Senator Bunning's Finest Hour: Stopping the Reckless Congress

“If the British Empire and its Commonwealth last for a thousand years, men will still say, ‘This was their finest hour.'” — Sir Winston Churchill, June 18th, 1940

Senator Jim Bunning (R-KY), 79, has been on Capitol Hill for 24 years, but yesterday was his finest hour. He was the only Senator to object to the unanimous consent agreement which would have extended unemployment cash and health benefits for 1.2 million Americans.
Bunning doesn’t oppose the benefits. They would cost $10 billion in borrowed money, with interest due in a year. The Senator just wants to bring an immediate halt to any more deficit spending. Bunning is insisting Congress first pay for these benefits because the government should no longer be spending money it does not have.
I sure wish other lawmakers would act in this manner. Were any of these Senators paying attention earlier this week when Federal Reserve Chairman Ben Bernanke said the current long-term deficits are “unsustainable” and they could push up interest rates and place a drag on the economy.
Bunning is the one Senator insisting Congress must comply with the “Pay-Go” (pay as you go) rules they just adopted. Pay-Go was intended to stop Congress from passing any more spending without first finding the money to pay for it. The Democrats often cite Pay-Go to demonstrate they are serious about budget deficits, but the program is worthless because the requirement is always waived.
There are many things all of us would like to purchase, but we can not afford them and we avoid going into debt. The liberal Congress never understands this message.
If these benefits are so important the Congress should find a way to pay for them. “If we can’t find $10 billion somewhere for a bill that everybody in this body supports, we will never pay for anything,” he said. Bunning’s suggestion is to use leftover “stimulus” money to pay for these benefits. The suggestion is excellent, and transfer payments accounted for over 80% of stimulus spending last year.
If his colleagues do not like that idea, then the money can come out of the budgets for National Public Radio, the Corporation for Public Broadcasting, green jobs, price supports for multi-millionaire farmers, or those eight new jets the Congress is ordering for its junkets.
The Democrats are resorting to their usual solution. They want to pay for these benefits on credit so future generations will be stuck with the bill. Bunning’s idea is to take away the Congressional credit card. He brought the Senate to a halt by objecting to a unanimous consent agreement, and the liberal news media went ballistic. Time magazine has ranked him among the five worst Senators.
One columnist described him as “loutish, eccentric and mean,” and another said the Democrats ought to make Bunning “the poster boy of the right-wing filibuster.” What they did not say is that this bill was passed by the House six months ago. Why is their anger not directed at Majority Leader Harry Reid (D-NV)?
Reid could have called the bill up earlier so objections could have been dealt with under the regular rules. Instead, Reid waited until the day before adjournment, but then his usual cloture motion trick would not work before the benefits expired.
Furthermore, it has been Reid’s policy to stop the Senate from operating under unanimous consent agreements. The liberals never said anything about this change in long established procedures when it was instituted in 2007. If Reid is so concerned about the unemployed, then why did he kill the bipartisan unemployment bill passed by the Finance Committee? All of the spending portions of that bill were paid for.
“Remember now, this all could’ve been changed had not the leader of the Senate decided that a bipartisan compromise jobs bill was not as important as his partisan jobs bill that just passed just before all of this debate,” Bunning said in his final remarks.
There is always a crisis used by the liberals to increase our debt burden. My sympathy is with the taxpayers. Am I cold hearted regarding the unemployed? No, all 100 Senators are in favor of this temporary extension. The Senate returns on Tuesday, and this bill is going to pass that day.
What Bunning has accomplished is to emphasize the hypocrisy of the liberals. They just passed the Pay-Go bill and the first thing they do is to make a $10 billion exemption. The unemployed are not going to suffer, but hopefully the taxpayer will gain because of Bunning’s courage.
His loud and clear message is how do we pay for this bill? Of course he is correct that the money should come from the stimulus. Bunning’s battle is essential because this is just an opening shot. The next initiative is the longer-term $100 billion jobless benefits package. This is also being exempted from Pay-Go. I am so glad someone is saying STOP to all of this outrageous deficit spending. Bunning is raising the correct question, what reductions can be made to the federal deficit?
The crisis occurred because Majority Leader Reid abandoned the $85 billion bipartisan jobs bill which was paid for. “My gosh, we’ve got over $400 billion in unspent stimulus money,” Bunning said on the Senate floor. “I’ll be here as long as you’re here and as long as all those other senators are here and I’m going to object every time because you won’t pay for this and you propose to never pay for it.”
Pay-Go passed by the House in 2007, and even Speaker Pelosi has used this trick to claim she is a deficit hawk. Pay-Go sounds great until you realize they exempt all of the liberal spending programs. There is a key difference between the GOP and Democratic Pay-Go proposals. Republicans wanted no easy exemptions.
Once again, this bill will be passed on Tuesday and no one is going to suffer. The opening shot has been made and now we are on to the $100 billion battle over the jobless benefits package. All we are asking is how do you pay for these new spending programs. It is a question which needs to be heard over and over again in the reckless Congress.
Senator Bunning is under fire for doing the right thing. He wants Congress to pay for its programs, quit passing bills that aren’t funded, and stop adding to the deficit for the sake of political expediency. He’s trying to bring change to Washington. Didn’t someone promise to do that before?

