The Federal Reserve is the central bank of the United States. It is in charge of printing money issuing bonds and setting interest rates for those bonds. Article 1, Section 8 says, “The Congress shall have Power … to coin Money, regulate the Value thereof” the Federal Reserve is never mentioned. Has it always been this way? Does any other country do this? How did the Federal Reserve get its power over our currency and our economy? And the issue so many are interested in today: is the Federal Reserve constitutional?
Has it always been this way?
At the dawn of the Republic our first Secretary of the Treasury Alexander Hamilton issued several reports which in many ways set the tone and pointed the way for the development of America in the economic sphere. His first report on the public credit recommended that the new central government not only honor the debts contracted under the original government as established under the Articles of Confederation but that it also assume the war debts of the States. This recommendation was followed by Congress and the Washington administration created what has evolved into a permanent national debt.
In 1790 Hamilton submitted his second report which asked Congress to charter the Bank of the United States. Several aspects of the bank Hamilton proposed will sound familiar and it can be seen that they provided the mold for the Federal Reserve. His plan was closely modeled after that used by Great Britain’s Bank of England. According to Hamilton’s vision the Bank of the United States would be a public/private hybrid. It would have an exclusive charter for twenty years. Its initial capitalization would be ten million dollars consisting of eight million from private investors and two million from the government. Congress would give the Bank the right to print paper money up to the ten million held in deposit. Most importantly the central government would declare that the notes issued by the Bank would be the only notes which would be accepted in payment for taxes. This would give the notes of the Bank of the United States credibility and value, which none of its state chartered competitors could match. This was Hamilton’s proposal. Now all he had to do was get it passed into law.
The report was introduced into Congress in 1790 and by February 1791 it passed both the House and the Senate and arrived on the desk of President Washington. This is when the battle of the Titans really began. Leading Anti-Federalists and strict constructionists such as James Madison, Thomas Jefferson, and Edmund Randolph, argued that the Constitution did not grant the government the power to incorporate a Bank. It was not an enumerated power and therefore it was reserved to the States or the people. Those arguing for a strict interpretation of the newly minted Constitution, which Madison and Randolph had helped write, urged Washington in a written report not to sign the bill.
Ever the fulcrum between his philosophically divided advisors Washington presented Hamilton with the argument opposing his plan and asked him to present his argument in favor. Hamilton using his excellent reasoning and communication skills presented President Washington with the original argument for the implied powers granted to the central government by the Constitution. This report appealed to what is now known as the “Necessary and Proper” clause. He argued that the government was inherently empowered to do whatever was necessary to implement the laws required to use the enumerated powers. President Washington accepted Hamilton’s argument and signed the bill and the first Bank of the United States was born.
Beginning on July 4, 1791the first thing the new Bank did was inflate a financial bubble by offering the largest initial stock offering the nation had ever seen. Investors showed their confidence in Hamilton’s plan by quickly buying the options on the first issue of stock. Many of these initial investors were members of Congress. The initial price for the options was $25. This was soon bid up to over $300. It soon crashed to $150. Thus within days of its first action this original central bank inflated a bubble that soon burst. However, Secretary Hamilton setting the example for the central bankers to follow stepped into the breach and averted a general financial panic by purchasing government securities with public funds thus stabilizing the markets and rewarding those who had initially speculated.
The bank opened for business in December of 1791. All manner of people, landowners, manufacturers, merchants, politicians, and most important of all, the government of the United States lined up to deposit money and to obtain the new Bank script. Within months the Bank was the single largest economic enterprise in the nation.
Beginning a pattern that would be repeated over and over the bank which had been created to ensure a firm foundation for the American economy inflated another bubble and caused another crash.
First the Bank flooded the market with easy loans and a massive issue of paper dollars. This move added liquidity pushing the new securities market into a sharp rise. However, then the Bank reversed course and began calling in many loans. Investors and speculators were especially affected as they were forced to sell securities to pay the loans. When the largest of the speculators William Duer was forced to declare bankruptcy the markets collapsed. This in turn caused the financial markets to freeze up putting a stop to much of the nation’s credit and commerce. This is known as the Panic of 1792. The crash didn’t last long because Secretary Hamilton once again stepped in and bought government securities with public funds injecting much needed capital into the economy.
Over its 20 year life the first Bank of the United States functioned as the central bank. It worked to regulate state banks, closing those that issued too much paper. It attempted to guide the entire economy through its monetary and interest policies. It coordinated all its branches up and down the east coast to project a united front in its economic policy by either tightening or loosening credit.
By the time it came for a renewal of the bank’s charter the Federalists were no longer in the seats of power and the newly ascendant Democratic Republicans led by Thomas Jefferson defeated its bid for another twenty years, and the first bank of the United States, America’s experiment with central banking was over.
Does any other country do this? Yes, many other countries have central banks. Today it is a hallmark of an advanced economy.
