Federal Reservations

As the Office of Congressional Ethics begins its investigation into the insider trading allegations leveled by Breitbart editor Peter Schweizer and 60 Minutes against Rep. Spencer Bachus (R-AL), a former Security and Exchange Commission official who now makes his money consulting individuals and corporations on financial regulatory or enforcement matters says he believes Mr. Bachus did nothing wrong.

“I haven’t seen anything that would indicate a law violation, in my view,”  Stanley Sporkin told the Birmingham News. “I don’t see why he would need my services. It’s not necessary.”

According to Larry Lavender, Rep. Bachus’s campaign manager:

“A friend of Congressman Bachus’ who knows Judge Sporkin asked Judge Sporkin if he might be of assistance in this matter,” said Bachus’ campaign manager Larry Lavender. He said Bachus’ lawyer gave the documents to Sporkin with the intention of hiring him as a consultant, but Sporkin “did not see any reason that he should be retained,” Lavender said.

If Rep. Spencer Bachus is not found to have engaged in using nonpublic information for personal gain, then it is unlikely that any member of Congress ever will be.

According to the Birmingham News, “Sporkin said he did not see evidence of insider trading because it was broadly known at that time that the economy was on the brink.”

That bit of revisionist history may benefit Rep. Bachus’s defense, but it belies the facts.

On October 6, 2008, CNBC’s Jim Cramer went on the TODAY Show and told Americans: “whatever money you may need for the next five years, please, take it out of the stock market right now—this week.  I do not believe that you should risk those assets in the stock market.”

The host pressed Mr. Cramer, saying, “Very dramatic statement, Jim.  Very dramatic statement.”  “I thought about this all weekend,” said Cramer.  “I do not want to say these things on TV.”

In the wake of Cramer’s comments, Mr. Cramer was strongly criticized as being alarmist and causing a market panic.

However, three weeks prior, Rep. Bachus–who was then the ranking Republican on the House Financial Services Committee—had access to high-level private meetings and phone conversations with then-Treasury Secretary Henry Paulson, among other senior financial officials, that let him know in advance what Jim Cramer would later be criticized for saying publicly.

Indeed, according to Peter Schweizer, on September 18, 2008, Bachus and congressional leaders received a private briefing from Mr. Paulson and Federal Reserve chairman Ben Bernanke inside then-Speaker Nancy Pelosi’s office.  Bernanke warned of a total financial meltdown in a matter of days. The very next day, September 19th, Bachus shorted the market by buying contract options on Proshares Ultra-Short QQQ, an index fund that strives for results 200% of the inverse of the Nasdaq 100. He nearly doubled his money when he sells his shares four days later for over $13,000.

In total, from July to November 2008, by executing well-timed, highly risky options trades throughout the turbulent period, Congressman Bachus made at least 40 trades that netted him as much as $50,000 in capital gains.

The argument that “everyone knew the markets were in meltdown” is a farce.  Rep. Bachus was aggressively trading while ducking in and out of meetings that were so secretive participants were forced to hand over their cell phones before entering them.  Again, even three weeks after said meetings, CNBC’s Jim Cramer was being blasted as a doomsayer for telling people to protect their assets, just as Rep. Bachus had already done weeks prior.  Put simply, the public did not know what Rep. Bachus knew–information that led him to maneuver his money and protect his assets.

The “logic” offered by Stanley Sporkin that everyone already knew “the economy was on the brink” brings to mind the classic insider trader’s defense used by almost all those accused of the crime: “I didn’t know anything special.    Nothing to see here.”   It’s the kind of defense reminiscent of Enron’s executives: “Everyone knew the company was in trouble.  Everyone knew what I knew.”

Whether the Office of Congressional Ethics will buy into Rep. Bachus’s story remains to be seen.  According to the Birmingham News, it is presently unclear whether the Office of Congressional Ethics will complete its investigation of Rep. Bachus prior to the March 13 Republican primary for Alabama’s 6th Congressional District.

Originally from Big Government

Earlier this week, GOP presidential hopeful Rick Santorum hit the nail directly on the head when he addressed the disingenuousness of the mainstream media when it comes to the Republican field of candidates vying for the party’s nomination and the entirety of the so-called “debate” process. This may not be earth-shattering news to those who eat, sleep and breathe Conservative politics (or politics in general) but it is newsworthy when a politico actually stands up and presents a challenge to rank-and-file voters to do something about it.

During a campaign stop in Maricopa County, Arizona, in preparation for the upcoming Arizona Primary Election, Sen. Santorum said:

“Will you be the generation that sat on the sidelines and watched as candidate after candidate comes up and the national media takes their axe out to try to destroy them in every way possible as they’ve done with every single Republican candidate, and as they will between now and the election?…Will you sit on the sidelines and say, ‘Boy that’s not fair,’ or will you stand up and fight back for freedom?”

