Root referred to Obama's “Whistle Stop Tour” as the “Whistle Past the Grave Tour” because while Obama smiles and waves, our economy is heading downhill towards a depression. On FOX News, Root called Obama “a President who understands nothing about the Constitution- virtually everything he is recommending from bailouts, to stimulus package, to tax cuts for people who don't pay taxes- is unconstitutional.”
Root continued, “Our economic crisis has been caused by crippling debt and bloated government spending. Obama's recipe for this crisis is more debt and more government spending. You cannot spend your way out of bankruptcy.”
Root's own economic stimulus plan will be the centerpiece of his upcoming book (released in May by John Wiley & Sons). Root favors a one year suspension of personal income taxes. He calls it an Income Tax Vacation. Root explains, “My plan rewards the people who create all the jobs and pay all the taxes in the first place. It allows American taxpayers and small business owners to simply keep more of their own money- and cut out the middleman (the government). When taxpayers are able to keep all their money for one year, the result will be the greatest economic recovery of all time. My plan puts the money in the hands of the its rightful owners- the people that earned it, and the people that know how to use it to invest in stocks, real estate, small business and the creation of jobs. It's time to save the group that truly is too big to fail- taxpayers, business owners, and job creators. The reason Obama is against this idea is he's afraid the taxpayers might find out that government wastes their money and can run just fine without it. He's afraid that taxpayers might actually like it and demand an end to income taxes.”
To his critics who say his idea is too expensive, Root says, “If we can afford $1 trillion for Obama's stimulus plan, we can certainly afford the $1.3 trillion it costs to suspend income taxes. Why can we afford to hand out trillions of dollars to fat-cat corporations, banks, Wall Street brokerage houses, auto companies, unions and people that don't pay any taxes, but it's considered too expensive to give the people that actually pay the taxes a one year vacation? This is the CHANGE that Obama should have brought to Washington. Instead he's bringing the same old 'big government, tax and spend, punish the successful people' policies that have failed miserably so many times in the past.”
Root calls himself "the only politician in the country with the guts to stand up for the people that pay all the taxes in the first place- taxpayers and small business owners." Root a lifelong Republican turned Libertarian calls the Republican Party "gutless, rudderless and leaderless."
Please visit Wayne's Website to see these and many other FOX News and FOX Business appearances by Wayne, as well as hear Wayne's latest appearance on “Savage Nation” with Michael Savage: www.RootForAmerica.com
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( 3 / 499 )The latest reports are out- and there's good news and bad news for California. The good news is that California leads the nation. The bad news is that California leads the nation in deficit, debt and the amount of residents escaping to other states. The Mamas and Papas are rolling over in their graves. The California Dreamin' of the 1960's has morphed into the California Nightmare.
My new book “The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts” is about the fact that liberal fiscal policies, government expansion, government employee unions, and government over-spending have all combined to bankrupt America. Examining the economic crisis occurring at this moment in America's largest state proves the point of my new book beyond a shadow of a doubt. “The People's Republic of California” experiment is Exhibit A that liberal “tax and spend” fiscal policy is a terrible failure. It is an experiment gone bad. VERY bad.
California is the perfect test tube baby- the state is arguably the most liberal, big spending, big government state in the entire United States of America. After decades of spending like there was no limit to taxpayers' money, California is mired in a deep economic crisis- poised to turn into economic Armageddon. The reality is that the state of California is bankrupt. Actually the state is far beyond bankrupt- what do you call “so bankrupt, there is no amount of money available anywhere in the world to pay off our debts”? California is so bankrupt that bankruptcy attorneys have no words to describe the depths of this disaster. Let's just call it “Bankruptcy squared.”
This is a lesson for the rest of America about what happens when you spend too much and tax too much. How much has California spent? The state has an expected budget deficit of at least $41.8 billion over the next two years. That's a bigger deficit than any state EVER. That's a bigger deficit than most countries. Yet since Governor Arnold Schwarzenegger's election in 2003, spending has increased by a staggering 40%. The actual dollar increase was $41 billion, to a total of $144.8 billion annually under the Governator. That's called “whistling past the graveyard.”
Here are the facts, plain and simple:
*California leads the country in spending on government employees.
*California spends twice as much as the national average on education (with dismal results).
*California spends almost $200 million per year on free college educations for illegal immigrants (no that's not a typo).
*California has the most draconian anti-business rules and regulations in the nation. That forces businesses to spend too much. The result is that California is the most costly place in America to do business (according to the Milken Institute's business cost index).
*California is heaven for trial lawyers and hell for small businesses. That could be why so many major employers have left the state (according to Investor's Business Daily).
*California has the second highest income tax rates in all of America. And it is among the nation's leaders in virtually every tax category possible- income taxes, business taxes, sales taxes, property taxes, taxes on real estate transactions, taxes on stock transactions, capital gains taxes, workers compensation taxes, the list is endless.
The results:
*Over the next 18 months, California is facing (according to the Governor) a budget deficit of over $40 billion dollars- and that may prove to be conservative.
*California is reduced to begging the federal government for a bailout. There is no other solution on the table. But one year after a federal bailout, the state would undoubtedly be $20 billion (or more) in debt again.
*California has been given the lowest bond ratings of any state in America (soon no one will dare to loan a penny to California). That little problem costs California's taxpayers millions of wasted dollars per year in increased interest costs.
*In the 1970's California led the nation in job growth. Since 2000, California's job growth is 20% lower than the nation. But it's not just any jobs that California is losing. According to the California Manufacturers and Technology Association, the state has lost 440,000 high-wage jobs.
*California's unemployment rate is now the 3rd highest in the nation.
*In the 1970's California was among the nation's leaders in population growth. Last year, over 144,000 more people left California than moved in. That led the nation. This was the 4th straight year of out-migration. Why is that important? As more and more high-income and high-net worth individuals move out, homes will drop in value, small businesses will fail (as they lose customers), and taxes will rise on the remaining citizens (to replace the taxes no longer paid by those who have escaped).