How did the Federal Reserve get its power over our currency and our economy? There were subsequent attempts to establish central banking in the United Sates. There was a second Bank of the United States chartered in 1816, but after being blamed for a series of bubbles and crashes its charter was not renewed and it ceased operations in 1836. In 1863 in the depths of the Civil War Congress passed the National Banking Act which chartered numerous Federal Banks. This law also taxed paper money issued by State banks but not paper money issued by the Federal banks giving them a decided advantage.
In 1913 the Federal Reserve System was born. It established what is known as a decentralized central bank in that it has semi-autonomous branches. It was given the power to control the currency, issue bonds, and set interest rates for those bonds. It was established as a public/private concern and actually owned by stock holders. Who are these stock holders? They are private banks, and ownership of stock is required to participate in the system. The system was instituted to provide the foundation for a stable banking industry and an elastic currency that could be used to smooth the rough edges of the business cycle. Whether this latest experiment in American\central banking has fulfilled its mission each citizen should judge for themselves.
Is the Federal Reserve constitutional? The first Bank of the United States was never challenged in court as to whether or not the government had the power to create a central bank. But the second Bank was. The Supreme Court in 1819 ruled in McCulloch v. Maryland that it was in fact constitutional due to the implied powers clause. Thus looking to precedent, and unless the Supreme Court reverses itself, the Federal Reserve is considered to be authorized within the confines of the broadly interpreted Constitution.
There was an important constitutional issue born with the creation of America’s first central bank. With the birth of the first Bank the acceptance and use of implied powers became the central government’s method to expand its powers beyond those expressly delegated in The Constitution.
The argument of Madison, Jefferson, and Randolph upholding a strict constructionist view would be codified and added to the Constitution in the same year the Bank was charted, and perhaps in response to it, in the 10th Amendment, but this did not end the appeal to implied powers as a means to the government’s ends. In theory this sounds good. In practice it has turned our limited government into an out of control leviathan that is crushing the free out of our free market and sucking the liberty out of the American experiment.
As my favorite American philosopher once said, “In theory there is no difference between theory and practice. In practice there is.”
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
Friday, September 30, 2011
Friday, September 23, 2011
Where Did This Debt Come From Anyhow?
Have you ever wondered where the National Debt came from? Do you wonder who started it? Do you ask yourself is the National Debt constitutional? I believe that a lack of Historical knowledge and context is a major contributing factor in our current state of political deterioration. Unless we know where we came from we cannot truly appreciate where we are and we have no point of reference to guide us to where we want to go.
The National Debt didn’t start under Barak Obama or George Bush. It didn’t start under FDR or Wilson or Lincoln. So where did it come from and when did it start?
The National Debt and the economic outlook inherent in its creation have not only been with us since the beginning it was one of the most powerful arguments for the ratification of the Constitution. I may have just lost many of the recently awakened. I most assuredly lost those who worship the Constitution as American Scripture and the Framers as demigods who brought the tablets down from on high.
Don’t misunderstand the intent of the following article. It is not to malign the Constitution. I believe it is the greatest political document to come from the hand of man. I have spent a life time testifying to its importance and working to educate people as to its continued relevance. However I also believe we need to know the History of its development, ratification and the continuing saga of its effectiveness. If we don’t learn from History we will be forced to learn from our own mistakes. It’s always less painful to learn from the mistakes of others.
At the turn of the twentieth century Historian Charles Beard published An Economic Interpretation of the Constitution of the United States and set off a debate that still rages around the idea that the Constitution was a the product of a conflict between competing economic interests. The argument goes like this: the Founders, who supported a strong, centralized government and favored the Constitution during its drafting and ratification, were men whose primary economic interests were marked by extensive personal property. They consisted primarily of people involved in commerce such as merchants, shippers, bankers, speculators, private and public securities holders, southern planters and all they could influence. Those who opposed the ratification of the Constitution were supporters of a decentralized government such as already existed under the Articles of Confederation. These were people whose economic interests were connected to real estate. They consisted primarily of isolated, subsistence non-commercial farmers and laborers, people who were often also debtors, and the people they could influence. This article fits into that debate.
Building within the above outlined framework, although James Madison is generally called the Father of the Constitution when it comes to economic concerns I believe the title should belong to Alexander Hamilton.
When the Annapolis Convention which was called in September, 1786 to deal with economic concerns failed to attract enough state delegations for a quorum Hamilton requested permission from the Congress of the Confederation to call another convention in Philadelphia for the purpose of proposing amendments to the Articles of Confederation. Once they closed the doors though they had no authority. The delegates from the twelve states attending wrote a new constitution. Then ignoring the provision of the Articles which required unanimous consent to alter the nature of the American government the Framers sent the Constitution out to be ratified by special ratification conventions by-passing the State legislatures.
Alexander Hamilton was born in the West Indies. By the time he was fifteen his father was bankrupt. At sixteen he moved to New York and went to work in an accountant’s office. He was a self-made man who put himself through Columbia University and personally raised artillery regiments for the Revolution. He spent most of the war as Washington’s top aide. Hamilton had a desire to create a central government both politically and financially strong.
Once the Constitution was ratified and Washington elected as the first president he chose Hamilton as his Secretary of the Treasury. Hamilton hit the ground running. He soon submitted three ground-breaking reports to Congress, one of which impacts the present discussion.
