Rebane's Ruminations

The Fed/ECB dollar swap

George Rebane

Does everyone understand what went down this morning between our Federal Reserve and the European Central Bank?  I venture that less than one in ten thousand Americans know that their pocket was legally picked today by international central banks.  This morning the Fed executed a “dollar swap” with the ECB that essentially allows the tottering European banks to have an endless and cheap supply of new US dollars flow to them through the ECB.

When I saw this barely coherent report on the online edition of today’s WSJ blandly talking about “making dollars available” to the ECB, I almost tossed my cookies.  My take on what had actually happened was corroborated by a couple of phone calls to one of my Washington spies who sent me the summary page of “the Fed memo” (about what the Fed did) that was hastily circulated to members of Congress to soften any awkward outcries to the press.

RR readers know the precarious sovereign debt positions of countries like Greece, Spain, Italy, … .  There is little chance that the euro will survive as the European currency, let alone continue on its vaunted march to becoming a competing reserve currency to the US dollar.  Recall that bankrupt countries borrow from commercial banks to finance their existing debt and continue funding their insane social programs.  Lenders to some countries have already taken ‘haircuts’ on the amounts loaned.  More of this is on the way since none of the eurozone countries have any foreseeable chance of growing their way out their debts.  Instead, many of their economies are shrinking.

So here’s the situation.   A growing number of eurozone countries, up to their eyeballs in debt, owe on their purchases of stuff like oil, other commodities, and their international trade imbalances.  The bills must be paid in dollars.  Their banks are tapped out of dollars (they can still borrow euros from the ECB which can print them, but euros won’t do) so they must borrow from the only source that will still give them the time of day, the ECB.  But the ECB is fresh out of dollars.

So Mario calls Ben and asks for a dollar/euro swap along the lines that was set up way back when “to provide dollar liquidity to foreign banks”.  This essentially means that the ECB sends over to the Fed some euros – at TODAY’S EXCHANGE RATE – and the Fed sends over some newly printed US dollars which get credited to Europe’s banks, who in turn lend them to the heavily perspiring eurozone countries.

In theory the Fed gets its dollars back along with some below market interest income when the ECB is able to repay.   But if the ECB can’t come up with the dollars as stipulated, then there is no default.  The built-in swap provisions allow the ECB to roll over the debt (er, I mean swap) and get more dollars if it needs them for more euros at the bygone fixed exchange rate.  This can go on indefinitely, and it means the Fed is on the hook for continuing to print more dollars to pay European debt with no end in sight, and no way to cash in on the collateral euros it holds in the ECB account.  The way it’s set up, this debt cannot default.

Now I know, dear reader, that you think this is a post in which I’m pulling your leg, and that it should really be posted on April Fool’s Day.   Unfortunately, I’m dead serious.  Without a single elected representative having had a say in this, the Fed has committed to have the dollar follow the euro into what most likely will be an inflation death spiral.  And the American taxpayer will become the lender of last resort to the profligate socialist governments of Europe.  You can get your own snootful on this through a careful read of the memo’s summary page I mentioned above – Download Fed Memo_111130.

I wonder if the fact that 70% of the profits for our international corporations comes from trade with the eurozone has anything to do with this quietly arranged European bailout that went down today.  Like the Chinese don’t want us to go broke, these multi-national corporations (and we?) don’t want Europe to go broke.  You may want to call your congressional rep and hear what s/he has to say about all this.  And that’s how we play kick the can. 

US Net Exporter of Oil Again

George Rebane

It isn’t clear whether we should laugh or cry.  But here we are, for the first time since 1949 we will be a net exporter of petroleum products this year.  The accompanying figure filched from the WSJ shows that exports started increasing during Bush2’s reign (recall Bush2 was an oilman).  Unfortunately, our exports are exceeding our imports because our economy has tanked, and is still mired in the mud (more here).

We used to use about 25M bbl/day; now it’s closer to 20M bbl/day.  Today we still import about 9M bbl/day.  Five years ago our becoming a net exporter was unthinkable.  Now we export the equivalent of about 9M bbl/day because the developing world is fuel hungry, and bidding up prices enough to make sense to send it there instead of consuming it here.  Meanwhile, we are wound up tightly in our underwear still trying to figure out an energy policy while the delay continues to kill and deny jobs, and at the same time substituting polluting ‘green’ energies that make no economic sense whatsoever.

It brings a tear to me eye to think about Obama sabotaging the Keystone XL pipeline project from Canada to Texas refineries which are the most modern and efficient in the world.  To think about all the corn that is going into engine-corroding biofuels that reduce no one’s carbon footprint, and only raise food prices here and among the poor of the world.  To contemplate all the Chevy Volts driven by propagandized dolts.  Now there is a piece of work.  In actuality it is a coal-driven car that gets no more range from its iffy battery than did the Roberts electric car more than a century ago.

No one dares contemplate the number of coal-fired electricity generating plants we have to build if the government forces us into those IEDs – yes, these Inadvertent Explosive Devices are bursting into flames and GM has now recommended that they not be driven until it can figure out why they spontaneously combust.  The under-educated greenies have apparently overlooked the total pollution and cost budgets required to field any significant number of ‘clean energy’ vehicles.  ‘Clean’ ain’t cleaner, and it most certainly is not cheaper.

So here we are, anticipating an economy on its butt for the remainder of the decade that will make us a net energy exporter for the first time in 62 years.  I keep wondering whether all this occurs by accident or does someone in Washington really know what’s going on.  Oh yes, I forgot that we do have the Department of Energy – what was I thinking?

Meanwhile, we are still trying to ram manmade global warming down the country’s throat.  An enterprise that is now shown corrupt from every angle you care to look at it.  (More here, and also see NC2012 for a fuller and ongoing account of this national trail of tears.)

How We Got Here – Looking at the Bush2 Record

George Rebane

On these pages I have argued long and hard that the permissive environment in which mortgage lenders made subprime loans was carefully constructed and energetically promoted by the congressional social engineering programs of the Democratic Party augmented by a klatch of RINOs. Yesterday’s announced retirement by Rep Barney Frank (D-MA), one of the prime perpetrators of Depression2, motivated this post of the record pointed to by an RR reader.

Since the 2008 election we have heard the constant and now-famous wail from our President, echoed by Democrats in Congress, that seeks to absolve him and his cohort of any contribution to the present financial mess.

Actually, Mr President, it wasn’t.  The sequence of events presented below was taken from President Bush’s White House website in September 2008, and it is open for refutation by anyone who can show that the public record is in error.  (Source: NiceDeb)

Ruminations - 27nov2011 (updated 28nov2011)

George Rebane

Communist spying and influence on our national policies have long been denied/diminished by our Left.  The public experience in uncovering these activities within our government was not sufficient to change any minds in our unions, mainstream media, or the halls of academe.  Things should have changed when the USSR collapsed in 1991, and the subsequent opening of some KGB historical files that contained conclusive evidence of atrocities like their massacre of Polish intellectuals and its officer corps in the Katin forest, and spying/infiltrating activities in all western governments.  No contrition from our progressives save a stiffer upper lip.  New evidence from more released files has produced added historical works on “revealing accounts of Soviet espionage in America, from the 1930s, when the pickings were easy, to the unforgiving Cold War era.”  Short summaries of books on the topic, including some classics, are presented in the 26nov11 WSJ here.  We expect no change in the historically impervious Left.