Do you get the picture? The proof is in the pudding- big government spending leads to economic disaster. When your state (or country) is run by government employee unions; teachers unions; trial lawyer unions (The Bar Association); auto unions (who demand billion dollar bailouts from politicians they supported); lobbyists; and special interests; the result is financial Armageddon. California is Exhibit A.
Governor Arnold Schwarzenegger should stand by a Washington D.C. freeway exit with a sign that says, “Broke. Need $40 BB handout. Will NOT work for food. We will spend it as soon as you give it to us- plus 20%. See you tomorrow.”
There is no way out for California, short of bankruptcy. The problem of course is California Dreamin. What I mean by that is that Californians live in a liberal, bleeding-heart, utopian dream world. It sounds like a nice thing to pay government employees huge salaries and pensions, as well as lifetime health benefits (as much as 60% higher than similar jobs in the private sector). It sounds nice to mandate a “living minimum wage.” It sounds nice to enforce tough rules and regulations on business. It sounds nice to offer generous welfare benefits to the poor. It sounds nice to spend lots of money on the homeless. It sounds nice to let anyone sue his or her employer for virtually anything. It sounds nice to make it virtually impossible for business owners to fire an employee. It sounds nice to mandate fines for whatever government thinks is beneficial for society (recycling, carbon taxes, greenhouse gases). It sounds nice to spend more money on education "to benefit the children." It sounds nice to offer free breakfast and lunch (as well as courses taught in Spanish) to poor students at public schools- even if they're here illegally. It sounds nice to pay for the college education of illegal immigrants. It sounds nice to defend animal rights. It sounds nice to ban offshore oil drilling. All of that sounds like “the right thing to do.” But in the real world, with real consequences, it is a dramatic failure.
The lesson here is that “nice” may sound nice in theory. It might work out well in some kind of utopian dream state. But in the real world “nice” doesn't pay the bills. “Nice” doesn't pay a budget in the real world. All the liberal do-gooding in the world only leads to one thing: the bankruptcy of your state and a massive exodus of taxpayers. Nice has turned the California Dream into a Nightmare.
Is this a problem (as liberal “tax and spend” politicians claim) of too little taxation in California? Not with the second highest income tax rates in the country. California even imposes an additional “millionaires” tax surcharge on the highest incomes. The result is that the wealthy pay huge taxes in California. The top 1% of the California population pays 50% of the income taxes. The top 14% of taxpayers (those earning $100,000 or more) paid 83% of the income taxes in California (the latest 2005 figures). Could there be a connection between these numbers and the mass exodus of productive people (like me) out of the state? I escaped to Nevada a decade ago for these very same reasons. The California Nightmare of big government, big taxes and big spending drove me away. My loss has cost California dearly- in the way of millions of dollars of lost tax revenues to the state. But in the real world that's what happens when you choose to treat the people who create the jobs and pay the taxes badly- they choose to leave. The result: California gets none of my money.
The California economic model proves once and for all that taxes are not too low. The out-of- control deficit in California has nothing to do with taxes. California has a spending addiction. It just doesn't matter what the tax rates are. Whatever tax revenues flow into government coiffeurs, the spendthrift politicians and bureaucrats in California find a way to spend it all- and then some. The actual total is irrelevant. Give them $1.00, and California politicians will spend $1.50. But raise taxes and give them $2.00 (thereby bankrupting small businesses and forcing them to flee your state) and they'll spend $3.00. There's always some “worthy” new government program to spend it all on. When you give billions of dollars of tax revenues to a government bureaucrat looking to keep a job for life, or a career politician looking to keep his or her job for life, they will find a way to spend it all- plus 20%.
How do we stop the insanity? Let's start with state and federal employees. No sane state can justify paying government employees compensation packages 40% to 60% higher than the private sector. Have you ever been to the DMV? Is government run efficiently for all that money? Is it run effectively for all those big salaries given to public service employees? In many cases, government employs people who couldn't get a job in the private sector. Do they deserve compensation 60% higher than you or me? On what grounds? Do they deserve to retire at age 55, while you and I work till the day we die, to pay all the taxes necessary for their huge pensions and unlimited health benefits?
Education is another place to start. “Spending more for the children” is one heck of a sound bite, yet what it sounds like and what it means are completely different things. A raise in “education spending” has little or NOTHING to do with spending more money on our children, or improving their economic opportunities in the future. It merely means spending more money on the education bureaucracy. It means hiring thousands of new bureaucrats (administrators) who will never pick up a book, grade an exam, or teach a course. Raising teacher salaries to far above the national average doesn't help the kids (just look at California for the proof). It does however increase union dues for the teachers union. It does fund more bureaucrats. It does bloat the population of the teacher's union- thereby giving it more clout and more reliable votes (in order to vote themselves more raises and pension increases).
Giving teachers tenure, so that under-performing teachers can never be fired- doesn't help the kids either. Giving teachers bigger pensions and allowing them to retire at age 55 to enjoy a pension for LIFE doesn't help the children one iota. But if that teacher lives to age 85, collecting a big pension for 30 years, it is guaranteed to overwhelm California's taxpayers and bankrupt the state budget. In many cases, government employees are retiring young enough to be paid a pension for more years than they worked. Perhaps now you understand why California is mired in deficit and debt.
It all sounds “nice” and seems like “the right thing to do.” In reality it's a one-way street leading to deficit, debt, and eventually bankruptcy. There just aren't enough taxpayers, nor is there enough money in any state or country, to allow people to retire at age 55 and collect pensions for 25 to 30 years (or more). The numbers just don't add up- unless you expect the rest of us to pay 70% or 80% tax rates until the day we die to pay for this “privileged class” of federal and state employees. And even that might not be enough.
