31 Dec 2008
Republican bankruptcy and the need for a sound money party
I’ve thought a lot about this issue over the years: In a general election, do you vote for the guy you believe in who will get .1% of the vote, or do you hold your nose and vote for the best major party candidate who can win? Lately I’ve leaned toward the latter because civil power comes through coalitions. But it depends on the candidate.
I no longer expect much of political parties anyway. Power attracts power-mongers like manure attracts flies. Obtaining power is all that really interests the parties that have a chance of winning, and I think that’d eventually be the driving force for a minor party that breaks through to replace one of our major parties (meet the new boss… same as the old boss).
An election like 1994 or 2008 may bring a temporary change, but a more powerful tsunami — the market — could well wash a whole lot of political parasites and their allies (e.g. the massive education establishment for one) out to sea. It will wash a lot of bystanders out to sea too. Government will have no choice but to shrink. The parasite won’t give up, but the host is weakened.
The year 2008 really showed me the bankruptcy of the Republican party on economic matters. Philosophically, it (finally) became all too clear that that the party sits on the same foundation as the Democrats: Keynesian counterfeiting, fiat currency, and massive government spending. Oh, the parties may disagree on who gets the money and how — farmers instead of welfare queens, health care accounts instead of the single payer model, a meaningless tax cut for taxpayers (since it’s occurring without any cut in spending) instead of a meaningless tax cut for non-taxpayers, a different type of Ponzi scheme for Social Security — but the premise is the same. The premise is the right of the government to spend trillions of dollars. Republicans can rail about big government all they want, but the cuts they support won’t make a dent in the trillions that our government continues to borrow and spend each year. Republicans don’t want to risk short-term unpopularity even if it’d position them strongly down the road.
America didn’t get to its current state of bankruptcy without Republican complicity. They say that they support the free market, but even the most conservative Republicans tell us that the government needs to smooth the business cycle, it needs to liquefy the markets, it needs to create incentives for home ownership, it needs to protect us from a greater meltdown, it needs to extend SEC regulation, etc. These phrases all mean “more government intervention.” In other words: We’re for the free market, but we’re not. Republicans are the Michael Corleone to the Democrats Sonny Corleone. They want to create mayhem, but in a more orderly and controlled fashion.
The Bush Administration and the Republican Congress have been more fiscally irresponsible than the Clinton Administration and its Republican Congress. If you don’t believe that, look at the charts. George W. Bush has pretty much killed what little remained of the Republican “brand,” and Congressional Republicans spent whatever moral capital they had left when many of them voted for the bailouts. None of them (save one, more on that momentarily) have demanded that the Treasury and the Fed cease their irresponsible actions. They are working with the Democrats to hamstring future generations.
How will the Republicans ever recover? One way might be due to the sheer incompetence of Barack Obama and the Democratic congress. It’s too early to tell if Obama will be a popular fraud a la FDR, who charmed the public even as he greatly damaged the country, or an unpopular Jimmy Carter type who wears out his welcome quickly. The other way Republicans could return is the better way. There’s one guy who has had a principled voice in this mess, and he just so happens to be a Republican! Ron Paul understands that sound money is the basis for sound fiscal policy. Mr. Paul isn’t getting any younger, so the window for Republicans isn’t open forever.
We need a major political party in this country that stands for sound money. Look again at the charts to see the explosive growth in spending and expansion of the money supply since the U.S. completely abandoned the gold standard in 1971. This ability to spend via inflation (i.e. by increasing the money supply) has enabled the explosion of entitlements and programs that have done enormous damage to the social fabric of the country.
A friend of mine who supported the Iraq War (which I did/do not) has long said that if you don’t defend our country, then nothing else will matter. This crisis may show us something different: If you don’t defend the currency from counterfeiting and defend the economy by reigning in spending, and that includes the trillions the Iraq War will cost us before we get out of there, then you’re not going to have a country that has the money to defend itself. The days of buying everything on credit, including our armaments, appear to be numbered. How many empires have fallen due to bankruptcy caused in part by wars?
Friends, we will never drive a stake into the heart of Big Government without killing fiat currency. The parties used to argue money policy in the 19th century; they need to do so again. When powerful people can enrich and further empower themselves and their friends by stealthily (and legally) devaluing your savings, they will do it.
If the dollar collapses in the next few years and 200 million Americans end up back at zero, which could very well happen, those Americans may be quite willing to listen to what once seemed arcane. Experience is a harsh taskmaster.
