Former Bush Administration Officials Shameless in Defending Torture

I’m amazed, but somehow the former Bush Administration still has the power to piss me off. Back when Bush was in office, the official word was that American didn’t use torture. Except that Bush officials gave a bit of a wink and a nod when the topic came up and Bush himself added a signing statement to the anti-torture bill saying, in effect, “It’s only torture if we say it is.”

Now that Barack Obama has released official memoranda that show that we were, in fact, engaged in torture, two former Bush Administration officials have come out in opposition to the release. From Bloomberg:

But in an editorial in The Wall Street Journal, former CIA director Michael Hayden and former attorney general Michael Mukasey charged that disclosure of the memos “was unnecessary as a legal matter, and is unsound as a matter of policy.”

We can always count on the Wall Street Journal’s editorial page to be the mouthpiece of whatever BS the Neo-Conservatives want to heap onto us next. Continue reading Former Bush Administration Officials Shameless in Defending Torture

Gold Ends 2008 up 5.53%

Not many things made a profit this year, except my old friend gold. Gold started this year priced at $838 an ounce and it closed 2008 at $884. That means that if you’d just bought and held gold all year, it would have gained you 5.53%. That’s an appreciation that is better than money market accounts and government bonds. As I’ve described in these pages many times, gold is the best asset there is for preserving your wealth in these tough economic times. It should also do really well in 2009. 

You see, the Fed is trying to reignite inflation and they’ve pumped a lot of money into the system to lower interest rates across the board. When you see thirty year bonds yielding somewhere in the neighborhood of 3-4% you now something weird is going on. I believe that the Fed will be successful in there attempts to blow one last bubble and that we will see consumer spending make a rebound this year, and many Americans will probably breath a sign of relief just to see George Bush leave office. Obama’s probably going to have a celebrated first year and it’s probably going to cause a significant enough rally for people to think that worst of the economic crisis is over. 

Of course, all that’s really happening is that the Fed is blowing one more bubble in the bond market. When that one crashes the economy will be even worse than before and we’ll be right back into this same mess, except the Fed will have run out of wiggle room in their interest rate policies. Once you’ve cute rates to zero and lowered the thirty year note down to 3-4%, you’ve started to run out of monetary shenanigans to pull. That’s when things are really going to get interesting. 

My regular readers have probably noticing that I haven’t been posting as regularly lately. That’s due to two things: spending time with family during the Christmas holidays and studying for the series 7 exam. I’ve made roughly 20% or more for the last three years and so I’m working to hang up a shingle and start managing money for people. And that’s requiring some study on my part. But fear not. I will be returning to California and my old routine on Monday. 

Till then. Happy New Year.

The Main Focus of this Meeting is … to Schedule Another Meeting.

The leaders of the G-20 nations met in Washington DC over the weekend. The discussions that were had were in secret, but it seems that the main result of the meeting was the schedule the next. You see, these talks were not attended by President-Elect Obama. Instead, the assembled leaders had to make do with George W. Bush who will only be in office for another couple of months. That would make it rather hard to get any serious business done.

Politically, I think it was the right decision for Obama to not attend. The goal of the meeting was not going to be desirable to the United States. The roster of G-20 leaders basically amounts to countries the US owes money, who want less protectionism  in order to help their own economies, and those who have been burned by buying “toxic debt” from us. Often, a single country can be filed in more than one of these categories. What is happening here is nothing short of an intervention. As if the friends and family of the US were forcing it to sit down and listen so that it might come to understand: “you have a problem.” And, after interventions, discipline and recovery is supposed to follow.

Really, who wants that?

Obama is in a particularly hard situation. He was elected on the Democratic ticket and they are already calling for a bailout of GM. Of course, by doing so, they will be protecting the jobs of autoworkers who have been one of the most ardent supports of the Democrats for decades. So Obama is caught between the nations of the world who want to have a “talk” with him and his own party that is basically saying “The Republicans have thrown money at their backers for too long; it’s time we get to throw money at ours!” It’s a no-win situation. By not attending, he’s at least playing hard-to-get.