Allowing trial lawyers to run wild sounds great for California consumers, patients, and of course the “victims” of abuse by big business- until you realize a few facts of life. First, if you raise taxes on business, the result will be a mass exodus by big business, small business and professionals (like doctors). They will flee your state by the tens of thousands- thereby reducing the tax base and requiring more tax increases for those who are left. Second, most jobs and tax revenues are created by thousands of small business owners- not by big business. Small business is hurt far more by high taxes and workers compensation rates. Third, business (even big business) isn't all bad- the reality is that business pays the bills for all these bloated government programs and government employee pensions. Chase business away and there's no one to pay the bills. Government (and all the people living off government) desperately needs business to be successful and satisfied, or government ceases to exist.
Fighting on behalf of the rights of “defenseless animals” sounds like the right thing to do- until new laws requiring more humane treatment of chickens (just approved by the voters of California in the 2008 election) force the entire egg industry to leave your state. That reduces tax revenues by millions of dollars- once again increasing the deficit and debt of California.
Radical environmentalism sounds nice too. Saving the beaches by banning offshore drilling; making it virtually impossible for new oil refineries to open within your state borders; and mandating draconian new greenhouse gas rules that will add billions of dollars to bills paid by business and consumers; all sounds great, until it you get your latest utility bill…until you see the bill as you fill up at the pump…until you realize every product you buy at the store now costs more…until you realize that these government mandates result in more energy dependence on foreign nations that support terrorism. The result is that Californians are treated to the highest energy costs in all of America- 35% higher than the national average.
This reliance on big government, big unions, big taxes and special interests is a toxic brew that has poisoned the future of California, its citizens, its taxpayers, and future generations. The California Dream has turned into a toxic nightmare.
Now it's coming to a city, county or state nearest you. Instead of running from Armageddon, we're embracing it. We're electing more big government proponents (Obama and his friends); creating more bureaucracy (more agencies with hundreds of thousands of employees like Homeland Security); more draconian government rules and regulations (in the name of global warming); more government involvement in our everyday lives (universal healthcare); more foreign aid, foreign entanglements and wars across the globe; more powerful unions (our bailouts of the “Big 3” automakers will prop up bloated auto union contracts); more corporate welfare (by handing taxpayer money to wealthy companies through trillion dollar bailouts); more government “economic stimulus” packages; and certainly higher energy costs for consumers.
In reality the best way to stimulate the economy is not for government to spend more, while the citizens must cut more from their budgets. It is not for government to increase budgets and hire more employees, while the private sector cuts budgets and lays off employees. It is not for government to choose winners and losers- by giving away the taxpayer's money through bailouts, corporate welfare, or stimulus giveaways. It is not for the government to impose new mandates and higher taxes in the name of global warming that force businesses out of business.
The best way to stimulate the economy is simple: dramatically cut the taxes of those who earn the money and create the jobs. There's no middleman (government) needed. Let people keep more of the money they already earn. Now that's the most powerful economic stimulus plan in the world. Give taxpayers and job creators like me a vacation for the next year from income taxes and watch the economy rebound. Watch real estate prices rise again. Watch the stock market soar. Watch credit and capital markets start to lend again. Watch jobs increase. Give taxpayers and job creators dramatically and permanently reduced taxes, so we can keep more of our own money, and get ready for the greatest economic expansion in history.
President Ronald Reagan already proved it works. But he made the mistake of allowing government spending to increase wildly out-of-control, at the same time as he dramatically cut tax rates. That was a big mistake. Now combine the Reagan tax cut model with a dramatic cut in the size, scope and spending of government, and watch the economy go and grow. But that would be far too simple. Too much common sense confuses politicians. Either that, or my plan ruins their plans to get re-elected by spending more and giving away taxpayer's money to special interest groups and entitlement addicts.
We're headed in the wrong direction. Instead of running away from the train wreck of California's economic model, we are embracing it. With Obama as President, now all of America can turn into one big California with crushing debt; dramatic job losses; out-migration; failing schools; failing businesses; higher energy costs; higher business costs; bigger legal bills; and a drastically poorer quality of life. California Dreamin' has turned into our national obsession…and our national nightmare.
Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. His new book, “The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts” will be released in May 2009 by publisher John Wiley & Sons. For more of Wayne's political views, commentaries and to watch his many media appearances on FOX News Channel, please visit his web site at: www.ROOTforAmerica.com
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( 3 / 1189 )“Little by little, business is enlarged with easy money. With the exhaustless reservoir of the government of the United States furnishing easy money, the sales increase, the businesses enlarge, more new enterprises are started, the spirit of optimism pervades the community…bankers are not free from it. They are human. The members of the Federal Reserve board will not be free from it. They are human…Everyone is making money. Everyone is growing rich. It goes up and up…until finally someone
whose judgment was bad, someone whose capacity for business was small, breaks; and as he falls he hits the next brick in the row, and then another, and then another, and down comes the whole structure. That is no dream. That is the history of every movement of inflation since the world's business began, and it is the history of many a period in our own country. That is what happened to a greater or less degree before the panic of 1837, of 1857, of 1873, of 1893 and of 1907…when credit exceeds the legitimate demands of the country the currency becomes suspected and gold leaves the country.”
A politician named ROOT
I am currently writing a book entitled, "The Conscience of a Libertarian" patterned after my hero Barry Goldwater and his all-time conservative best-seller, "The Conscience of a Conservative." In my book, I present Barry Goldwater's insightful philosophy back in 1959 (when he wrote his book) to prove that nothing in politics ever really changes. It has been half a century since Goldwater put pen to paper to write his amazing book. His words back in 1959 could easily be used today to describe virtually all of our country's problems- and few readers would even notice that anything he talks about is half a century old. His description of problems and solutions back then turned out to be right on the money. If only we had listened.
Well the quote above by a certain politician named ROOT certainly describes the economic crisis of 2008 to a T: the bailout, the bankers' mistakes, the stock market collapse, the credit freeze, and the reaction of the Federal Reserve. But they aren't my words. And they weren't spoken about the government banking crisis and bailout of 2008. Yes, they were the words of a politician named Root. Just not this Root.