Bravo, Mr. Santorum. Bravo.

Everyone I have interacted with who has watched the plethora of so-called “debates” – and I will get to the reason I call them “so-called” in a moment – has indicated the same thing. Not only have the questions presented been, for the most part, inane and superficial, they appear to have been manufactured to cause tension between the Republican candidates. And, contrary to what many of the big name media pundits suggest, the resulting manufactured tension between the candidates does not help them to hone their debating skills in preparation for a showdown with Progressive darling, President Barack Obama. Politicians at the national level have already honed those skills in prior elections. Instead, the back-biting, tit-for-tat infighting that results makes the entire field – the entire field – look petty, foolish and – most importantly – beatable.

Perhaps the one thing we all should be angry with the mainstream media about–and when I say everyone I mean everyone: Republican, Conservative, Democrat and Liberal–is the lost opportunity for meaningful discussion among the candidates abdicated to facilitate this style of “debating”; the lost opportunity for a teachable moment on the issues facing our country.

Imagine how the electorate would be affected if:

▪ Instead of hearing Mitt Romney attack – yet again – his brethren Republicans on personal and inconsequential points, he used his time to communicate why having someone who is experienced in business as president is better for our country than the stewardship of an ideological zealot community organizer.

▪ Instead of hearing Newt Gingrich’s barbed retorts to his on-stage detractors, he used his allotted time to explain the overwhelming benefits to the world offered by not only Capitalism, but Americanism. Imagine how beneficial an honest, fact-based discussion about the evils of Progressivism and globalism, conducted by one of the most learned political historians ever elected to office, would be for our nation and her future.

▪ Instead of railing on about “Romneycare,” when he knows full well there were more “chefs in that Massachusetts kitchen” than just Mr. Romney, Mr. Santorum was to use his national face-time with the American people to explain why cohesive family units are essential to achieving the well-being of an ethical nation. Imagine if Mr. Santorum, instead of having to answer the negatively-charged questions of the mainstream media task masters, could chronicle the evolution of eugenics for the American people, explaining how this barbaric, elitist, ideologically genocidal movement is directly – directly – related to not only the Progressive Movement but, specifically, to Planned Parenthood.

▪ Instead of calling his fellow Conservatives “fakes,” Congressman Paul could further educate the American people on the need to not only audit the Federal Reserve, but either restructure it or abolish it all together. Imagine how beneficial it would be to the nation if Mr. Paul took his air-time to explain why we left the Gold Standard and why many of the federal entitlement programs and monetary policies are, indeed, unconstitutional.

Imagine how much more informed and educated the American voting public would be on the issues if the Republican candidates refused to fall for the mainstream media’s goading, rejected the tired and disgraceful tactic of negative campaigning and, instead, honestly and genuinely ran on the merits of who they are and what they propose; diving deeply into the issues so that We the People might be able to make up our own minds as to who is best suited to lead out nation.

Imagine…

Instead, we have four good men falling to the vanity of political egos; four good men falling to narcissistic political opportunism; four good men playing the Progressive Alinskyite game of “tear down your opponent,” rather than earning the support of the voters. That really is the bottom-line with attack politics, with negative campaigning: it does not inform the voter about how qualified a candidate is, it simply tarnishes all the others so that the least dirty looks the best; so that even the mediocre look politically attractive.

As to the so-called debates and the mainstream media facilitators of garbage politics, it is puzzling to me how they can actually call these spectacles “debates.” A debate, by definition, is:

“…a discussion, as of a public question in an assembly, involving opposing viewpoints.”

Is anyone hearing any substantive discussion of opposing views – or even similar views – on any of the critical issues facing our nation during these broadcasts? Or are we simply hearing a litany of National Inquirer-esque “gottcha” questions that may make for great television news ratings but serves no informational purpose whatsoever?

What the mainstream media is producing in their “debates” is nothing but a political freak show meant to – as Mr. Santorum said so eloquently – “take an axe” to the entirety of the Republican presidential field. To me the motives of the mainstream media malefactors are clear: to manufacture an advantage for Mr. Obama, their leader in the Progressive Movement’s agenda to “fundamentally transform the United States of America” from a Constitutional Republic to a Socialist Democracy, complete with full-blown social engineering that touches every aspect of our lives.

We the People – our nation – would be better off if the four Republican candidates for the 2012 Republican nomination for President of the United States refused to participate in any more mainstream media “debates” unless they networks agree to have no “moderator,” instead, allowing for a series of frank and honest discussions on single issues – devoid of the stupidity of talking points – amongst the candidates themselves for the full ninety minutes allotted. Is there anyone out there who believes that a presentation such as this wouldn’t be more informative and more productive for the selection process than the sad and pathetic “reality television show” being foisted on the American people as “debates?” Why not just call these debates “Real Candidates of the Republican Party” and be done with it?