I can’t imagine a worse time to be President than right now. While I feel that Obama will play the politician and negotiator, and try to say as little as possible for as long as possible, the forces at work can’t be kept waiting forever. They will want an answer. GM wants a bailout, and the G-20 wants the US to get its financial house in order. Doing both isn’t possible and neither is putting the question off forever. Returning the US to the path of financial discipline is an unpopular one in the best of times; today, doing so would involve alienating the very party that got you elected. Meanwhile, throwing more and more money at the collapsing economy will just hasten the collapse of the dollar on the world stage. The G-20 leaders, seeing that the US is not ready to end its addiction, will start making plans for how they will alienate the addict and instead do business with one another. And that can’t be good.

This is most likely the beginning of the end for the dollar.

The US is simply in denial regarding how bad the situation is, and the G-20 isn’t going to be able to penetrate a denial of that magnitude. Regardless of how many incidents you try to recount to the addict, until they’ve bottomed out, there is just no talking sense to them. I’m sure Obama can be made to see the reality of what is happening, but I doubt he has the ability to convince a nation that now’s the time to kick the “print more money” habit that has seemingly played out so well for it. Failing that, what else can really be done but to delay the inevitable?

And so the chase has begun — between our creditors who want to schedule a serious meeting so that we can have a little talk — with the REAL President in attendance this time — and the man who cannot, try as he might, find a win-win solution to all of this.

Bush Tells Banks to Stop Hoarding and Lend

In the promotion for Naomi Wolf’s new book Give Me Liberty: A Handbook for American Revolutionaries Ms. Wolf states that the United States has recently been overtaken by a coup. She further asserts that George Bush will not release the presidency but will instead declare martial law.

As someone who loves liberty and distrusts governments (in general) and the Bush Administration (in particular) I have to admire Ms. Wolf’s spirit, but I also have to disagree with her assertions. George Bush will not declare martial law. I believe it’s simply not in his nature.

We’ve never meet, but I feel I’ve come to know George W. Bush over the last nine years or so. I started out disliking him because of his politics, warming to him as a leader who would not hesitate to deliver a good country butt-whopping to Osama Bin Laden, and then watched as he proceeded to use 9/11 as merely another political tool to justify invading Iraq and getting him re-elected. I not the first to doubt the sincerity of our President regarding finding weapons of mass destruction in Iraq, but by his 2004 election campaign I was convinced that the justification for the war had been entirely manufactured. At the time a lot of Republicans vehemently disagreed with me; now they just change the subject. 

I realized that our fearless leader was carrying out the tried and true politics of fascism: praise Americans for their self-perceived virtues, preach fear, make power grabs for increased legal authorities and oversights, and work closely to favor certain corporations. In that way, Ms. Wolf and I do see the President in a similar light, but she takes this to its logical conclusion: surely aggressive grabs for power must come from a power mad figure who will not release control. That is where we disagree. 

I don’t feel that Bush is really all that power hungry. In fact, I think he’s sick of politics. I know it’s strange to try to analyze inner motivations of someone I’ve never met, but I’m not even sure Bush ever wanted to be President to begin with. I think the Bush family and friends thought that he could become President and encouraged him to do so. To my way of thinking,  Bush is merely the puppet for the “advisors” behind the scenes who developed the plans to invade Iraq long before Bush even took office. And so I envision Bush looking upon his Presidency much like his college must have seemed to him: important stuff but really he’d rather be doing something else. Even since becoming a politician, Bush has had to study all over again- except instead of tests he has to study for, its debates, speeches, and press conferences. 

That’s perhaps why Bush’s politics have seemed so fluid. He started out preaching about the power of free markets combined with small governments. Then, much like college, he passed that test and went on to study entirely new material that didn’t necessarily relate much to the past material. It would seem the course curriculum of Bush’s Presidency started with a lot of early testing on small government, then moved on to how to build public support for a war, then spent some time delving into how to build a police state, and is now being tested on Socialism and international coordination to intervene in the function of the marketplace.

I’m certain that all of this has taxed the poor man’s brain. Let’s face, that’s a lot of material to cover in eight years- much less make it seem part of a coherent political agenda that has any consistency at all. So while Ms. Wolf is pointing to Bush’s power hungry politics, I’d like to inform her that that was last year’s material. He’s a Socialist now. Case in point, Bush is now telling the banks how to run the banking business. I suppose in some ways this might be perversely justified. After all, it would seem the government has recently become a major stockholder in the major institutions of banking and it is only natural for large shareholders to feel that they have a say in how the company is run. 