His Report on Public Credit caused controversy because of its social and financial implications. During the Revolution the Confederation and the individual States had run up large debts to both foreign and domestic individuals. Hamilton proposed that the Federal Government assume all the war debt of the states which helped the measure gain approval in Congress. These debts had devalued in worth due to the inflation. As the debts lost their value they were bought up by speculators at a fraction of their face value. Hamilton proposed to redeem them at their original value giving tremendous profits to the speculators, many of whom were prominent in Congress and State governments. The new national government was short on cash, so Hamilton proposed to pay the war debt by issuing interest-bearing bonds, and thus the national debt was born at the dawn of the Republic. It has existed ever since. It has never been paid down to zero and it never will be.
Is the national debt constitutional? Yes, in two ways. Article VI among other things states, “All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.” And because the 14th Amendment states, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” So the Constitution both in its original form and as amended both validates the debt and takes the question of its legality off the table.
Over the hundreds of years since its inception our nation has continuously had a National Debt. Every President has faced it when they took office and every president has left it for their successor. Some have reduced it, most have increased it. At times it has contributed to our strength and stability. At first by helping to establish the credit of the United States and then by proving the trustworthiness of our government, no one ever doubted redemption. Today the National Debt soars beyond the perceived ability to redeem. It races ahead at an average rate of $3.93 billion per day which is $163,750,000 dollars per hour, $2,729,166,666 per minute and, $45,486 per second. We all know from our personal finances debt in and of itself isn’t a bad thing. We also know unsustainable debt is. No one can afford to spend more than they make forever. Unless of course they have their own printing press then they can do it until no one will accept the paper any more. Then they will do something else.
Stand by for something else.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
The National Debt didn’t start under Barak Obama or George Bush. It didn’t start under FDR or Wilson or Lincoln. So where did it come from and when did it start?
The National Debt and the economic outlook inherent in its creation have not only been with us since the beginning it was one of the most powerful arguments for the ratification of the Constitution. I may have just lost many of the recently awakened. I most assuredly lost those who worship the Constitution as American Scripture and the Framers as demigods who brought the tablets down from on high.
Don’t misunderstand the intent of the following article. It is not to malign the Constitution. I believe it is the greatest political document to come from the hand of man. I have spent a life time testifying to its importance and working to educate people as to its continued relevance. However I also believe we need to know the History of its development, ratification and the continuing saga of its effectiveness. If we don’t learn from History we will be forced to learn from our own mistakes. It’s always less painful to learn from the mistakes of others.
At the turn of the twentieth century Historian Charles Beard published An Economic Interpretation of the Constitution of the United States and set off a debate that still rages around the idea that the Constitution was a the product of a conflict between competing economic interests. The argument goes like this: the Founders, who supported a strong, centralized government and favored the Constitution during its drafting and ratification, were men whose primary economic interests were marked by extensive personal property. They consisted primarily of people involved in commerce such as merchants, shippers, bankers, speculators, private and public securities holders, southern planters and all they could influence. Those who opposed the ratification of the Constitution were supporters of a decentralized government such as already existed under the Articles of Confederation. These were people whose economic interests were connected to real estate. They consisted primarily of isolated, subsistence non-commercial farmers and laborers, people who were often also debtors, and the people they could influence. This article fits into that debate.
Building within the above outlined framework, although James Madison is generally called the Father of the Constitution when it comes to economic concerns I believe the title should belong to Alexander Hamilton.
When the Annapolis Convention which was called in September, 1786 to deal with economic concerns failed to attract enough state delegations for a quorum Hamilton requested permission from the Congress of the Confederation to call another convention in Philadelphia for the purpose of proposing amendments to the Articles of Confederation. Once they closed the doors though they had no authority. The delegates from the twelve states attending wrote a new constitution. Then ignoring the provision of the Articles which required unanimous consent to alter the nature of the American government the Framers sent the Constitution out to be ratified by special ratification conventions by-passing the State legislatures.
Alexander Hamilton was born in the West Indies. By the time he was fifteen his father was bankrupt. At sixteen he moved to New York and went to work in an accountant’s office. He was a self-made man who put himself through Columbia University and personally raised artillery regiments for the Revolution. He spent most of the war as Washington’s top aide. Hamilton had a desire to create a central government both politically and financially strong.
Once the Constitution was ratified and Washington elected as the first president he chose Hamilton as his Secretary of the Treasury. Hamilton hit the ground running. He soon submitted three ground-breaking reports to Congress, one of which impacts the present discussion.
His Report on Public Credit caused controversy because of its social and financial implications. During the Revolution the Confederation and the individual States had run up large debts to both foreign and domestic individuals. Hamilton proposed that the Federal Government assume all the war debt of the states which helped the measure gain approval in Congress. These debts had devalued in worth due to the inflation. As the debts lost their value they were bought up by speculators at a fraction of their face value. Hamilton proposed to redeem them at their original value giving tremendous profits to the speculators, many of whom were prominent in Congress and State governments. The new national government was short on cash, so Hamilton proposed to pay the war debt by issuing interest-bearing bonds, and thus the national debt was born at the dawn of the Republic. It has existed ever since. It has never been paid down to zero and it never will be.
