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Divided Nation or Divide the Nation?

During my lifetime there have been repeated comments on occasion about how the US was divided into two groupings based on political outlook.  It always was about more than just Democrat or Republican.  It broke along conservative versus liberal perspectives in the most general way.  This talk was first more rampant during the ’60’s as there were those who had an international and socialist outlook on the world and  US society counterbalanced by those who adhered to a much more traditional look at our nation and its position in the world.  Those suggestions that we should divide the country and let the left and rights go their separate ways have been around from our very birth as a nation. 

The first serious discussions of secession did not come from the South but rather from the New England states in the early 19th century.  That was the time period when the English and French were both harassing our shipping and the Embargo Act was being enforced half heartedly to restrict foreign trade.  Many in Massachussetts and Connecticut were very upset because their livelihood was dependent on foreign trade and they felt the US government was not doing enough to protect American shipping and they were really mad about the Embargo Act which attempted to shut down all trade with Britain and France.  There were serious rumblings about secession by those states but the international situation improved and the pressure of the issue faded before the momentum built.  Free trade was restored and the matter dropped.  The next serious talk of secession was in the 1850’s shortly before the War.  There were many scholarly works on the topic.  Sound legal arguments could and were made that the individuals states were sovereign prior to the Constitution and still retained their complete sovereignty after the Constitution was adopted.   Just like a country is free to leave NATO if it chooses; the argument was made that the Constituion was a freely made compact among equals and that each retained the right to withdraw.  Obviously there were differences of opinon. 

During the ’30’s the gap between right and left was even more  intense than it is now.  The worst atrocities of the Soviets and Stalin were not known or were intentionally not reported by sympathetic observers.  Of course the observers of those days went there with preconceived notions about the Soviets or they would not have been allowed to go in the first place and what they observed was strictly limited to what the Soviets wanted them to see and hear.  Those on the right in the ’30’s felt very much left out because they were then outnumbered in Congress and the White House.  The radical labor movements were  more active and vocal than they are today.  Again there was discussion about whether the nation could survive as one unit because the vision of each camp was so different. 

Now there has been renewed discussion over the issue of the separation of the nation into two parts.  There were the recent comments of the Texas Governor about secession.  I heard so many commentators saying both jokingly and seriously that the issue had been decided by the War Between the States.  Legally that is not true at all.  The Yankess won the war.  The South surrendered.  That was all that was established as a result of that war.  Please look up and read some of the arguments made about secession before the war.  Many Yankees were in favor of letting the South go and supported the legal and Constitutional arguments that they had a legitimate right to do so.   As always the real facts are more complicated than  the historic sound bites crawling across the bottom of CNN’s screen.

Now the arguments for division are resonating again.  The Texas Governors has even gotten press for his off hand comments about secession.  Maybe we would all be happier if we did divide the nation into two camps.  Why have the turmoil and disruption of contrary and very different views of our future.  Those views do not appear reconcilable at the moment.  There is a sensible way to do it without the necessity of another war.  California, and perhaps Oregon and Washington along with the New England states and one or two from the Midwest like Michigan would make a natural fit.  They are ideologically aligned.  That could be the Coastal US.  The South, most of the Midwest and the West could be Continental US.  We wouldn’t have to abide  any longer those views each camp finds so repugnant about the other.   The disagreements between these two region are profound as we all know and should be intelligent enough to recognize.  I can’t fathom a state that would put Charles Schumer in the Senate and I am sure some on the Upper West Side would assess me as worse than a yokel.  Each of these new nations would have ample natural resources and access to the oceans of the world.  Those contentious issues would be resolved in a more sensible and less threatening way.  Everyone could be happy. We wouldn’t have to constantly be blaming “them” for everything that was wrong.  Each new nation would reap the rewards of its vision of the world and each would bear the consequences of bad policy.

The Coastal US could open it borders and allow illegals complete entry to their nation and grant immediate citizenship if they liked.  They would be free without a filibuster to raise taxes on individuals and companies as high as they liked.  They could punish the rich to their hearts content and even redistribute the wealth on any basis they thought prudent and their government could take over and run any industry for the good of the people.   They could run up debts as they liked and have deficits as long as they wanted and provide free government run health care for everyone from cradle to grave.   Those trouble makers with access to firearms would be a thing of the past and they could outlaw any gun ownership–only the government would be allowed to have any weapons.  They could bypass the paperwork hassle of the proposed Card Check uni0n sign up system and mandate that everyone had to join a union at age 18.  They could have judges on their courts who couldn’t win elections as legislators and who love re-writing the law as they believe it should be to conform to their world view and cultural instincts–activist from head to toe.  Coastal could be as “progressive” as it liked without anyone trying to step on the brake.  The New York Times could even be subsidized by them.  Everyone could be made to drive a green car and install solar or face jail time.  They could do all this because the left in Coastal would have such an overwhelming majority that there would be no opposition and they wouldn’t have to give a moment’s thought to the opinions of the yokels in the hinterland.  They could terminate their war on terror for real because they would be such a feel good and groovy place that no one in the world would dislike them.  They could offer a blanket apology for everything and anything to the entire world.  It would be their political nirvana.  If all those ideas are good ones then they would prosper and be quite happy and good riddance to those troglodytes in Continental. 

The Continental US could shut down its borders, deny any benefits to illegals such as schooling and free health care and deny citizenship to illegals born here as the original 14th amendment intended.  They could lower taxes on individuals and companies.  They could reform health insurance by requiring a vigorous competition in a free market.  The governmental powers would be restricted and required to be those essential to the public good and safety and regulators and bureaucrats would be reined.   The taxes of the Continental US would be very low so as to allow the maximum amount of tax revenues to be collected at the state and local level to be used and utilized as each state and locality saw  fit.  Contintental could burn coal to its heart’s content and drill baby drill.  Judges would be required to interpret the law and never allowed to mandate new law from the bench.  Debt and deficits would be limited against projected revenues and the books of Continental would have to be kept just like the books of any public company.  No “off  book” accounting would be allowed.  Again the majority would be large and there would not be the inconvenience of stalmating debate with the opposition.