Still, it does strike me as rather hypocritical for a man who bankrupted so many oil companies to tell bankers how to do their job. Ironically, the advice that Bush is giving them (i.e. get out there and lend more money) was exactly the thing that got them into this pickle to begin with. After all, in terms of lending money, once banks have given billions of dollars to people who had no means of repaying it, there’s really no where to go but down. 

I wonder who convinced Bush to be a Socialist. They certainly seem to have been excellent tutors for him. These days he can rattle off rhetoric that would have made FDR and John Maynard Keynes proud. After all, it was in regard to the banking industry that FDR opined “The only thing we have to fear is fear itself.” Bush, like FDR before him, is telling banks to ignore their natural fear of bankruptcy and get out there and lend some of this money the government/Federal Reserve is giving you so that we can start inflating again.

It’s sad that we as a nation have now been reduced to seeing Bush parroting the most influential figures of the school of thought and political party he was supposed to be staunchly opposed to, and I can’t help but think that it must eat at him. I’m sure that he doesn’t like the notion that he’s made a terrible mess of our nation and I’m sure he must be secretly blaming the course instructors who gave him the notes to study to begin with. “Why the hell am I having to give the speeches of FDR?” he must be wondering. 

And as such I’m sure that Bush will step aside when the time comes. He must tacitly admit to himself that things haven’t gone all that well and that it’s time to step aside and let someone else can in and fail spectacularly. As for the voting public, it would seem that fake Socialism just won’t do. “Why buy imitation when you can get the real thing?” might be the thoughts of many people voting for Barrack Obama- a man who has been much more consistent in his Socialism than our current President. As Bush demonstrated in the 2004 election, the American people want consistency. They don’t want Capitalism Warmonger one day, and then Socialist international coalition builder the next. 

So soon it will be Obama’s turn at the wheel and we in the United States will get to see how a real Socialist does things. I can hardly wait.

On Patriotism

My good friend Taylor recently posted this comment:

Not sure I would use predictions from Mahmoud Ahmadinejad to bolster my opinions. Actually that last graph was pretty unpatriotic. Why not put your efforts more into the “here is what I think we can do to see that this country remains/becomes great” instead of “I will enjoy watching you burn.” There are enough nay-sayers on the net already, I think people would rather read and contemplate ideas of salvation (for the economy and country) rather then have reiterated the doom and gloom they already are getting from the media (not to mention from their investment statements).

I see a trend on your blogs to gloat at the circumstances we are in. You do offer alternatives but few seem viable (i.e. returning to the gold standard). I guess what I am trying to convey here is that I want to read your opinion on what can actually be done to better the situations you comment on.

– How can we practically reduce entitlement program spending?
– How can we practically buy out our debt?
– How can we practically curb inflation, raise home value, bolster jobs and growth?

Anybody can tell me the situation is bad…put your efforts into educating us instead? If there is something to be learned from you I want to know it.

It’s not that I respect the words of Mahmoud Ahmadinejad that caused me to quote him. After all, how accurate can someone be when the claim that there are no homosexuals in their entire country? But when he is one of a chorus of voices saying that this is the end of the American Empire, it’s worth noting. 

In regards to your charges of my lack of patriotism, that would depend entirely on how you define it. If you define patriotism as the willingness to make sacrifices for your country, then I am clearly not a patriot. As far as I’m concerned, I think I’m getting a raw deal on the taxes I pay and I’ll be damned if I sacrifice anything more. But if you define patriotism more broadly to be acting in support of the ideals of liberty on which this nation was founded, then I feel I am being very patriotic. 

Our founding fathers, whom we consider paragons of patriotism, were clearly not patriotic to the causes of the British, the ruling government of the time. As Jefferson wrote

“The spirit of resistance to government is so valuable on certain occasions, that I wish it to be always kept alive. It will often be exercised when wrong, but better so than not to be exercised at all. I like a little rebellion now and then. It is like a storm in the atmosphere.” 

I feel Jefferson would be proud of the people speaking out against our government today. I feel he would call us patriots. This, of course, just reinforces the saying that “One man’s patriot is another man’s terrorist.” 

