Hawaii Liberty Chronicles

The real reason behind Obama’s bank bailouts are paybacks to bankrolling politicians as exposed in this Richard Ebeling article.  Hat tip to Ken Schoolland for forwarding this article.

By Reason.tv

2008 was an apocalyptic year for the American car industry, with sales of Ford, General Motors, and Chrysler cars all falling by 25 percent. Supporters of the Big Three automakers argue that the government needs to provide Detroit with at least $50 billion in taxpayer money in order to save the American car industry, on top of the billions of federally subsidized loans they’ve already received. President Barack Obama agrees, having attacked John McCain during last year’s presidential campaign for opposing a bailout of Detroit.

But while many commenters and union advocates paint Detroit’s economic troubles as a consequence of the financial crisis, necessitating its inclusion in the bailout sweepstakes, the financial troubles of the Big Three long predated the current mess. Indeed, in 2007, GM sold more cars and trucks than Toyota. Yet Toyota made almost $2,000 per vehicle while GM lost more than $1,000. So why does the United Auto Workers union and President Obama want taxpayers to reward Detroit—and punish her competitors—for making unprofitable cars?

By David A. Singhiser

Dear Senator,

I have no illusion and will not be surprised when you vote for the new scam President Obama is pushing on us. He is using fear to further increase the power and scope of the Federal Government (as Mr. Emmanuel said, “Never let a serious crisis go to waste.”)

Nevertheless, I want you to know that I am against the bailouts.

Can you explain to me the moral and constitutional justification for doing this?

Can you explain where the money will come from?

There are only three sources: inflate the currency, borrow the money, or increase taxes.

Can you explain how it is moral to inflate the currency, thus taxing the poorest of our citizens and robbing the people of their savings?

Can you explain how is it moral to borrow more money, thus putting our children, our grandchildren, and us further in debt?

Can you explain how is it moral to increase the tax burden on a nation that is already suffering, robbing the people of what little the government already allows them to keep in order to bailout incompetent corporations?

You swore to uphold and defend the Constitution.

How is this bailout constitutional? It is not. It is immoral and unconstitutional.

Let’s be honest, shall we?

We are no longer a constitutional republic under the rule of law; we are a democracy under the rule of the mob. The Constitution is dead. Every vote for a bailout, every unconstitutional act of Congress, the President, and Judiciary shows the contempt the three branches have for the Constitution, making a mockery of it and your oath of office to uphold it.

David A. Singhiser is a Honolulu resident.

IBM CEO, Sam Palmisano eyes federal billions in this recordonline.com article.

The editor of this clip saved the best for last (7:19).

By Chad Crosier

With all this talk about Capitalism and Free Markets systems failing us one has to wonder if the talking heads on the financial shows truly understand basic economics or are they projecting their interpretation to sway public opinion. The fact is the U.S. is not under a Free-Market system. Free Markets by definition is markets not interfered by the government. We have just the opposite of Free-Markets in America. If we did, we would not have government backed Reverse Mortgages, trade agreements like NAFTA, CAFTA and the like. Nor Sarbanes-Oxley, Fanny and Freddie Mac, we wouldn’t have legislation that permitted HMO’s and PPO’s to be formed. And the biggest one of all, a Central Bank like the Federal Reserve Bank dictating the value of the dollar. A Free-Market system would let the value float and be priced by buyers and sellers. That’s called the equilibrium price, remember Econ 101? Instead the value of the dollar is managed by a handful of men at the Fed. They are independent from our Government. Neither Congress nor the people have any say or any direct control over the actions of the Fed. Whenever the chairman gets pulled in front of a Congressional committee he just sits there and gives often befuddling answers. In a Free-Market society there wouldn’t be the thousands of regulations and legislation in this country creating a market climate induced by the government favoring certain businesses. Making well connected business and government insiders wealthy at the taxpayers’ expense. This is exactly what we have today.