Remembering the Battle of Iwo Jima

There are currently 2.5 million American veterans of World War II still alive today, out of the 16 million who served. Around 900 of these veterans die every day. They fought the greatest armed struggle in human history, but their endeavors are fading from public memory. This month is the anniversary of the Battle of Iwo Jima (February 19 – March 26, 1945). While the battle was still being fought, Fleet Admiral Chester W. Nimitz said “Among the men who fought on Iwo Jima, uncommon valor was a common virtue.” This is the only quote inscribed on the Marine Corps War Memorial which is dedicated to all Marines who have given their lives in the defense of the United States since 1775.
Marines have been in the forefront of every American war, and Iwo Jima was the largest all-Marine battle in history. The Marines have carried out over 300 landings on foreign shores. Their record of readiness reflects pride, responsibility and challenge. The USMC motto is “Semper Fidelis.” It is Latin for always faithful. Faithful to god, country, family and the corps.

Senator John McCain Faces Difficult GOP Primary Battle

Sen. John McCain (R-AZ), the 2008 GOP presidential nominee, faces a difficult battle this year in the Republican primary in his home state. The Senator has been in the forefront of conservative ranks for the past year, but his role as the co-author of the McCain-Feingold legislation (campaign finance reform), the McCain-Lieberman bill (climate change), and the McCain-Kennedy act (immigration reform) has come back to haunt him. The biggest liability in Arizona is the later. The immigration-reform package would not have relax enforcement at the borders. What it would have done, instead, is to provide an opportunity for citizenship to undocumented immigrants who’ve been here for many years, who’ve raised their children here, and who’ve worked hard and who’ve obeyed our laws. McCain’s support of this legislation nearly cost him the GOP’s presidential nomination.
McCain is moving to his right and his first 2010 TV commercial says: “Obama is leading an extreme left-wing crusade to bankrupt America. I stand in his way every day. If I get a bruise or two knocking some sense into heads in Washington, so be it.” Narrator: “Perhaps no battle in our lifetime is more vital than the one McCain fights now – a battle to save America, and save our jobs. Re-elect Senator McCain.”
McCain’s primary opponent is former Rep. J.D. Hayworth who has made many controversial statements. He had a completely safe GOP district but was defeated for re-election in 2006. Since then he has been a weatherman and has had a conservative Phoenix-based talk radio program. It has featured prominent spokesmen who are challenging President Obama’s birth certificate, and Hayworth has been cynically playing to the worst elements of the conservative base to gain wide support.
Hayworth keeps saying Obama must produce his birth certificate, “All I’m saying is, for every race across the country, especially with identity theft in the news, it would be great that people can confirm who they say they are,” Hayworth said. CNN host Campbell Brown reacted by saying, “Identity theft? I mean, come on. Is that honestly what this is about?”
Once again, Hayworth is also effectively using the immigration issue. McCain deserves tremendous credit for the border fence, enhanced security and quadrupling the the enforcement budget. Hayworth’s response is that McCain supported Bush’s plan, and his rhetoric sounds anti-Hispanic. There are very legitimate concerns regarding illegal immigration, but the former Congressman’s rhetoric will set us back with Hispanics.
A reporter for Spy magazine once played a trick on Hayworth. He asked him about U.S. relations with a fake country. It was from a Groucho Marx movie. Hayworth fell for it and spoke about how concerned he was about the situation in that nation. There will be other Hayworth stories in the weeks ahead.
McCain moved to the center from 1998 to 2008 when he was engaged in presidential politics. Now that his White House ambitions are behind him, McCain’s focus is on his conservative constituency back in Arizona. He no longer has to try to win praise from network anchors and The New York Times editorial board. His years of being a national reform candidate are over, and he is finally on the right course.

BOOK REVIEW: Happy Times by Lee Bouvier Radziwill (168 pages)

The author is the younger sister of the late First Lady Jacqueline Kennedy, and she witnessed many key events during JFK’s presidency and his rise to power. The Bouvier sisters were the epitome of taste, style and elegance in the 1960s and ’70s. Despite reports of a rivalry, they were each others most trusted confidants.
They were beautiful, smart, superbly dressed, and lived privileged lives in beautiful places. They also encountered tragic and unbelievably sad events, but you will not read about them in this book. It is a brief and pleasant memoir and is primarily about the 1960s.
“Happy Times” is a coffee table scrapbook which reveals a limited amount about her life story. The author acknowledges this is not a definitive biography and many important chapters in her life have been omitted. The Princess focuses on good times and vacations, and does not mention the assassination of her famous brother-in-law, the untimely death of her son, the strained relationship with her mother, or the divorce of her parents.
She first wed at the age of 20 and the marriage lasted for six years before being annulled. Her second marriage to Prince Stanisław Radziwiłł lasted 15 years. He was from a Polish noble family, and his mother died in a Soviet labor camp during WW II.
In 1979, Radziwill became engaged to Newton Cope, the owner of the Huntington Hotel on San Francisco’s Nob Hill. The marriage was called off five minutes before the wedding ceremony was to begin. The groom would not sign a prenuptial agreement which stipulated a $15,000/month payment to the bride. Her third marriage to director Herbert Ross in 1988 ended in divorce shortly before he died in 2001.
In the summer of 1999, her nephew John F. Kennedy, Jr, 38, was killed in a plane crash and three weeks later, her son Tony, 40, died of testicular cancer. The story of that painful summer is best told by her daughter in law, Carole Radziwill, in the New York Times best seller, “What Remains.”
The tragedies are known to all, but she reveals the love and compassion behind the scenes. Radziwill has a remarkable ability to be positive in the face of adversity. Her message is to focus on the good, not the sad. She believes it is best to move on and keep going.
There are no political statements or negative feelings in this book. Her ex-husbands and famous boyfriends would all approve of the text. A typical example is when she describes a fun filled friendship with author Truman Capote. They attended dozens of parties as a couple, but she omits their major falling out in his final years.
This is an easy read, and it is full of pictures of smiling celebrities from her remarkable life. They include Diana Vreeland, Rudolf Nureyev, Andy Warhol, Mick Jagger, Leslie Caron, Peter Beard, Richard Meier and Aristotle Onassis. The photos from her private collection alone are worth the book’s price. You will understand why the sisters were regarded as American royalty, and you note many of the people in their circle were taken prematurely.
Both sisters were incredibly thin, and to curb her appetite, Jackie was a secret chain smoker. She died at the age of 64 from non-Hodgkin’s lymphoma, which was probably related to smoking. The sisters were especially close to Jean Kennedy Smith and her husband Stephen Smith. She was JFK’s youngest sister, and he was a longtime smoker who died after a brief battle with lung cancer at the age of 62. Prince Radziwiłł also died of lung cancer at the age of 62.
“Happy Times” is the complete opposite of the many derogatory comments found in Diana Dubois’ “In Her Sister’s Shadow: An Intimate Biography of Lee Radziwill.” If you like Lee Radziwill, then this book will be enjoyable. If you want to read about extramarital affairs that happened 50 years ago and harsh criticism of her, than the Dubois book is for you.