Those words above were actually spoken in 1913 by Elihu Root, United States Senator from the state of New York. That distinguished politician Root went onto become Secretary of War and Secretary of State under President Teddy Roosevelt. But no truer words have ever been spoken. Despite being almost a century old, those words almost perfectly describe our current economic crisis. Once again, proving that nothing ever really changes. History repeats itself again and again- it's just a recycling of the same events and same mistakes. Only those who study history can hope to avoid making those same mistakes over and over again.
As a former member of the 2008 Libertarian Presidential ticket who speaks across the country on economic issues, I am constantly asked, “How would you solve our current economic crisis?” In my new book, I'll explain how I'd dramatically cut spending and taxes. I'll explain how important it is to institute term limits (to limit the power of career politicians). I'll explain the greatest threats to our economic prosperity- big government, big unions, and big taxes. More specifically the union threat that comes from teachers unions, auto unions, lawyer unions (known as The Bar Association) and perhaps the most damaging of all, government employee unions. I'll describe the threat to our economy from illegal immigration. I'll describe the threat to our economy from proponents of global warming. But before the book even comes out, I want to present what is perhaps the most important piece of the puzzle: the elimination of the Federal Reserve. It's that important.
I have come to understand that we must destroy this cancer on our economy before the Fed destroys us. And in concert with the elimination of the Fed, we must go back to the Gold Standard. Is this a new solution? No, my namesake Elihu Root had the same advice back in 1913 when arguing against the formation of a central bank. If only we had listened to Root back then, just as we should have listened to Barry Goldwater back in 1959.
“Eliminate the Fed? Are you crazy?” I can hear the naysayers now. But the Federal Reserve isn't the solution. Like big government (of which they are a tool), the Fed is the problem. Virtually every economic downturn since 1913, when the Fed was created, can be traced to Fed policies. Lest we forget, the Fed was around in 1929 when the stock market crashed. They were around for the Great Depression- actually they were right smack dab in the middle of the worst economic mess in U.S. history. Their policies helped to turn a deep recession into the Great Depression. Even if you're a Fed defender, and don't agree that they were a contributor to the Great Depression, you'll have to admit that the Fed didn't prevent or solve the deepest economic crisis in American history. They certainly didn't see it coming. But then they never saw the financial crisis of 2008 coming either.
As recently as last April 2, 2008, the Fed didn't even know we were in a recession. Back then, Fed Chairman Ben Bernanke testified before a joint Congressional committee where he said, "A recession is possible." He described the economy back then as in "slight contraction." In response to those remarks, I wrote a political commentary (just like this one). My shocked and angry response was to ask "Are the Feds cooking the books?" That's how certain I was as a small businessman that we had already been in a deep recession for months. I believed Bernanke's statement to be so ignorant, naive and just plain dangerous, as to indicate he was either purposely lying to the American public, or hopelessly out of touch.
How is it possible that a small businessman like me clearly understood how bad things were in the
American economy way back in April 2008, while our Fed Chairman was completely in the dark (or in denial)? The answer is simple- I live on Main Street. The Fed lives in an "Ivory Tower" and hasn't a clue what's happening in the real world, until after it happens.
The Fed doesn't run a business. The Fed simply reads about business. They study reams of economic statistics- thereby deducing we have a problem long after guys and gals like me with a dozen, or a few dozen employees, have already experienced it. Small businesspersons are the "canary in the coal mine."
Little 'ol me knew there was a huge economic crisis going on, when the big, bad, powerful Fed still didn't have a clue. How scary is that? These are the geniuses running the entire U.S. economy. Worse, Bernanke is widely considered one of the world's experts on the Great Depression. This is a man who once served on a panel of experts that determine when recessions begin and end. Yet it turns out he doesn't know his front from his end. It is obvious that if you want to know whether we're in a recession or not, you're better off asking the butcher, baker or candlestick maker. Or in this case, the butcher's son.
By the way, in that same commentary, I reported that the economy for small businessmen like me was
so bad that we were not only already in a recession, but facing the deepest recession since 1929- possibly a second great depression. It turns out that my prediction was far more accurate than anything that came from the lips of Ben Bernanke, or anyone in the Fed, last Spring. Perhaps we need to put a small businessperson in charge of the Fed. Or better yet, eliminate it altogether.
The Fed's strategy is simple: The Fed floods the economy with “easy money” by either artificially lowering interest rates, or printing more money. That creates an artificial economic boom- to help politicians to get elected or re-elected. Invariably this artificial economic boom is followed by a very real “economic bust.” Recent examples of this artificial bubble bursting can be seen in the dotcom (technology & computer) world implosion in 2000, and again when the banking, credit and real estate markets collapsed in 2008.
If it's so easy to see the mistake, why does the Fed continue to pursue a failed strategy? Good question. The answer is simple: political pressure from fat cats (big contributors like banks, Wall Street, real estate firms), special interests (big contributors), and voters- who demand prosperity, easy money, low interest rates, and entitlements from big government. Someone has to pay for all these giveaways, handouts, goodies, corporate welfare, bailouts, stimulus packages, and entitlement ponzi schemes. The Fed makes it all possible by printing up new money to pay for it all. Without the Fed printing presses working overtime, politicians couldn't make promises to pay for every program under the stars. They certainly couldn't afford to pay for all those promises.
Nothing in the Constitution gives Congress the authority to give control of monetary policy to a central bank. NOTHING. That same United States Constitution demands that our U.S. currency be backed by stable commodities- such as gold or silver. The gold standard is a very simple concept- paper notes (our currency) are simply set at a fixed value, by matching them to pre-set fixed quantities of gold.
The return to the gold standard is (excuse the pun) the “gold standard” for a stable, credible, reliable money supply and a true free market economy. Why don't politicians want to set our currency to the gold standard? Simply because the gold standard stands in the way of the goals of big government proponents and their endless spending programs. The gold standard prevents politicians from inflating the money supply to hide the actual costs of the welfare state- from welfare itself, to corporate welfare, bailouts, handouts, entitlements, stimulus packages and nonstop wars across the globe. A billion here, and a billion there, and eventually this stuff starts to add up to serious money! That's exactly what politicians are afraid of.