‘The New Tammany Hall’ is how Leftwing historian Fred Siegel sees the last forty years of public-sector union permeation into all levels of government in America.  Siegel, a senior fellow at the Progressive Policy Institute, is still able to call them as he sees them.  In a recent interview Siegel acknowledges that “The Great Society put the state on growth hormones. Less widely appreciated, the era gave birth to a powerful new political force, the public-sector union. For the first time in American history there was an interest dedicated wholly to lobbying for a larger government and the taxes and debt to pay for it.”  The quotable interview is worth a read for the independent voter, and also as a stress test for the rock solid progressive.  The happy conclusion from this is that there exist Leftwing intellectuals who are still Americans first.

Many of us keep wondering how long the national ‘green jobs’ farce will be continued at a government budget near you.  Organizer Obama has been touting green energy jobs for as long as he has been a sty in our public eye.  Every day we hear of more corruption, misdirection, lies, and malfeasance in the government’s nurture of the crony socialism that is the country’s green energy industry.  In  spite of this, the traditional (read fossil) energy sector today employs over 440,000 workers, and since 2003 has grown 80% in its number of American jobs.  And this growth doesn’t take into account the multiplier effect for non-energy jobs to support all these workers and their families.  Now the Left is real good at claiming all kinds of multiplier goodies for their mythical green jobs projections, but howl their heads off when the same analysis is applied to real jobs and job growth in our workforce.

In the meanwhile the political corruption continues without so much as a sniffle from our journalistic stalwarts.  Well almost; according to the Washington Post Obama’s $38.6B green loan program had created – drum roll please – a whopping 3,500 jobs compared with the 65,000 he touted the program would “save or create”.  And please don’t look under the rug where all the Solyndras have been expeditiously swept.  There is no learning here, the beat goes on.

Now for the good news (almost).  Since the government nationalized the nation’s school loan program, someone in the bureaucracy had their bulb light up.  To save the entire enterprise from going bust sooner than later, why not discriminate in who gets the loans.  Don’t lend to students with dumbbell majors who will have little chance of paying back the loan.  What a concept!  But don’t hold your breath, this has yet to be implemented.  And dumbbell majors got rights too, know what I mean?

Stupid once, stupid forever.  My favorite socialist site truthout.com skidded on yet another patch of slick progressive history.  In it Martin Bennett and Richard Walker write ‘Job Crisis: What did Roosevelt do that Obama should?’ This piece deftly cherry picks the sorry record of Depression1 in the 1930s, and concludes that we can replicate FDR’s performance (recall the National Recovery Act and its alphabet soup of jobs programs) by taxing the bejeezus out of the ‘rich’ and closing corporate loopholes.  They turn a blind eye to the high hard statistic of that era that is oft repeated in these pages – unemployment was at 17+% in 1933 and still in 1939 when Sec Treas Morgenthau confessed to Congress that nothing had worked except growing government, running up the country’s debt, and extending the misery.   The socialists’ standard response to such failures over the decades has been to double down and do it again.  It still is.

[28nov2011 update]  This morning Rep Barney Frank (D-MA) announced that he has reconsidered, and will retire at the end of his current term in Congress.  This is the man who is one of the authors and energetic goads of the subprime loan mess, the pompous ass who assured the nation that Fannie and Freddie were in the best of health and doing the right thing in buying all those worthless loans, a member of the dynamic duo of the Dodd-Frank 'Wall Street Reform Act'.  Except for separating the trust and investment functions of banks and insurance companies (as they were before the ill-advised Republicans joined them), the law is a typical one step forward, three steps backward in creating unnecessary frictions in America's financial industry.  So along with the hastily retired Senator Chris Dodd (D-CT) of Countrywide scandal fame, the pair will be in a timely retirement instead of jail for their shady careers on the Hill.  Both leave/left easy shoes to fill, and the sad part is that the voters of Massachusetts and Connecticut have been up to the challenge.

The Views of a Rightwing "Extremist" – Indictment without Evidence (updated 29nov2011)

George Rebane

Many readers of RR, me included, are continually labeled as holding “extreme” Rightwing views.  Yet, when examining the record on these pages, those on the Left, and even some of the self-declared middle-roaders, skip the evidentiary phase, and proceed directly from indictment to punishment.  When asked to delineate, to spell out what brings about this judgment and this startling label, the accusers are silent and simply continue with the punishment.

The punishment phase consists primarily of ongoing accusations of not doing our part to “compromise”, and accept their admired/espoused progressive tenets and public policies.  The record shows that in these pages RR and its right-of-center readers have cited chapter and verse of why and how collectivist policies have not worked, and continue to lead the country into an autocratic abyss.  The response is always the echo chamber of lack of compassion and compromise to help the needy and less fortunate.  There is never any evidence whatsoever given of how these policies and their enforcement will maintain the country’s liberties, exceptional opportunities, or even be sustainable.

So let me quickly list the seminal tenets that, according to my lights, the Right holds dear (not to be confused with the history of what the Republicans may have practiced), so that the reader can judge for himself 1) the evidence presented by the Left, or 2) the nature of their ongoing sidestep.

1.    The Bastiat Triangle of Rights (cf ‘About the BTA’ top right column) as the foundation of a free, classically liberal, and bountiful society.
2.    Constitutionality – Interpretation of the US Constitution according to the intent of the Founders as explicated in their writings.  Recognizing also that the Constitution is a living document and contains explicit directions on how it may be modified to best serve future generations.  Modifying it by other means – e.g. from the judiciary bench – undermines the Constitution and our national weal.
3.    Free Market Capitalism – Society’s commercial activities provide the most bounty and the highest quality of life when prudently and minimally regulated capitalism is allowed to flourish in free markets equally tended.
4.    Limited and Fiscally Prudent Government – Government should only perform the functions delineated in the Constitution, and do so in a minimalist manner.  Government is always a necessary encroacher on our individual liberties, and the bigger the government, the fewer the freedoms retained by those governed.  In no case should government become the competitor of private enterprise in the goods and services better supplied by private enterprise.  Government should manage its fiscal affairs as any other prudent and prospering enterprise, wherein it spends what it collects in revenues, and does not become a corrupt pawn of its creditors.
5.    The United States was constituted as a democratic republic comprised of the several states retaining the preponderance of rights to manage their own affairs as competing laboratories of liberal governance in a national federation of citizens free to move and trade throughout the country.  All efforts to remove republican functions and progress toward a pure democracy are inherently detrimental to our national survival.  All forms of collectivism, especially collectivism founded on a direct democracy, are inherently unstable and lead through autocracy to tyranny.
6.    Citizenship and Voting – Citizenship, equal and without rank, is the highest station the country can give to those who live within its borders.  A citizen is always first in line to receive the benefits of his government and the consideration of his fellow citizens.  The national policy should be such as to minimize the number of illegal aliens living in our midst through provision of secure borders, enforcement of alien laws, and propitious immigration laws that serve the national interest.  The right to vote in elections is granted only to franchised citizens, their franchises being determined by the federal, state, and local governments as appropriate.
7.    Foreign Policy and Trade – The United States should be militarily able to defend itself against any aggressor on Earth.  National security is Job One of the federal government.  The US should join with other nations only to promote its openly announced national interests; such unions should be minimized as appropriate.  Foreign aid should be provided visibly and only to recipients in a manner that serves our national interests.  Foreign trade should be maximized to the extent that it does not conflict with our national interests.
8.    Liberty and Opportunity – Government should always seek to provide and ensure the maximum of individual liberties to its citizens.  As policy, it should err on the side of more rather than less liberty.  The opportunities provided in our land have always been best when measured at the starting line of the competing participants, and not at the finish line.  Gratuitous enforcement of equalities should be minimized with the realization that state-enforced equality is always bought and paid for by the surrender of liberty – they are at opposite ends of the see-saw.