Patriot Act is Reauthorized

Despite all the rhetoric of the 2008 campaign, the House and Senate have both voted to reauthorize key provisions of the Patriot Act for another year without changes. The Senate passed it by voice vote and the House voted for it today by a 315 to 97 margin. In 2006, several organizations mounted a campaign to impeach George Bush because of the Patriot Act. As Sen. Jeff Sessions (R-AL) noted, “The PATRIOT Act is a bipartisan bill that has helped save countless lives by equipping our national security community with the tools it needs to keep America safe. Recent terror attacks, such as those at Ft. Hood and on Christmas Day, demonstrate just how severe of a threat we are facing. There is simply no reason to weaken the PATRIOT Act—and every reason not to.”

Ron Paul's Economic Policies are Not Constitutional

The House of Representatives overwhelmingly passed legislation co-sponsored by Rep. Ron Paul (R-TX) and Alan Grayson (D-FL) to open the Federal Reserve to an audit. The bill had 317 co-sponsors. The General Accounting Office already has Fed audit authority and they have used it more than 100 times. There is full disclosure of Fed lending and few people oppose auditing certain activities, and the Fed chairman routinely testifies before Congress. The problem is that the Paul measure would undermine the independence of monetary policy and could restrict the ability of the Fed to act in times of crisis.
The Congressman’s book “End The Fed” wants to return our nation to the economics of the 1800’s. America was an agrarian society, and it was a time when land was plentiful and cheap. The barter system was popular and people did not use a lot of money in the 19th century. At that time the supply of money was determined by the supply of gold, and Libertarians are seeking a return to this system.
The Congressman says:

“I don’t think the Federal Reserve should exist – it would be best for congress to exert their responsibilities and that is find out what they are doing. It is an ominous amount of power they have to create money out of thin air and being the reserve currency of the world and be able to finance runaway spending whether it is for welfare or warfare; it seems so strange that we have been so complacent not to even look at the books. If we knew exactly what they were doing, who they were taking care of, there would be a growing momentum to reassess the whole system.”

He ignores the fact that before the creation of the Federal Reserve there were 16 recessions from 1850 to 1910, and they averaged 22 months long. During this time period, the U.S. was in a recession 60 out of every 91 months. It was because of the severity of these recessions that the Federal Reserve System was created.

They wants our national wealth to be determined by the ups and downs of the gold mining industry. I believe the Fed is doing a better job managing the money supply than gold miners. Ron Paul also believes ending the Fed is a good idea because “It would take away from government the means to fund its endless wars.” He does not explain how the government was able to pay for the American Revolution and the Civil War before the Fed existed in 1913. He claims ending the Fed would end the business cycle but he never explains how that could happen. America had recessions and depressions well before the Fed was established.
A gold standard is an effective inflation fighter, but Paul ignores the problems of deflation. That is what is happening now in Japan and it was what happened to the United States in the 1930s. James Pethokoukis of Reuters made these observations about the Fed Audit:

“Most Americans surely don’t realize that the non-policy aspects of the Fed are already audited by the GAO, nor have they watched the Fed chairman’s twice-a-year testimony, once known as the Humphrey-Hawkins testimony, in front of House and Senate committees. But Paul’s bill would go further. An audit would create an explicit and clear congressional assessment of the Fed’s performance. “Indeed, there would be no point to this proposal, given Humphrey-Hawkins, if it were not the intention of the bill’s proponents to exert congressional control of monetary policy decisions in a way that the Humphrey-Hawkins testimony alone does not allow them to,” argues Michael Woodford, an economics professor at Columbia University.
How might more influence be exerted? Economist Anil Kashyap of the University of Chicago thinks an audit suggests the GAO and Congress could force the Fed to supply all the background information that goes into an interest-rate decision and compel all members of the FOMC to share their individual thinking on any issue in real time. “The spirit of the Paul bill seems to be that having FOMC meetings live on C-SPAN would be best way to make monetary policy. That would be a disaster.”
The effect on the economy might not be so beneficial, either. Even if the result of the Fed bill is only more aggressive congressional questioning and criticism, financial markets might well fear the bank would start taking congressional wishes into account when making policy. “If the markets and foreign investors perceive it that way,” says economist Michael Feroli of JPMorgan, “it could immediately push up borrowing costs even if the audits are only a symbolic increasing of congressional oversight of monetary policy.
“More congressional authority would more likely be biased toward pushing for looser monetary policy to bring down unemployment. If Congress were full of hard–money guys like Paul, that would be one thing. But who really wants Nancy Pelosi and Barney Frank deciding when to tighten and ease? And right now do Americans really want global investors to start questioning the Fed’s commitment to low inflation and a stable currency, right as Uncle Sam is running up record budget deficits? The economy is only now pulling itself out of recession. Paul’s bill, if successful, could send it back the other way.”