Is the national debt constitutional? Yes, in two ways. Article VI among other things states, “All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, as under the Confederation.” And because the 14th Amendment states, “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” So the Constitution both in its original form and as amended both validates the debt and takes the question of its legality off the table.
Over the hundreds of years since its inception our nation has continuously had a National Debt. Every President has faced it when they took office and every president has left it for their successor. Some have reduced it, most have increased it. At times it has contributed to our strength and stability. At first by helping to establish the credit of the United States and then by proving the trustworthiness of our government, no one ever doubted redemption. Today the National Debt soars beyond the perceived ability to redeem. It races ahead at an average rate of $3.93 billion per day which is $163,750,000 dollars per hour, $2,729,166,666 per minute and, $45,486 per second. We all know from our personal finances debt in and of itself isn’t a bad thing. We also know unsustainable debt is. No one can afford to spend more than they make forever. Unless of course they have their own printing press then they can do it until no one will accept the paper any more. Then they will do something else.
Stand by for something else.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
Friday, September 16, 2011
Solyndra Obama’s Enron
Remember Enron? When this huge company went belly up because of mismanagement, misrepresentation and criminal intent the Bush administration was put through years of screaming headlines, congressional investigations and dubious investigative specials on the wall-to-wall talking heads of the cable news channels. In the end there was no connection found between the Bush administration and the leaders at Enron who broke the law.
Today unlike Enron who played fast and loose with private money we have Solyndra which received $535 million in federal loans filing for bankruptcy protection leaving American tax payers on the hook for the cash. The Obama administration not only disbursed the money to their friends and campaign contributors at Solyndra they did so even after the Office of Management and Budget (OMB) said in emails they felt as if they were being rushed to make a decision without adequate time to assess the financial risk to taxpayers.
Why did the White House force this decision on the first loan approved under their Stimulus Bill?
They pressured the OMB to make a call in favor of the loan before they felt comfortable so that Vice President Biden could announce the approval at the groundbreaking for the company’s factory in 2009. And this was not just “some” company. Solyndra was an important component of President Obama’s ideologically driven campaign to develop green jobs and what he calls renewable energy. The political motives took precedence over economic considerations and caused the loan to be approved without due diligence. When White House chief of staff, Rahm Emanuel asked officials at the OMB whether “there is anyway we can help speed along on OMB side” one official responded, “I would prefer that this announcement be postponed.” This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right.” The loan was subsequently approved and the announcement was not postponed.
Did the involvement of the Obama administration end with executive pressure to approve a massive loan without the same stringent requirements a common citizen must face today to get a home mortgage? No. According to House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), chairman of that panel’s oversight and investigations subcommittee, “Solyndra was the hallmark of the President’s green jobs program and widely promoted by the administration as a stimulus success story, right up until its bankruptcy and FBI raid.”
Is there any evidence that members of the Obama administration were personally involved with this empty shell of a company? In May 2010, President Obama made a personal visit and promoted the company. According to White House visitor logs, between March 12, 2009, and April 14, 2011, Solyndra officials and investors made no fewer than twenty trips to the West Wing for personal visits with members of the administration. Most troubling of all, a big financial backer of the company, Oklahoma billionaire investor George Kaiser, was one of the top bundlers to President Obama’s campaign. Bundlers are people who gather contributions from individuals in an organization or community, and present that sum to a campaign. Kaiser made numerous visits to the White House before the company received the multimillion dollar loan from the government.
Was this favoritism? Was this a massive example of the Crony Capitalism that is poisoning our economy? An audit by the Government Accountability Office in July 2010 concluded that the Energy Department “lacked appropriate tools for assessing the progress” of the loan program and that the department treated applicants inconsistently, “favoring some applicants and disadvantaging others.”
Was this expensive boondoggle unforeseen? Was it a shock out of the blue blindsiding the Obama administration without warning? Hardly, a now exposed e-mail exchange between Energy Department staff members in August 2009 stated that a credit-rating agency predicted that the green energy company would run out of cash in September 2011. Solyndra filed for bankruptcy on the final day of August. Can the administration in any way claim they were kept in the dark about the inner workings of the company? This is difficult to maintain since Energy Department officials have been sitting in as observers at Solyndra’s board meetings for months prior to the crash.
Can you imagine what the reaction of the media would have been if when Enron imploded it was revealed the Bush Administration had guaranteed a half billion dollars in loans or if any of the serial investigations had found that members of the administration had sat in on the board meetings with the very people who perpetrated the fraud? Does anyone doubt that there would have been a feeding frenzy? Does anyone imagine there wouldn’t have been cries of “Who knew what and when did they know it?”