What not let everyone have the nation and the future they wish.  All things and Empires come to an end.  I can’t imagine anything I have in common with Bernie Sanders or Carl Levin and I am sure they feel the same way about me.  So why put up with each other?  It is not written in the stars we have to co-exist in the same nation. 

The ten year T-bill rate is now up to 3.35.  You give some thought to why that is happening.  Your analysis will not comfort you about the future of our economy.

Read more at www.olcranky.wordpress.com and the commentary on Texas secession written months ago.

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Budget Alternatives That Follow the Constitution

Ther are vocal defenders of the proposed budget of the new administration and a fair number of critics.  The defenders constantly harp that those opposed to the budget are simply saying no and not offering alternative solutions to fiscal and budgetary demands.  Well, I am happy to offer some thoughts on how to change the budget and reduce the future deficits.   I believe these few suggestions are only an example of the direction the budget could take that would improve our economy and enhance our federalist system of government. 

First we could require that every agency and department of government reduce its staff by 3%.  Yes, you heard me right, lay off people.  There would be no exceptions.   The Pentagon would not be required to reduce mililtary staff in uniform but the civilian workers there would be reduced.  Those workers remaining would take up the “slack” to the extent that there really is any slack in the first place to make up.  I personally doubt any of those government workers are all that over worked compared to those toiling in the private market place.  They have cushy jobs and they damn well know it.  Some would say “but what about the FAA or Homeland Security”?  I would answer that I firmly believe that any organization that large is ripe with more than 3% “dead wood” in the employee stock.  I am quite confident that the suprevisors could think of at least 3% of folks that they would love to can now but can’t because of all the restrictions on firing federal employees.

Second, every department and agency would be required to reduce its budget by 5%.  I mean actually reduced year over year without those phony adjustments that they put in every year for inflation.  As you all know right now they plug those increases into each year’s budget and if the increase is reduced that is considered a reduction in the Federal budget.  Don’t we all wish we could handle our personal budgets that way.  I mean in plain language that if a budget for a department was 1 billion in ’08 that it would be $950,000,000.00 for ’09.  That is a real deduction just like private business has to endure and private citizens do when their revenues are lower. 

Third, I would require Homeland Security to remove all illegal aliens from the public school systems around the country.  The Supreme Court ruled in Tyler v. Roe that they were permitted to attend schools.  But that ruling did NOT say they had a right to be in the country.  You should read that opinion for yourself by the way.  You don’t have to be a lawyer to see the tortured language and reasoning of the majority in the opinion to realize how absurd that ruling was.  In Texas alone more than 5 billion dollars are expended annually to pay for these illegals–and that estimate is way on the low side.   Don’t tell me it can’t be done.  Of course it can.  Every one of those children and their parents are committing a fraud on the citizens of the respective states each time they attend school.  It is a criminal fraud.  If you aren’t a citizen are you entitled to a loan from the Home Loan Administration?

Fourth, the following departments of government would be eliminated and shuttered: Commerce, Education, Labor and Energy.   I challengedyou to think long and hard about what benefit you receive from any of these agencies of government.  The census can be done by another branch or even the post office.  You are reminded that the Constitution has no provision whatsoever for the Federal government to be involved in the educational process.  That is a matter that is a State issue and responsibility.  It is also a right reserved to the States under the 10th amendment.  As part of this process I would require that every dime that the Federal government is spending on education in whatever form be excised from the Federal budget through tax cuts on individuals and business.  That money would not be collected in the first place and would remain with the people and the respective states.  Then the states would be free to raise their taxes as they saw fit to offset the loss of Federal funds, penny for penny if that is their wish.  The same money would be spent on education but all the decisions and the power to make decisons regarding the use of those funds would be at the State level where it is supposed to be under the Constitution in the first place.   If some states did not wish to raise their taxes in an offset amount that would be their choice.  This would put a stick in the spoke of  “national” education standards.  I for one want there to be 50 different standards.  The genius of the Federal system is the ability to innovate and experiment by all 50 states.  Let’s have that laboratory of ideas bubbling and boiling all the  time. 

That is only a few ideas and a starting point.  I bet you can make your own list of agencies and departments that could be downsized.  If the Tax Code were simplified how many employees could be canned at the IRS?   It is only because it is about 70,000 pages long that it needs that many employees.  If the standard form was only two pages long how many employees would be needed to process our returns?  How many of you have had a dispute with the IRS and sent them documents only to receive something back, late, that is non- sensical or unrelated to the issue at hand?

Lastly, we don’t need to spend all those trillions on bailouts and handouts.  If a company or bank is a loser then let it fail and the regulators deal with it or the bankruptcy court.  I for one do not buy the argument of those crying wolf in Washington.  They do that to advance their own agenda.   They rightly believe our fear makes us more maleable.   The market would have already repaired most of the damage done by now and the cost certainly wouldn’t have been any worse than the trillions Government, Inc. is expending. 

I would invite anyone to add to my thoughts on cutting the budget and deficits.  We are not sheep and I trust the people.  We  have some good ideas also even if we are not the “smartest guys in the room”.

The proposed 100 million “reduction” in a 3.7 trillion budget is an insult to our intelligence as much as the “savings” from no troops in Iraq when they aren’t going to be there anyway.  That is like me saying I am saving $50,000.00 next year because I am not going to the South of France and spend a month on chartered yacht that would cost that much.

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Ability Will Always Prevail

So many people now are concerned with the unequal outcome of results in the lives of Americans that they are actively calling for more government intervention in every aspect of our lives to shoe -horn results into a pre -packaged outcome.   This includes the recent calls for redistribution of the wealth.  How many times do we have to repeat the same old experiment to realize that approach has always failed because it ignores the central reality that we are all born different.   You can start with the Tower of Babel.  The people then were very similar to one another and felt that had reached the highest level of achievement possible for man.  The erected the giant tower to celebrate their cleverness and and as a monument to man’s glory.  You know how that worked out.  They soon developed factions and even broke into separate language groups.  The tower came down and so did that society.  The factions split and went their separate ways to start anew. 

