Federal Reserve adding another nail to the coffin

The Federal Reserve is adamant about meeting its mandates so much so that it will utilize whatever statistics make it appear their policies are working. Ask anyone who exists in the real world and they will tell you that the ‘official’ inflation rate as reported each month by the Bureau of Labor Statistics (BLS) through the consumer price index (CPI) is out of whack with what they are paying. The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Not to worry. Federal Reserve Chairman Ben Bernanke agrees with you that the core CPI numbers are too unstable and unreliable. Forget the fact that core CPI excludes food and energy prices already, the result was still too high to justify the Fed’s actions. So Bernanke has switched to personal consumption expenditures (PCE) as a baseline for setting monetary policy. PCE is supposed to better reflect changes in people’s buying habits. Historically it runs about 1/3 lower than CPI.

I won’t bore you with all the technicalities involved with the methodology utilized in measuring inflation as you can find it all over the web. Suffice it to say that employing a statistical measure (PCE) that consistently runs 1/3 lower than the previously utilized measure (CPI) which is only a fifth of the real inflation rate as measured by the real feel pain in consumer’s wallets can not lead to anything good. The Fed has a dual mandate of price stability and full employment. Anyone following the unemployment numbers is aware of the fallacy of their measure as well. It only stands to reason that the Fed use artificially low measures of inflation to go along with the massive block of unemployed or underemployed Americans. It’s not at all unrealistic to take the ‘official’ unemployment and inflation numbers and multiply them by a factor of two or three, possibly even more, to get a true picture of our economy.

So why would the Fed engage in such destructive practices? The incessant flooding of the market with liquidity hasn’t seen the corresponding increase in velocity the Fed desires. Simply put, the money isn’t circulating throughout the economy, it’s sitting dormant. The Fed sees this as a problem. They respond to low velocity with further stimuli in a vicious circle of chasing increased economic activity. Economic activity is what fuels the measure of Gross Domestic Product (GDP). Here we go with another misleading measure of the economy. High volumes of economic activity (money changing hands) drives a high GDP number. Along with the artificially manufactured low inflation and unemployment numbers, the Fed wants an artificially high GDP number. This is the broken window fallacy of Keynesians. Economic activity just for the sake of appearing productive doesn’t grow the economy. Only economic activity that increases wealth is productive.

Gas station security guards for Detroit?

Yet another example of the failed progressive experiment in the city of Detroit.

After Wave Of Violence, Councilman Wants Gas Station Security

A standard, poorly thought out reaction to a symptom rather than addressing the cause. Crime is a result of the failure of Detroit. Placing a costly burden on business owners to act as a proxy police force is just that. The result will be less competition and fewer gas station retailers with-in the city who simply will refuse to absorb the cost.

Just amazing that a city with the highest per capita wealth and a population of 2 million in 1950 has now fallen to 700,000 and is the 2nd poorest city in the nation behind only Cleveland. Can you imagine a city of 700,000 residents that doesn’t have a single national chain grocery store? It’s true.

Violent crime is way up with the city seeing its 50th homicide already in 2012. That’s up 25% from last year.

The Detroit Public School system can claim the worst performing students in the nation. With that feather in their cap, what does the DPS system do? Hand out raises, of course.

The city has been embroiled in a debate as to whether or not to appoint an emergency manager to oversee its finances as the city faces a general fund budget shortfall of $9.5 million by May . They have a financial review team in place and it was told it must comply with the Open Meetings Act and hold deliberations in public. What did they immediately do? Create a sub-committee to hold private meetings as they are not subject to the Open Meetings Act.

The State of the Police State

Can you name the country with the lowest violent crime rate in the world? Perhaps a tyrannical regime in which the people are ruled with an iron fist and fear any reprisal from violence? A strong police state nation in which crime is simply not tolerated? You may be surprised to learn it is a country that doesn’t even have a full-time standing army. Yes, it’s Switzerland.

Why is this the case? Because Swiss citizens are well-armed and well-trained in how to use their weapons. From a BBC report which you can read here, comes this statement.

The country has a population of six million, but there are estimated to be at least two million publicly-owned firearms, including about 600,000 automatic rifles and 500,000 pistols

Every male Swiss citizen serves in the military for a short time each year for the better part of their lives. They keep their rifles at home. Women are encouraged to own a firearm, but not required. The point is that deterrence works wonders. Gun crime rates are so low that statistics aren’t even kept.

