unashamed to express their loyalty to it. On the other hand you have people like Ms. Tate-Bradish herself. People who believe that most Americans are stupid and need an elite class to think for them, who believe that reciting the Pledge or singing the national anthem are hopelessly outdated, and who look down on the rest of us who think the Pledge is as meaningful today as when it was first penned by Francis Bellamy. Frankly, I'm happy to be counted in the first group.
Just thought you might like to know.
Monday, October 4, 2010
Free Trade
A new Wall Street Journal/NBC poll concludes that Americans have largely given up on the idea that free trade is good for the economy.
According to the Journal more than half the people polled say that free trade has hurt the U.S. economy. That's up 66% over the last 10 years. It's one thing for blue collar workers, unionized and non-unionized, to feel that free trade is responsible for jobs being shipped to South America or Asia. But 95% of upper income, highly educated respondents agreed that such outsourcing is responsible for our ailing economy.
But free trade is a two-edge sword. The same people lambasting it are the same ones walking out of Walmart with $89 DVD players. The fact is that the issue of free trade goes hand-in-hand with monetary policy. In fact, one of the factors in Congress currently igniting the firestorm over free trade is the value of the Chinese yuan compared to the U.S. dollar and China's apparent unwillingness to let its currency rise in value. Chinese currency manipuation has made Chinese goods a bargain here, and U.S. goods in China hopelessly uncompetitive.
But for many years U.S. monetary policy has resulted in low-cost imports, cushioning the blow from the loss of so many manufacturing jobs. Per capita income may have declined with outsourcing, but the U.S. manipulated the value of the dollar to cushion the blow of lost jobs.
The fact is the number one job of central banks is to value their currencies in such as way as to promote domestic bliss. Neither China nor the U.S. is an exception nor exceptional when it comes to this.
But turning our back on global trade right now is the wrong thing to do. In 1930 Congress passed, and Republican President Herbert Hoover signed, the Smoot-Hawley tariff bill. Why? Because in the midst of economic distress the popular belief was that the U.S. was being disadvantaged in the global trade of agriculture products. Then, as now, Congress believed that taxing imports would improve the economy by "leveling the playing field" for American exports-the same rationale the anti-globalization crowd gives for its opposition to expanding free trade. The result in 1930 was a global trade war that further plunged the U.S. and the rest of the world into what we now know was the Great Depression. Protectionist policies 80 years later would have the same result.
Like it or not we live in a global economy. Igniting a trade war will deny our farmers, manufacturers, service companies and entertainment industry access to important markets and further weaken our economy. Once again, as with healthcare, education, and social welfare, Congress will end up hurting the very people it purports to help.
Just thought you might like to know.
According to the Journal more than half the people polled say that free trade has hurt the U.S. economy. That's up 66% over the last 10 years. It's one thing for blue collar workers, unionized and non-unionized, to feel that free trade is responsible for jobs being shipped to South America or Asia. But 95% of upper income, highly educated respondents agreed that such outsourcing is responsible for our ailing economy.
But free trade is a two-edge sword. The same people lambasting it are the same ones walking out of Walmart with $89 DVD players. The fact is that the issue of free trade goes hand-in-hand with monetary policy. In fact, one of the factors in Congress currently igniting the firestorm over free trade is the value of the Chinese yuan compared to the U.S. dollar and China's apparent unwillingness to let its currency rise in value. Chinese currency manipuation has made Chinese goods a bargain here, and U.S. goods in China hopelessly uncompetitive.
But for many years U.S. monetary policy has resulted in low-cost imports, cushioning the blow from the loss of so many manufacturing jobs. Per capita income may have declined with outsourcing, but the U.S. manipulated the value of the dollar to cushion the blow of lost jobs.
The fact is the number one job of central banks is to value their currencies in such as way as to promote domestic bliss. Neither China nor the U.S. is an exception nor exceptional when it comes to this.
But turning our back on global trade right now is the wrong thing to do. In 1930 Congress passed, and Republican President Herbert Hoover signed, the Smoot-Hawley tariff bill. Why? Because in the midst of economic distress the popular belief was that the U.S. was being disadvantaged in the global trade of agriculture products. Then, as now, Congress believed that taxing imports would improve the economy by "leveling the playing field" for American exports-the same rationale the anti-globalization crowd gives for its opposition to expanding free trade. The result in 1930 was a global trade war that further plunged the U.S. and the rest of the world into what we now know was the Great Depression. Protectionist policies 80 years later would have the same result.
Like it or not we live in a global economy. Igniting a trade war will deny our farmers, manufacturers, service companies and entertainment industry access to important markets and further weaken our economy. Once again, as with healthcare, education, and social welfare, Congress will end up hurting the very people it purports to help.
Just thought you might like to know.
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