The Fed engages in foreign currency trades worth hundreds of billions of dollars. These are called central bank liquidity swaps, and the purpose is to make sure foreign central banks had enough dollars to meet their obligations. The effort has kept interest rates low and the identity of the countries which received dollars is made public as is the amount each got.
The Fed can be criticized for the most recent recession. Interest rates were kept low for a long period of time and the Fed did not do a good job of monitoring the major banks.
Ron Paul wants Congress to take full control of monetary policy and eliminate fiat money in favor of a gold-backed national currency (the gold standard). He wants to abolish the Federal Reserve and freeze the money stock. He says his goal is not reform of the Fed, but revolution, and the end of the Fed. Without the Fed, he says, we would enjoy “all the privileges of modern economic life without the downside of business cycles, bubbles, inflation, unsustainable trade imbalances and the explosive growth of the government that the Fed has fostered.” He ignores the economic turmoil America experienced in the 19th century without the Fed. He also ignores the panic of 1907 which ultimately led to the Fed.
George Cooper in “The Origin of Financial Crises” describes all central bankers as schizophrenic. When the economy is performing well they leave it alone, but once there is a down turn they stimulate it with rate cuts. The problem is that excess credit builds up which inflates asset prices. Cooper believes the Fed conduct “fire drills” by occasionally withdrawing liquidity from the market.
According to a recent article in Red State, “Ron Paul is a complete moonbat and an embarrassment not just to the Republican Party, but to the whole nation. The guy is an ignorant fool on foreign policy and on economics and his rants about the Constitution are never better than marginal. . . He starts with reasonable but amateurish analysis of the effect of low interest rates, then degenerates into nonsensical allegations and conspiracy theories.
“Letting Congress set interest rates would be a disaster. His supporters proclaim that they are defending the Constitution, but what they are advocating is unconstitutional. They want private banks only, with fractional reserve lending outlawed, issuing currencies to compete against each other. We had that ‘free banking system’ for 30 years after the Second Bank of the United States was outlawed. It was a big failure which led to two great depressions and nearly a third but the California Gold Rush saved us.
The libertarians “have become infected with the idea that there are ‘hidden masters’ behind every corporation, government official and president. It’s just that they all seem to have different ideas who these hidden masters are. Sometimes it’s the Builderburgers, the CFR, the UN, or whatever other group is popular at the moment.”
Last month the Chairman of the Federal Reserve Board, Ben Bernanke, appeared before the House Banking Committee. He told Ron Paul: “Well, Congressman, these specific allegations you’ve made are absolutely bizarre. And I have no knowledge of anything remotely like what you just described.” Paul asked if Congress can get “the results of every agreement, every single loan made.” Bernanke said yes. Paul is also accusing the Fed of hiding information about past activities, and Bernanke said “We produce complete transcripts of every word said in the FOMC meetings. So you have every word in front of you.”
While Congressman Paul’s major campaign’s to abolish the Federal Reserve, he is very vague about the alternative. Do we really want to go back to the early days of this nation when private banks essentially were the Federal Reserve. Private banks essentially ‘owned’ and operated banking operations of the federal government. Do we now want Goldman Sachs, BoA and Citicorp to be the three major shareholders of “Federal Reserve Part Two” and make all the decisions for themselves and for the nation in terms of monetary policy?
Another major flaw in Paul’s arguments is that he places all blame for numerous economic problems on the Federal Reserve. According to his logic, no one but the dim bulbs in Congress have any responsibility for buying homes that were beyond their means, and they knew it when they bought them. That is a pretty amazing hop, skip and a jump from the ideal of personal responsibility and individual duty he was supposed to be aiming for in America. It is hard to see how 100% of this problem can be laid on Washington. The Libertarians make it sound as if the Fed pinned home buyers to the ground and forced them to take out these extravagant loans, albeit with federal assistance and support.
GOLD STANDARD
Ron Paul does not speak for conservatives. His recommended solution is always a return to the gold standard but that was soundly rejected by right wing icons such as Milton Friedman. According to Market Biz News, “Ask any Libertarian leader to point out why the gold standard should be readopted and he’ll immediately point to the “roaring 20’s”. He will point out that the average man was paid more wages. People were able to pay cash for most assets, including homes. American prosperity was live and well. However, when questioned specifically as to what made the 20’s so great, they’ll quickly say the gold standard.
“I don’t know if they honestly believe the gold standard had something to do with Americas financial success during the 20’s or if they are just trying to dumb it down for the public. The truth of the matter is, tariffs were dramatically raised during the 20’s. This had a twofold effect. It protected American jobs, allowing the common man to be paid more. Secondly, and prevented dumping of cheap goods on the market, protecting American manufacturing.
“However, the federal reserve had already been instituted and they needed to solidify their hold on America. They did so in 1920-21 and 1929 – 1944. The only thing that brought prosperity to the country was the heavy use of tariffs. The government subsisted on tariffs before 1916 when the banking cartel pushed forth the unconstitutional income tax. Although, many deny that the income tax amendment was constitutionally passed, no one has done an open national recount of the states that ratified the amendment. They simply brush it off as hogwash, that it was passed and there is no need to hold an open recount of the states ratifying the amendment.”
The United States is fully in control of its own currency and the Federal Reserve is not owned or controlled by world bankers. No stock in any Federal Reserve Bank has ever been sold to foreigners. It would not matter if it was. America’s monetary policy is controlled by the publically-appointed Board of Governors, not by the Federal Reserve banks.
Ron Paul’s claim that we are paying interest to the Fed is definitely not true. His “End The Fed” book does not tell the truth. The Congressman claims if it were not for the Fed charging the government interest, the budget would be balanced and we would have no national debt. This is an outrageous lie.
The Fed rebates its net earnings to the Treasury. The interest the Treasury pays has always been returned. Money borrowed from the Fed has no net interest obligation for the Treasury. He can call yourself a Constitutionalist but his interpretation is wrong. The Federal Reserve is Constitutional. Ron Paul claims it is unconstitutional because “lawful money” is limited to gold and silver. He claims paper money is not allowed.
Congress has the right to coin money and to regulate its value. No court agrees with his interpretation of “lawful money,” or that paper money is unconstitutional.
Congress also has the right to make laws that are “necessary and proper” (Article I, Section 8, Clause 18). s does not have the specific power to create a central bank.
There is a legitimate debate over Fed policies such as the new round of “quantitative easing,” but to argue for the abolishment of the Fed is silly.
If you want to turn America over to foreign investors the best way is to “End The Fed” and go back to the gold standard. The United States does not have enough gold at current prices to return to the gold standard. Going back to the gold standard would essentially turn America over to foreign investors who have considerable reserves of dollar-denominated assets.
The FED was created to do much more than manage monetary policy. They facilitate the backstop of our entire financial system. Our weak dollar is not the result of the FED, but the result of very bad fiscal policy. It is Congress that authorizes and appropriates spending, not the Fed.
And there is little room for error. A 10% increase or decrease in the real value of gold seems very small when it is just a commodity. But under a gold standard that sort of shift can be accommodated only by changing the overall price level by 10%. A sudden 10% rise or fall in the price level is very destabilizing to the economy.
But we now know that fiat money can produce modest inflation rates, so our voters won’t undergo the pain of the mid-1890s, or early 1930s, just to stay on gold. And if you aren’t willing to undergo that pain, the system won’t work.