Of course, we could all wait for the GOP candidates to abandon the pathetic practices of negative campaigning and attacking one another, hoping that they finally hear us; realizing – at last – that it all just makes them look like a bunch of childish “jackasses.” But then, sadly…frustratingly…infuriatingly, we would be waiting quite a long, long time.

But, never fear, there will be another “debate” soon…

Originally from Big Government

Given that Rep. Ron Paul has long been a champion of frugal, ethical government, while supporting calls to audit the Federal Reserve, his lack of cooperation with Roll Call in two reports on what appear to be duplicate reimbursements for airline travel he’s received exposes the Congressman to charges of hypocrisy.

Today, Roll Call follows up a previous item with this report.

But James’ recollection and new documents obtained by Roll Call suggest Paul was aware that he was often being reimbursed twice for individual flights. In all, Roll Call found 26 flights in which several layers of documentation show double payments: credit card statements that detail the ticket purchases, a payment to Paul from his taxpayer-funded House account for reimbursement of a flight and Federal Election Commission records or copies of checks that verify a second payment from a separate group for the same flight.

Roll Call obtained copies of checks from the Liberty Committee to American Express that paid for Paul’s expenses. The records obtained by Roll Call cover about 17 nonconsecutive months. Beyond the 26 flights, documents show an additional 31 flights where it appears Paul was double-reimbursed but the records lack sufficient detail to prove duplicate payments.

The initial item from February 6 can be found here.

Roll Call identified eight flights for which the Texas Republican, a GOP presidential candidate and leading champion of smaller government, was reimbursed twice for the same trip. Roll Call also found dozens more instances of duplicate payments for travel from 1999 to 2009, totaling thousands of dollars’ worth of excess payments, but the evidence in those cases is not as complete.

Rep. Paul, through his offices, has repeatedly refused to cooperate by providing access to the Congressman and pertinent staff members. As an elected member of government, it would look better if Paul set an example for the same type of transparency in his professional financial dealings, as he has long advocated for with regard to other branches of government.

Originally from Big Government

All things good and bad come to an end, and that is true of the long recession, which, according to the economic statisticians, we are in no longer.  When the jobs numbers for last month came in President Obama was quick to proclaim that the recovery is on track, and let us hope he is correct.  But the story can’t end there if the country is truly to be restored to economic health.

There are lessons to be learned about government policy actions, which have been adversely affecting the private sector where jobs are created. While employers are beginning to hire again, real and sustained growth historically has been stimulated by new business start-ups, especially among small businesses. While there has been an encouraging uptick in job creation, net of jobs lost, the level of new business start-ups still lags well behind pre-recession levels.  And while, as we stated in our last essay, the job creation numbers for the last couple of months have certainly been encouraging, we cannot lose sight of the reality that the share of working-age people in the labor force (the so-called participation rate) has declined to the lowest level in 29 years.

Fed Chairman Bernanke correctly stated last week that the technical improvement in the unemployment rate obscures the vulnerabilities in the job market. “It is very important to look not just at the unemployment rate, which reflects only people who are actively seeking work,” Bernanke said in response to a lawmaker’s question during testimony last week, “There are also a lot of people who are either out of the labor force because they don’t think they can find work” or who have taken part-time jobs.

As the headline for this essay opines, government needs to get out of the way of the recovery that, while still feeble, has the potential for quickened momentum. Those who invest in the establishment of new businesses need clarification and a higher degree of certainty regarding their healthcare costs, healthcare penalties, tax rates on returns on investment, new regulatory hurdles, etc. The current climate in Washington exudes uncertainty, which in turn creates a vacuum that sucks the willingness to take entrepreneurial risks out of the economy.  Either Steve Jobs was right when he lectured President Obama about why he took all of his manufacturing out of the country, or the President and his statist advisors know best.   Both political parties need to learn from the lessons our lackluster recovery is teaching us, and stop their efforts at short-term, politically motivated fixes.  That almost seems impossible in Washington, D.C

The Federal Reserve issued a report that the 2007-2009 recession, the affects of which still burden the recovery, was the longest one in the postwar period.  Most important was the magnitude of the decline in economic activity.  During the recession, employment fell by 6.3 percent and output fell by 5.1 percent.

The U.S. economy experienced 10 recessions from 1946 through 2006.  The 2007-2009 recession began in December 2007 and ended in June of 2009.  The 10 previous postwar recessions ranged in length from 6 months to 16 months, averaging about 10½ months.  The 2007‑09 recession was the longest recession in the postwar period having lasted, as we noted above, for 18 months.  In addition, the federal debt has increased by about $5 trillion–more than the total national debt of about $4.2 trillion accumulated by all 41 U.S. presidents from George Washington through George H.W. Bush combined.