I guess it would be nice if we were all born with an IQ of 120 but then that would merely be the new “norm”.  Besides that we could all become cyborgs.  We would sure all be equal and have equal results for all.  We each could have a standard cubicle for rest and –well, what do cyborgs do for fun?  Where would the Michaelangelos and the Shakespeares come from in such a society?  Such a person would be deemed a danger to society because their achievements would give lie to the lab tested theory of “equality”.  Some of us are builders, some are dreamers.   Some build goods and some of us build ideas.  We have savers and we have spendthrifts.   Some nuture and protect and some are criminals.  Yes there are those who would have you believe that all those varieties of human nature and appitude could be corrected with the right envoirnment provided by and enforced by government.

At the Appomattox courthouse when Lee was forced to surrender to Grant, the adjutant for Grant was unable to write the terms of surrender because he was so nervous.  The history of the moment overwhelmed him and he couldn’t write legibly.  Grant had to call on another aide to write the document.  This young man wrote at the terms that were signed by the generals.  This young man had been with Grant since the beginning of the War.  He was born in Upstate New York a full-blooded Iroqois Indian and had obvious talents as a young man. He was sent to school and took a Christian name.  He later went to law school  but was not allowed to practice because he was an Indian.  He migrated west to Ohio and was working with the government on engineering projects when he met Grant.  Grant was then operating as a merchant but his business was failing and did fail.  When the War came Grant took this young man with him as an aide and they remained together throughout the entire War.   After the War the young man worked for the Corps of Engineers. 

This young man was named Walker and he overcame the prejudice and mistrust of his times to achieve a very successful life.  Neither the Indians or the whites totally trusted him or liked him because he straddled two cultures.  Yet in spite of these handicaps he prevailed and indeed rose to high and respected positions.  I love these success stories.    They celebrate our diversity of talents and demonstrate that sweat and perserverance can accomplish much.  Thank God we can still walk to our own drummer for the most part today but the cries for everyone to march in lockstep are growing louder.  The problem is that there are those who want to repeat the same failed experiment over and over and somehow expecting diferent results.  You know about that definition of insanity–doing the same thing over and over and expecting different results.  We have not only the Tower of Babel but the experiment was tried again in the 20th century by some nations.  That resulted in filling graves with countless millions who didn’t conform to the notions of the ones in charge of the experiment.  We will never have equality of results and I for one praise that.  When we do ever achieve that end we will all be cyborgs.  The heart and soul of our humanity will be gone.

Remember that there is no situation that can not be made better–maybe not perfect but better.  There are those who will sit beside the work all day and then complain about the results of the job by those who did labor.  I hope we always have the freedom to have vast differences in the results of our lives.

As my wise uncle said “the problem with doing nothing is that you can’t ever take a break and rest”.

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Tea and Sympathy

Surely you recall the old movie of that name.  It was a bit bloated and overwrought but a real tear jerker for the ladies.  We had some tea served yesterday around the nation and the attendance revealed the sympathy the attendees have for responsible and limited government.  I have never been to any type of protest or demonstration in my life.  I am just not that type.  I am truly one of those silent majority figures.  I rant and rave but it is usually only to a captive audience like my long suffering family members.   As always is the case the press gets so much of what they report wrong. 

First I was amazed at the geographic scope of the meetings taking place around the country.  I did some research yesterday out of curiousity more than anything to see where some of these events were going to be held.  It was not organized by any party or organization so there were various websites listing the events.  I looked at those in my state and was surprised to see them being held in even the small towns across the state.  You would expect something in the major cities of Dallas, Houston, San Antonio but they were having them in Abilene, Albany, Chilicothe, Childress, Alpine, Palestine, Kilgore and hundreds of other locations.  Those aren’t big burgs and the attendance was small I assume at most of them but the fact that someone volunteered to sponsor an event and get a time and place and have it announced and then set things up is very impressive.  There were over 200 listed in Texas.  Some were in places you wouldn’t expect like El Paso. 

My wife and I decided we would go to observe and learn something.  I figured there would maybe be a few hundred people in attendance since our rally was at dinner time and many would be going home from work or just worn out from the day’s activities or not interested enough to make the journey to the central business district.   I was stunned when  we arrived.  There were thousands of people there.  I have been to the Dallas city hall plaza many times for races and can judge the size of crowds fairly well from those past experiences at the same location.   We had at least 6 or 7 thousand in attendance, maybe more.  I over heard a police officer talking with some one as we passed him on our way and he said “there is a huge crowd there, you better park where you can”.  The crowd was not Republican.  In fact one of the most criticized politicians by a speaker was a Republican State Senator who is proposing some tax increases.  I stood next to a Hispanic lady with her teen age son and some black folks were within 10 feet of me.  It was quite a cross section of America.  It was peaceful.  It was raucous and emotional and inspiring to see so many people who care about the future of the country.  I didn’t agree with all the comments of the speakers but I did agree with the overarching theme of reining in runaway government power grabs and spending that borders on the criminal.   Indeed if any of us kept our books the way that Government, Inc. does we would go to jail for fraud and money laundering.  That is not an exaggeration but a truth. They put incredible expenses off the books and mislabel and lie about others.  The books of the US government are not “a regular Statement and Account of the Receipts and Expenditures of all public Money” as required by Article One, section 9 of the Constitution.  They are anything but that. 

It is not only ridiculously high taxes that provoke the people it is the government operating now in the Don Corleone mode–making those deals too good to refuse to our private sector.  I didn’t hear any extreme views only concern about the government ignoring the rule of law and seeking to amass empircal-like powers into the maw of Washington p0liticians and bureaucrats.  AIG, GM, a Stimulus bill, and mortgage bailouts for the undeserving, deficits beyond comprehension, and Government, Inc. violating the Fifth Amendment rights of property were the thorns in the side of this crowd.   This crowd was not made up of millionaires.  I can assure you that most of them would definitely qualify as the 95% who are supposedly getting a tax break.  Yet they were there and unhappy.   No one attacked the truly needy or disparaged a charitable nature in man or government.  It was an evening about freedom versus the yoke of Government, Inc. tightening its grip on the necks of the workers and those with aspirations.  