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Ron Paul Claims The Dollar is Worthless
The dollar is not worthless and our monetary system is the strongest in the world. The dollar is the world’s prime reserve currency, and since World War II it has dominated the currency markets. Your comments are filled with absurd fear-mongering.
The dollar index has been down many times before, it happens every time the economy fluctuates – which it always does. Currencies and economies will always fluctuate. Recessions are painful but in the aftermath the American standard of living has always increased.
Value of the Dollar
Ludwig von Mises was wrong when he predicted a collapse of the British pound. Ron Paul’s economic adviser in 2008 was Peter Schiff who ran unsuccessfully for the Senate in 2010. Schiff predicted an economic crisis would cause the U.S. dollar to weaken significantly, whereas the opposite occurred. Schiff stated the US Dollar should “completely collapse” after the dollar’s 2008 rally.
Some Austrian adherents have been labeled as “permabears” or “Chicken Littles” for continually making predictions of “catastrophic” financial crises, whilst making little allowance for spans of stable economic growth. For example in 2002, months before a multi-year advance in the US stock market, Austrian advocate Peter Schiff claimed that the US was at the early stage of an economic crisis and has frequently predicted an imminent U.S. dollar “crash” (which has yet to materialize). These claims have prompted Schiff to be labeled a “permabear” and to draw comparisons of his pronouncements with “stopped clocks” (which are right twice a day but useless nevertheless).
It is not necessary for the dollar to always be strong. A low dollar is actually also good for America. Never before haves so many foreigners bought goods from the United States, and never before has so many foreigners come here to shop. It’s not all negative news. A strong dollar is important when we are experiencing inflation, but now the problem is deflation.
Furthermore, the value of the dollar is not the only factor to assess the currency. In volume, for instance, the dollar is be far the most traded currency.

The race to the bottom in currencies could get more competitive.
The dollar has a nice head start, having dropped 16% over the past year against a basket of major U.S. trading partners. But the benefits of a weaker currency – cheaper exports, the ability to stick it to your creditors by repaying them with less valuable paper, abundant opportunity to blame your problems on hapless central bankers – aren’t lost on people outside this country.