This increase in the national debt means that during Obama’s term the federal government has already borrowed about an additional $40,000 for every American household–or about $45,000 for every full-time private-sector worker.  When Obama was inaugurated on Jan. 20, 2009, according to the Treasury Department, the total national debt stood at $10.6 trillion.

At the end of January 1993, the month that President George H. W. Bush left office, the total national debt was $4.2 trillion, according to the Treasury Department. Thus, the total national debt accumulated by the first 41 presidents combined was about $44.8 billion less than the approximately $5.0 trillion in new debt added during President Obama’s term.  This is all borrowed money, which will have to be paid back by future generations; generations of primarily private sector wage earners whose wages and benefits are substantially lower than those of government employees whose salaries they pay.

According to Adam Summers a policy analyst at the Reason Foundation:

“Average wages and benefits in the public and private sectors reveal that state and local government workers earn more than private sector workers.  According to the most recent Employer Costs for Employee Compensation survey from the U.S. Bureau of Labor Statistics, as of December 2009, state and local government employees earned total compensation of $39.60 an hour, compared to $27.42 an hour for private industry workers - a difference of over 44 percent.  This includes 35 percent higher wages and nearly 69 percent greater benefits.

Data from the U.S. Census Bureau similarly show that in 2007 the average annual salary of a California state government employee was $53,958, nearly 32 percent greater than the average private sector worker ($40,991)”.

The public debt of the U.S. now exceeds $15 trillion and will soon climb to $16.4 trillion as a result of the President’s latest request to raise the debt ceiling by another $1.2 trillion.  The increases in our national debt, during the Obama Administration have been staggering, and, by any rational assessment, have accomplished little.  Specifically, the debt was increased by $1 trillion in FY2008, $1.9 trillion in FY2009, and $1.7 trillion in FY2010. As of January 31, 2012 the gross debt was $15.356 trillion. The annual gross domestic product (GDP) at the end of 2011 was $15.087 trillion, with total public debt outstanding at a ratio of 101.8% of GDP. Public debt at 90% of GDP is widely accepted as a danger point beyond which economies begin to contract. On top of all the policy issues we have enumerated, the economy faces other major pitfalls.  Among them are,

1. Unemployed who have given up returning to the labor market thereby technically lowering the unemployment rate. ;
2. A huge rise in oil prices;
3. Government risking inflation (“accommodating” Fed monetary policy);
4. Small businesses bracing for tax increases;
5. Higher income families bracing for tax increases;
6. Business expecting new and restrictive regulations;
7. Potential collapse of the Euro, setting up severe recession in Europe;
8. Stronger dollar driving down U.S. exports;
9. People who are living on dividends from stocks accumulated over a lifetime of sound retirement planning facing a tripling of their federal tax rate; and

10.  Lack of serious entitlement reform creating strong headwinds as baby boomers begin to retire.

The recession, put this nation in such a deep hole that our present rate of growth simply will not get us back to where we need to be.  At this point, our economy, consistent with all prior postwar recoveries should be growing by four to five percent on a sustained basis.  Given the hazards enumerated above, we fear a serious downturn is still something about which we need to worry.

As stated at the top of our essay, all recessions end.  That is the very essence of economic cycles.  Sooner or later they commence, and sooner or later they conclude.  Whoever is in the oval office when they commence will take the heat, and whoever is in the oval office when they end will take the credit.  We understand that.  But when a recession lasts so much longer than all prior postwar recessions, there are lessons to be learned.  And when government spends and borrows at unprecedented levels to tame a downturn with no discernible affect, then, too, there are lessons to be learned.  The current economic malaise is a product of Minsky’s Law; that is, prolonged infusion of easy money into the economy will always produce a bubble.  Years of terribly misguided public policy and a private sector all too willing to accommodate the government’s imperative to push home ownership at any cost got us where we are today.  The slow depletion of inventories throughout the economy as consumers zipped their wallets and spent very sparingly, and the current replenishment of those inventories has, at last, begun to stimulate positive economic activity.

The Obama Administration should (but won’t) immediately adopt the simplified tax proposals recommended by Simpson‑Bowles, and issue an executive order that new regulations on the private sector be halted except on an absolutely as needed basis.  That would provide the positive jolt the economy needs if it is to avoid being sandbagged by the substantial perils that still encumber the path to recovery.

By Hal Gershowitz and Stephen Porter

Originally from Big Government

If one was looking for fiery, crowd pleasing, political rhetoric from former Speaker Newt Gingrich as he addressed CPAC today, they were likely disappointed. What Gingrich did do was run through a litany of policy solutions he claimed he has committed to implement immediately upon taking office in January of 2013.

Contrasting an America that can versus an America that can’t, Gingrich compared America’s speed and might in winning WWII versus her current inability to seal its own border. In a lighter moment, the former Speaker contrasted the efficiency of package tracking by Federal Express with the government’s inability to track illegal immigrants, suggesting sending each one a package may be the best way to apprehend the latter.