In our transforming America, what is the reaction to the Obama administration’s intimate relationship to the collapse of their flagship green technology company? Silence. Unless you follow the alternative media you wouldn’t even know there was a problem. The masses of voters who get their news from the Corporations Once Known as the Mainstream Media or their comedic fellow-travelers, Jay Leno, John Stewart, and company have no idea of the scheme which has flushed over 500 million dollars down the tube, into someone’s pocket and probably future political contributions to the very people who signed the check.
Not only is the hypocrisy stunning the chutzpa and hubris of our cynical leaders is breathtaking. The Obama Administration, which operates in accord with Saul Alinsky’s Rules for Radicals, has embraced the Cloward/Piven Strategy to collapse the economy through over the top spending. With a world collapsing around us because of debt they continue to spend and spend and spend.
What should we do? How should American citizens react to this betrayal of the public trust? We should demand our money back and we should demand that those involved be prosecuted to the fullest extent of the law.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
Today unlike Enron who played fast and loose with private money we have Solyndra which received $535 million in federal loans filing for bankruptcy protection leaving American tax payers on the hook for the cash. The Obama administration not only disbursed the money to their friends and campaign contributors at Solyndra they did so even after the Office of Management and Budget (OMB) said in emails they felt as if they were being rushed to make a decision without adequate time to assess the financial risk to taxpayers.
Why did the White House force this decision on the first loan approved under their Stimulus Bill?
They pressured the OMB to make a call in favor of the loan before they felt comfortable so that Vice President Biden could announce the approval at the groundbreaking for the company’s factory in 2009. And this was not just “some” company. Solyndra was an important component of President Obama’s ideologically driven campaign to develop green jobs and what he calls renewable energy. The political motives took precedence over economic considerations and caused the loan to be approved without due diligence. When White House chief of staff, Rahm Emanuel asked officials at the OMB whether “there is anyway we can help speed along on OMB side” one official responded, “I would prefer that this announcement be postponed.” This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right.” The loan was subsequently approved and the announcement was not postponed.
Did the involvement of the Obama administration end with executive pressure to approve a massive loan without the same stringent requirements a common citizen must face today to get a home mortgage? No. According to House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and Rep. Cliff Stearns (R-Fla.), chairman of that panel’s oversight and investigations subcommittee, “Solyndra was the hallmark of the President’s green jobs program and widely promoted by the administration as a stimulus success story, right up until its bankruptcy and FBI raid.”
Is there any evidence that members of the Obama administration were personally involved with this empty shell of a company? In May 2010, President Obama made a personal visit and promoted the company. According to White House visitor logs, between March 12, 2009, and April 14, 2011, Solyndra officials and investors made no fewer than twenty trips to the West Wing for personal visits with members of the administration. Most troubling of all, a big financial backer of the company, Oklahoma billionaire investor George Kaiser, was one of the top bundlers to President Obama’s campaign. Bundlers are people who gather contributions from individuals in an organization or community, and present that sum to a campaign. Kaiser made numerous visits to the White House before the company received the multimillion dollar loan from the government.
Was this favoritism? Was this a massive example of the Crony Capitalism that is poisoning our economy? An audit by the Government Accountability Office in July 2010 concluded that the Energy Department “lacked appropriate tools for assessing the progress” of the loan program and that the department treated applicants inconsistently, “favoring some applicants and disadvantaging others.”
Was this expensive boondoggle unforeseen? Was it a shock out of the blue blindsiding the Obama administration without warning? Hardly, a now exposed e-mail exchange between Energy Department staff members in August 2009 stated that a credit-rating agency predicted that the green energy company would run out of cash in September 2011. Solyndra filed for bankruptcy on the final day of August. Can the administration in any way claim they were kept in the dark about the inner workings of the company? This is difficult to maintain since Energy Department officials have been sitting in as observers at Solyndra’s board meetings for months prior to the crash.
Can you imagine what the reaction of the media would have been if when Enron imploded it was revealed the Bush Administration had guaranteed a half billion dollars in loans or if any of the serial investigations had found that members of the administration had sat in on the board meetings with the very people who perpetrated the fraud? Does anyone doubt that there would have been a feeding frenzy? Does anyone imagine there wouldn’t have been cries of “Who knew what and when did they know it?”
In our transforming America, what is the reaction to the Obama administration’s intimate relationship to the collapse of their flagship green technology company? Silence. Unless you follow the alternative media you wouldn’t even know there was a problem. The masses of voters who get their news from the Corporations Once Known as the Mainstream Media or their comedic fellow-travelers, Jay Leno, John Stewart, and company have no idea of the scheme which has flushed over 500 million dollars down the tube, into someone’s pocket and probably future political contributions to the very people who signed the check.
Not only is the hypocrisy stunning the chutzpa and hubris of our cynical leaders is breathtaking. The Obama Administration, which operates in accord with Saul Alinsky’s Rules for Radicals, has embraced the Cloward/Piven Strategy to collapse the economy through over the top spending. With a world collapsing around us because of debt they continue to spend and spend and spend.