Anyone want a rematch?
The euro is “objectively overvalued in comparison with other major reference currencies,” Eurogroup chairman Jean-Claude Juncker said Monday afternoon. The comment comes as the euro, up 22% against the dollar over the past year (see chart, right), trades near a 52-week high at $1.47 even as the Greek debt crisis threatens to erupt.
Juncker made the remarks in Strasbourg, France, as he and another top European official, Olli Rehn, tried to make the case that the Greek mess needn’t lead to a financial crisis.
But if Greece’s unbearable debt burden is the acute problem, the chronic one is the currency that ties together financially weak and strong states without giving the weaker ones any recourse to improving their competitive positions, short of sharp wage cuts.
That is a problem in putting Greece and Portugal in the same currency union as Germany and France at any rate, but the higher the euro exchange rate go the more intense the pain gets in the weaker states. Juncker suggested officials will have to consider this as they adopt reforms to what is obviously a broken union.
“There are colleagues in the European Council who think that the euro zone should have an exchange rate policy,” he said. “I’m more inclined to think that we should have an exchange rate policy because in a structurally globalized world an economic and monetary unit which doesn’t even have a vision of an exchange rate policy isn’t really in the long run going to have a satisfactory profile.”
Yet even with a prominent official calling for a weaker euro, it’s far from clear that markets will be in any hurry to comply. A run of weak numbers has economists referring as one to the “soft patch” in U.S. data, and few expect it to end any time soon.
As long as the U.S. economy wheezes and the Federal Reserve keeps interest rates near zero, money is likely to keep flowing to Europe, where rates are higher and the European Central Bank has signaled it intends to further tighten policy soon.
What’s more, while Europe obviously isn’t exactly setting any records in responding decisively to the Greek crisis, it’s hard to overstate the scale of problems facing U.S. policymakers – or their failure to devise something approaching a coherent response. This too is apt to keep funds flowing away from the dollar.
As Bank of America economist Ethan Harris writes in a note to clients Monday:
Despite the ongoing recession in the housing market, there is no serious discussion about how to resolve the crisis. Despite a 9% unemployment rate, there is no serious discussion about how to speed up the job market recovery. And despite clear signs of economic weakness, there is no let-up in the pressure for quick monetary and fiscal tightening. The U.S. needs to set a clear path to debt sustainability, but the timing of tightening should be dictated by the strength of the recovery.
Of course, Congress being Congress, what should happen is anything but a sure thing. As long as the Greek crisis stays on the back burner, the dollar looks unlikely to give up its lead spot in the race lower.

The lie meaning, that 88% of the money was used for foreign banks, or that Congressionally allocated bailout money was used in the discount window? He has the same FOIA data the rest of us do. As I have stated before, the rules of the discount window preclude banks that can’t show sufficient credit liquidity from utilizing them. This isn’t a “Ron Paul information only” thing here. I watched the CSPAN video where he said something to the above, and even HE misstated HIMSELF different on his Facebook page. On CSPAN he said roughly that 1/3 of the money lent in the discount window according to the FOIA data was lent to foreign banks. That’s true, and not out of the ordinary provided those banks have US assets and meet credit requirements. It DOES NOT mean they received TARP money

on Paul’s latest status: “My hearing went well today. Did you that 88% of the bank bailout money through the discount window went to foreign banks?”

Where in the world does he get his information from? Is there a “Ron Paul only” definition of discount window lending? The Fed’s discount window is limited to solvent institutions only and was not part of the bailout. See link provided for criteria.

The lie meaning, that 88% of the money was used for foreign banks, or that Congressionally allocated bailout money was used in the discount window? He has the same FOIA data the rest of us do. As I have stated before, the rules of the discount window preclude banks that can’t show sufficient credit liquidity from utilizing them. This isn’t a “Ron Paul information only” thing here. I watched the CSPAN video where he said something to the above, and even HE misstated HIMSELF different on his Facebook page. On CSPAN he said roughly that 1/3 of the money lent in the discount window according to the FOIA data was lent to foreign banks. That’s true, and not out of the ordinary provided those banks have US assets and meet credit requirements. It DOES NOT mean they received TARP money.
“88%” claim was attributed to the peak, which no one has crunched the data on, but the data ranges in the FOIA request data only are indicative of the “peak” being days, which is not an alarming thing in itself either. Bottom line here is he twisted the truth (and well, I consider the outcome to be a lie) because he took significant license by defining the “peak”, didn’t even mention on his facebook post the word “peak” at all, and then used the term “bank bailout money”, which is indicative of TARP and not the discount window. That’s how I know.

The FED was created to do much more than manage monetary policy. They facilitate the backstop of our entire financial system. Our weak dollar is not the result of the FED, but the result of very bad fiscal policy. It is Congress that authorizes and appropriates spending, not the Fed.

Ron Paul says that the Federal Reserve is not authorized by the constitution. The Supreme Court ruled in McCulloch v Maryland (almost 200 years ago in 1819) that the Necessary and Proper Clause allowed the creation of a central bank, because a central bank was a logical implication of the explicit power to regulate the value of money.

The Fed is already thoroughly audited in every area except two: monetary policy and dealings with foreign central banks. The only purpose of having additional audits of the Fed is to undermine its independence precisely with regard to these two areas. If Woods presents the best argument for doing so, the argument is very shallow indeed.