It is tea parties this year.  There will be many more of them come July 4th.  If the government continues its march toward total control of our lives and our property then next year it will be the tax  revolt.  They can’t put us all in jail.  I mean who would they have left to steal from?   Do they think they can fund their operations from the money of that 50% who already don’t pay income taxes or those who can’t even make their mortgage payements?  As much as Geithner might despise and demean we  “wealthy” people he needs us to reach his goal of total government dominance.  If the beast won’t repsond to reason and argument then we will starve the beast. 

Tea was poured out this time.  There was no sympathy for the administration’s grand schemes to make us all lackeys of those in power in Washington.

Jesus wept.  That is the shortest verse in the Bible.  You look up what made him weep.  It will do you some good.

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Liberal Changes To Chagrin of Conservatives

Looking at a long historical perspective it occurs to me that there is a consistent pattern in a liberal view of the political and social world.  You can start pretty much any where you like with the analysis on a timeline.  Whether it is 1850, 1900, 1940 or 2000 there is a pattern to the liberal fulminations and calls for action.  The liberals like to change the rules in the middle of the game.  If you start at any time period there will be “rules’ in place that everyone is expected to follow.  Those rules are the formal laws of the land and even the informal laws of society.  At any given point in our history there are those who find a way to flourish and thrive whatever the prevailing rules are at that time.  Naturally there are those who don’t flourish.  They bounce along at the lower levels of society economically and in social esteem.   This has been so since the birth of man.   A far smarter man than me said we would always have the poor with us.  You might recall His name.

We are born with different talents and aptitudes.  That is a fact of nature beyond any control of man.  For example someone with an 80 IQ is simply not as likely to achieve the same standing and status in society as the fellow who was blessed with an IQ of 120.  That fellow with the low score I believe does have certain rights and is entitled to the dignities of our society.    Some are born with a drive to achieve and indeed might become a “workaholic” and have financial success but abysmal familial success in life.  We are all so diverse in our abilities and motivations that it is not realistic to expect that we all will have the same “success” in life.  That success is normally measured in one’s earning capacity and has been thus for all recorded time.   Those with the higher level of talent will succeed under the rules of their time and generation.  But that disparity in achievement causes envy and resentment in those who don’t   fair as well in society.  In comes the liberal to rectify that situation.

The liberals are in a constant and repeated pattern of wanting to change the rules.  You grow up under one set in any era and along the way the liberals decide that there is not an equality of outcome for everyone.  They refuse to accept my basic premise that all are not created equal in ability even though in rights.  They change the rules to bring down those on top and to lift up those on bottom.  This evening out process is not based on merit or achievement but simply on status.   Look back over our history.  All that legislation over the past 150 years for the alleged advancement of the common  man has been to disrupt the natural striation of society.  Then everyone adopts to the new rules of the game.   Sure enough after a while the disparity still persist even under the changed rules of the game.  Then the process starts over again after a generation or so.   The Great Society of Johnson was to put an end to these descrepancies once and for all if you remember.  Lord knows enough Government goodies were handed out in one fashion or another that persist to this day.  Same with the New Deal. 

The elite liberals inherently think they are smarter than everyone else and certainly more caring about their fellow man.  They brook no disagreement with their tenets.  They believe fervently in a top down approach to the new rules everytime.  The rules are imposed from on high–the Federal Government.  They believe that they know what is best for all of us.  They believe in freedom but only so far as it makes everyone pretty much equal in their life outcome.   If there are disparities then freedom takes a back seat to whatever new rules they impose to work their equalizing strategy.  They are there for the common man.  But the elites are so removed from the common man that it is all theory not reality.  Remember when Sargeant Shriver of Kennedy family connections was going to run for President and he went to the local bar to have a few drinks with the working crowd and he order a Courvoisier brandy?  I can’t think of a better example of that attitude and detachment of the liberal elites.  Unless it is Mr. Geithner giving us that “you don’t understand” attitude about the bailouts and expansion of Treasury power beyond Constitutional limits.  He attended prestigous schools for sure but he can’t do his own taxes and he thinks we don’t understand. 

The other liberals are those that are attached to the “victimhood” outlook like a leech to a juicy leg.  It is not that they can’t achieve like the rest of us; no, they are victims of an unfair and unjust society!   Look, I accept the fact that I am NOT the smartest guy  in the room, that I can’t jump as high as some other men, that I don’t have the business acumen of T. Boone Pickens.   I believe most conservatives accept their shortcomings and will take responsibility for their achievements or the lack of them.  Many conservatives work on the railroad or drive a truck or paint your house.  They are not all country club denizens.  Liberals will not accept the differences in our innate abilities and the willingness of some to work harder than others.  So they will want the rules changed yet again.  I fear the process will go on ad infinitum.  No doubt there will be a liberal push two hundred years from now to rectify the disparities in society. 

Both camps of liberals fed on each other and need each other–the elites and the victims.  They do have a symbiotic relationship.  One can’t exist without the other.  I wish that we could someday get a set of rules that will last but the struggle will continue I fear.  The problem is that every time there are new rules there is a corresponding restriction on our choices in life and our freedoms, including the freedom to fail.

It is time to remind you again about the date for Easter.  We get so many requests for this information.   Easter Sunday is always the first Sunday after the first full moon after the spring equinox.   It is geared to the Jewish Passover which is based on the lunar calendar.  That is why Easter varies by as much as a month from year to year.