He also mentioned repealing Obamacare, Dodd Frank, and Sarbanes Oxley on his first day in office. He stated his desire to be a “paycheck president” versus a “food stamp president,” a term he used to denigrate Barack Obama.

Calling for a Fall campaign focused on substance, Gingrich also mentioned eliminating the Capital Gains tax and implementing 100% expensing for all new equipment written off in one year to help get the economy growing. Additionally, he called for a modernization of the workforce, proposing that unemployment compensation be linked to business training programs to avoid paying people for 99 weeks “for doing nothing.”

The solutions were bold but would obviously involve more than giving one speech. He called for the elimination of the EPA, replacing it with a new agency that would take economics and business interests into account in all decision-making. On tax policy, Gingrich called for a 12.5% corporate tax rate, abolishing the death tax, and the option of a 15% flat tax for individuals he called a tax cut.

Citing the need to shrink spending to meet revenue levels and the replacement of the current Civil Service system with a new modern personnel management system, his remarks appeared to be well received. Gingrich also cited abolishing the Dept of Energy (DOE) and a task forced to be headed by Texas Governor Rick Perry focused on the 10th amendment to return power to the states, as appropriate.

Gingrich also called for an audit of the Federal Reserve and an end to Ben Bernanke’s term as Chair of the Federal Reserve. The former Speaker also called for a more honest foreign policy, one acknowledging the dangers of radical Islamists intent on doing America and Americans harm.

Originally from Big Government

Just over a week ago in an article I published here in Big Government: “New California Budget Crisis May Torpedo November Tax Increase Initiative.” The article illuminated how State Controller John Chaing had shocked California’s spendthrift politicians by announcing the State would be out of cash beginning March 8th and would miss up to $5.4 billion in vendor payments through May 1st. The timing of the Chaing announcement was disastrous for state politicians; because it destroyed any hope that Governor Jerry Brown’s $6 billion tax increase initiative on the ballot in November would pass.

Now it appears that Brown successfully lobbied for California to get $6 billion in cash and siphon off a total of $18 billion from the $25 billion mortgage settlement with the five largest U.S. banks, who were accused of fraud in the handling of foreclosures and loan modifications. But as Franklin Center Fellow, Steven Greenhut asks in a deliciously sarcastic article: “Why should a taxpayer in Houston or Wichita bail out irresponsible California homeowners, banks and the state’s public employees’ retirement fund?” Greenhut highlights that the mortgage settlement money is really just another accounting entry, because the real source of cash to fund the “Left Coast” is “implicitly via Federal Reserve/Government coffers.”

Most Americans still snarl about crony capitalism when they think of multinational banks taking $1 trillion slurp of taxpayer’s hard earned cash and then paying themselves record bonuses, while hiking fees and cutting off borrowers. But with the United States President and Congress solemnly telling Americans healthy banks were key to our future, most Americans gritted their teeth and came together to bail-out of banks, insurance companies, and other financial firms.

When the good people of the other 49 states learn the terms of this bail-out, I believe they also come together. But this time they will be showing their fangs and carrying pitch forks! With only 13% of the GDP of the United States, California gets 72% of the settlement proceeds. Undoubtedly, the five national banks will pass 100% of the cost of this settlement on to all their customers nationally. Consequently, 87% of the increased bank fees will be paid by other states increases to bail-out California’s insolvent budget.

Kamala Harris, California’s Attorney General, claimed the settlement may help roughly 250,000 California borrowers by requiring the banks to cut mortgage debt amounts and extend $2,000 payments to homeowners who already suffered foreclosure. But Greenhut points out that powerful interest groups, like the California Public Employees’ Retirement System, which had nothing to do with individual mortgage holders being unfairly foreclosed upon, carved off a piece of the settlement money to bail-out some of their investment losses on real estate speculation that resulted from bad advice.

According to the L.A., a 17-month investigation recently found that some of that bad advice came from Federico Buenrostro Jr., the former chief executive of the $250 billion California public employee pension fund. It seems that he and , and a couple of his pension Board buddies were recently accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms and strong-armed a for a $4 million in fee to be paid to consultant Alfred J.R. Villalobos, who later hired Buenrostro.

Most Californians refer to Jerry Brown as left wing, but I think he just proved he is more left brained. Left brain thinkers excel in math, language studies and logic problems. Since the banks that settled only control or own only 7.3% of all outstanding single-family mortgages, every time Brown wants to increase spending, he just needs to do another “settlement.” After all, California bank customers only pay 13% of the settlement costs, while the State gets 72% of the proceeds. Either Brown is a very smart or the other 49 governors and their Legislatures are really stupid.
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Originally from Big Government

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the recent foreclosure settlement, why it’s not that bad for banks, and whether or not there is another round of QE on the horizon.