What should we do? How should American citizens react to this betrayal of the public trust? We should demand our money back and we should demand that those involved be prosecuted to the fullest extent of the law.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
Friday, September 9, 2011
Real Hope for a Change
Hope and change were the magic words that swept a relatively unknown, inexperienced Barack Obama into the Oval Office. He campaigned as the one able to fix the Bush economy. Once in office he has protested that he didn’t know how bad the economy was even though that was what he had run his campaign on. He has spent the majority of his first term blaming everyone for everything. His signature accomplishments, the stimulus, Obamacare and the Dodd-Frank financial reform have done more to hurt than help. Serial vacations and weekly golf outings aside, President Obama has worked hard and has so far managed to turn a recession into the Great Recession. Now he offers the opening salvo of his 2012 campaign economic platform and the message is, “More of the same” with no solution in sight.
The solution to our current malaise is not more of the same. It isn’t spreading the wealth around in a step-by-step slide into socialism. The solution isn’t even a return to the status quo as it stood before the current administration began its war on American exceptionalism. We cannot return to a system that alternates between Republican and Democratic Progressives. We must make a break with the post-Reagan past. We must return to the fundamentals that made America the greatest nation the world has ever known: individual liberty and free enterprise safe guarded by a written constitution, and a federal representative republic operating on democratic principles
The solution is simple. How we get there is the subject of this article and hopefully a sign pointing in the direction of change.
First we have to unleash the primary engine of our greatness, our people.
Currently a tax system no one, even the people who write it, can understand depresses creativity and entrepreneurship by penalizing anyone who excels with the aptly named progressive tax. Income tax had been declared unconstitutional by the Supreme Court in 1894. So Congress led the way in proposing and passing the 16th Amendment which allowed for not only an income tax but a graduated income tax. The first income tax law provided for a graduated tax with a top rate of 7%. And when it was stated during the debate that someday the rate might reach an unbelievable 50% the speaker was laughed to scorn. Yet, by 1961 the top rate had climbed to 91% with the 50% rate beginning at the $16,000 level. These rates were cut dramatically under Ronald Reagan and a wave of growth was ignited that blazed for decades. However they have been creeping back up ever since. But it isn’t the rates whatever they are that we should stand against. It is instead the idea behind them. If we want a level playing field and if we want everyone to pay their fair share what we need is a flat tax. Everyone, whether they make $1,000, $10,000 or $10,000,000 pays the same percentage with no deductions and no tax credits. Everyone pays. Everyone contributes. If you earn money you join with all other earners to support the nation. Trying to tax our way out of debt elicits a paraphrase of Parkinson’s Law, “Expenditures always rise to meet income.”
Next we have to unleash our corporations.
Today America has the highest corporate tax rate in the world. This makes us uncompetitive and unattractive to foreign capital. First of all tax on corporate profits is a double tax because corporations are owned by stock holders. When the profits are distributed to the owners of the stock they are responsible for this as income. Therefore the corporate tax is a double tax which is obviously unfair and an inhibition to growth and productivity. I do not propose to lower the corporate tax rate. I propose we eliminate it entirely. This would strike a blow for true equality, freedom, and fairness. It would also take a giant step in the direction of making America once again the most attractive place in the world for those who want the freedom to excel.
I would couple this with an immediate moratorium on federal regulations and a roll back on those which have shackled our economy since the beginning of the progressive era. Take the oil industry for example. If we would cut the ideologically driven threads which bind this giant we could unleash the power of our vast reserves, free ourselves from dependence on our enemies and create millions of jobs. “Drill Baby Drill” could become the slogan for a general renewal of American free enterprise. We need to cut the red tape that strangles us and let freedom ring.
What about foreign Affairs?
Internationally we need to return to the policies which guided us from being a raw undeveloped nation on the edge of civilization to the pinnacle of world power. This foreign policy is superbly summed up by one of the most under-rated presidents in American History, John Quincy Adams in his statement, “America goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.” To return to America’s traditional foreign policy we need to end the undeclared wars. Stop maintaining garrisons in more than 100 nations around the world, bring our troops home, and guard our own borders. We need to quit trying to build nations for people who don’t even like us, come home and rebuild our own infrastructure once the envy of the world now a crumbling reminder of what we could once accomplish.
We also need to return the control of America’s money to Congress where it belongs according to the Constitution. The perpetually re-elected have abdicated their responsibility to create money to the Federal Reserve. Originally instituted to abolish the business cycle and manage the economy this central bank has presided over the devaluation of American currency and the inflation of one bubble after another which has led to one crash after another.
It is instructive to remember, that Marx in his Manifesto of the Communist Party called for, “Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.” And that Thomas Jefferson said, “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” We must free ourselves from this privately and secretly owned corporation that controls our monetary system and our economy.
Lenin once said, “The surest way to destroy a nation is to debauch its currency.” The Federal Reserve Bank has inflated our currency almost beyond recognition and to re-establish our nation as the greatest experiment in human freedom that it was meant be we must reverse this trend. To do this we must stop the deficit spending which drives our debt which creates the need for politicians to inflate our currency to hide their mismanagement. We need to cut current deficit spending, cap future spending, and begin to pay down the debt. Only by actually becoming responsible once again will we create the certainty of value that sound money portrays. Inflation is a dishonest tax upon all we earn and the silent thief of all we save.