So let’s start with these tenets of the Right, and respectfully ask our Left and middle-roaders to identify which of these would be considered as “extreme” views in today’s America.  We recall that in arguing against a tenet with which you don’t agree or have an opposing viewpoint, does not satisfy hanging the ‘extreme’ label on it.  Extreme is a relative position within a range or spectrum.  In this case we are talking about the spectrum of common beliefs held by the Right, and the placement of the above in that spectrum – that is the point of this exercise.  And please, in considering any response, don’t embellish what you read with what additional provisions, implications, or ‘hidden meanings’ you think that I surreptitiously inserted.  We can cover such fears in follow-on discussions of how these are or should be implemented.

[29nov2011 update]  Russ Steele on NC2012 has discovered an excellent short video highlighting the differences between the tenets of the Tea Party and OWS movements.  The point made and supported in the video is that there literally is no middleground between the attributes that describe the classical liberal forms of governance and those of the progressivists.  This has been the longheld and unfortunate conclusion in these pages, which joins with a growing national consensus that is collected here under the discussion category of 'The Great Divide'.

Happy Thanksgiving 2011

‘Thank you God for this day, and for this food.’
Traditional Rebane family grace.

What is a right-wing dingbat?

[This invited piece by our very own middle-of-the-road cartoonist and regular RR commenter, Bob Crabb, will set us all straight on his introduction of a new moniker to these pages.  In addition to his website, Bob’s work may be seen in the print and online editions of The Union, and is occasionally filched to be featured on RR.  He appears here with his copy editor Clovis.]

RL ‘Bob’ Crabb

Several readers of Rebane's Ruminations have asked that I define my characterization of them as "right-wing dingbats". I originally created a cartoon character by that name back in 1999, as the battle between conservatives and the liberals who had taken control of the Nevada County government was just beginning to heat up. My main inspiration was Drew Bedwell, who rose to prominence during that turbulent era, but the name could apply to any number of activists that emerged from the backwoods to fight for mom, apple pie, and property rights. Over the years I have refined the image, after studying the species in its native habitat.

The dingbat is conservative in nature, and there are many varieties. There are fiscal conservatives, religious conservatives, libertarian conservatives, green conservatives, liberal conservatives, and conservative liberals, the latter also known as the sub-species Blue Dog Democrats and Republicans-in-name-only (RINOS). The Urban Dictionary describes a dingbat as "someone who attempts to provide a definition of dingbat and misspells the word 'retarded' in his definition. (That would be Todd, who explains that he purposely does it to confound his opponents.)

In the common mythology, the dingbat was prominent in America until the Great Depression, when he was subdued and co-opted by the Liberal Green Treehugger. The dingbat during that time emulated the hard-drinking image of John Wayne, which made it vulnerable to the wiles of the seductive femi-nazi treehugger. He was co-opted, and went along with the treehugger program until the late seventies when he woke up one morning with a horrendous hangover. Looking to his left, he saw that he was trapped in bed with his natural enemy. His only means of escape required him to gnaw off his left wing, leaving him with limited flying abilities.

Over the years, he returned to his constitutional roots, expelling any vestige of progressive tendencies. Yet in his zeal to overcome the duplicitous nature of the liberals, he became obsessed with the writings of Saul Alinsky, the hero of libo-progresso-commu-socialism, and adopted many of his attributes.

For instance, Alinsky advised organizers (Tea Party) to focus their attention on a small number of selected strategic targets (limited government, fiscal responsibility). Spreading an organization's passions too thinly was a recipe for disaster (abortion, gay rights).

Avoid the temptation to concede that his opponent (Frisch) was not the devil or that he possessed any admirable qualities (working to build a better community). Men will act when they are convinced that their cause is 100% on the side of angels and that the opposition is 100% evil.

Winning is the only objective, and will be achieved incrementally over time (forty-year plan). Any exaggeration, distortion, or outright lie is considered fair play. After all, that's what the other side does. And so the dingbat becomes the very thing it has fought to destroy.

Some dingbats, in a rare moment of conciliation, have suggested that they part ways with the treehuggers peacefully (great divide), but they have infiltrated each others habitat to an extent that such a solution could never be achieved without violence. The truth is that the land they both covet, once separated by war, could be so weakened that it would become easy prey for other invasive species. Since its creation, the Republic has been contentious, is contentious, and will always be contentious. It is that diversity that keeps it vibrant and alive. E Pluribus Unum.

A New Corporate Vision – The Constitutional Partnership Corporation

[In the 'Hiroshima+66, Detroit+Welfare' comment stream RR reader Michael Rogers introduced us to the John Lewis Partnership, a unique type of worker owned/controlled corporation that has a ‘constitution’ as its organizing and operating policy document – let’s call it a Constitutional Partnership Corporation (CPC).  MichaelR launched a comment thread that expanded its examination.  RR readers are familiar with my concern about the growth of US un(der)employment which I project to be over 70 million by the end of this decade.  This will call for massive wealth redistribution which I have discussed extensively in these pages and in my Union column (here).  I introduced the Non-Profit Service Corporation (NPSC) as a stake in the ground for starting a discussion about how to accomplish such wealth redistribution.  I have elevated MichaelR’s thoughtful and extended comment into a post of its own to invite development (integration?) of his expanded CPC and the NPSC ideas.  For continuity, please see the 'Hiroshima' comment thread. gjr]

Michael Rogers

Since when has complex design ever stopped us? We flew to the moon, built the Panama Canal, the Transcontinental Railroad, and the modern economy that has brought security to billions worldwide for gosh sakes.