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Originally from Big Government

I have watched Ron Paul for a very long time and one trend I see over and over is the split that emerges between people of roughly under the age of 40 and those who are older when his name is mentioned. I have no polling data to back this up, but young people seem to like Ron Paul and older people seem not to.

This is by no means uniform. I know plenty of older folks who love the good doctor and plenty of young people who do not like him, but generally the above statement holds I think. Why is this?

Fundamentally I believe it comes down to faith in the markets and whether or not one is playing for the future, or if one is clinging to the past.

Young people have much to lose in the economic quagmire we find ourselves in, namely their future. They recognize that times have changed, that the old economic regime is corrupt, and in order to get things going in any real way (not government stimulated) fundamental reforms must be implemented. Many, including myself would embrace a gold standard or a standard based on a basket of commodities. This is a radical departure from the Fed centered fiat currency regime. It would disrupt the current economic order, but a reset is needed and many young people recognize that it is vital that we head in this direction before it is too late. The economic hubris of the 20th century has come home to roost. We would like a real economy.

Older people understandably believe they have much to lose with a reality based economic system(I know this is a loaded term) such as the one Ron Paul advocates. In fairness they likely do.

If one has spent a lifetime compiling paper currency, amassing sums large and small in IRAs and retirement plans, a gold centered revolution could be pretty scary. For many people, especially those who are just now retiring, they have lived their entire lives with the understanding that the money they have saved will provide for their future. It’s a pretty reasonable assumption.

They, and even many long committed “conservatives” believe in the current system. The truth is, they like a large state. They like Social Security, and indeed many rely on it (which makes economic sense if one believes that the current New Deal based system is sustainable and they had always been told that it was.)

The baby boomers are also children of the Cold War where a massive military in the face of the Soviet threat seemed to, and arguably did, make sense. A large state is deeply engrained in the grey matter of the older generation and this is completely understandable.

However even older people must adapt when the alternative is catastrophe.

We are not yet at the point where a majority of thinking people understand the extent of the economic challenges that lay before us. My sense is that many smart older people know that there is much that is wrong, and that something must be done, but that the regime to which they have given so much of their lives can still be saved without real change. In fact many bristle at the thought. Ron Paul is an agent of change, and so they bristle at Dr. Paul.

Aside from the new economic paradigm Ron Paul introduces, something that is at least equally as scary for some is Ron Paul’s foreign policy stance. The thought that the United States should dominate the world, and that it would be dangerous for it not to, runs deep in the baby boomer generation.

For a generation that it is said to not only recognized the folly of Vietnam but brought an end to it, the boomers seem pretty keen on keeping the war machine going. The concept of the military as “big government” is lost on many baby boomer conservatives.

It doesn’t seem lost on many active duty members of the military however, who have given more to Ron Paul than to any other presidential candidate in this election cycle. But most of those active duty folks are young.

What I write here is probably moot of course. It looks like the establishment has gotten Mitt-”I don’t worry about the poor” -Romney, just as it wanted. But Ron Paul will collect enough delegates to make noise at the convention that is for sure.

Also, though the Republican establishment may feel that it has effectively put down the libertarian uprising, liberty oriented Republicans are the future if the GOP wishes to remain viable.

The libertarians are young, committed, information savvy, economically correct, and they are going to see their time in the sun like it or not.

The smartest, most innovative political thinkers on what is called the “right” aren’t in the Romeny, or Gingrich camp, they are in the Ron Paul camp. And the GOP knows it. But the party will fight this reality every step of the way. The real question is whether the Dick Cheney types would rather commit party suicide than capitulate to the New Wave. We’ll see.

Just as the Goldwater Republicans overtook the Rockefeller Republicans, the Ron Paul Republicans will take things further down the freedom path as they eclipse the Bushies.

Time may not have come today, but it is coming.

This article was originally posted at AgainstCronyCapitalism.org.

Originally from Big Government

A couple of years ago, after the bubble crashed, my wife and I decided to buy a condo in Vegas.  There were many reasons behind that decision, but Sin City is known for delivering the unexpected.  And so, political junkie that I am, I suddenly found myself eligible to participate in an early, swing-state, caucus.  Las Vegas had taken me into virgin territory.

Being a caucus neophyte, I approached the matter gingerly.  I called the Clark County Republican Party office seeking guidance.  What happens at a caucus?  How long does it run?  What’s the procedure?  No one possessed definitive answers to these complex questions, but we were able to determine that folks in my precinct were caucusing at a nearby High School.  The doors opened at 8:00 AM, with the caucus itself slated to start at 9:00.  Anyone could speak on behalf of any candidate; each speaker would have two minutes.  Beyond that, things got a little vague.  I pre-registered on line “to avoid the crowds” of caucus day.