Whatever one thinks of the Fed’s policies in recent years–and there certainly are grounds for criticism–there is no reason whatsoever to believe that undermining its independence and putting the Congress in control of monetary policy–Ron Paul’s goal–would improve matters at all. Indeed, there is every reason to believe that full congressional control of monetary policy would be a disaster. Instead of getting Switzerland-like stability, as Paul foolishly imagines, the more likely result would be Zimbabwe-like hyperinflation. In the end, I agree with Barry Ritholz that whatever the Fed’s failings, those of Congress are vastly worse. As he put it in explaining why he didn’t testify yesterday:

I was invited to testify this week to the House Financial Services Committee about reform and regulation. I politely demurred. While I have been critical of the Federal Reserve (especially the Greenspan years), my beef with them has been their judgment and decision-making process. Congress, on the other hand, is a whole different matter. Its not their judgment, but rather, the fact they are owned not by the American people, but by lobbyists, and corporate interests. They have become structurally deformed. How weird is it for me, who spent so many pages blaming the Fed for a lot of the recent crisis, to find myself in a position of defending them from outside political pressure? The choice we face is the recent Fed regime of secrecy, nonfeasance, irresponsibility, and easy money — versus something possibly likely to be a whole lot worse. If the Fed has been a major source of problems, Congress is much worse. They were the great enablers of the crisis, readily corruptible, bought and paid for by the banking industry. I find Congress to be the worse of two evils — lacking in objectivity, incapable of producing legitimate regulatory review.

The FED haters don’t realize The FED haters don’t realize that speculative cycles occur not just from fiat money and a central bank, but from the use of leverage to fund the buying and selling of stock. To get rid of such cycles, dumping the central bank is not enough. Trading and speculation in stock must also be ended – however I don’t see von Mises types arguing for an end to capitalism any time soon. Business Cycles. You’d think we never had business cycles or speculative bubbles before the Fed was invented. Tell that to John Law.

If not for unprecedented actions by the Ben Bernanke-led Federal Reserve, the United States economy might be mired in a depression. Already, the GAO reviews the central bank’s supervisory and regulatory functions. But a bill introduced by Representative Ron “End the Fed” Paul, a Texas Republican, would also subject monetary policy and discount window operation to GAO audits. The bill has nearly 300 co-sponsors and as well as conceptual approval by Barney Frank, chairman of the committee.

The Fed views these expanded audits as threats to its independence from political pressure. As Alvarez put it, “These concerns likely would increase inflation fears and market interest rates and, ultimately, damage economic stability and job creation.” For instance, when it comes time for the Fed to start withdrawing monetary stimulus from the economy despite continuing high unemployment, the last thing it will need is haranguing from Capitol Hill that it’s moving too fast, too soon.

And if the Fed becomes the regulator of systemically important financially institutions, as the White House advocates, it’s easy to imagine how the central bank would be subject to even more intense and frequent grilling from an emboldened Congress. Now the move for expanded Fed audits results from both the Fed’s unprecedented efforts to end the financial crisis and its regulatory failures that contributed the financial crisis. The audit bill should be a wakeup call to the central bank that the more it gets involved in the regulatory process, the great future scrutiny from a skeptical Capitol Hill.

And it’s not just Congress. World Bank President Robert Zoellick says that after reviewing the Fed’s regulatory performance, he’s concluded that it’s a bad idea to “vest the independent and powerful technocrats at the Federal Reserve with more authority.”

Past regulatory failures have already undercut confidence in the Fed – “technocrats” is hardly a compliment — and breaking new regulatory ground in the field of systemic risk increases the chances for further erosion. As it is, the Fed is already buckling to congressional pressure. Alvarez told the committee that the Fed would be “happy to work” with lawmakers on ways to release names of companies that borrow from the central bank, perhaps after a period of time.

Not only should Congress reject the idea of expanded Fed audits, it should reject the idea of expanding the Fed’s role as regulator. If need be, create a new regulatory agency or council. Let Team Bernanke focus on executing its stimulus exit strategy and strengthening its reputation as an inflation fighter.

Since Burns was a Republican who had been appointed by Richard Nixon, criticizing him wasn’t really in the Republican playbook. But Ron was adamant that inflation had no other cause than too much money and that Burns could stop it if he wanted to. Most economists now agree with this view. That period of inflation ended only when Burns’s successor, Paul Volcker, slowed growth of the money supply.

What Happens If You Break Up The Federal Reserve?
I looked in vain through out the book for answers to many simple questions. The author does not want to replace the Federal Reserve with anything. He just wants to walk away from the present system and never tells readers:

  • How are checks going to be cleared?
  • Who will hold the gold we have for collateral from other countries?
  • Who will regulate the money supply to fight inflation?
  • How will banks earn interest on overnight deposits and who will provide overnight liquidity?
  • How will funds be moved between countries?

America needs a federal banking system like all industrialized countries who have copied ours.

I do not believe this is a “worst nightmare” for the Chairman of the Federal Reserve Board, Ben Bernanke. There is already full disclosure of Fed lending and its chairman routinely testifies before Congress.
Bernanke’s response to Paul’s conspiracy theories and strange claims will not change, and we went through this last June.
The Federal Reserve has already been audited over 100 times and Ron Paul’s accusations are lies. Bernanke told him: “Well, Congressman, these specific allegations you’ve made are absolutely bizarre. And I have no knowledge of anything remotely like what you just described. . . The General Accounting Office has always had complete authority to conduct audits, and they have never hesitated to use that authority.”
Paul asked if Congress can get “the results of every agreement, every single loan made by the Fed.” Bernanke said “Of course you can. It has never been a secret.” Paul accused the Fed of hiding information about past activities, and Bernanke said “We produce complete transcripts of every word said in the FOMC meetings. So you have every word in front of you.”