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Power Defeated by Greed and Pride

The history of the world is filled with good examples of behavoir to avoid but we mostly ignore them and mankind continues to suffer the consequences of failing to heed those lessons.  The Battle of Tours in 732 A.D. is a prime exhibit of what to avoid.   The Bible is full of stories about pride and the pain it will inevitably cause if it is allowed to run rampant in the human heart.  Proverbs had very good advice about how to deal with your fellows and what it means to “play nice” with the other kids.  It even has some very good economic advice for those ears willing to listen and learn. 

From the death of the Mohamend the Prophet the semetic races adopting his beliefs and commands had spread their fervent religious  beliefs with  the edge of the sword across great swaths of the earth.  From the heartland in Saudi Arabia the religion was moved outward in all directions–Syria, Persia, Eygpt, then all  of north Africa and even into the European continent across the straits of Hercules to Spain.  This vast expansion had all occurred within a little more than 100 years from the death of the Prophet.  Christiandoom was in full retreat.    Only the barrier of the Pyrenees separated the two factions.  The Caliph had appointed one of the most able and skilled of all his commanders to the post in Spain.  At that time the Muslim world was ruled by a single Caliphate.  (We here rumblings from time to time from some modern Muslims about the restoration of that hegomony–see Iran and the Al-Queada statements of recent years).  There had been forays into France from time to time but no permenant establishment had been made by the Muslims thus far.  They invaded briefly and plundered and then would retreat and did suffer a few minor defeats but all these were minor encounters. 

The Muslims had known nothing but victory for over a hundred years.  There were a few setbacks along the way but the tide of their victories was inexorable.   Now the new leader, Abderrahman, was determined upon a  permenant and devastating invasion into the heartland of the European continent across the Pyrenees and then as far as his victories would take him.  He gathered a mighty army.  The estimates vary greatly as to its size, some say it was 80,000, some accounts say it was hundreds of thousands.  The army took with it all its baggage and families and fellow travelers.  They met with initial success and took in much loot.  The villages and towns of southwest France fell to them.  The alarm went out.

France at that time was not “France” but a hodge-podge of principalities and small kingdoms.  They had emerged from the detritus of the fall of the Roman Empire a couple of centuries earlier.  There was no central governement over the entire region.  But this part of France and a good deal of central Europe was Christian. 
That was the one bond they all held in common.  Charles Martel was the highest ranking of the minor kings and princes of the area.    He won his surname due to his prowess in battle and victories–Martel means hammer.  There was no standing army because the Gallic land was divided up into so many principalities.  He cobbled together a force to do battle with the Muslims.  The Muslims were reaching farther into France and gathering loot along the way with every new victory they obtained.   They had already conquered Toulouse and Bordeaux and were now well into the heart of France.  You can see from  a modern map that Tours is only a little over a hundred miles southwest of Paris.  There they continued their rampage, rape and pillage.  They took Tours and the slaughter was horrific.   It was so bad that even the Muslim chroniclers noted that God’s chastisment was sure to follow. 

The Muslim leader did not want to displease his soldiers when the army of Charles Martel arrived by having them temporarily abandon their baggage train that contained all their loot and spoils.  Often in the face of battle an army would carry with it only it arms and horses.  They stayed close to their baggage and tents for the battle.  the Muslims had known only victory on this campaign and were puffed up with confidence they would sweep the foe from the field of battle and see only  their heels soon.  It is open country there, mostly plains.  The battle lasted for a few days.   The exact number can not be determined.  The Muslims attacked the army of Martel but his army held and indeed inflicted great casualties upon the Muslims.   A few days into the battle the Muslims became concerned that the army of Martel was making an end run to attack their baggage and tents to steal their loot.   This casused some of the Muslim forces to move in that direction and broke their ranks.  They were moving to protect their loot.  It was more important than following orders or winning the victory they desired so much, or at least they did till their purse was believed threatened.  That opening was all that was needed by Charles Martel.  He slashed with his army into the breach of the Muslims and killed Abderrahman and then the balance of his army.  The battle became a complete rout. The exat casualties will never be known but the losses for the Muslims was almost total; the losses of Martel were small.  Only a remnant of the Muslim force made it back to Spain to tell the tale.   They lost due to the military skill of Charles, the bravery of his troops, their devotion to their religion and the greed of the Muslims.  If they had held ranks the battle might well have been a draw as so many were in those days and the ultimate outcome would still have been undetermined.

The history of Europe was changed forever by that event.  Martel’s grandson became Charlegmagne.  The Muslims hung onto a foothold in Spain for centuries more but never threatened again the European heartland until the fall of Constantinopole in 1453.

You are referred to Creasy for this and  accounts of the other significant battles of the world.

A harbinger of things to come that I have predicted about problems with the Chinese owning so much of our debt is the recent proposal by them to go to a global currency rather than the US dollar.  They are thinking and worrying already about our future inflation with the reckless spending spree we are embarking on.  Keep up with that story.  It WILL affect your life.

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Equal Protection Abuse of Mortgage Bailout

We have more details now about the mortgage bailout proposals and how it will supposedly work.  I say supposedly because there will be many unintended consequences and more outrage as neighbor sees neighbor getting or being denied the Federal help.  Today we will not focus on the equity of the program.  That has been argued and will be argued as long as the program exist.  To say the least it runs against the grain of basic American concepts of the rugged individual and taking personal responsibility for our actions.  We won’t talk today about the people who are getting mortgage help with a new car sitting in the drive way and a state of the art plasma tv in the den when you and I might still be using that ten year old tv.  Today we are discussing the legality and legal equity of the program.  It has major implications for our beliefs in the rule of law.  The rule of law is what makes us all equals.

Throughout our history we have had a great regard for the contract rights of the people and businesses.  Our courts have historically been there to protect those rights.  Contract rights are mentioned in the Constitution in several areas and in several ways.  Remember that the States are required to respect the contract rights of other States.   If you have a valid contract in Geo. and the other party defaults on the contract it can be enforced in Texas for example.  The Constitution also mentions the right of property i.e., the Fifth Amendment.  If you have a property then the Government can not take it away from you without just compensation.  The whole notion of property is at the heart of contract law and contract rights.   That is why you have contracts–to deal with property whether it is personal property or real estate.  The contract rights themselves are property in the eyes of the law.  That is well established in our common law and the Uniform Commercial Code in effect in virtually all States.   In the typical situation you have the right to sell a contract right to another person. 