The housing crisis was brought about by many cascading factors but the root cause is due to the monetary policies of the Federal Reserve Bank. The Fed was following a policy (based on Keynesian School of Economics)of lowering interest rates to spur economic activity. The Keynesian School of thought is by lowering interest rates you promote lending and consumption of products and services which in turn will lead to more employment and greater economic prosperity. While this does actually work in the short term and creates a “boom” this artificial lowering of the interest rates also creates a “bust”. Let me explain why. To lower interest rates the government increases the money supply. Meaning they print and circulate more “dollars”. This makes loans cheap (easy to obtain) but because money is now more widely available this now bids up prices on assets (i.e. houses. stocks). This is exactly what happened in the latest housing crisis. Due to the Fed policy people were are getting cheap loans and purchasing houses therefore prices are going up (because of artificial demand). Investors see that prices are rising sharply eager to get in on the action investors start buying up houses which accelerates prices even further. Then builders, seeing a demand start getting loans or investments to build to meet the demand. This is called misallocation of capitol. This misallocation of capitol by consumers, investors and builders will lead to money invested on this asset to be wasted. This scheme works as long as there is a never ending amount of consumers, loans and money to be spent on housing. But as soon as there is no one to keep buying up property, prices begin to level then eventually fall. Builders with excess inventory cannot sell and default on their loans. Wages lag behind inflation which is caused by the money supply expansion policies of the Federal Reserve. Prices are so high on houses they are disproportionate to wages and most people cannot afford a house without prices falling. And the people that did buy houses at the end of the cycle are now stuck with a debt greater than the value of their declining asset (home). This greatly lowered demand will have the opposite effect of the artificial demand created by the actions of the Fed. Businesses created in the “boom” phase will either go out of business completely or lay off workers due to the “new economic reality”. There will be an unwinding of economic activity creating a “bust”. This is history repeating itself. This is what happened in the Savings and Loans in the ‘80’s, .com bubble in the ‘90’s and the roaring 20’s just prior to the Great Depression.

So as you can see Inflation (more specifically monetary Inflation) is directly caused by the Federal Reserve Bank. Although most people do not understand how inflation comes about they do intuitively understand that inflation is bad. Where most people make the mistake is that they feel inflation is a fact of life but it doesn’t have to be. The Federal Reserve had failed miserably to meet one of its primary directives which is to have price stability. Instead, since the creation of the Fed in 1913 the purchasing power of the dollar has fallen to 4% of its original purchasing power. The United States did very well without a Central Bank for hundreds of years. We will do well again without one. The Keynesian School has failed us we should now look towards the policies promoted by the Austrian School of Economics which have been a long time critic of the Keynesian School.

Now, the Wall Street scamsters, ballooned beyond all reality by the Fed but now punctured too, will fool fewer of us for the next few decades, and that is all to the good. The same with purchasers of residential housing, another consumption expense. Far too many people were drawn into something they had no business doing. No longer. They don’t call it a correction for nothing.

~ Lew Rockwell (12/31/08)

Republican National Committee leaders are pushing a resolution accusing President George W. Bush and congressional leaders of embracing socialism.  Ralph Z. Hallow of the Washington Times covers this story.

“We can’t be a party of small government, free markets and low taxes while supporting bailouts and nationalizing industries, which lead to big government, socialism and high taxes at the expense of individual liberty and freedoms,” said Solomon Yue, an Oregon member and co-sponsor of a resolution that criticizes the U.S. government bailouts of the financial and auto industries. Republican National Committee Vice Chairman James Bopp Jr. wrote the resolution and asked the rest of the 168 voting members to sign it.

The question locally is will local Hawaii Republicans active and dormant rally around the growing nationwide cause to support personal freedom and oppose expansive local bureaucracy Hawaii Republican leadership has either promoted or turned a blind eye to?

Will the HRP display any red in 2009?

Congressman Ron Paul interviewed on Lew Rockwell’s latest podcast.

In The Know: Should The Government Stop Dumping Money Into A Giant Hole?

When one gets in bed with government, one must expect the diseases it spreads.

~ Congressman Ron Paul M.D.

Thanks to Warren Woodward for sending this ‘newest car ad.’

Congressman Ron Paul second address during general debate on U.S. House floor regarding auto bailout from December 10, 2008.

First address- “… (the auto bailout is) a gross distraction to the great harm we’ve (Congress) done over the past 6 months.”

By Jeff Flake

Fannie Mae, Freddie Mac, AIG, CitiGroup, the ‘Big 3′ and the union bosses all appear to be getting what they want this season, but the taxpayers are left with the looming debt - and an increasingly sluggish economy to boot. Merry Christmas!