In regards to what can practically be done to improve our current situation, my answer is this: nothing. The American political system has rotted to its core. The realities of fiat money have combined with powerful corporations to ensure that what is in the best interests of the people will be hardly given any consideration at all. If that we’re enough, mass media and polling have enabled politicians to shift the political dialogue away from anything meaningful and towards such chestnuts as abortion, gay marriage, and the “War on Terror.” I watch in abject horror as every year our politicians seem to get dumber and more empty. Just when I though George Bush was as low as we could go, McCain dug up Sarah Palin. 

That’s not to say that there weren’t meaningful candidates running this year. One person was running for President who say this crisis coming a long time ago, and he was running as a Republican. But the Republican establishment was not ready for someone like Ron Paul. They distanced themselves from him and even went so far as to form a collation to deny him the delegates from the State of Louisiana

Since you work in the corporate world, here’s a corporate analogy for you. Pretend you were brought in as a consultant to clean up a failing company. The problems with the company were obvious, but when you proposed the obvious solutions, you were told none of them could be undertaken because management wouldn’t allow it. Would you not then call for the ousting of management?

You are asking for new insight into this problem. It seems to me almost as if you were asking for a magic bullet. “Please don’t talk to me about the gold standard and the dangers of fiat money.” you seem to say, “I just want to know what policies we can adopt that will fix this situation (and allow us to go on just as we have been).” Were there is no magic bullet. Nothing will fix what is so clearly broken. You can add all the fertilizer you want. the tree of our nation’s governance died long ago. 

The solutions to this problem are as simply as they are unpalatable. Take all powers to control money away from the government entirely and outlaw fractional reserve banking. The resulting monetary system will be run by private institutions who are closely audited by their depositors, and precious metals (or whatever the free market decides) will be the unit of accounting of commerce. Suddenly the government will have to raise in tax revenue all that it spends. When such a day comes, you will notice a sudden and drastic curtailing of government spending, including entitlement programs. Meaningless wars will suddenly shift from convenient exercises to gain public support to the truly horrible actions that should only be taken as a dire last resort that they really are. 

None of these ideas are new. Jefferson wrote about them in the late 1700s, as did Murray Rothbard in Man, Economy, and State in the late 1900s. If you’re looking for a sample of Dr. Rothbard’s work, check out his essay on “Taking Money Back.” Times may change, but our situation is not new. But then again I think you knew this. I suspect you’re now saying to yourself how impractical all of these hard money ideas are in our current environment. “There must be some other way to fix the system,” you might ask. 

Let me assure you, there is not. Attempts at fixing our current system is as meaningless as rearranging deck chairs on the Titanic. The system is broken, but few seem to realize it. Until the system is allowed to collapse, we are powerless to improve the situation. You yourself once ridiculed me for being a Libertarian as “wasting my vote.” So you now claim to think that there is some meaningful action that I can take? 

The system must be shown to be what it is: a failure; a sham; a tragic disaster. It is only from its ashes that we can meaningfully move forward. Only once people clearly understand the folly of the life that they have been leading can we make the hard decisions to take back our liberties from the all powerful nanny state we have built to take care of us all. That is why I am contently and excitedly watching the decay and collapse of the system. I believe I am going to outlive our current system, and it is what lies on the other side of it that excites me. 





Bush’s Plea for $700 Billion

I’ve often considered George W. Bush to be one of the most arrogant Presidents of my lifetime. A Republican friend of mine argues that it was William Clinton, and I do have to concede that Clinton certainly had his arrogant moments, but he came off humble when he had to be. By comparison, Bush has always seemed to me to be someone who was reveling in the fact that people intensely disliked him. Maybe it was the way he would tend to give a half-smile to his own jokes when he thought he had told a zinger, or maybe it was the way he won by both of his elections by very thin electoral margins yet seemed convinced that he had a mandate from the people in favor of what he was doing. Whenever I hear him speak, I feel I can hear him telling me that he doesn’t care whether he’s popular with the people or not, he’s going to do with this country whatever he and his cronies decide and the rest of us will just have to live with it. 