In the current proposals many contract rights are being abrogated by the Government.  They are not apparently so bold as to simply remove the rights of lien holders who hold first mortgages on homes.  At least not yet.  That can be done in bankruptcy and that would be Constitutional because bankruptcy laws are specifically given to Congress to draft and enforce.  It is an enumerated power of Congress.  However the reports are that the proposals will simply wipe out the rights of the second lien holders on houses.  The proposal now offers incentives to the first lien holders to rework the loans and thus the mortgage.  That would pass legal muster if indeed that is its only provision because the restructuring of the loan is “voluntary” by the lien holder.  Voluntary is in quotes because you can imagine how voluntary it is when the bank is “encourgaged” by the very regulators who have the power to shut it down that they do this.  Maybe there is a gun to their head but they signed the dotted line on their own.  That will probably fly.  However to simply rewrite the terms of the second mortgage or reduce it in amount will not fly.  Those are often held by a completely different entity than the first lien holder.  In most cases a default of the first mortgage is also legally a default of the second mortgage and reworking the first mortgage by giving more time for payment may well affect the value of the second mortgage.  Further complicating the situation are the holders of securities, not the mortgage holders themselves, who invested in the notes and mortgages.   Their interest will be dramatically affected by the reworking of the liens.  It diminishes the value of their asset.  The Government is taking that asset (property) without just compensation.   You are probably like me and have no sympathy for those investors here and around the world who bought these securities.  But to me the crux of the issue is how they are treated under our Constitution.  That does indeed impact us all.  I don’t like the Government treading on our Constitutional rights in an “emergency” or otherwise.  Those rights are supposed to be inviolate.  It is very dangerous for all of us when one group out of favor can be treated so cavalierly.  If you look hard enough in the news you will see a couple of stories on the back pages of the paper where this issue is being considered by the Treasury department.   They know damn well that they are going too far.  They are concerned about lawsuits.  They should be.  If they persist in pursuing the current proposals I predict that suits will be filed and that after the cases wind their way through the courts that the rulings will be in the favor of the second lienholders and the security holders on Constitutional grounds.  The law is clearly on their side.  We don’t allow, so far anyway, the confiscation of property by the Government in this country.  We aren’t Venezuela yet. 

When that happens then there will be an even bigger mess on our hands as the Government will have to figure out how to undo all those unconstitutional reworks and takings of property and how those injured by the Government action will be compensated.   I have a feeling that many of them will get 100 cents on the dollars plus interest and attorneys’ fees.   They should and we should all hope that they do.  If they don’t what will be next?  The Government decides your car is a polluter and simply seizes it to remove the danger from the streets?   When one person’s constitutional rights are trampled on, all our rights are trampled and endangered.

“Time was when every Englishman had a musket in his cottage, and along wit it hung a flitch of bacon; now there is no flitch of bacon for there is no musket; let the musket be restored and the flitch of bacon will soon follow”.  George Harney, English Journalist

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Stocks Slump, Washington Shrugs

Since the election last fall the market has plunged farther and faster than many  would have anticipated.  About half the country liked the new guy and you would have thought that they at least would have been optimistic enough to put their money where their mouth and votes were and invest in the new administration’s economic proposals.  But then the proposals started emerging on an almost daily basis and lots of people decided to remain on the sidelines or sell.  More than 55% of American households do have ownership in the stock market.  That is millions of people.  More than half of all people earning over $50,000.00 a year are invested in the stock market.  The slide in values has only accelerated after the inauguration.  Does Washington care?  From the public responses so far it would appear that they don’t.  The more that Wall Street diminshes the greater the power of  Washington. 

The new guy clearly believes in big government and an ever expanding role of government in every aspect of our lives including the economic affairs of companies and individuals.  It is scary that Washington has now become the center of economic policy and investment strategy.  Politicians are making the fundamental decisions regarding which industries will thrive or survive and which are to be punished with higher taxes or more onerous regulations.   It is daily becoming a centrally planned economy rather than one that is composed of thousands and millions of individual decisions made by employees, employers and investors.  

The lack of confidence of investors is palpable at the moment.  Why should they be confident?  The governemnt is spending without regard to any sense of responsibility and proposing regulations like cap and trade that will cost hundreds of thousands of jobs and impose hidden taxes on all consumers.  It is not an exaggeration to say that everyone who uses gasoline, runs the home dryer, buys any product that uses plastic, or buys groceries will see the cost of these and virtually everything else rise dramatically in the very near future if the proposal is passed.   You may have cleaner air, maybe, and who knows the temperaturs might cool (unless the Sun has other ideas) but you well could end up living in a hut hauling drinking water from the neighborhood well.   But not to worry the Government will pay for the hut and the water will be free. 

Many years ago when I had nothing invested in the market I still paid attention to it.  I believe most people pay attention to it today whether or not they have money invested in stocks.  For years I simply didn’t have any extra money to invest but I knew the health of the economy affected us all and did have a bearing on my life.   I wanted the market to do well and for people invested there  to make money, lots of money.  I think the current administration only wants to see a “weak” Wall Street now and forever.  It is a competitor for policy direction of the economy, almost like another political party.   Having the people afraid of Wall Street encourages many to look even more to Washington for the solutions to all their troubles rather than to the private market place.  That suits the pols in power now just fine.  They do want a dependent people.  Those types are malleable and make perfect and loyal serfs. 