I am not happy with (the John Lewis Partnership) constitution either -- not a tight feedback system as I see it. I also am not sure I see robust checks and balances or separation of powers in their design. However, they do seem to have created a stable management system that has a good deal of accountability built in, and appears to have legitimacy in the eyes of at least the long-term partners.

I think that a system like this applied to Detroit would necessitate the elimination of unions and the imposition of personal responsibility on the individual worker level so that working partners would need to focus on the efficiency of their unit in particular, and the coordination of the entire company in general, in order to get their wage or benefit desires fulfilled. Also, the more self-managing a unit was, the fewer managers are needed and thus more resources are available for higher wages/benefits or shorter work weeks.

There might also be the possibility of passing legislation where Industrial Democratic Incorporations are giving special tax-exempt (or at least tax reduced) status and long-desired deregulation could be achieved with bi-partisan support based on the premise that an Industrial Democratic Corporation would have a self-regulating, tight feedback design and does not need the regulatory oversight that an open loop control, traditional corporate management system does.

This could be extended to a drastic reduction in OSHA and Labor Law interference which were all predicated on an adversarial worker/management dynamic. When workers have the right to redress their grievances within an internal structure then the need of a nanny state to meddle is reduced if not eliminated.

It might also be possible to achieve a privatization of Social Security as the accountable and elected corporate officials in the pension division of the company would act as professional managers of the retirement portfolio of the partners thus reducing the likelihood of waste, graft, or stupidity diminishing the value of the portfolio -- and the portfolio manager who achieved a 55 year retirement age would be carried around the company on gilded litters as if he were a conquering Roman general.

The financing to build these companies could come from tax free government bonds which would create a tax advantages investment vehicle for the "1%" so that, rather than worrying about taxing the rich, the left could be focused on convincing them to invest.

You spoke of the ephemeral nature of our monetary system and the disconnect from anything of tangible value. I have even imagined the possibility of the growth of a stock standard, where the bonds of self-regulating companies become a currency of value. Where the stock of smart, well-run companies with solid markets, low levels of debt, and abundant tangible assets are traded at a premium and the bonds of poorly run companies with speculative markets and highly leveraged are discounted to their true market value -- these bonds would become the currency of trade and the ability of government to reduce or manipulate their value is eliminated.

Musings on Money and Faith

George Rebane

[I have to begin this ramble with an apology.  It is long and not as tightly written and dense as the prose you have come to expect here ;-)  I’m really posting it as a future reference for discussing the fiscal fiascos spreading over Europe and starting here at a capitol near you.]

The storage and exchange of retained wealth has been a long time interest of mine.  Here I’d like to just wander around some random thoughts on the subject.  Please excuse the lack of structure to the ideas and beliefs that are rolled out.

But before starting, a detour to some related reports.  Many of us on the Right have been saying for years that SS is totally unfunded, there is no “trust fund” that can legitimately be called that.  Now that national debt and unfunded liabilities have been raised in the country’s consciousness, especially in its Left lobe where this has been denied for years, it was refreshing to hear Congressman Peter Defazio (D-OR) state last week on Fox News that “there is no Social Security trust fund” with any money in it.  And this especially in the sense of money that I’ll talk about here.  The Congressman was emphatic that SS is instead “the largest creditor of the United States”, having lent the federal government $2,600,000,000,000 (that’s like in trillion).

Last Friday I was at Tea Party Patriots meeting with Mark Meckler (TPP co-founder) and a few others (big problem, we were wondering how to spend all those oil company and Koch brothers’ checks) when Mark confirmed that the congressional select committee on deficit reductions was not only a distraction, pabulum, and entertainment (as characterized on RR), but specifically it was Kabuki theater designed to fail.  And that we should all keep focused on real deficit reductions and not the piddling amounts being dangled in front of the sheeple.  He re-emphasized that this Congress cannot commit or compel future Congresses to do anything.  All they can and should be held to do is make their own deficit cuts before the next Congress is sworn in (or at) in January 2013.  (But then, all RR readers already knew that.)

OK, onward.  Money, we are told, is anything that is accepted as payment for goods and services, and also repayment of debts.  The three functions of money are 1) medium of exchange, 2) unit of account, and 3) store of value (i.e. wealth).  It’s the last that I want to dwell on in the sequel.  The money supply of an economy today consists of currency (banknotes and coins) and so-called “bank money”.  The latter is in the form of little ones and zeros spinning on a disk somewhere, and that’s all.

Back in the olden days, wealth was stored in the form of real stuff that you could stub your toe on – be it land, cattle, precious metals, crops, buildings, … .  This made it tough to do business and build more wealth, because you had to haul and trade (barter) big things whose value was usually in dispute.  And the local big guy (government) couldn’t get in there and take out his tribute very conveniently.   But when you had wealth, you knew you had something(s) indelible and certain.  Enter commodity money.

Ruminations - 21nov2011

George Rebane

Two prominent Democrat pollsters argue for ‘The Hillary Moment’ in 2012.  They make a compelling case for Reid and Pelosi to pick up the phone and call Obama to ask him to take the Truman/Johnson moral high ground and bow out.  Their well-stated arguments revolve around The Community Organizer’s horrible record in office, and his harm to the Democratic Party as he continues to play the only card he has left – a devastatingly negative campaign against the Republicans that offers nothing new for his second term.  To this I would add that anyone paying attention will have noticed that Obama has become irrelevant to the important issues in today's national debate.  It's hard to see how he will regain his 'presidential voice'.  Meanwhile, there is the loyal, strong, and experienced Mrs Clinton, the one who can bring both sides together to make the hard decisions required to again move the country forward.  Hmmm …

An email from our ‘designated reader’ forwards a copy of a post and related comments on another blog that once more with feeling denounces RR and its view of the world.  The best I can make of the lament is that the worthy representatives of the Left, who regularly read and comment on RR, have not been able to change a hair on the heads of the reprobate Right who also frequent these pages (mine notwithstanding due to haircut).  Their frustration is understandable since they see no weakness in their collectivist ideology or its buttressing arguments.  In the past they have often relinquished the field, only to regain their strength, if not their composure, and then again leap into the breach.  The door is always left open and the welcoming light is on.

At this writing, the Dow is down about 300 points on what the WSJ calls “debt disappointment” resulting from the Congressional Kabuki’s imminent demise.  It is forever a mystery to this commentator as to what alternatives did those stockholders expect – that the Dubious Dozen would come up with some solution to our runaway spending programs and economy killers??  Mind boggling.

Are the Occupiers’ tent cities free speech?  Have to wonder about the strength of their message if they have to resort to repeatedly breaking the law.  It's clear that those who can’t or won’t do not comprise their vaunted “99%”, and their message ranges between muddled and maniacal.  This is not the correct way to start the revolution they seek.  Why these street idiots have not been organized into a coherent and forceful voice is something to ponder.  Are they being viewed by the unions and the Democrats as an uncontrollable and embarrassing election year liability.  Save from bullhorns of the far Left, the message to them from both sides of the aisle seems to be ‘Eat S#!t and Die!’