In 1971 Richard Nixon totally removed the dollar's link to gold. This final deathblow to “real” American money created the fiat currency (paper notes) that we all use today. With this decision, the Fed could now print unlimited amounts of inherently worthless paper dollars, and in their eyes, were immune from any (immediate) consequences.Why did Nixon do it? To hide out-of-control government spending on the Vietnam war. Bombs, bombers, jet fighters and tanks cost big money. Governments can't afford them- unless the Fed covers the actions (and tails) of big spending politicians by creating more money out of thin air.
Needless to say, since 1971 inflation and the CPI have soared and the savings of hardworking Americans have been subtlety robbed to fund the giant welfare system that exists today. Unlike the deflationary early 1930s, when the US was on a gold standard and hence couldn't print unlimited dollars, today the US has no standards at all. The Fed can and does print (or create via computer) as many dollars as it wants and as a result, the money supply growth has vastly outstripped underlying real economic growth since 1971. Bernard Madoff has nothing on the U.S. government. Our government runs the biggest ponzi scheme on earth.
The politicians want no part of the gold standard because it threatens to limit their imaginations (and re-elections). It ruins their party. It keeps their imaginations (and greed) in check. With a gold standard in place there is no ability for a central bank to create money out of thin air to fund any and every bailout, stimulous package, pet project, or earmark. The gold standard forces politicians to live within their means. It forces banks to lend only to those with the credit to afford it- because the federal government is prevented from printing unlimited new money to bail them out.
The gold standard is a Libertarian's dream. It prevents deficit spending. It prevents the unlimited hiring of government bureaucrats- and the unfunded pension liabilities that come with them. The gold standard hinders government's ability to dole out massive welfare and entitlement programs. The gold standard stands in the way of government's ability to redistribute wealth and pursue economic re-engineering. With the gold standard in place, government automatically becomes more open, honest and transparent- it either lives within its means or raises taxes, as opposed to simply printing more money (creating a stealth tax called inflation).
Instantly, with the gold standard in place, government is more responsible and accountable to the people and the taxpayers. Inflation caused by the wholesale printing of money by the Fed is theft- government sanctioned white-collar crime. Because of the wholesale printing of money by the Fed, taxpayers and citizens lose the value in their savings accounts and assets without knowing how or why.
Here is a good question to ask your political leaders and representatives: Why on earth would we want to rely on the wisdom of fallible human beings (at the Fed) to determine monetary policy and stability,
when the gold standard is infallible? There is concrete proof that the Fed makes mistakes- afterall, the Fed never saw this present economic crisis coming. Sound familiar? The flawless Fed never saw the 1929 crash or Great Depression coming. Perhaps an adjustment to their crystal ball is needed? The gold standard is objective- it doesn't need to think. Humans on the other hand are subjective- they often make bad decisions (over-reacting, under-reacting, or being intimidated in response to political pressure at the moment).
Under the gold standard, money regulates itself. The gold standard regulates government by keeping spending under control. The gold standard regulates the behavior of banks (limiting their lending to qualified borrowers). The gold standard regulates savings- citizens are automatically incentivized to save more if their money is actually worth something. Why save $1.00 today, if that same $1.00 is worth 30% less tomorrow due to the Fed printing enormous amounts of new money?
The gold standard regulates interest rates, which suddenly reflect real supply and demand for credit, not numbers artificially created out of thin air to reflect political needs. The gold standard regulates business, as CEO's must base their business decisions on sound policy (knowing government or the Fed won't be there to bail them out).
Elihu Root realized all this back in 1913. It's a shame we didn't listen. Please study history and explain to me where the elder Mr. Root was wrong? Explain to me what exactly the Fed has accomplished in the almost 100 years since then? How have those results been an improvement in performance over the economic results the U.S. economy achieved under the gold standard?
If you don't believe me, or Elihu Root, just listen to the words of Thomas Jefferson, the Founding Father who wrote our Declaration of Independence:
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”
--Thomas Jefferson
Lastly, ask yourself the most important question of all: With record-setting budget deficits under President Bush; trillion dollar bailout and stimulus programs under President Bush; even bigger trillion dollar bailout programs under President Obama; even bigger trillion dollar stimulus packages under President Obama; record-setting handouts, entitlements and redistribution of wealth under President Obama (due to higher taxes); record-setting national debt under President Obama; and the Fed printing presses working overtime to create unlimited quantities of depreciating dollars (to cover up all this lavish spending); why would anyone want to own the dollar? Why indeed. We are in for a rough ride.
The antidote is simple: destroy the Fed before the Fed destroys us.
Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. For more of his views, commentaries and to watch his many media interviews, please visit his web site at: www.ROOTforAmerica.com
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( 3 / 1199 )One solution to the insanity, stupidity and arrogance of politicians is so simple: Term Limits.
Kings and queens, otherwise known as career politicians, govern us. And it's not just kings and queens that rule the American citizenry- but family dynasties handed down to princes and princesses. Our commander in chief was named either Clinton or Bush for 20 consecutive years. We almost extended that streak to 28 years with Hillary Clinton. Instead we elected Obama- and he named a Clinton Secretary of State. Hillary Clinton has left the U.S. Senate for her new job- and the replacement for her New York Senate seat appears to be a battle between a Cuomo (the son of the 3-term New York Governor Mario Cuomo) and a Kennedy (the daughter of John F. Kennedy). But what are their qualifications? A name? Is that enough to qualify for the United States Senate nowadays? Shouldn't there be an election, as opposed to a coronation by the political establishment fawning over a celebrity family name? And if a Cuomo or Kennedy is named to that seat, how long will they occupy it? 18 years? Perhaps 24 years? Will they leave the Senate seat to their children?
But far worse than the arrogance and sense of entitlement by a Kennedy, Cuomo, Bush or Clinton, is the arrogance, greed and corruption of politicians like Illinois Governor Rod Blagojevich. The media has made Blago into a monster (and a household name). He has come to symbolize everything wrong with politics. But there are Blagos all across this country- at all levels of political office. They are career politicians with a talent for raising money, twisting arms, doing favors and winning elections. We should not be naïve enough to believe that Blago was the first politician to allegedly try to sell a political office, or the last. We should not believe he was the first politician to allegedly expect a favor in return for a political appointment. It happens every day- although usually in more subtle fashion (and not on federal wiretap). Politicians like Blago prove the old adage that “power corrupts, and absolute power corrupts absolutely.”