23 Dec 2008
Rick and Barack
Much ink has been spilled about Rick Warren and Barack Obama. Warren is trying as usual to play both sides of the aisle, none too successfully at the moment. I’m not sure if this all about grandstanding and self-promotion, or if Warren actually believes he shows “love” by cozying up to the world.
Worldliness is the only defining characteristic of modern evangelicalism. Isn’t it within all of our hearts to only show areas where we “relate” to unbelievers (I like the same TV shows as you!) and silence our own witness? I’m a chief offender. We’re all man-pleasers now.
Of course, Rick Warren is a pastor with a big platform. He’s using that platform very poorly, but that’s exactly how he hit the bigtime. The whole Purpose-Driven movement is based on Arminian theology, minimizing the offensive Gospel message, franchising the church, providing entertainment instead of the means of grace, encouraging pastors to be CEOs instead of shepherds, watering down the prophetic witness against the most cherished evils of the age (sodomy, abortion) in favor of things popular with the press and Hollywood (environmentalism, AIDS relief, other big government programs), and providing non-Christians with purpose that doesn’t include repentance and the cross. In other words, there’s almost nothing Biblical about it. Warren offers a unity of works — the same thing the early mainline church liberals attempted — rather than Gospel unity.
Rick Warren is no Nathan and Barack Obama is no King David. In Obama, Warren has found a fellow man-pleaser, except that based on his words Obama’s own religion is functionally modern Unitarianism (or moralistic therapeutic deism or Christianity and water, whatever you prefer to call it… it’s all the same wishful thinking.)
Conservatives like to remind liberals that Obama does not support gay marriage, but conservatives must know that this is a nominal position based on political consideration. It’s hard to imagine Barack Obama in front of a hostile crowd defending his position, or trying to convince hecklers to reconsider. This position will be quietly dropped once polls allow.
21 Dec 2008
Pastor Matt Timmons has a good post that informs this one and expands on a past post.
Has anyone else noticed that there are fewer Christmas lights at stores this year? It’s like retailers’ joy is snuffed out. Mine has increased; I wish there were more lights!
My 81-yr old mom told me recently that she sort of welcomes this economic downfall and a “return to what is important.” Despite the criminality of what the government has done, I think I understand that sentiment. I’m tired of conspicuous consumption: $5 lattes, BMWs, $300 toys, etc. These things may be considered blessings, and of course I heartily oppose forcing consumers to act as I see fit, but does anyone else think we’ve gone a little overboard? I’m tired of the Starbucks culture. I’m tired of the shallow, authoritarian movements that hatch from idle prosperity (e.g. the green movement, animal rights, etc).
Americans won’t be making economic decisions to buy paper that has the little recycling thing on them; they’ll be buying it based on what is affordable. It’s laughable that paper is considered “litter” that needs to be recycled anyway. You can cover old newspaper with dirt and it’ll soon break down and feed the soil.
Maybe people will start getting real jobs that build and push the economic wagon rather than the public-sector and non-profit jobs that simply consume what’s on it (not that there aren’t vital jobs in these spheres- e.g. the ministry- but they are in my opinion the minority). Maybe they’ll realize what an expensive joke our education system is and simply stop funding much of it, which will send a lot of people from the public sector into the private sector and lower education costs.
We may learn firsthand why our Depression-era forefathers were such cheapskates. If that doesn’t sound like happy news, well, we’re alive and we have warm homes and families. Most of all, we have a Savior who isn’t phased by any of this. The “things” are being shown for what they are– unreliable vanities. In relief the kingdom of heaven shines ever brighter.
19 Dec 2008
A pictorial view of things…
Just to give you a pictorial idea of what federal government has been up to this year, check out the graph on this page showing the expansion of the monetary base.
15 Dec 2008
Faith is the opinion that some person will do something for you. If that person will really do that thing for you, then the faith is true. If he will not do it, then the faith is false. -J Greshem Machen, Christianity and Liberalism
A recent piece by Gary North got me to thinking: When federal politicians sit at home after a long day’s work, do they ever reflect and ask themselves how the country will pay for their spending? My wife thinks not. She thinks they’re content to kick the can down the road (when it will be someone else’s problem).
It’s been estimated that we have almost 100 trillion in Social Security and Medicare liabilities. Maybe, like Mr. Micawber, politicians are hopeful that something will turn up. I doubt 100 trillion will turn up, though, and Congress would find a way to spend it if it did.
North makes the germane point: there is no way the “commitments” to provide all these goodies can be met. These commitments are nothing but broken promises. They’ll either default on them altogether or dilute them to the point where those expecting the equivalent of steak or even hamburger will be fortunate to get roadkill.