I arrived at Valley High School at 9:00 AM, impressed to see a sizable packed parking lot.  Perhaps these are the political activists I hear so much about, I thought.  Great to see how many of them show up early on a Saturday morning.  But for a group of activists, the lot seemed singularly inactive.  Where were the Paulistas, gesticulating wildly to emphasize that the Fed is our enemy, while Iran is not?  Where were the Romney and Gingrich surrogates deflating each other’s tires?  Where were Santorum’s nattily-dressed minions?  Where were the folks waving Perry and Bachmann signs, refusing to admit that their party was over?  Two helpful teenagers provided the answers: the caucus was on the other side of campus.  The folks parked in this lot were there for—get this—Valley High School.

I dutifully drove around the block to find the much smaller but equally pacific lot bearing two signs marked “Caucus here,” one sign for Ron Paul, and a TV truck.  I entered the school cafeteria, where a helpful volunteer directed me to the table for pre-registrants.  I surveyed the scene quickly: Fifty or so small tables, broken into groups, and perhaps two hundred people.  No politicking as far as I could tell, no speechifying, just a room full of Americans out enjoying their morning.  The young woman who checked me informed me that my precinct was convening in the gym.  I thanked her for the directions.  Then I told her that it was my first caucus, and asked her what the procedure was.  “It’s my first caucus, too,” she said.  “So I don’t know.”  I thanked her again and headed to the gym.

I found groups of people sitting either in the bleachers or in chairs on the gym floor.  Each group had a sign with a four-digit number—a precinct number, I presumed.  I found my precinct.  A gentleman with a list—the precinct captain, I guessed—checked me in.  I told him that it was my first caucus, and asked him what to expect.  “It’s my first caucus, too,” he said, “but I think that pretty soon we get to vote.”  I thanked him for the information and struck up a conversation with some of the other voters.

A man named Steve wandered by.  He wore a T-shirt with what appeared to be some sort of caucus logo and carried a clipboard, so I sensed an air of authority.  “How many voters do you have?” he asked.  “Fourteen,” said our captain, forgetting to count himself.  Steve counted out fourteen blue ballots.  “You get eight delegates and one alternate,” he said, then ran off to the next precinct.

Our captain distributed the ballots, each of which bore the names of the four remaining GOP candidates.  “Now we have to select eight delegates and an alternate,” he announced.  “Then we get to vote for President.”  “Why don’t we just see who is not interested?” suggested the man to my right.  I looked around to see if, perhaps, I might make a good delegate.  I realized that I was the youngest voter in the precinct, likely by at least a decade (I’m 48), but reasoned that I could nevertheless represent the group admirably if chosen to do so.

“I’m not sure that I want to go to Tampa during the summer,” one voter mused.  “Oh,” said our captain.  “I don’t think we’re electing delegates for the national convention.  Are we?  Does anyone know?”  “I would imagine that there’s some sort of state thing,” someone suggested.  We agreed that that sounded right.  “Does anyone know when that is?  Or where?”  “Probably around here somewhere,” someone suggested, “or maybe Carson City.”  “My vote would be Chicago,” our captain offered, but conceding that such a venue was unlikely, he set off to ask some questions.  He returned.  “Someone says they think its in Reno, but they’re not sure when,” he announced to the group.

I decided that it was time to pull up a browser on my iPhone.  Apparently, between today’s caucuses and the national convention, the Nevada Republican Party plans to hold a series of county conventions—sometime tentatively scheduled to fall between March 10 and March 17 at places to be determined—and a state convention in Reno in May.  I suggested that perhaps we were selecting delegates to the Clark County convention.  Everyone agreed that my analysis seemed plausible, but our captain went to find Steve to verify this new information.

He returned with answers.  We were tasked with selecting delegates for the county convention, to be held some time in March somewhere in Clark County.  Then we could vote for President.  “What do the delegates do?” someone asked.  “Are they bound by our votes for President?”  “Is there any relationship between our votes for President and delegate?”  “Are we supposed to support delegates who share our preferences for President?”  Our captain looked perplexed.  He set out once more in search of Steve.  He returned.  Delegates to the county conventions get to vote on delegates to the state convention, and on a platform, he announced.

“Does any of that have anything to do with our presidential votes?” someone asked.  “Well, those are distributed proportionally,” someone else answered.  We collectively deemed this answer sufficient, marked our X’s on our blue ballots, and handed them back to our captain.  He sealed them in an envelope and put check marks near those of us who had agreed to serve as delegates.  “Now what?”  someone asked.  “I think we’re done,” said our captain.  We all wandered off.

I surveyed the broader scene again, this time from my vantage point as an experienced caucus-goer and a freshly minted delegate to the Clark County Republican convention.  I was pleased to note that I was not the youngest person in the room, though everyone younger did seem to be either wearing a volunteer’s badge or providing mobility assistance to someone in need.  Very definitely not the crowd you see at Lavo, I thought.