The entire agenda of Rep. Ron Paul (R-TX) and his radical libertarian allies is a series of silly conspiracy theories which exploit very gullible people. He was just on the Alex Jones radio show and speculated that America was behind the new tension between North and South Korea. Why would the United States do that?
According to Paul, it is to boost the dollar and help our economy. He claims the United States wants a war, but then again, he always makes that claim. He says: “Doing it deliberately, and sort of orchestrating this in order to have the military-industrial complex benefit and the dollar temporarily benefit….” The Texas Congressman claims the RAND Corporation wanted a major war two years ago to help defense contractors and the economy.

So what would would the Free Market have done with interest rates during the sub-prime mortgage crisis? Normally when the economy shows signs of a recession the Fed will reduce rates to head off the recession, but rates were already at historic lows at the urging of the Bush administration. What does the Free Market dictate in this situation?

The House this week passed H. Res.1735, “Condemning North Korea in the strongest terms for its unprovoked military attack against South Korea.” The vote was 403 to 2, with Rep. Ron Paul (R-TX) being in opposition. Paul is instead blaming the United States and claims we are behind the attack because wars help the American economy.
I proudly belong to the Republican Party of Abraham Lincoln, not Ron Paul. Former Gov. Mike Huckabee (R-AR) says the person behind the Wikileak disclosure is guilty of treason and should receive the death penalty. Ron Paul is today defending the leaker.

Conservatives Leaders React: The John Birch Society at CPAC

The annual Conservative Political Action Conference (CPAC) ended last Saturday, but right wing spokesmen are continuing to denounce a controversial decision made by its host, the American Conservative Union. For the first time, the John Birch Society (JBS) was allowed to co-sponsor CPAC, and several leaders on the right said the decision gave ammunition to enemies of the conservative cause.
In discussing the JBS, the late Senator Barry Goldwater (R-AZ) said “We cannot allow the emblem of irresponsibility to attach to the conservative banner.” Now the American Conservative Union has brought them to the head table.
Below are quotes from various conservative leaders on the JBS participation at CPAC.
Mark Levin, author, “A Conservative Manifesto”:

I was invited to be the opening speaker at Saturday’s CPAC session. I had accepted but then, to my amazement, I learned the John Birch Society would be one of many co-sponsors. This takes the big-tent idea many steps too far for me.
So, I withdrew. Apparently, others were not so moved. That’s fine. But it wasn’t for me. Bill Buckley and Barry Goldwater, among others, chased the Birchers from the movement decades ago. And they’re not a part of the movement. So, to give them a booth at CPAC was boneheaded.

Rich Lowry, National Review:

The John Birch Society is co-sponsoring the American Conservative Union’s big annual conference. The Society’s paranoia has outlived the Cold War that inspired it: A recent perusal of its website turned up the same old dreary theories about David Rockefeller and the New World Order, denunciations of the ‘American colonial enterprise,’ and hints that maybe our soldiers should not follow orders in the pursuit of that enterprise. We have no idea what the ACU is thinking but assume that the Birchers are eager to ferret out any Communists in its ranks.

Scott Johnson, The Weekly Standard:

ABC’s Jonathan Karl reports that this year’s CPAC event was co-sponsored, unbelievably to me, by the John Birch Society. Karl quotes some of William F. Buckley’s characteristically vibrant denunciations of the JBS. ‘Two years after Buckley’s death,’ Karl observes, ‘the John Birch Society is no longer banished; it is listed as one of about 100 co-sponsors of the 2010 CPAC.
Karl reasonably asks: ‘Why is the Birch Society a co-sponsor?’ ‘They’re a conservative organization,’ according to Lisa Depasquale, the CPAC Director for the American Conservative Union, which runs CPAC. ‘Beyond that,’ she told Karl, ‘I have no comment.’ Additional comment is required, and if Depasquale will not provide it, I will. This is a disgrace.

John Hawkins, Right Wing News:

I visited the JBS booth at CPAC and was told the Council on Foreign Relations is engaged in some sort of secret, bipartisan effort to build a one world government. Then, I asked about the North American Union. Not only do they buy into it, he gave me some sort of movie to watch. Honestly, a group like the John Birch Society shouldn’t be allowed to be a sponsor of CPAC. . . I suspect the kookier fringe brings in so much money and energy for a group the size of the Birchers that they can’t bear to give it up. Conspiracy theorists and fringe groups are death for any mainstream group.

Ryan Mauro, Pajamas Media:

CPAC is being co-sponsored by the John Birch Society. Every liberal commentator needs to send a thank-you note to CPAC’s organizers for that monumentally stupid decision. . . CPAC has made a major PR mistake in forming this alliance with JBS. It won’t be long until the media puts all those taking part on the defensive, forcing the organizers to spend precious time explaining this move. From now on, when I hear the acronym ‘CPAC,’ I won’t think ‘Conservative Political Action Conference.’ I’ll think ‘Consciously Providing Ammo to Critics.’

Erick Erickson, Red State:

I think the JBS’ers are insane and I was dumbfounded that they had a booth.

The JBS was established in 1958 and reached its peak in 1965 with 60,000 members. The founder was candy maker Robert Welch and his brother’s company is best known for the “Sugar Daddy.” Welch often spoke of the dangers of fluoridated water which he claimed was a Communist-backed plot to weaken the minds of the American public.
The organization was long headquartered in the birthplace of Joe McCarthy, Appleton, Wisconsin. For the past five decades they have attacked and defamed practically every major political figure in the United States.
In his book “The Politician,” Welch said President Dwight Eisenhower was “a dedicated and conscious agent of the international communist conspiracy,” and the U.S. government was “under operational control of the Communist party.” He later amended this statement to say Communists only had “50-70 percent” control of the government.