You have noticed how the Washington gang talks every day, rolls out new ideas and budgets, proposes and travels around constantly and the market continues to drop.  There has been nothing so far from the new administration that would enthuse investors to believe that private enterprise is going to thrive and be able to create the new jobs we all need.  I truly think those pols believe they can strip the so-called rich of all their wealth and redistribute it through their power and dominate the economy and the people for as far as the eye can see.    I urge you to take your own serious look at the market.  It is not only one segment of the market that is suffering but it is wide spread.   Financials are falling off the chart; Citigroup is now under a dollar per share.  The oil and gas industry is being clobbered and that is an industry we desperately need to function well for many years to come before alternatives become viable.   Coal?  Dying, and remember that coal provides roughly a quarter of all electricity power in the country.  Health care companies that so many thought might do well under the new guy’s proposals are collapsing, including the pharmacueticals.  It is very very expensive to do research and development for new drugs.  Soon we will have government bureaucrats in charge of that it seems.  Autos will be a government subsidized industry forever to prop up the unions and a drain on the economic health of the country.  The list goes on.  If you find an area that is doing well or you predict will do well let us all know so we can invest.  Millions will appreciate your advice.

The recent budget reveals everything you need to know about the intention of the new guys to dominate American economic life and therefore our very freedoms.  It is a clear blueprint of what they want to construct.  It doesn’t have anything in it to promote private enterprise, indeed it hampers or punishes private enterprise.  That is not good for the bus driver, farmer, doctor, painter or even those pointed headed economists.   The debts that will be accumulated under the budget proposal will be so staggering that the argument that only Government can deal with the economic crisis will continue in finitum.  The government is creating a problem so it can cure the problem.  How long will we let them get by with that?  

Many say that the new guys inherited all these problems.  True to a great extent.  But market decisions are not made on last year’s news.  Markets are all about the future, never the past.  When the market sees the direction of the gang in Washington, it shudders.  The continuing drop in market values is NOT due to past problems.  If the market liked the monetary, regulatory and fiscal proposals it would at least hold steady and more likely have been climbing.  It doesn’t like the picture of the future and is cratering. 

Interesting to note that the head tax cheat at Treasury can’t even get his deputies and top assistants on board and  new guy will have to look elsewhere to meet his diversity goals in his administration it seems. Gupta is gone as Surgeon General.

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Funding the Deficit

The proposed budget of the new crowd in Washington calls for deficit spending in huge amounts for years to come.  The lowest level of those deficits is over 400 billion and shows increases in the out years, climbing all the way to over 700 billion in ten years.  A deficit of over 400 billion would be huge headlines anytime.  Here we are contemplating deficits of much greater size without any end in sight or any coherent game plan to rein them.   I know about the current economic crisis and the need for some action or inaction to get our economy moving again.   Motion however does not equate to progress.   These numbers are without even considering the need to stem the increases coming for Medicare and Social Securityd benefits.  There is more blather in Washington about working on those matters but we have heard this story before.  Excuse me if I think it is the little boy crying wolf again.  We last did a major overhaul of Social Security about 25 years ago and that was after more than a decade of dithering and delaying the political pain of dealing with the problem. 

We will be spending lots more money than we will be collecting.  Firstly, tax revenues will drop in the immediate future because the economy has weakened and personal and business incomes will be lower and thus the tax revenues.  That can’t be denied; only the amount and duration of the revenue loss can’t be speculated.  The new budget also calls for increases in taxes.  People generally don’t like to pay taxes especially if they don’t believe them to be fair or that their use is for purposes that they don’t support.   With these increases now looming on the horizon and coming closer with each passing day people will start making plans on how to lower their taxable income.  The changes in the deductible items will also dramatically affect how people spend their money.   The fellow who could maybe make 265,000 a year might take a hard look at the numbers and decide he is better off making only 230,000  because the bulk of the extra income goes to the IRS.   I remember when  the rates were so high before Reagan and I did the same thing every year.  I looked for every conceivable deduction and spread my income over the years at every opportunity to reduce my tax rate.  Millions will be doing the same thing now.   Sadly, all the special interest groups and lobbyists will be beating the walls down in Congress looking for deductions or exemptions for all those groups, industries or unions.   You see it has already started with the charities.  It will only accelerate.  

As an aside I have often thought that we would be more willing to pay our taxes if we were allowed to designate the use of the money on our tax return.   Just like they have designated gifts to Churches and charities where the donor can specify how the money will be used.  It has to be used for that purpose and no other.  Some folks will give money to their church for the music department.  That money can only be used there.  Be interesting to see how the money would be allocated if the Government provided a form on the back of the tax return with all the Government departments and their numerous agencies listed there so you could allocate percentages for each one or none at all.  I wonder how much would be allocated for HUD for example or snail darter research in the EPA.  Would the EPA get enough to function?  What exactly does the Commerce department do that makes your life better?  By the way it employs 65,000 government workers doing whatever the hell it is they do all day long.  Yes, I know they do the census.  Do they need 65,000 full time for that chore once every ten years.  They hire a couple million extra for that anyway.

These deficits will be funded by issuing more Treasury notes and bonds.  So far we  have buyers because the rest of the world is also facing difficulty.  That won’t last forever and the worlds’ governments probably won’t run deficit spending forever like we are projecting.  Not to worry we are told because if there is not enough demand then the Federal Reserve will buy the notes when foreign demand wanes.  It will wane at some point or else the interest rates will soar on those notes and that will make the deficits even worse, much worse with the increased interest cost.  You should note that the so-called bell weather 10 year Treasury notes have already soared to 2.88% from  2.07% in the last 2 months.  That is a huge leap in that time frame.  Those notes are normally a sleepy backwater in the financial markets and moves are normally a few basis points in a week at most.   That move is a harbinger of things to come.  Yes, something wicked this way comes.  When the Fed buys the Treasury notes it does so by printing up the money and it is the most blatant of fraudulent dealings imaginable.  I mean can you loan yourself money?  Wouldn’t it be nice to loan yourself a million dollars and put that on your balance sheet as a real asset?  It is not real and that is the problem.  Printing press money only dilutes the value of the dollar.  Sure the dollar is ok right now and even moving up against some currencies but that is due to weakness around the world not because of great confidence in the dollar as a resevoir of value.  It is higher now only by comparison and again that condition will not prevail for as long as the deficits are projected to extend.  Those Treasury notes bought by the Fed will only stoke the flames of inflation and I worry that the Dems will return us to those glorious days of Carter all over again.  We’ve seen this movie before. It is “stagflation”.  High tax rates, very high inflation, shortages of essential commodities and a floundering economy and high unemployment.  Inflation plus the unemployement rate was called the “misery index”.  Never forget it is people with more money than you that hire you as an employee or give your small business a contract for work.   I promise you will never work for someone poorer than you.  