I found myself standing next to a guy who appeared to be about my age—one of three men in the room wearing a suit.  “Are you a reporter?” he asked me.  “No,” I said.  “Just a voter.  But I do blog from time to time.”  “Same thing, these days,” he said.  “Are you a reporter?” I asked.  “Yes,” he said.  “For whom?” I asked.  “From Israel,” he said, starting to edge away from me.  “For Israel Hayom.  I cover elections all over the world.  Egypt.  Tunisia.”  I laughed.  “Very different,” he said.  “Yes,” I agreed.  “No one gets shot here.”  He nodded.  “This is a very good thing,” he said, completing his escape.

I realized that I must have wandered into some unmarked press area, because the one other obvious reporter in the room—the one with the TV truck and camera from the local NBC affiliate—was  interviewing another man in a suit.  I overheard the interviewee’s bold prediction that Romney would win Nevada and then take the nomination.  The reporter took this news in stride.  With his interview concluded he sat back down and struck a pose that seemed to say don’t bother me.  No one did.

I determined that I had learned all that I could learn, and that it was time to leave.  As I turned to go, I saw Steve, standing still behind a table.  I seized the opening.  “So I think I’m a delegate, but I’m not sure what comes next,” I said.  “Did you fill out one of these forms?” he asked, waving a form at me.  “No,” I said.  “But none of us did.  We just put check marks near the names of folks who agreed to be delegates.”  He looked concerned.  “Would you like me to fill out a form?” I offered.  “No,” he said.  “Just give me your name.”  I did.  He wrote it on a yellow post-it note.  “Would you like my e-mail address?” I asked.  “Yes,” he said.  “That would be a good idea.”  He handed me the post-it note.  I jotted down my e-mail address and handed it back.  He folded it in half and put it in his pocket.  “We’ll let you know,” he said, and ran off.

I headed back to the parking lot.  Looked my watch.  The whole thing had taken about an hour.  Grassroots democracy in action, I thought.  And no one got shot.  Gotta love it.

Originally from Big Government

The Senate’s 96-3 vote to ban members of Congress from using nonpublic information to inform their private investments brought with it important additional amendments that stand to shape the debate next week as the House takes up the STOCK (Stop Trading On Congressional Knowledge) Act.

In addition to outlawing members of Congress and their staffs from engaging in insider trading and requiring a 30 day public disclosure rule for all investments, an amendment by Sen. Richard Shelby (R-AL) successfully expanded the STOCK Act to also include the executive branch’s 28,000 workers.  Sen. Shelby said the reason for his amendment , which passed on a 58-41 vote, is simple:

It only seems fair that executive branch officials who are already required to file annual financial reports, also be directed to meet the same additional reporting requirements being imposed on the legislative branch.

The specifics of Sen. Shelby’s added provision will have to be hammered out in a House-Senate conference committee, as Sen. Shelby’s language conflicts with that of Sen. Joseph Lieberman (I-CT) who wants to limit the provision to just include the 2,000 top policymakers, such as the president and vice president, as well as the Federal Reserve Board.  Sen. Lieberman claims the amendment would apply to 300,000 federal workers and place an undue burden on them.  Sen. Shelby’s aides contend that his amendment would only include 28,000 workers.

Another important amendment that was added to the STOCK Act would subject so-called “political intelligence” operatives to the same kinds of disclosure and registration requirements lobbyists must submit to.   The amendment, proposed by Sen. Charles Grassley (R-IA), would apply to the $100 million, 2,000-person political intelligence industry that seeks to gather tidbits of relevant information in and around Capitol Hill and sell them to stock traders.  According to Sen. Grassley:

Political intelligence professionals aren’t considered lobbyists, so they don’t have to disclose that they’re seeking information and are paid for it.  As a result, members of Congress and congressional staff have no way of knowing whether such meetings result in information being sold to firms that trade based on that information.  My amendment would shed sunshine on this kind of political intelligence gathering.

Finally, Sens. Barbara Boxer (D-CA) and Johnny Isakson (R-GA) successfully passed an amendment that would require all members of Congress, the president, vice president, and most Senate-confirmed appointees to publicly disclose all residential mortgages, something current law does not require senators to do.   Sen. Boxer said that:

This measure makes it clear that any mortgage held by a member of Congress must be disclosed to ensure that lawmakers are treated the same as every other American.  The amendment corrects an omission in Senate ethics rules that did not require disclosure of all residential mortgages.

Sen. Isakson agreed and added:

I am a firm believer that the greatest accountability mechanism for members of Congress is transparency, and this amendment will add more transparency to our financial disclosures.  The Senate’s passage of this amendment demonstrates a commitment to making ourselves more accountable to the American people.

The Senate’s overwhelming 96-3 bipartisan passage of the STOCK Act readies the bill for consideration next week in the House.

Originally from Big Government