But how does a politician become “absolutely powerful, arrogant and corrupted?” By gaining power and then keeping it for years, in many cases decades. Doug Bandow of the Cato Institute pointed out in 1996 that there had been more turnover at the Soviet Communist Party Central Committee in previous years than in the United States Congress. It has only gotten worse since 1996. It is almost impossible for a reformer with fresh ideas to unseat an entrenched incumbent at any level of government. Having politicians like U.S. Senator Byrd in West Virginia or U.S. Senator Harry Reid in Nevada may be good
for bringing home the bacon to West Virginia and Nevada, but it's absolutely terrible for the nation as a whole. Career politicians become special interest tyrants- demanding favors and federal dollars for their long list of friends and contributors- and with seniority and power gained over the years, rest assured they get whatever they want. Only term limits can bring an end to the absolute power and corruption of powerful career politicians.
The current system encourages career politicians. And of course having career politicians in office is exactly what encourages bigger and more powerful federal government. First, if a career politician faces a citizen politician in a race, who has the advantage? Of course it's the lifelong D.C. incumbent who has all the fundraising connections; has done favors for powerful special interests; and knows all the political dirty tricks. So the small business owner turned citizen politician (like me) has little or no chance to win election. Secondly, politics-as-usual (without term limits) tends to attract people who want to be career politicians. It attracts people who actually admire government (and the power of government). That type of person also can't wait to use the power of government to rule the lives of others. That type of person loves to use the power of incumbency to stay in office for life. That type of person knows how to "game the system" to benefit special interests (so they will help him stay in office for life). That type of person will make sure to expand the size of government, increase the power of his office, and hire more government employees- who will be forced to campaign, vote and contribute to politicians that support bigger government (in order to keep their jobs and increase their compensation). Is this the kind of individual you want to have power over your life? Is this the kind of individual you want in charge of our government? In control of our economy? Do you want this type of individual in power for life?
Term limits provide at least some form of reasonable check on this kind of abuse of power. They give a fighting chance to our odds of electing true reformers and citizen politicians. They give a fighting chance to achieving true reform and change. They give a fighting chance to those looking to break the power of incumbency. They give a fighting chance to electing candidates with a diversity of backgrounds- as opposed to nothing but Kennedy's, Clinton's, Bush's and Cuomo's. And they put an end to the reign of the Blagojevich's of the world.
And then there's the Bloomberg's of the world. Michael Bloomberg is the Mayor of New York. Limited to two terms by term limit laws passed by the citizens of New York, Bloomberg had the gall to go around the people and get the New York City Council to overturn the law so he could run for a third term. Like Rudy Guliani before him, this meglo-maniac actually believes he is the only man who can save New York from disaster and financial ruin. Guliani (after 9/11) also flirted with the idea of overturning the term limit law to install himself as perpetual ruler of New York. But even Rudy held his ego in check and thought better of it. Funny how New York City has survived just fine without King Guliani.
But Bloomberg went a step further and actually overturned the law to try to get himself installed as ruler of New York for a third term. How on earth could New York City possibly survive without King Bloomberg? Even when ignored or overturned by arrogant politicians, term limits serve a purpose. Without term limits we could never understand the true heights of ego, arrogance and ruthlessness possessed by our rulers.
But even politicians that appear to be reformers show their true colors once elected into office. Don't be fooled by public announcements from “reformer politicians” meant to create an image of integrity and honesty in government. The key word here is “image.” The reality is far different. Nothing changes so long as we keep electing a political class whose entire career and life are tied to politics. As a prime example, President Obama set a “bold standard” to rid the White House of lobbyists and ties to special interests. Isn't it funny how career politicians who know their way around Washington, also happen to find ways around the rules (and the truth)?
Let's examine the reality of the Obama Administration. Let's start with Obama's new Secretary of Health and Human Services Tom Daschle (long-time Senate Majority Leader). No, Daschle wasn't officially registered as a lobbyist before his appointment. He was only a “special policy advisor” for the lobbying law firm of Alston & Bird. During Daschle's three years in that role advising this lobbying group, the firm earned over $16 million representing (can you guess?) many of the most powerful interests in the health care industry. A perfect role to avoid charges of conflict of influence for a Secretary of Health and Human Services, don't you think? Government lobbying disclosure forms list the firm that Daschle “advised” representing health care companies, hospitals, pharmaceutical companies, nursing homes and pharmacy benefit managers. No potential for conflict of interest there. No violation of Obama's new anti-lobbyist pledge, right?
How much money is there in this lobbying business? As just one example, Health South paid Alston & Bird nearly $1.5 million to lobby the Department of Health and Human Services (as well as Medicare and Medicaid) on its behalf. Note to American consumers and patients: As Secretary of HHS, Daschle's job will be to oversee a wide range of health regulations; decisions on which drugs can come to market; and Medicare and Medicaid reimbursement levels. Are you getting sick to your stomach right about now? Don't worry, I'm sure Daschle can recommend a drug for that.
But wait- it gets better. Several of President Obama's top choices to run our government are married to lobbyists. Tom Daschle's wife Linda Hall Daschle (why is this not a surprise) is one of the most powerful aviation lobbyists in Washington. New Energy Czar Carol Browner is married to Tom Downey (a former Congressman), the Founder of one of the most powerful lobbying firms in DC- which just happens to represent (can you guess) energy companies. Exxon Mobil and Chevron are among its many powerful clients, as well as foreign governments. And let's not forget one of lobbyist Downey's biggest past clients- subprime lender Fannie Mae. Starting to feel a need for a shower right about now?