In the past few months the federal government has dangerously overreached into the free market in an effort to jump start the economy. The government - or to be honest, the taxpayer - has already allocated nearly $1 trillion to help with mortgage foreclosures, to prop-up many of the nation’s financial institutions, and to provide a bailout, er…bridge-loan to the auto industry.

Now the Democrats are talking about spending another $500-700 billion more for ‘infrastructure improvements’ and other measures to stimulate the economy and create jobs. Here we go again. The last thing we need is the government in the job creation business. Does anyone truly believe government is more efficient in allocating capital than the free market?

During the holiday season we all want to give more and help those that are less fortunate. If Congress truly wanted to get into the Christmas spirit, the first thing it should do is remove the financial barriers to job creation and economic expansion. How about letting people keep more of their money and spending it as they see fit?

Here’s hoping Congress finds the Christmas spirit…soon.

Jeff Flake is a U.S. Congressman from Arizona.

Thanks to Ken Schoolland for forwarding this link with nine different charts and commentary on our nation’s borrowing.

http://benbittrolff.blogspot.com/2008/11/really-scary-fed-charts-nov-us-bankrupt.html

By Nick Gillespie

When the history of this awful moment of bailout hysteria is written, there’ll be a chapter or 20 on the complete bogosity of what might call “the infrastructure flim-flam”—the idea that government can boostrap the economy out its funk by hiring two guys to dig a hole and a couple more to fill it in.

Don’t you see? It’s the perfect plan!, as Batman’s Riddler might exclaim. In fact, one only wonders why they don’t hire three guys to fill the holes, thereby cutting unemployment to negative-something.

Then again, taxing Peter to pay Paul to build a parking deck with solar panels for Mary just might not be the sort of economic activity that, you know, accomplishes anything other than creating even more inefficient and generally non-productive public-sector spending with a major administrative dead-weight loss on the top.

Who cares, though, right, because the important thing, in the words of New York City Mayor Mike Bloomberg and countless others, is that we don’t just stand there, do something! And when it comes to wasting taxpayer money on what used to be called make-work projects, the nation’s mayors are true visionaries. From a CBS4 account:

Stressing that investing in Main Street will help Wall Street, the nation’s mayors have gathered in Washington D.C. to push for emergency federal aid to fund infrastructure projects.

Led by U.S Conference of Mayors President Miami Mayor Manny Diaz, the mayors, including New York Mayor Michael Bloomberg; Chicago Mayor Richard Daley and Los Angeles Mayor Antonio Villaigosa, will release their second report on a number of local ‘ready-to-go’ infrastructure projects, those which can be started and completed in two years, if the emergency funding were made available.

According to the report, the ‘ready to go’ projects include Community Development Block Grants, transit, highway infrastructure, green jobs, school modernization, public safety and public housing.

Whole account here.

And if you want to crash your browser with over 4MB (and 803 PDF pages) of hot steaming pork projects laid out in loving, excrutiating, and blood-pressure-popping detail by the United States Conference of Mayors, then look upon this document and abandon all hope.

Among the highlights:

• a proposed “O’Malley Road Reconstruction” in Anchorage, Alaska, that will cost $30 million but provide 300 (count ‘em!) jobs;
• a Gadsen, Alabama “Hoke Street Sidewalk Construction to serve new Department of Human Resources facility” that’s a real steal at $150,000 but will take almost surviving members of the Allman Brothers Band off the public dole (at last!);
• Police Facility Solar Panels for Lake Havasu City, Arizona, for only $400,000 and 75 jobs;
• Stormwater Settlement Ponds for Beloit, Wisconsin for $1,428 million and five whole jobs, which will feed a family of four in the Badger State, especially if they only eat government cheese;

And, literally, so much more it’s virtually impossible to document.

But the mayors have. Don’t you know that the Columbia Avenue storm sewer in St. John, Indiana needs “additional capacity” (and it will only cost $275,000 and provide 15 Hoosiers good, decent jobs)? Or that Manhattan, Kansas can finally (finally!) coordinate the traffic lights on Fort Riley Boulevard for a measly $71,250 (sure it will add only one job to the economy, but one is almost twice as much as zero when you think about!)? And that for barely over $4 million, Atlanta, Georgia can install “reflective or green roofing” on unspecified buildings, thus becoming the Reflective or Green Roofing Capital of the United States, or at least the Southeastern United States? Maybe the lights will really go out in Georgia, but Hotlanta will be keeping cooler than ever.