Did Panetta gaffe? Did we win the Afghanistan war? Is the leaked NATO report wrong?

Did U.S. Defense Secretary Leon Panetta commit a gaffe this week when he let slip early the plan to accelerate the pullout from Afghanistan? After all, the move comes as a surprise to Kabul which was still operating under the end of 2014 timeline. What does this mean? Has stability in the region exceeded expectations thus justifying an earlier than planned exit? In fact, the opposite is likely true. A NATO report entitled ‘State of the Taliban 2012′ has leaked and purports that the Taliban are winning the war with the Afghan people and are prepared to re-establish control as soon as the U.S. steps aside. The U.S. and NATO dispute this claim.

Of course, nothing is ever as it seems when Afghanistan is involved. We claimed to enter the conflict (because it’s another undeclared war) in response to the 9/11 attack in order to eradicate the Taliban and subsequently Al-Qaeda and Usama Bin Laden. That’s the narrative for public consumption at any rate. The truth is far from it and the U.S. pullout without completing the stated mission vindicates it. Let’s review.

In 1995, Turkmenistan and Pakistan were negotiating a proposed pipeline with an Argentinian company called Bridas Corp. in order to secure a pipeline from the Caspian Sea (which is landlocked) to an open sea port. The logical path was through Afghanistan, however, a civil war was still underway in the wake of the Russian pullout when they lost their war there. This pipeline is called the Trans-Afghan pipeline (TAPI) and has been dead or alive in varying degrees for decades now. It could not be built without stability in Afghanistan. UNOCAL was the primary U.S. corporation in line to benefit from this pipeline. UNOCAL had strong ties to the Bush administration. In 1998, a UNOCAL executive named John Maresca testified in front of Congress as to the need for pipeline expansion in this region. Here is a good primer on the entire history of the pipeline – http://www.pm-pipeliner.safan.com/mag/ppl0411/r06.pdf.

Here is an excerpt from a Chicago Tribune article from March 18, 2002. Read it here.

If one looks at the map of the big American bases created for the war, one is struck by the fact that they are completely identical to the route of the projected oil pipeline to the Indian Ocean

Did you know that Hamid Karzai, the Afghan President, is a former UNOCAL employee? The situation has evolved immensely since the early 90′s when it started as UNOCAL is now completely out of the project. Karzai is considered a U.S. puppet installed by Bush and will likely be replaced once the Taliban retake control of the country.

Fast forward to 2001 and we had the 9/11 attacks. The perfect opportunity to enter Afghanistan and secure the region for our strategic energy policies. I know what your thinking. Another 9/11 conspirator. Not at all. My position has always been one that our government is an opportunistic one. They take advantage of geo-political events in order to execute policy goals. Creating a false flag event such as a government planned and executed disaster such as 9/11 would take too many people involved to ever keep it quiet. Do they ‘allow’ events to happen that they have knowledge of if it will benefit them? Do they actively engage as with the negotiations prior to 9/11 with Bin Laden and the Taliban over pipeline access in exchange for Taliban recognition? Both Clinton and Bush played ball here so it’s not at all a partisan issue. You decide.

U.S. seeks to expand its role as global cop

The White House has laid out our nations strategic defense plans going forward and they reflect the largest change in focus in decades. No longer will we expect, or have the ability, to fight two major wars on different fronts simultaneously. Nor will we plan to engage in nation building, long-term occupations that require unsustainable investments of troops and supporting infrastructure. Primarily, this is budget-driven. In fact, many will argue that our nations debt is the biggest threat we face as a nation. For the record, our Commander-in-Chief has identified radical extremists and rogue nations seeking WMD’s as our biggest threats.

While we have been focused on Iraq and Afghanistan for the past decade, the Middle East will no longer be our sole focal point. Obama sees us as expanding the war theatre essentially across the globe. That includes the U.S. homeland. The recently passed NDAA highlights that America itself is now considered a battlefield and that the rules have changed. To combat the threat of homegrown terrorists, American citizens can now be indefinitely detained without charge if they are suspected of terrorist activities. No trial. No civil rights. The need for GITMO has now been eliminated completely as we don’t need an offshore holding area anymore. The entire globe has been identified as a war zone and no one is immune from these procedures.