The Congressional Kabuki's Coming Swansong (updated 21nov2011)

George Rebane

That the congressional super committee was orchestrated to fail from the moment it was commissioned was a known to anyone paying attention (or reading RR).  Now all the talk shows have come to that conclusion after interviewing various stiff-upper-lip members of that dysfunctional dozen.

This morning Chris Wallace of Fox News Sunday asked a series of the most stupid and embarrassing questions of two members of the Kabuki troupe, one Dem and one Repub.  I swear, any reader of these pages would have known the answers the two members of Congress were forced to give.  Wallace acted as if he had no idea how negotiations are conducted.  Example – he asked whether raising the start age for SS had been accepted or not by the Democrats, and a similar one of the Repub.

Both informed him, gently but firmly, that individual factors are not treated in that manner.  Everything will be on the table until the very end.  Each side will take turns presenting the other with a complete package, which then will be modified and counter presented.  All factors and issues will always be taken within a total context.  Someone should tell Chris before the week wears on.

And rather than trying to get success/failure predictions out of the participants – they were, of course, both hopeful and BSd their way through the answers – I would have asked them questions about the ongoing procedures and process.  This would have given them an opportunity to answer between the lines.

A high hard one of my questions would have been – ‘Given that no Congress can compel, commit, or coerce a succeeding Congress, you all know that any deficit reductions you expect to achieve have to be achieved in the coming year (2012), and only in the coming year.  The rest is just BS for us folks watching at home.  Some of you were members of the preceding Congress that kicked the can to the present Congress.  Now you are the kick receivers preparing to kick it to the next Congress of which many of you will also be members.  In your deliberations, do you actually bring up this factor and talk about it?  If so, how do you reconcile the endgame you’re headed for?  If not, what do you think of the guy you see in the mirror in the morning?’

Just so no one is mistaken, this Kabuki performance (stylized and bizarre dance-drama) is predestined to go nowhere, and its mandated draconian alternatives (scheduled to kick in in 2013) will almost certainly be punted by the lame duck Congress after next November.  Nuff said.

[21nov11 update] The long expected obituary and memo to the next generation reported in the WSJ -

Sen. Patty Murray (D., Wash.) and Rep. Jeb Hensarling (R., Texas), the co-chairs of the the Joint Select Committee on Deficit Reduction, said in a statement.

"Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve."

Now I'm ready to start entertaining words and wagers of hope that the legislated "sequestering" of $1.5T in deficit reductions will actually take place.  Step right up!

[21nov11 more]  Did everyone notice all the charges and counter charges about which party proposed what when?  I would like to see a news organization request under FOIA the copies of the date/time stamped communications between the two sides.  That should put an end to the partisan crap flying on the airwaves as to what really went on.  If they had no written proposals, then the bastards did little beyond exchanging hot air for three months of which there remains nothing but partisan memories and self-serving recounts about an affair that was, at best, extra-legal.

Hiroshima+66, Detroit+welfare

George Rebane

In 1945 Hiroshima was devastated by the first atom bomb used in anger.  The bombings of Hiroshima and Nagasaki saved a net of at least two million lives and untold millions of casualties, plus a Japan devastated more horribly than it already was in August 1945 when the bombs were dropped.  The outcry from the know-nothings was that the bombs would leave a radiation ruin that would last into the thousands of years.  Instead, 66 years later we have the thriving metropolis of Hiroshima that is a showcase to the world.  Why?

In the United States we started with a thriving metropolis and world class industrial center that could be matched nowhere on this Earth.  It annually produced millions of the finest motor vehicles, and supported a war effort by making thousands of B-24s in the largest facility on the planet.  The city was located on the nexus of land and water transportation conduits and close to all of its major markets.  It was the gateway to a better life for untold thousands of poor blacks seeking a new life and relief from a Jim Crow south.  Then Detroit was struck by the cancer of collectivism - labor laws, welfare, .... .  As a result, it lost it all.

What has made the difference in these two cities - collectivism and/or culture?  (H/T to a correspondent for the photos)

Threshold of New Progressive Era Hailed

George Rebane

Jeffery Sachs of Columbia University is a very prominent and celebrated far Left academician who writes extensively in the national media.  For example, he is the spearhead of that august Scientific American having been politicized over the last decade or so (it is now also a much thinner magazine with articles that have definitely turned to ‘science lite’).  Dr Sachs wrote a piece in the 12nov11 NYT that has gained much attention, and is hailed by the liberal media and weblogs as a definitive statement summarizing how things were, are now, and ever shall be.

Capitalism is definitely dead and buried in his new world, socialism is the accepted form of governance, and incomes are collectively equitable.  Taxing the rich will pay the fare for the trip, and the Occupiers are the ones starting our journey to social justice and renewed prosperity.  I draw your attention to it, dear reader, because you need to understand what fills the sails of the liberals who so enthusiastically promote their world on these and similar websites across the land.  They firmly and fully believe the adornment of history that Sachs provides – it is such a straight, obvious, and simple road from here to Man’s destiny – Marx lives!  (Image pilfered from the article.)

You may proceed to read the whole piece – ‘The New Progressive Movement’ – after you have poured yourself a stiff one and fastened your seat belt.  (For those readers yet to install seat belts on their home couches and easy chairs, be forewarned.  This oversight indicates that you have not yet exposed yourself to the full force of collectivist thought.  Brace yourself!)

On flat tax Blinder is leading the blind

George Rebane

[This is the transcript of my regular KVMR commentary broadcast on 18nov11.

Princeton’s progressive economist Alan Blinder is in the national media again (14nov11 WSJ) arguing against the flat tax.  Ignoring all the benefits that flat taxes have brought to post-Soviet eastern European countries, he lambasts America’s reconsideration of the flat tax as the “bouncing back of a bad penny.”   Before taking a closer look at Professor Blinder’s arguments against the flat tax, let’s review some basics of the new tax proposals.

The Flat Tax is often mentioned together with the Fair Tax without many people knowing the difference.  A flat tax is computed as a fixed percentage of your taxable income, which according to its promoters, is easily computed with few or no deductions or exemptions.  The Fair Tax is actually a federal sales tax imposed in place of the current income tax.  Both taxes have provisions for giving some advantage to the poor wage earners and consumers.

The prime criticism against these leveling taxes is that, yes they cause more people to pay taxes on a more even basis, but they both come out being unfair in the sense that they are not as progressive as the current taxing scheme.  Progressive is taken to be good in and of itself since it makes the higher earners pay a more disproportionate share of their income in taxes.  Today this disproportion has the top 5% of earners paying almost 60% of all federal income taxes, and almost half the workers paying no federal income tax at all.