Am I the only American saddened by such bushwah? I hope not, even as I acknowledge that perhaps I am the only American outside of Silver City, New Mexico wondering why Silver City, New Mexico didn’t ask for more than $60,000 for the “creation of Economic Developer position to service entire county.”

I mean, seriously, why didn’t the idiots there read their Bastiat, the great 19th century economist, and petition the government for I don’t know, like a bazillion dollars for a “Window Breaker to break windows for the entire county“?

Don’t you see how it works? All those broken windows will mean work for the glazier, who will then buy bread (which means work for the baker!), who will then buy solar panels (which means works for the solar panel guys!), who will then drive more on Fort Riley Blvd. (which will mean more acccidents on the street, thus increasing demand for traffic light coordinators, who will buy cars…).

Skim the mayors’ begging petition, then read your Bastiat. Then go to sleep and pray that you wake up and it’s December 2000 and the Supreme Court rules differently in that year’s presidential contest.

And laugh for 23 seconds as the ultimate statement on phoney-baloney jobs is made in Mel Brooks’ Blazing Saddles:

Cato analysts have appeared on more than 50 radio and television programs and written in the world’s leading newspapers and magazines to show why the federal government should not bail out the struggling “Big Three” automakers.

Compiled is the best footage of Daniel J. Ikenson, associate director of Cato’s Center for Trade Policy Studies, as he argues against another bailout.

By Jeff Flake

Today, the heads of the ‘Big 3′ automakers are in Washington for yet another attempt at a bailout. Much is being made of the fact that the executives drove to the hearing this week rather than flying in their private jets.

I don’t know about you, but I don’t care if they fly, drive, walk, or ride a camel to Washington, a taxpayer bailout is still a bad idea. They may have a “plan” to become solvent, but Congress is in no position to judge whether such a plan is realistic or not. That’s the job of the free market. We simply cannot allow government to inject itself more deeply into the private sector and put taxpayers on the hook for more spending. Enough is enough.

On another matter, I’ve made it public that I’m running for a seat on the House Appropriations Committee. We’ve known for years that the Appropriations Committee hasn’t done an adequate job providing oversight of congressional spending, largely because it has devolved into an “earmark favor factory.” Recently, FreedomWorks, a grassroots conservative organization run by former Republican Majority Leader, Dick Armey, launched www.makeitflake.com in support of my efforts to get a seat on the committee. You may want to visit their website and give it a look.

Jeff Flake is a Congressman from Arizona.

Fascism will come at the hands of perfectly authentic Americans, as violently against Hitler and Mussolini as the next one, but who are convinced that the present economic system is washed up and that the present political system in America has outlived its usefulness and who wish to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing millions every year and spending them on all sorts of projects through which such a government can paralyze opposition and command public support; marshaling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination all to be done under the authority of a powerfully centralized government in which the executive will hold in effect all the powers with Congress reduced to the role of a debating society. There is your fascist. And the sooner America realizes this dreadful fact the sooner it will arm itself to make an end of American fascism masquerading under the guise of the champion of democracy.

~ John T. Flynn, As We Go Marching

GM has announced that they are ending their endorsement deal with Tiger Woods. When asked why, a GM spokesman said, “Tiger Woods is successful, competitive, popular… and that’s just not us.”

~ Conan O’Brien

By ReasonTV

One of the great casualties of the tech bubble bust, Pets.com’s Sock Puppet mascot, asks Congress for his unfair share of the awful bailouts.

Ever wonder how Washington calculates bailouts will help our economy?  Ma and Pa explain how it’s done.

Peter Schiff is interviewed on Lew Rockwell’s podcast.  A must listen.  Schiff called the current crisis last Summer.

He wrote The Little Book of Bull Moves in Bear Markets: How to Keep Your Portfolio Up When the Market is Down.

South Carolina Governor Mark Sanford testified to Congress to not pass a $150 Billion bailout package for his or any other state governments (10/29/08). Here are Sanford’s statement in the Wall Street Journal.

Sanford is the recently elected Chair of the Republican Governors Association.  With Congressman Jeff Flake (R-AZ) and former New Mexico Governor Gary Johnson, Sanford represents the rising standard bearers for limited government in our nation.  Here is Sanford’s official site.  Here is an unofficial Sanford site.

A pic from the Denver Post.

Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke graded.