The report outlines that our challenges will become much broader in nature. It specifically mentions the entire Asia-Pacific region. Cyber threats are expected to become more commonplace. The idea is to not leave any potential front unidentified so as to leave all options open. In fact, it can be said that Obama has assumed the role of CEO for global security. He’s actively pursuing a sales pitch.

Across the globe we will seek to be the

security partner of choice, pursuing new partnerships with a growing number of nations .–

including those in Africa and Latin America

The Constitution mandates that the Commander-in-Chief will direct the national defense of the United States. Don’t remember reading anywhere that we should be moonlighting as  a ‘security partner of choice’. Choice meaning these foreign countries can pick anyone out of the Yellow Pages for security purposes, but Obama would like it to be us.

The “New Great Game” of natural resources control is U.S. foreign policy unless Ron Paul wins

The foreign policy of the United States may have seemed a bit out of focus at times in the past few decades, but it’s now clear where we’re headed. With the recent release of the United States Strategic Defense Initiatives, the administration has now officially wrapped its arms around what has been somewhat of a hit and miss strategy toward securing energy resources for the future. The President has announced a shift in focus toward the Asia-Pacific region now that the Iraq war has ended and our occupation of Afghanistan is scheduled to end in 2014.

I’ve posted several times as to the real reason we have made Afghanistan the longest running military engagement in the history of the United States. It’s all about securing natural resources access. Read the post here. Or the original post here. In fact, here is an excerpt of testimony in front of a Congressional subcommittee on Asia/Pacific relations from 1998 by an executive from Unocal by the name of John J. Maresca.

I would like to focus today on three issues. First, the need for multiple pipeline routes for Central Asian oil and gas resources. Second, the need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements to the conflicts in the region, including Afghanistan. Third, the need for structured assistance to encourage economic reforms and the development of appropriate investment climates in the region. In this regard, we specifically support repeal or removal of section 907 of the Freedom Support Act

He goes on to talk about the options available to the U.S.  for pipeline options.

The second option is to build a pipeline south from Central Asia to the Indian Ocean. One obvious route south would cross Iran, but this is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route is across Afghanistan, which has of course its own unique challenges. The country has been involved in bitter warfare for almost two decades, and is still divided by civil war. From the outset, we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, lenders, and our company

Still not convinced? How about this statement made by Dick Cheney to the Guardian.

In 1998, Dick Cheney, now US vice-president but then chief executive of a major oil services company, remarked: “I cannot think of a time when we have had a region emerge as suddenly to become as strategically significant as the Caspian.” But the oil and gas there is worthless until it is moved. The only route which makes both political and economic sense is through Afghanistan

The New Articles of Confederation

What is the greatest threat to our liberty? Central government. What is the driving cause behind our deficits and debt? Central government. Those are by far the two biggest issues we face today as Americans. Did I forget about a terrorist threat or a rogue nation with a nuke? No, but they aren’t the same. Terrorists may hit us, and while that will always be horrific, it will never bring America down. Neither is a nuke a practical threat. Any nation capable of launching enough to take us down would meet the same fate. A rogue nation that launched one, assuming it wasn’t intercepted, would be obliterated in response. Our known and direct threats are to our rights and our property and the federal government is behind both.

What is the solution? Based upon think tanks, economists (with the obvious exception of Keynesian inspired), bloggers, talk shows and even responses I’ve received to my posts, it is to elect true conservatives and get back to the Constitution. I disagree for several reasons. Let’s take electing true conservatives. Can they survive an ascent through party ranks while retaining principle? Remember, the establishment runs the leadership of both major parties and controls all pivotal appointments. A reformer from with-in is a threat to both parties.

What about getting back to the Constitution? For that, we must consider an even larger question. Why does the Constitution exist? Was it in response to our victory in the Revolutionary War? No. The Treaty of Paris ending the Revolutionary War didn’t occur until 1783 years after the Constitution was ratified. Was it to protect our natural rights after declaring our independence from Great Britain? No. Of course, the Declaration of Independence was passed just after a year into the Revolutionary War which began in 1775.

The Constitution came to be to protect the power of the State. Yes, it’s true. We already had the Articles of Confederation in place which placed the emphasis on the rights of the people and more power to the State’s with a very limited Federal Government. For various reasons, the Articles failed and the response was essentially to start from scratch and draft the Constitution. History shows us that they went too far in promoting the State and a Bill of Rights was required to protect the people’s liberty.