Hillary Clinton is our newest Secretary of State. Does anyone find it a conflict of interest that her husband, ex-President Bill Clinton, has accepted millions of dollars in donations for his Presidential Library from foreign governments that Hillary might be dealing with? Vice President Joe Biden's son Hunter has been a registered federal lobbyist since 2001. Obama, his wife Michelle, Biden, and virtually everyone they have appointed at every level of government are lawyers. You think they may be a bit biased towards trial lawyers? Do you believe they will make eliminating frivolous lawsuits a first priority? Any priority at all?
Why is any of this any different than Vice President Dick Cheney's prior career as CEO of Haliburton? Republican, Democrat- it doesn't matter. The names change, as does the party affiliation, but the conflicts of interest for career politicians remain the same. It's all about power and connections…and absolute power and absolute connections. And of course, how this absolute power benefits special interests, who in turn benefit career politicians (by giving them enough money to insure their re-election year after year).
The longer politicians stay in office, the more powerful they become, the more hooked on power and greed, the more deep their tentacles grow into the political establishment. John McCain was no “maverick.” Obama couldn't spell “change.” Those were merely campaign slogans their advertising agencies and political strategists desperately wanted you to believe. Obama and McCain are both career politicians. They are not Republicans or Democrats. Career politicians have only one party affiliation- Beltway Insider. None of this should surprise us. Smart, ambitious, tenacious, driven people using their power and connections to advance their career and enhance their power is not exactly a shocker.
But there is a way to cut short the careers of career politicians: term limit them out of office. There is a way to make sure that a Kennedy, Cumo, Clinton or Bush can't own an office for life. We must change the I.D. of our politicians from lifelong careers in political office, to the vision of our Founding Fathers- to that of citizen politicians. Our Founding Fathers were farmers, property owners, small business owners, and entrepreneurs who put down their pitchforks and muskets, and set aside their business careers, to serve their country and countryman as civil servants. They served for short periods of time, and then went back to their businesses and families. They could not even imagine a lifelong career in politics. That is the only reason they did not put term limits into the Constitution. But that is precisely why our Founding Fathers created a Constitution to limit the power of government and politicians. Limiting their time in office is a simple way to limit the actual power of government.
Term limits quickly and efficiently create a new political “brand” - from career politicians to citizen politicians. Suddenly our government will rely on citizens who earn their livelihood outside of politics. Term limits aren't perfect. They're certainly not the only answer. But they make it harder for seasoned, connected, professional politicians to "game the system" in favor of their friends and special interests.
Let's end the dynasties (Bush, Clinton, Cuomo or Kennedy). No more kings or queens, no more princes or princesses. No more hoods (Blagojevich) who rule like mafia dons handing out patronage. Let's end the political machines; end the sense of patronage, end the arrogance once and for all. Let's end the earmarks, graft and waste created by powerful career politicians like Nancy Pelosi, Harry Reid, Barney Frank, Christopher Dodd, Robert Byrd and of course Alaska Senator Ted Stevens (he of the infamous $200 million "Bridge to Nowhere" fame)- who think that the House or Senate is their own personal fiefdom to do whatever they please.
Want more proof of the importance of limiting the power of the wolves, frauds, and corrupt conmen that run our political process? Look no further than my home state of Nevada. Our state constitution limits our legislature to the role of part-time politicians- meeting only for a few months every 2 years. Nevada has also enacted term limits on the state level. Are those limits on a politician's power perfect? Far from it. Our Nevada politicians manage to cause plenty of damage in only the few months they meet every two years. But keeping our politicians sidelined for most of the time, has kept our state government in check for almost 150 years. Nevada is among the lowest tax states in America. And of course, we have also been the fastest growing state in all of America virtually every year for the past quarter of a century. The Census Bureau recently predicted that Nevada will lead the nation in population growth for the next quarter of a century too. Nevada provides proof that limiting the power of government (and the politicians that run it) breeds success and more power to the people. Look to my home state of Nevada as the model for limiting the power of politicians and government.
No politician in America- at any level of office- should serve more than 2 to 3 terms. PERIOD. That's enough to do what they pledge to do, then retire from public service, and go back to their real careers. That reduces the opportunities for corruption, the pay for play, and the special interest domination. That eliminates the endless need for fundraising (because there is no reason to fundraise if you are not running for office again), and the conflicts of interest that are created by endless fundraising. That eliminates the incentive for politicians to vote for bills just to curry favor with special interests (in order to collect more money so they can get re-elected). That eliminates the power of incumbency, and encourages more diversity in our elected officials. Term limits restore some measure of balance of power back to the people- just as the Constitution intended. It's time to restore the citizen politician to lead this great country.
Wayne Allyn Root was the 2008 Libertarian Vice Presidential candidate. For more of his views, commentaries and to watch his many media interviews, please visit his web site at: www.ROOTforAmerica.com
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( 3 / 983 )America wanted change and we sure got it. We elected a politician who looked and sounded fresh and new and different (and don't forget "clean" as Senator Biden once remarked), and promised that magic
word "change." Aren't we lucky? It appears that the change we got is that we've moved Chicago machine-style politics into the White House. We found out on Tuesday what that business model consists of- the good Governor of Illinois was arrested for allegedly trying to sell Barack Obama's United States Senate seat. Yes, I said sell Obama's seat to the highest bidder. It's nice to know even in this terrible economy, you can still sell a Senate seat. I wonder if Governor Blagojevich accepts credit cards? I can hear the announcement now in Marshall Fields department store on the Miracle Mile: “U.S. Senate seat on sale now on the 4th Floor- Ladies Lingerie.”
Governor Blagojevich's “play for pay” request allegedly included cash up front, major federal government appointments, and a high paying job or corporate Board appointment for the his wife. No wonder Democrats win the female vote in Illinois- this Governor is certainly committed to equality. The Blagojevich's motto is “the couple that commits fraud and extortion together, stays together (in federal prison).”