Real News and Pabulum (updated)

George Rebane

Until further notice, please pay attention to –

1.    The German/French sovereign debt spread – subtract German interest rate from French interest rate.  This summarizes the entire eurozone crisis.  Use formula/chart in 'Investors playing the odds' to find likelihood that France defaults and/or that the ECB starts massive printing of euros to bail out their banks – hyperinflation.
2.    The price of gold – ever upward, but watch for the super-exponential bubbles.
3.    Israel’s plan to attack Iran’s nuclear weapon facilities.  When there’s no news about it, the risk of attack goes up.
4.    China’s US debt holdings – decreases are bad.
 
And ignore the following as distracting noise, pabulum, or simply entertainment –

1.    Who’s ahead among the Republican presidential candidates.
2.    Promised Congressional spending cuts and tax increases.
3.    Pedophiles in athletics.
4.    Moonbeam’s plans to reduce California’s unfunded liabilities.
5.    Anything on climate change that is connected to the UN.
6.    Obama’s promises.
7.    Bernanke’s economic projections and statements on quantitative easing.

8.    Who ran their hand up whose dress.

9.    Anything concerning Occupy.

10.  Any claims that government mandated green energy will ever be affordable.

Reader edits invited.

Van Jones – he’s baaaack! (updated)

George Rebane

We know that this formerly proud communist has been busy since he had to be jettisoned by Team Obama, but all that has been relatively sub-rosa.  Now the newly-minted Marxist in mufti is on his ascent to the top of the pile located somewhere beyond the American Left.  The man again deserves a feature article – ‘The Return of the Rabble Rouser’ - in the 21nov11 Time magazine that celebrates his political rebirth.

Mr Jones has been working on his American Dream Movement to bring socialist change to America.  His message has been embraced by no less than the Center for Community Change, “one of the left’s most active institutions”, and funded by Soros’ moveon.org.  Cheered on by a slew of Democratic notables like Nancy Pelosi (“Van Jones has made it his life’s work to speak truth to power.”), Jones is looking at the occupiers of OWS as his next legion of action-ready acolytes.

Joining in with labor unions and various leftist NGOs, Jones plans to organize and focus the occupiers into a cohesive voice akin to the tea party movement, and then make an impact on the 2012 elections.  His vision for our country is more than scary, “You talk about the Arab Spring, we could be on the verge of an American Autumn.”   Now American Autumn is about as open and as stark a translation of the promised “fundamental transformation” that I have heard.  This man and his fellow ideologues do not like what they see in our land (“banksters … the worst people in the world”), and they intend to finally marshal the masses to do something about it.

So there will be movement afoot.  One of the more significant asymmetries between the Left and Right is how they evolve in times of stress.  Leftwing movements transit through various stages of collectivism into regimes that finally dispense with their opponents through wholesale slaughter programs like the ‘Kulak liquidation’, ‘Final Solution’, ‘Re-education Camps’, ‘Great Leap Forward’, ‘Cultural Revolution’, or simply the ‘Killing Fields’.  The Rightwing efforts that promote values based on preserving the Bastiat Triangle of rights are co-opted by movements that trade individual liberty for promises of economic security, or the Right just fades away because its people are busy minding their own business.  Collectivists march, conservatives mumble.

So in the coming months we can look forward to that handsome, energetic, and loquacious Van Jones, organizing and leading those upturned faces with fuzzy minds not able to formulate the crisp thoughts and obvious conclusions with which he will provide them.  And then they will seek to be the next generation that is again dissatisfied with the pace and direction of human progress, and in the process militating for a change that they will make their own.

Yesterday they started with a nationwide series of coordinated strikes and demonstrations.  They are on their way, it would be foolish to dismiss him.

[update]  Communism (11%) is more popular than Congress (9%) in America.  These CBS poll results were highlighted this morning on NPR, not once, but from two journalists' reports in a single segment.  The fringe of communism always becomes more prominent when socialism establishes itself.  The duty of progressives high and low is to turn up the volume of denial when this happens – ‘No, no, no, don’t look behind the curtain!’.  Desperation and ignorance join to make this evil extreme of collectivism again look good.  One out of nine people believing anything is a significant faction in a society.

Investors Playing the Odds

George Rebane

At the risk of boring the bejeezus out of RR’s readership, here’s a bit of quantitative follow-up for all you investors playing the odds on the approaching collapse of socialist Europe.  Well, maybe that’s putting it on a little too strong, but looking at the way sovereign debt is being priced by the bond markets today, you gotta do more than wonder.

My last yawner on this (it got all of 4 reader comments) was ‘Greece and the 100% haircut’ where I showed how to calculate the probability that a borrower (here Greece) would default within a future interval of time, say, in the next year or two years.  The probability would be assessed by the world bond markets.  I gave the formula for computing that probability on your calculator using your own input values.

The piece also had another formula for computing what minimum interest you should demand from a borrower if you thought he’d go belly up with a certain probability within a given time.  Fun stuff if you are an investor playing that great American favorite ‘You Bet Your Ass'.

Anyway, for those who don’t want to mess with their calculator, and still want to keep track of the real shenanigans in Europe (the rest is just BS), I made a plot of default probability as a function of time and the rate difference.  The numerate reader will notice that the probability of default (Q) depends on the interest rate spread (r_B – r_RF) between the current bond rate and the so-called available ‘risk free’ rate – for the faithful, that’s what a 10-year US Treasury pays.  The formula for Q is shown in the figure below, and when you use it remember to convert percents into decimals.


Suppose you hear in the news one morning that some teetering country’s bonds are going for 23% per annum, and US Treasuries are paying 3% - that gives you r_B – r_RF = 23%  - 3% = 20%.  And you want to find out what is the probability that said country will default before two years from now (T = 2).  Then enter the horizontal T-axis at two, go straight up to the 20% curve, and then left to the vertical Q axis to read off about 33%.  The market is saying that there’s a one out of three chance that you’re going to get a haircut if you buy and plan to hold those bonds for two years - that's the real news.  Now is 23% enough of a return for you to take that risk?  If your numbers fall between the values given in the figure, you'll have to remember how to interpolate.  See, you’re having fun already.

A Ray of Hope or …

George Rebane

As an illustration of the public policy stasis that our collectivist brethren always wallow in, the National Space Society will announce today (14nov11) that space solar power (SSP) will be a viable, feasible, and limitless energy source within ten to twenty years.  SSP will beam energy from high orbit solar collectors to anywhere on earth bringing to bear the more than seven times energy efficiencies over surface solar collectors.  Talk about a green technology, and this energy source has been talked about for years.  Of course, we have to figure out how to keep such an energy beam from getting into the wrong hands and becoming a death ray.  (Image from SpaceWorks Engineering, Inc./Spaceworks)

Kurzweil reports (here) that today “on Monday Nov. 14 at a press conference (open to the public) at the National Press Club in Washington, D.C., the National Space Society will announce the findings of an impressive three-year, ten-nation study of space solar power by the International Academy of Astronautics (IAA), co-chaired by John Mankins, a 25-year NASA veteran who headed NASA’s study of space solar power in the 90s, and Prof. Nobuyuki Kaya, Vice Dean of the Graduate School of Engineering, Kobe University.”