Our current leaders work to manage the decline of America. However, those of us who refuse to accept the inevitability of this decline can turn it around. We can stand in the gap and bring forth the re-birth of America. So, if we have the will and the courage we can have some real hope for a change.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
The solution to our current malaise is not more of the same. It isn’t spreading the wealth around in a step-by-step slide into socialism. The solution isn’t even a return to the status quo as it stood before the current administration began its war on American exceptionalism. We cannot return to a system that alternates between Republican and Democratic Progressives. We must make a break with the post-Reagan past. We must return to the fundamentals that made America the greatest nation the world has ever known: individual liberty and free enterprise safe guarded by a written constitution, and a federal representative republic operating on democratic principles
The solution is simple. How we get there is the subject of this article and hopefully a sign pointing in the direction of change.
First we have to unleash the primary engine of our greatness, our people.
Currently a tax system no one, even the people who write it, can understand depresses creativity and entrepreneurship by penalizing anyone who excels with the aptly named progressive tax. Income tax had been declared unconstitutional by the Supreme Court in 1894. So Congress led the way in proposing and passing the 16th Amendment which allowed for not only an income tax but a graduated income tax. The first income tax law provided for a graduated tax with a top rate of 7%. And when it was stated during the debate that someday the rate might reach an unbelievable 50% the speaker was laughed to scorn. Yet, by 1961 the top rate had climbed to 91% with the 50% rate beginning at the $16,000 level. These rates were cut dramatically under Ronald Reagan and a wave of growth was ignited that blazed for decades. However they have been creeping back up ever since. But it isn’t the rates whatever they are that we should stand against. It is instead the idea behind them. If we want a level playing field and if we want everyone to pay their fair share what we need is a flat tax. Everyone, whether they make $1,000, $10,000 or $10,000,000 pays the same percentage with no deductions and no tax credits. Everyone pays. Everyone contributes. If you earn money you join with all other earners to support the nation. Trying to tax our way out of debt elicits a paraphrase of Parkinson’s Law, “Expenditures always rise to meet income.”
Next we have to unleash our corporations.
Today America has the highest corporate tax rate in the world. This makes us uncompetitive and unattractive to foreign capital. First of all tax on corporate profits is a double tax because corporations are owned by stock holders. When the profits are distributed to the owners of the stock they are responsible for this as income. Therefore the corporate tax is a double tax which is obviously unfair and an inhibition to growth and productivity. I do not propose to lower the corporate tax rate. I propose we eliminate it entirely. This would strike a blow for true equality, freedom, and fairness. It would also take a giant step in the direction of making America once again the most attractive place in the world for those who want the freedom to excel.
I would couple this with an immediate moratorium on federal regulations and a roll back on those which have shackled our economy since the beginning of the progressive era. Take the oil industry for example. If we would cut the ideologically driven threads which bind this giant we could unleash the power of our vast reserves, free ourselves from dependence on our enemies and create millions of jobs. “Drill Baby Drill” could become the slogan for a general renewal of American free enterprise. We need to cut the red tape that strangles us and let freedom ring.
What about foreign Affairs?
Internationally we need to return to the policies which guided us from being a raw undeveloped nation on the edge of civilization to the pinnacle of world power. This foreign policy is superbly summed up by one of the most under-rated presidents in American History, John Quincy Adams in his statement, “America goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.” To return to America’s traditional foreign policy we need to end the undeclared wars. Stop maintaining garrisons in more than 100 nations around the world, bring our troops home, and guard our own borders. We need to quit trying to build nations for people who don’t even like us, come home and rebuild our own infrastructure once the envy of the world now a crumbling reminder of what we could once accomplish.
We also need to return the control of America’s money to Congress where it belongs according to the Constitution. The perpetually re-elected have abdicated their responsibility to create money to the Federal Reserve. Originally instituted to abolish the business cycle and manage the economy this central bank has presided over the devaluation of American currency and the inflation of one bubble after another which has led to one crash after another.
It is instructive to remember, that Marx in his Manifesto of the Communist Party called for, “Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.” And that Thomas Jefferson said, “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” We must free ourselves from this privately and secretly owned corporation that controls our monetary system and our economy.
Lenin once said, “The surest way to destroy a nation is to debauch its currency.” The Federal Reserve Bank has inflated our currency almost beyond recognition and to re-establish our nation as the greatest experiment in human freedom that it was meant be we must reverse this trend. To do this we must stop the deficit spending which drives our debt which creates the need for politicians to inflate our currency to hide their mismanagement. We need to cut current deficit spending, cap future spending, and begin to pay down the debt. Only by actually becoming responsible once again will we create the certainty of value that sound money portrays. Inflation is a dishonest tax upon all we earn and the silent thief of all we save.