If the budget is passed as is and the future budgets in the near term and so many programs become entitlements that weren’t before, we face a difficult and sagging, limping economy for years to come.   There will be an economy.  Just nothing that will make you happy.  It is not morning in America right now but a long evening we face unless our course is changed.   We better change it.   We’ve let the inmates take over the institution.  It is crazy enough with sensible people running the place.

This is the week that Texas celebrates its declaration of independence from Mexico and the Alamo fell.  That band of about 185 men indeed became immortal with their stand.  It matches the heroics of the Spartans at Thermopilae and is a story known literally by peoples around the world. 

“The ancient insanity of governments: the mania of wishing to govern too much”.  Robespierre.   We need to listen to that butcher.  Even a villain can have a good thought.

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Is the Stock Market a Washington Concern?

The bailouts, stimulus bills, bloated budgets and exponential expansion of Government that we see evolving everyday recently raises questions about the viability of Wall Street and the stock market.  The market continues its plunge with no let up in sight.  It has sunk below its recent lows and may be headed toward 5000 on the DJ index.   The government is taking over the auto industry, at least that part that is owned by Americans, and has effectively nationalized a few of the larger banks already and likely will be taking over even more in the near future.  AIG is an insurance company that is now owned by the Government.  The Feds own 80% already and today’s news is that the ownership position will increase in a matter of days.   As the Government increases its ownership of the assets of the industrial and financial base of our economy the power, influence and independence of Wall Street and the Stock Market come more and more into question.

It has to be remembered that the Government now owns Fannie and Freddie effectively and that between them they control over 50% of the mortgages outstanding in the country.  The Government already holds a grip on the transportation industry through regulation and the upcoming cap and trade of carbon emissions will greatly enhance the power of Government to control the commercial activities of virtually every commercial or even industrial enterprise in the country.  The just announced budget makes clear the direction the Government is taking with regard to dominance and control of our economy.  Even in the areas where the Government doesn’t take a direct ownership position like it has already in some of the banks, auto, insurance and mortgage business it can control the business practices and procedures of virutally every business in the nation through tax provisions and regulation.  The oil and gas industry is already very heavily regulated and has been for decades.  More regulation is coming there in this vital industry in the name of fighting global warming and pursuing so- called green energy. 

Do you have any doubt in your mind that the next major airline that gets in serious financial trouble will come under the control of the Government just like the Big Three have already?  It will happen if our current course is followed, sure as night follows day.   Mining will not be far behind.  No matter how hard the push to switch to the alternative energy sources may be it will be decades at least before we get there.  The fact is coal still provides about half of all our electricity power.  The cap and trade policy will make the costs of power soar in the near future.  The new restrictions on carbon emissions and thus the new engineering methodes required will be very expensive and someone will have to pay.  As the cost accelerates for the c0nsumer there will be a hue and cry for something to be done and our good friends in Washington will gladly step into the fray.  The position will be that the Government doesn’t need to make a profit on electric production and electricity is necessary to the general welfare of the citizenry and therefore the Government will take over.   The owners won’t be able to make a profit because the regulators will not let them raise rates enough to cover the new engineering and construction costs required under cap and trade.   Nanny Government will come to the rescue again of the middle class and the needy.  That will be the spin.   Everyone  will pay more for electric power through other tax provisions and methods, especially the  “rich” and the consumers rate will be kept lower on the backs of everyone, not just those who use coal power for electricity.   We will get the usual Government efficiency we all have come to love like with the IRS or Social Security.  Who cares if the industry is subsidized by all of us, we all own it and we will be making the world a cleaner and cooler place.   Of course the entire medical field and medical insurance will be either owned outright by the Government or regulated so highly that you couldn’t tell the difference between ownership or not.  Those important industries will be “run” by the Goverment.  The budget makes that clear.  The Government will pay for your medical care, assign you the doctor and hospital and regrettably guide and direct future research and development of new drugs and medical procedures.  That is a huge portion of our economy and certainly an intrusion into some of our most private and personal decisions.

We are heading in a socialist direction.  There is no real argument about that.  The left is still avoiding that term and even the term “liberal” and using the term of art for the moment which is “progressive”.  But when the Government either directly owns or controls major aspects of our commercial and industrial base, it is socialism.  You can argue about degree or methods but the direction and end result can’t be denied.  As the Government takes over more and more of that base it cares less and less about the Stock Market.  We are beginning to see the first hints of that attitude now.  The current administration is obilivious to what it happening on Wall Street.  It is an indifference.  I rather suspect they enjoy seeing the market crater and additional industries fold and become part of the walking wounded.  That is just so many more easy fruits on the tree ripe for the picking.  The reach of Governmet now is huge.   It is not retreating and the budget just submitted calls for even more expansion and an increase in the pace of that expansion.  The “real” economy, that is non government workers, is about 85% now but that number will dramatically decline over the next decade if the proposals on the table and the budget become law.   The Governmet will own most of our wealth and control what it doesn’t own outright through taxes and regulation.  That may be the world you want but it is not my vision of America.  Some will be delighted.  Especially th0se eltites who get to control the destiny of millions with the stroke of a bureacratic pen.   Agreee or disagree but give the matter thought.  Size does matter in some things.  It matters a great deal when evalutating the relationship between Government and the liberties and freedom of its people.  We ultimately get the Government we deserve.  I hope we deserve better.

If you give me six sentences written by the most innocent of men, I will find something in them with which to hang them.  Cardinal Richelieu, advisor to Louis the XIV.   That is the kind of attitude the KGB took under Stalin.

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