(The report’s) findings include:

•    Space solar power appears to be technically feasible within 10–20 years using technologies existing now in the laboratory;
•    It appears to be economically viable in the next 1–3 decades under several different scenarios for future energy markets, including potential government actions to mediate environment/climate change issues;
•    Low-cost Earth-to-orbit transportation systems appear to be technically feasible during the coming 20–30 years using technologies existing in the laboratory now;
•    Flight experiments are needed, and policy-related and regulatory issues must be resolved.

Today we consume about 110T KWh of energy annually (good number to remember).  This will double in about 20 years, and then keep shooting upwards as the Asian countries really come online.  That will be a tough challenge for fossil fuels.  But it sure looks like if SSP turns out a feasible promise to deliver all that clean energy, then surely it’s a’comin’.

The Liberal Mind – Ridiculous Rules of Engagement (updated 14nov2011)

George Rebane

The political season is in full swing again; actually I don’t think that it has taken a breather since 2008.  The Great Recession and all the government programs designed to bring us back into a fine and fundamentally transformed fettle has highlighted an ideological rift in America of proportions to rival its Grand Canyon.  And the result has been a debate that is now changing into a shouting match in the streets.

That would be all well and good if it laid the groundwork for greater understanding between the sides.  Not a chance.  And one of the main reasons is the fact that, starting with the politicians in Washington, we don’t argue our respective cases very well.  The Left and Right, having long ago given up on each other, are both trying to convince the supposedly undecided Middle.  They do this by putting on a show of attempting to persuade the other through various arguments relying on a supposedly shared sense of justice, equality, fairness, with even an occasional nod to reason and logic.

I don’t think the Middle is all that impressed with the rhetorical fireworks.  Some of that may be due to limited interest or background in things political, historical, international, or even economical.  Although the last part is beginning to get people’s attention, especially those looking for a job.

Admittedly, this is not the most favorable view of those ideologically innocent millions, so let’s assume that enough undecideds out there are interested in the country’s direction and fate, and that they have been keeping up with what’s going on.  So let’s assume that what and how we argue matters.

If so, then the ‘where was X when Y first happened?’ sounds silly right off the starting blocks.  You know the ones I mean; as when Congress or the Administration is about to do the next questionable (aka dumb) big thing.  The often brilliant retort by the defenders of the proposal is an indignant, ‘Well, where was (Bush/Clinton/…) when all this first began?’  And that repartee, accompanied by a well-delivered smirk, is supposed to defend the issue?  Most certainly not to anyone paying attention.

You see, it really doesn’t matter where anyone was when it first happened or was first opposed or first ignored or whatever.  That was then, this is now.  Logically, the puffed up defender responds instead by asserting to all within earshot that the current proposal is justified, as a what? – a belated tit-for-tat, a retribution? Against whom? For what?  Almost never is there anyone to demand that he answers the criticism by citing the merits of the present case, and not by some dubious dredging of politicized history.

The (inter)national cancer of public service unions

George Rebane

[This is the submitted form of my regular column in The Union which appears in its 12nov11 print and online editions (here) under its less harsh title 'Public service unions will be our demise', no doubt edited for a more sensitive readership than frequent these pages.]

Today socialist Europe is unraveling after years of ‘robbing Peter to pay Paul’ has finally hit a brick wall.  With riots in the streets, the Peters have run out of money and patience with a system of governance that simply does not work.  And what has caused the rot now toppling governments of countries that have essentially gone broke and live on borrowed money?  You need look no further than the trans-national common denominator – public service unions.

These unions have bloated governments to hire and retire workers in prodigious numbers.  In Greece, the current paragon of socialist corruption, more than one in four of the country’s workers are government employees being paid benefits that are out of reach in the private sector.  Well, the music has stopped and everyone there is scrambling for a safe seat.  Why? Because the lenders are refusing to throw more money into a fiscal cesspool from which there is little chance of payback.  Eurozone lenders say that there is less than one chance in ten that Greece will NOT go fiscally belly-up in the next twelve months.

But Greece is chump change when compared to Italy, Europe’s third largest economy on a headlong charge off the inevitable socialist cliff.  Maybe Greece can be bailed for a year – anything longer is not feasible.  There is no will left in Europe’s more fiscally prudent countries to rescue Greece.  It will simply have to quit the euro, and print itself into oblivion with drachmas.  But Italy is too big to bail and, for the sake of international stability, too big to fail.  The country’s sovereign debt is over $2,500,000,000,000 (that’s trillions), and they can’t print euros.

Beyond 1984, right here in River City?

George Rebane

Yesterday’s 11am PST nationwide FEMA radio alert made many people of all political persuasions sit up and take notice.  It appears that the federal hardwired capability to control content on all broadcast media is now in place, is operational, and (here’s the interesting part) ready to be exercised with non-emergency content.

Infowars.com reports (here) that this technology demonstration is just the first step in a systematic government takeover of all broadcast and internet media via existing executive orders.  The claim is made that the feds have already notified all radio stations to “prepare for multiple hours per day” of government programming.   Sorta like the street propaganda and patriotic music loudspeakers on city streets in totalitarian countries.

Even though the technology exists and is in place, the whole affair seems a little farfetched; don’t we all have ‘Not in America!’ ringing in our ears?

A Reader’s Complaint Answered

George Rebane

Mr Ben Emery is a regular RR reader who vigorously defends his Left/liberal ideology in these pages.  He recently issued a complaint about the content, viewpoint, and perhaps the form of this weblog.  His general lament is that RR’s scope of topics is too narrow and doesn’t cover the substance of the ideas discussed.   I believe his comments deserve a more extended answer that may also be of interest to other readers of this weblog.  This follows BenE’s complaint repeated below, which is also his ‘8nov11 09:12 AM’ comment to ‘The Liberal Mind – How much socialist, before being a ‘Socialist’?’.

The Liberal Mind – How much socialist, before being a ‘Socialist’?

George Rebane

In debates on governance and other issues between what we today call the Right and the Left, we observe an interesting use of semantic camouflage that has been in practice for at least a century in the American public square.  The Right and its various political candidates proudly proclaim their socio-political ideologies under labels such as conservative, libertarian, capitalist, free-marketeer, and even rightwing.  And this no matter if they run/serve as Republicans or Libertarians or some other splinter rightwing political party.  The same can be said for the public proponents of these same ideologies that range from the private voter through national media pundits to humble political commentary bloggers like me.  We all wear our tenets on our sleeves.

This is not the case with candidates from the Left.  Starting late in the 19th century, the intellectuals of the Left began to discern that a more, shall we say, nuanced sales pitch was required to sell their brand of collectivism to the voting public, no matter if they were Marxists, progressives, socialists, communists, … .  And after some early successes in installing such forms of governance and the inevitable tragedies that were then visited on the suckered populations, the Left largely abandoned the ‘nuanced’ phase of their promotions to ones of subterfuge, dissembling, and outright lies.