Our current leaders work to manage the decline of America. However, those of us who refuse to accept the inevitability of this decline can turn it around. We can stand in the gap and bring forth the re-birth of America. So, if we have the will and the courage we can have some real hope for a change.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
Friday, September 2, 2011
Ride to the Sound of the Guns
He graduated with the highest number of demerits and at the bottom of his class. He was the poster child for graduating by the skin of your teeth. Yet he also became the youngest Major General in American History and the man General Sheridan believed did more than any other to win the Civil War. He was a fighting commander whose standing order in combat was, “Ride to the sound of the guns!” Perhaps it flowed from the fact that while at West Point George Armstrong Custer didn’t study very much, that he had only one strategy, and only one tactic. The strategy was victory, and the tactic was charge.
Although our current crop of military leaders are made up of politicians who have learned how to pull the levers and work the system in a way they resemble the always ready for action Custer. They appear to be a one trick pony. Unfortunately that trick is kowtowing to the political leadership telling them exactly what they want to hear when what they need to hear might be the exact opposite.
For a decade between 1979 and 1989 the United States military and Intelligence establishments were intimately involved in supporting the Mujahedeen insurgents of Afghanistan battle against the invading Soviets. We supplied weapons, training, Intel, and logistical support. We had many field operatives, soldiers, and analysts who were deeply conversant with all the nuances of the military and political realities in Afghanistan.
Yet when our leaders decided to invade the country to flush out Al Qaeda and punish the Taliban for sheltering them, military leaders who should have known better presented and approved plans that even a layman could see would lead to a new insurgency against America as the next invaders. These leaders bowed to the dictates of modern America post-Vietnam strategy delivering a campaign with minimum casualties and victory in name not in fact. Instead of using the expert professional American forces needed to produce a real victory they relied on mercenary indigenous warriors who with the help of our firepower pushed the Taliban to the wall and then let them walk out the back door.
What is the result? Ten years later we are still fighting and taking casualties in a war scheduled to end like a bad movie in 2011 or 2014 or…? Having never sealed the border between Afghanistan and Pakistan we are fighting an enemy that can not only melt into the civilian population it can rest and regroup in safe havens attacking our isolated and exposed garrisons almost at will.
Even at this point, after President Obama’s surge, an army of less than two hundred thousand trying to pacify a nation the size of Texas with the most forbidding terrain on the planet isn’t going to work. After the investment of half a trillion dollars and more lives, limbs, and blood this mission teeters on the brink of failure. Our only allies in the country are hopelessly compromised and corrupt characters who have little relevance outside their palaces and little interest beyond funneling our money out of the country for their post-war retirement.
Where are the military leaders with the courage of Custer? Where are the ones who will hazard their career to speak truth to power? If an untutored armchair general with no more information than is commercially available can see that if we don’t seal the border and provide enough troops to hold the territory we capture we will never win why can’t military experts? Where are the generals who demand what they really need to win and ready to resign if they don’t get it? If General Petraeus had done this he would have had a lock on the Republican nomination and the White House in 2012.
What about our fearless media? Where are the nightly counts of the fallen that graced the network newscast when Bush the Younger was in office? Where are the anti-war demonstrators who stood guard outside his Texas ranch and dogged his speeches? Where are the American people? Why is no one asking how can it take more than a decade to train an Afghan army to protect their own country from their own people? In WWII we trained and deployed more than ten million soldiers, sailors and marines. We equipped armies, air forces, and navies and defeated all comers. Now we cannot secure one country in ten years?
I am not saying that after the sneak attack of 9-11 we shouldn’t have responded. We should have immediately devastated our enemies and their allies telling the Taliban if it happened again it would happen again. Al Qaeda had been attacking us for a decade, and we knew exactly where they were. With B-2s and cruise missiles we had the capability to decapitate them without the necessity of boots on the ground. We needed to strike hard and fast. We should have had the political and military leadership to take them out within twenty-four hours. Instead we dithered around until Al Qaeda and their Taliban hosts were dispersed and disappeared. We didn’t do what we should have done and instead did do what we shouldn’t have done producing a decade long occupation in a land that has defeated or outlasted every invader.
How should we have dealt with the on-going threat of Al Qaeda: a non-state enemy? Instead of fighting undeclared wars we should have followed the Constitution and granted Letters of Marque and Reprisal which would have granted compensation and legal authority to private firms or individuals to exact retribution upon the perpetrators of the attack. Such action is not only authorized by the Constitution it is recognized by International Law. Send in the military equivalent of Dog the Bounty Hunter. Let Blackwater do the job, and see what free enterprise can accomplish.
What we need are military officers with the bravado of Custer. We need military leaders willing to hazard all, even their careers. Officers who are willing to walk into the Oval Office and say we’re fighting the wrong war, the wrong way, in the wrong place, and at the wrong time. We need officers who remember that they have sworn to uphold the Constitution of the United States not an administration, not a career, and not a pension.
What we need is another Custer. Without one what we may get is another Little Bighorn.
Dr. Owens teaches History, Political Science, and Religion for Southside Virginia Community College. He is the author of the History of the Future @ http://drrobertowens.com View the trailer for Dr. Owens’ latest book @ http://www.youtube.com/watch?v=_ypkoS0gGn8 © 2011 Robert R. Owens drrobertowens@hotmail.com Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens.
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