The Ron Paul foreign policy question

I haven’t spent any time delving into the debate surrounding the foreign policy of Ron Paul, but since election year is upon us now seems as good a time as any. Paul supports a foreign policy based upon non-intervention, not isolationism. Of course, many even debate that, but that is not my focus today. He is on record that America has reaped much of what it has sown by our policy of meddling in the affairs of foreign nations. Thus, he supports no foreign aid whatsoever and no compacts or allegiances either. Then there is the 9/11 debate in which he believes we helped to exacerbate our tragedy by inflaming militant Islam with our interventionist policies.

The answer appears to lie in what importance you place upon the threat posed by radical Islam. We are said to be in a war on terror. This can be true or untrue depending upon your interpretation. So much of the conflict in the world today is all about interpretation. The fundamental challenge for the Muslim world today is the interpretation of the Quran and Islamic beliefs. For not only does the Bible promise the Jews their Holy Land, so does the Quran. The Jihadists of today yearn for days gone by when true Islam ruled. These Islamic Fundamentalists reject the Western culture as well as Jews and Christians who don’t convert to Islam. This is where Paul is wrong on his assertion that adopting a policy of non-intervention will serve to pacify the Arab world and prevent terrorist attacks on the United States.

Islamism rejects our way of life. The very fact that it exists, not just the notion of us intervening in Arab affairs. Paul’s philosophy would be acceptable to a majority of the Arab world. Afterall, as I said earlier, even the Quran itself recognizes the fact that the Jews were promised their Holy Land. Their objection lies in Muslims recognizing and submitting to Jewish rule on their own land. They’ll never do it as we’ve seen that still today they refuse to recognize the State of Israel because of where its border lie. They’ll allow a Jewish settlement in Palestine, but never a State. A Paul non-intervention edict would serve peaceful Muslims well.

When liberty is stolen, can the ‘right’ people legislate it back?

I said at the end of my last post that I will start putting forth my ideas on what to do about saving liberty in America. I’d like to start by referencing a post from another writer at The Burning Platform. I like the post but I point it out because I can’t agree with the solutions provided. Please read on.

“A general dissolution of principles and manners will more surely overthrow the liberties of America than the whole force of the common enemy. While the people are virtuous they cannot be subdued; but once they lose their virtue they will be ready to surrender their liberties to the first external or internal invader… If virtue and knowledge are diffused among the people, they will never be enslaved. This will be their great security.” — Samuel Adams

I don’t have to tell you that the biggest problem in America is malaise. Last week’s Republican debate drew approximately 3 million less viewers than X Factor. People can tell you what Chas Bono was wearing on Dancing With the Stars last week, but they don’t know that the federal government has made it illegal to give your garden vegetables to your neighbor. It is scary, shocking, and terrifying how far this nation’s people have fallen since we were the world leader in, well, everything worth being the world leader in.

It’s time for a Jeffersonian rebellion

I was working on a massively long post that breaks down the whole litany of election issues we face next year until I had an epiphany. Everybody has heard enough on these issues already, so I can replace that post with this sentence. We’re all wasting precious time.

We can spar all day long about who is the best candidate. Makes no difference what your party affiliation is or your political ideology either. We simply aren’t asking the right question. It isn’t how to beat Obama. It isn’t about taxes or spending or some combination thereof. It isn’t about any of the very important issues that have been debated seemingly endlessly. The question we should be asking ourselves is this. What are we going to do about saving our liberty?

No question you can raise as an American is more important. Those are the stakes if we continue down the path we’re on. The worst part of it is that we’re doing so willingly. More and more Americans are buying into the notion that government is the solution to what ails us. Democrat or Republican, makes no difference. Our Federal Government is entirely too powerful. What is your candidate going to do about it? Do they have a plan? Not just a plan to cut spending, a comprehensive set of reforms to restore the Federal Government to its enumerated powers. This is the key issue of this election, yet you’ll never hear that from either major party.

My logic isn’t at all complex. Generally, we’re concerned with maintaining a clear balance of power amongst the three branches of the Federal Government. That balance is dynamic and fluctuates as a result of the election process. What has become dangerously skewed is the balance of power between the Federal Government and the States, and ultimately, the people. The enumerated powers had intended to ensure that we the people wouldn’t become enslaved to a master. Thomas Jefferson had the foresight long ago to see what would befall us.

The natural order of things is for Liberty to yield and government to gain ground – Thomas Jefferson