Keep in mind this isn't just any Governor. Illinois Governor Rod Blagojevich is Barack Obama's good buddy. Obama endorsed Blagojevich twice for Governor, and served as a top adviser to him. Blagojevich also endorsed Obama in his run for the U.S. Senate. David Axelrod, a top aide to President-elect Obama, said only days ago on FOX News that Obama had recently spoken to Blagojevich about potential replacements for his U.S. Senate seat. Now Obama denies they ever spoke. There's our change- Obama's story is changing swiftly to avoid political corruption charges.
Chicago is the most corrupt city in America. Illinois is the most corrupt state. Don't rely on my word. Listen to the words of the FBI agent at Tuesday's news conference announcing the arrest of the Illinois Governor. He said if Illinois is not the most corrupt state in America, it is sure near the very top of the heap. Perhaps the FBI agent has never been to Washington D.C.
The corrupt Democratic machine runs politics in Chicago. Obama came directly out of that machine. He endorsed the machine politicians again and again. He's never supported a reformer. He's spent his entire political career neck deep among that den of thieves. The politicians, bureaucrats and state government employee unions live high on the hog in Chicago. But the taxpayers get the shaft every day. Illinois has among the highest tax rates in the country. It's now obvious why. You need high tax rates to pay top dollar for all those U.S. Senate seats.
Income tax, business tax, sales tax and property taxes are so high; they are driving residents by the thousands out of state. Illinois is a prime example of the folly, fallacy and failure of big government and big taxes. Business owners are overwhelmed by taxes in the state that the Obama family calls home. The result is a dramatic loss of jobs, businesses and residents. It's a vicious downward cycle caused by liberal tax and spenders like Obama and Governor Blagojevich.
But this corrupt rotting corpse of a city named Chicago isn't only known for high taxes. There are other bonuses for the people of Chicago- such as the worst public schools in America and the highest murder rate in the country. It appears all that tax money used for corruption, payola and bribes on behalf of politicians, unions and overpaid government employees hasn't work out so well for the people of Illinois. If you elected Obama because you wanted Chicago, Illinois to be the model for America- congratulations, we all just won the reverse lottery.
You think selling a U.S. Senate seat is bad? That's small-scale fraud. Obama has brought the large-scale fraud with him to Washington D.C. You see he was elected with the enthusiastic support of union leaders across the country. Auto unions are right at the top of Obama's list of who's been nice for Christmas. Obama owes his political life to his friends at the auto unions. He is expected to repay the favor. But this kind of corruption is called "legal bribery" in Washington D.C. The unions give Obama tens of millions of dollars in contributions, millions of votes, and millions of campaign "man hours" (union members go door to door, man phone banks, stuff and seal envelopes). In return, Obama, Harry Reid, Nancy Pelosi and the Democratic Congress gift-wrap a $15 billion loan to the "Big 3" automakers and their unions. That's called payback. And that $15 billion loan is just for starters. Trust me, there are much bigger union bailouts and handouts on the way once Obama is sworn in on January 20, 2009.
The shameful auto bailout is really not much different than what the FBI just arrested the Illinois Governor for. One is under-the-table illegal fraud and bribery. The other is in-your-face, tit-for-tat, legal fraud and bribery. But they both emanate from the same Chicago-machine business model. The model is simple: you give something big to me (paid for by union members), I'll give something bigger back to you (paid for by taxpayers). Who are the kings of Chicago? Unions. Who are the new beneficiaries of the auto bailout? Unions. Do you sense a pattern here?
I don't mean to say, "I told you so." But I told you so. I predicted it all weeks ago on dozens of radio stations across the USA. I predicted Congress would put on an Academy Award-quality acting job that would impress the likes of Pacino and DeNiro. I predicted the Democratic leaders of Congress would put on a world class charade for the nation to see- they'd talk rough and tough to the CEO's of the "Big 3" automakers, rant, rave, demand major changes in their business model, and threaten to fire the executives responsible for this mess. They'd huff and puff before the TV cameras and put on a high profile reality show for the evening news- proving that the Democratic Congress owed nothing to auto unions. Proving that Congress was no friend of automakers. Proving that Congress was no pushover. Proving that Congress was carefully watching over the taxpayers' money. But I predicted that behind the cameras, in the smoky backrooms, the Congressmen, the CEO's and the auto union leaders were back-slapping and toasting to the stupidity and gullibility of the people.
I predicted they'd put on a show in front of the cameras, publicly berate and humiliate the CEO's, and swear they'd never give them a dime. Then in a month, the same CEO's would be back to D.C. (driving hybrid cars instead of flying in private jets), with hat in hand, and all would be forgiven. It happened just as it was scripted. Just without the drama of plastic Greek columns this time.
Suddenly, as if by magic, the skies opened, the sun shined, and a $15 billion bailout deal appeared. Despite that great big public lynching of the Big 3 CEO's, the tough-talking Democratic Congress has decided to give the automakers another billion dollar handout. What a surprise!
I say "another bailout" because most Americans don't even realize that Congress just gave the "Big 3" a $25 billion bailout in September- under the cover of darkness (distracted by the stock market crash and the Wall Street bailout). Of course, the bloated, corrupt “Big 3” auto unions who pay their workers almost $150,000 per year in salaries, pensions and benefits to drill fenders, and who elected Obama and the Democratic Congress with union money, just happen to be the biggest beneficiaries of this “Big 3” bailout. Just another strange coincidence in the D.C. corridors of power.
And lurking the whole time in the background- coordinating everything quietly, yet leaving no fingerprints, was the President-elect Barack Obama. Obama tipped us off as to the outcome days ago when he said publicly that we cannot allow the "Big 3" automakers to fail. That was Obama's subtle sign to Congress to get the deal done. Just like a mafia don, Obama made it happen with a wink and a nod. And the liberal Congress delivered.
Obama has learned well from the corrupt Chicago machine and his good buddy Governor Blagojevich. Actually the student learned better than the master. Blagojevich is headed to federal prison. Obama is headed to the White House.
America demanded change. Well we have our change all right. By the time this cold-blooded Chicago gang of thieves is done with the taxpayers, all we'll have left in our pockets is change.
Which brings up an important question: I wonder what kind of price you can get for the White House?
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