Consequentially, on occasions like last night where he comes on national TV to convince us all that *gasp* the economy’s not going so well and desperately needs a bailout, I really wish there was a service that could show me the speech complete with those robots from Mystery Science Theater at the bottom to make snaky comments. President Bush’s speech included a description of exactly how our economy got in such dire circumstances to begin with- that cheap credit caused a housing boom and that now both the loans made to the homeowners as well as the value of the underlying real estate are all in question. As I read his description, the feeling I get must be the same as a parent who is listening to his teenager tell him that somehow the idea to sneak out, go to a friends house, and get hammered somehow didn’t turn out so well. I mean, if it really is as simple as credit inducing a inflationary boom which later came crashing down, why didn’t President Bush call a halt to the easy credit terms that lead to the inflationary boom to begin with?

It’s not like he didn’t know it was going on. In fact, it was a point of pride for the President who in 2003 crowed that low interest rates had given rise to a record level of home ownership in the United States. In fact, President Bush went on to say that he goal was to increase home ownership further by reducing the purchasing price of the home via tax credit, the interest rates one would have to pay, and the amount of paperwork one would need to go through to get approved for a mortgage. Looks like all those chickens are coming home to roost, eh George?

That’s the real kicker about macroeconomists and politicians; when the economy is booming because it’s being force feed credit like a goose being fattened for a French delicacy, they want to talk about how amazingly healthy the economy is. When it finally all comes crashing down, they act as though they had nothing to do with it. It’s strange, but of all the individuals involved in the current Presidential race, I think I agree with Sarah Palin the most when she said that America was facing “another Great Depression.”  Although it’s hard for me to admit that, because she’s probably my least favorite person of the four, but I think she may have accidentally nailed it. We’re not just talking about a recession anymore, we’re talking about a depression. And it’s probably not going to be the complete slow down of commerce that the 1930s was, but instead the Japanese type of downturn that never seems to end. America is about to have it’s own “lost decade” or two, and that’s unfortunately turn regardless of which party you vote in for President. 

As I council my friends, there’s nothing that can be done to stop the fall of the Pax Americana, nor is there anything that can be done to stop the oncoming depression. Perhaps certain politicians can help to make it a harder or softer depression, but it’s going to come. Make yourself ready.

Waiting for the bailout shoe to drop

The markets started this week with quite a fall on Monday with the Dow down over 4% and gold up strongly. Tuesday and Wednesday have been a good bit more calm with stock prices falling slightly along with gold. It seems investors want to hold onto cash until things become more certain. Everyone seems certain that the government will bail out Wall Street from this situation, but there seems to be some disagreement about the details. 


I’m sure that there are a legion of Wall Street lobbyists right now working furiously to try to get Washington to pay top dollar for all of the dead assets currently sitting on so many balance sheets. And if this were anything but right before an election, they’d probably get their way. But Senators McCain and Obama are no doubt wondering how this bailout is going to look to the voters if Wall Street makes out like bandits on taxpayer money.  So now Wall Street is uncertain as to what the terms of the plan are going to be.

The American voter, much like the American consumer, is expected to have a very short attention span. They aren’t suppose to be able to really understand what’s going on for themselves, you see, so this bailout plan has to be turned by the political pundits to become something so easy that your average voter could understand it. “Wall Street is bailed out by your money after a long period of making money off of you,” is just the kind of thing to work up voter ire. It is, as Bill Bonner suggests, just one grand spectacle. 

The one question that I’m sure will never be asked by either of the candidates or anyone, is “Where is this $700 Billion supposed to come from?” Much like the war in Iraq, it’s just expected that someone will be nice enough to front us the money for us to continue down the path of spending far more than we’re making. That someone has increasingly been foreign investors, and I’m not sure how well they’re going to react to our asking for another Trillion or so. They probably think that it’s a shame that they don’t get a voice in this election, but if things keep going like this it’s a good guess that their time will come. 

After all, a politician may get elected promising to keep us safe from terrorism by “fighting them over there, so we don’t have to fight them over here”, but when the American people have to actually start paying the real bill for these military misadventures, we may suddenly find that we’ve lost our taste for blood. Let’s not forget that we asked a lot of foreign investors to buy these same toxic credit derivatives in the first place, and no government has been nice enough to step forward and bail them out.