(A humorous sidelight here is that often a Leftist who is labeled a ‘socialist’, ‘progressive’, ‘liberal’, … will rear up, and not only deny membership in such a benighted cohort, but actually accuse the labeler of name-calling, smearing him, or an outright attack on his character which will brook no such pejoratives.  And as a conservetarian, I may be forced to agree with him, at least in principle.)

In America this policy was implemented in spades as the American Communist and Socialist Parties became the buffoons and off stage noise makers in our political dramas.  No Leftwing politician expecting to get elected advertised his true collectivist ideology.  Instead they ran as democrats (and Democrats), softly selling class distinctions and promoting a ballooning government into every quarter of our economy and personal lives.  Their populist fodder for the public ear was the ever present disparity of incomes and wealth that occur in a growing free market, capitalist society.  Class envy, as later confirmed by Kahneman and Tversky (q.v.), is a staple of human nature to be exploited, and exploited in spades.

Local Government—An Oxymoron?!

[This article on Agenda 21, emphasizing its history in the US, was sent to me by Judi Caler, co-founder of Reclaiming our American Rights (ROAR!).  It was also published in the Nov 2011 edition of the CABPRO News.  gjr]

Judi Caler

Several months ago, a young Executive Director of a community nonprofit volunteered to help a Grass Valley citizens group approach our local elected officials in order to affect public policy on an important issue. Having been a lobbyist and political activist in the past, I didn’t think I would learn anything new. I was wrong.

Peoples’ lives are being hijacked, compliments of the United Nations and their Agenda 21 (AKA Sustainable Development); our young people, products of our public “educational” system, don’t understand how representative government was intended to work by the founders of our country. They have been indoctrinated to accept without question what is imposed upon them, and also to help impose that doctrine upon others.

Agenda 21 is the 1992 United Nations plan for the global elite to control every facet of our lives—what we have, what we do, where we live, where we go, what we eat, etc. President George H.W. Bush signed Agenda 21 for the United States along with the leaders of 178 other nations. It was deliberately designed as a non-binding “soft law” document, not a treaty, so as to avoid the Senate confirmation process.

President Clinton followed up by creating the President’s Council on Sustainable Development (PCSD) by Executive Order in 1993 for the purpose of implementing Agenda 21 in the United States. He thus laid the foundation to restructure our political process to conform to a one world government.

To further carry out Agenda 21, President Obama, by Executive Order in June 2011 established the White House Rural Council to exercise control over rural America in education, food supply, land use, water use, recreation, property, energy, and the lives of 16% of the U.S. population.

The PCSD produced “Toward A Sustainable America” in 1999. Among its 16 “We Believe” statements is Number 8:

“We need a new collaborative decision process that leads to better decisions; more rapid change; and more sensible use of human, natural and financial resources in achieving our goals.”

In other words, the constitution was getting in the way of their plans. The “old” political process involved private citizens lobbying their local elected officials to adopt policy; vigorous open debate on both sides; and an eventual public vote by elected officials. Sustainable Development couldn’t take hold across America if this process were allowed to continue. And so the “consensus” or “visioning” process was born.

The consensus process bypasses local government officials, and cumbersome argument and debate; early participants are handpicked and friendly. Through stakeholder meetings, the public is given the impression that a broad spectrum of the community’s citizenry is engaged.

A typical stakeholder meeting is run by a highly trained, highly paid facilitator. His or her job is to drive a consensus sympathetic to the desired outcome of the project and marginalize any opposition. Stakeholders are persons or groups with no legal interest in the property in question, such as environmental nonprofits, dictating the use of that property to the owner. Shills are sometimes hired to join in the “consensus.”

The new process is most often accompanied by a government grant that local elected officials rarely reject, especially if the local community has been told that the grant is awarded to help usher in “sustainability.” Organizations such as the American Planning Association are provided funding to produce plans and procedures that are ready-made for local governing bodies to approve.

Only after the plan is essentially developed is the governing body called upon to give it the force of law by a formal vote. If the governing bodies do not vote as expected, the threat of a lawsuit is not uncommon. Once the new decision-making process has been established, it can be used to develop policy in all areas embraced by sustainable development, i.e. economics, social justice, education and the environment.

There can be no accountability to the people when public policy is developed by government-funded advocacy groups, administrators or bureaucrats. Individual freedom is lost as property rights are eroded. Local authority is thus removed from elected officials, and control moves up to the regional or state level or higher. Top-down government management of local communities is achieved.

To find Agenda 21 operating in your community, watch for the buzzwords (partial list): sustainable, social justice, smart growth, public/private partnership, common good, collaborative, vision/visioning, affordable, livable, walkable, consensus, stakeholder, International, regional, endangered species…

Reclaiming Our American Rights (ROAR!) is a Nevada County citizens group fighting Agenda 21. We have available a new slide show presentation entitled “What Is Sustainable Development?” It is intended as an introduction to Agenda 21, a subject we need to understand if our freedoms are to survive. To join ROAR or to arrange a showing for your group, big or small, please contact us at unagenda21@hotmail.com.

Judi Caler lives in Nevada City. She founded AnimalSave and co-founded ROAR!

When the Music Stopped...

[I received the follwing in an email from an old friend and fellow artillery officer with whom I served in Germany many years ago.  gjr]

(For those who  are unaware: At all military base theaters, the National Anthem is played  before the movie begins.)

This is written from  a Chaplain in Iraq:

I recently attended  a showing of 'Superman 3' here at LSA Anaconda. We have a large auditorium  that we use for movies as well as memorial services and other large  gatherings.

As is the  custom at all military bases, we stood to attention  when The National  Anthem began before  the main feature.  All was going  well until three-quarters of the way through The National  Anthem, the music  stopped.

Now, what would  happen if this occurred with 1,000 18-to-22-year-olds back in the  States?  I imagine that there would be hoots, catcalls, laughter, a few  rude comments, and everyone would sit down and yell for the movie to begin. Of  course, that is, only if they had stood forThe National  Anthem in the first  place.

Here in Iraq 1,000 soldiers  continued to stand at attention, eyes fixed forward. The music started again,  and the soldiers continued to quietly stand at attention.  Again, though,  at the same point, the music stopped. What would you expect 1,000 soldiers  standing at attention to do??  Frankly, I expected some laughter, and  everyone would eventually sit down and wait for the movie to  start.

No!. . . You could  have heard a pin drop while every soldier continued to stand at  attention.

Suddenly, there was  a lone voice from the front of the auditorium, then a dozen voices, and soon  the room was filled with the voices of a thousand soldiers, finishing where  the recording left off: "And the rockets' red glare, the bombs bursting in  air, gave proof through the night that our flag was still there.  Oh,  say, does that Star Spangled Banner yet wave, o'er the land of the free, and  the home of the brave."

It was the most  inspiring moment I have had in Iraq, and I wanted you  to know what kind of U.S. Soldiers are  serving you!  Remember them as they fight for us!