You used to hear people falsely say: “Who cares about the national debt, we just owe ourselves.” The truth was that the government owed some people, namely American bondholders. Now, however, foreigners are the creditors. We’ll just keep running the printing presses until these foreigners tire of providing us with products in exchange for freshly-printed green paper. Then the problems will really start.
We not only have enough unpayable liabilities as it is, but the world’s ramshackle savior, Barack Obama, wants to spend even more. More broken promises to come. The solution is to eliminate the messianic nanny state and return to the limited government suited to man’s finite capabilities.
Do politicians ever question the morality of borrowing money they have no plan and no ability to repay? North closes with Psalm 37:21, an apt Scripture:
The wicked borroweth, and payeth not again: but the righteous sheweth mercy, and giveth.
There’s quite a difference between the promise-breakers in Washington and and the covenant God!
12 Dec 2008
Tax cuts aren’t enough
You watch this financial situation unfold and about all the Republican leadership does is (1) meekly fight to spend 75% as much and (2) call for tax cuts. Republicans who believe in tax cut salvation need to get it through their head: every dollar the government spends has to be paid for somehow. If you don’t cut spending, then anything you gain in tax cuts is simply going to be inflated away. Both taxes and inflation lower your standard of living and you are still all the poorer for it (in fact, economists argue persuasively that inflation is MORE insidious than taxes).
Let’s take an example. Say dad gives his son a credit card. The son spends $5,000 a month. To the dad’s complaint about this spending, the son retorts: “I’m going to keep spending that $5,000, dad (in fact I will be increasing it as we go), but don’t worry, I called the credit card company and they agreed to halve your monthly minimum payment.” Now, is dad any richer thanks to the son’s action? He’s still going to have to pay the tab. The measure of a politician on economic matters isn’t their support for tax cuts, it’s how much they want to limit spending.
Liberals and “moderates” have long told us (disingenuously, given their complicity) that we can’t “afford” to cut taxes. This may be why we so often hear Republicans reply with the supply-side canard that says when we cut taxes, more revenues come in to the government, and thus we should focus on tax policy rather than spending policy. However, while tax cuts may spur greater revenues in the short-term, all that does is encourage a spendthrift government to spend more. And again, every dollar the government spends must be paid for. Revenue isn’t the problem; spending is. Conservatives need to ditch supply-side nonsense and cross the Danube.
The government has no pot of gold, as Peter Schiff is fond of saying. It produces no wealth. It simply redistributes and destroys it. What we need are massive spending cuts that allow us to make massive tax cuts. We need to phase out programs that can never be paid for. Above all else, we need to abolish the central bank and get rid of the pestilence of fiat currency which is the greatest enabler of Big Government.
Not gonna happen, you say? You’re probably right. But until this country resolves to live within its means, we will be be prey to these horrid downturns and tax cuts will be meaningless.
The government is currently doing its best to destroy the dollar. Remember all the survivalist talk during the Y2K nonsense? I think we’re closer than we’ve been since the Civil War in seeing a massive disruption in this country. I’m not saying that you will be buying stuff in a few years with .22 rounds and cigarettes, but it would no longer surprise me if we hit that point. I also foresee the government taking drastic steps to deal with unpayable entitlement liabilities: nationalizing (ie. stealing) 401Ks and IRAs, repudiating debts to foreign countries, sudden currency devaluations, etc. They could do the wise thing instead, but when do they ever do that?
I believe that this country will be — financially speaking — significantly poorer in a few years than it is now. Obama will be the caretaker for the depression. And, like the abysmal FDR, its nurturer.
09 Dec 2008
The stars and hope
The economy is tanking, and I believe we’ve seen but the tip of the iceberg. Wickedness seems ascendant in our land. However, you can go out on any clear night and look up. And you really need to get outside and do just that sometime this winter. Few sights beat a clear, starry December sky. If there’s snow on the ground and you can see your breath, well, that’s better yet.
Jupiter and Venus are lighting up the southwest.
Look south and you’ll see Orion and his brilliant belt, with Sirius the dog star following behind. I’ve always thought Orion’s belt looked more like a the head of a crowned king, with the murky M42 area the hair at the base of the king’s neck. We have a south-facing home, and so every night when I head to bed I look for the belt. It is a glorious thing that never gets old. It reminds me that evil men come and go, but the stars, those incandescent lights of unimaginable size, remain, silently looking down. It’s a reminder that Christ remains and His purposes cannot be thwarted.
For those of you blessed enough to live in a rural area, look to the western sky and you’ll see the Northern Cross (also known as Cygnus the swan) standing upright. What a perfect Christmas-time sight.