Saturday, December 31, 2011

How core inflation remains low

From Boston.com

The Federal Reserve stated that the April "core inflation" rate increased by 0.2% and about 1.3% on an annual basis. My anecdotal experience seemed to indicate otherwise. The three most important products in my life (and probably in the world); bacon, coffee and gasoline are all costing me significantly more than last year. In the last 12 months, pork products have increased almost 11 percent, gasoline has increased 37 percent, and coffee prices have increased almost 16 percent.

How does the Federal Reserve justify the low inflation numbers that it puts forth? Inflation in many cases is not simple to measure. For commodities, it is relatively easy. The price of gallon of gasoline today versus last year is relatively easy to measure for inflation. However, non-commodity items are not so easy to measure. For example health care costs increase significantly each year. But health care is not an apples to apples comparison each year. Advances in health technology contribute to the higher costs, but these advances should also improve our lifestyle. So if our health care is 10 percent better in quality and the price increases by 15 percent, then the inflation impact should be 5 percent. Obviously something like this is not easy to measure. There are all kinds of other areas that make measuring inflation an art as much as it is a science and it is prudent to see that inflation can be measured in many different ways. However, the biggest impact with the Federal Reserve’s calculation of “core inflation” rate is what they do not include in this measurement, namely energy and food.



Is Unofficial Inflation Present In The Economy?Posted by Repair_Man_Jack (Diary) 33 Comments

In the late 1970’s and early 1980’s, inflation became a crippling detriment to the American Economy. Federal Reserve Chairman, Paul Volker, showed remarkable patriotism for a Democrat. He brought down the hammer athwart this scourge. He raised interest rates through the roof and forced down the price of most consumables to acceptable levels. As a result of Paul Volker’s courage and love for America, the fixed-income consumer was temporarily spared great misery and deprivation.

Of course Fed Chairman Volker’s policy decisions were kryptonite to elected officialdom. They solved a long-term Seldon-Crisis of political economy with little or no concern for short-term public opinion. The primary measure that set off Paul Volker’s alarm system was the CPI (Consumer Price Index). Sadly, the CPI referenced today would not mathematically map to the CPI Volker relied upon back in the day. Therein lies a tale of statistical machination and nerdacious skullduggery.


The base CPI data is collected by the Bureau of Labor Statistics using an exhaustive survey. Details follow below.

The CPIs are based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected each month in 87 urban areas across the country from about 4,000 housing units and approximately 26,000 retail establishments-department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments.

(BLS ObCit)

If the BLS just stopped at using the data they got from the surveys, their numbers this month would map to the same CPI that Paul Volker used as a decision point. Yet soon after Volker solved our nation’s inflationary crisis, the mathematical calculation of the CPI underwent alterations that resulted in a reduction of the calculated values.

The old, Volker-Era CPI strictly measured price level. Michael Boskin (Bush I Budget Director) and Alan Greenspan decided that this direct comparison of surveys was too mathematically naïve to accurately measure inflation. Thus, they argued for the inclusion of substitution effects. At this point, they were measuring relative rather than absolute inflation. President Bill Clinton enthusiatically agreed. His BLS put this new measure into effect.

At this point, in order to effectively calculate what I’ll refer to as CPI*, they claim sufficient knowledge of consumer ability and preference to produce an estimator of how people would react to a real change in price level. This dampens inflation measured by CPI* to the extent that a consumer was willing to reduce his utility against a higher price level. The statistical mind-reading implicit in CPI* regrettably camouflages higher price levels.

At this point, the BLS had a data normalization problem. They were forced to account for qualitative preference using quantitative measures. The BLS had no opinion surveys to gauge elasticity of demand for CPI components, so they presumably used prior research to model these effects. They could then use weighting factors to downshift consumer preferences towards cheaper goods as real price levels rose. This mathematically enforced CPI*<= CPI.

Another mathematical conundrum effected CPI*. This happened when they attempted to account for adjustments to the quality of market goods that were not physically measureable with respect to price level. For example, if the government regulated baby cribs to make them safer, the BLS attempted to adjust the price level downward to account for the happiness a new mother would have that her offspring was safer in the new government-approved crib. This got them involved in the very sticky mathematics of quantifying consumer preferences.

Since the BLS had neither the time nor the sample availability to properly compose a Von Neuman preference lottery, they had to guess. They had to guess with no knowledge of how many lower-income mothers would react to the baby crib price increase by making their adorable offspring sleep on the floor wrapped up in a swaddling blanket due to substitution effects. The BLS Hedonic Adjustments are educated guesses, which are probably founded on the best expert opinion available prior to press time. We thus are treated to CPI** (original CPI adjusted both for substitution and hedonic quality factors.)

In fairness to the people who calculate CPI** (or whatever ridiculous notation they use) the cranks and paranoids make outlandish claims. The propriator of Shadowstats.com states that what I call CPI** systematically understates old CPI by 7% per year. I have yet to hear their explanation as to why that hasn’t caused me to live in a cave and hunt wild animals for subsistence yet. However, based upon my own professional training and academic background in Operations Research and Applied Mathematics, I find the current BLS methodologies potentially fallacious for two key reasons.

The most pressing problem comes from the decision to reduce the CPI measures by including a mathematical proxy for economic substitution. I believe that an unbiased estimator of real price level changes is more useful to both citizens and firms than an estimator modified by the BLS’ mathematical attempt to predict substitution patterns. Just tell me the actual change in real price levels and I’ll decide how much hamburger to eat instead of steak. Intentionally rigging up a CPI* that is mathematically forced to behave so that CPI*<=CPI is disingenuous political gamesmanship.

The Hedonic Adjustment problem is more typical of what goes wrong with honest bureaucracy. It’s such a methodological grab-bag of Fuster Cluck that I can’t honestly tell you whether CPI**<=CPI*. My suspicious instincts tell me they play this to political advantage. However, sorting through this dung heap of statistical stupidity is too much work to verify this conjecture. If they don’t have an actual set of Von Nuemann-Morgenstern lotteries to justify claiming that I have ten cents of additional happiness value per gallon of modified clean air gas, they flunk my Intro to Stochastic OR class. Hedonic Adjustments are bravo-sierra.

So we calculate an inflation statistic called CPI. We used to calculate an inflation statistic called CPI. Yet if you attempted to map 1960’s CPI stats to 2010 CPI stats you would find mathematical discontinuities and a ridiculously high margin of error to your estimate. The statistic called CPI does not measure the same thing it measured back before it was dorked with.

This probably means we pay more for the basic necessities of life than our current government is willing to tell us. We now suffer from some level of unofficial inflation that is between 0 and 7%. Is this fatal? Not for me personally. Yet it does contribute to that sense that we just go through an endless cycle of elections to select the next dumb son of a (NSFW) that will stab us all in the back. That is all.



04/14/11 Calculating Inflation
Each month your finances get tighter. You haven't had a raise in awhile and expenses appear to increase. Yet, the government insists there is very little inflation. How can that be?

One inflation rate is based on CPI, the consumer price index. CPI is determined by changes in the prices paid for about 80,000 different goods and services.

Another rate is called "core inflation." Unlike CPI, food and energy costs are stripped out. The Federal Reserve, which sets U.S. monetary policy, uses core inflation. The Fed argues that food and energy prices are too volatile and distort the true inflation rate.

This would make sense if food and energy prices were to register dramatic highs and lows. But they don't. We only see highs.

In February, the CPI measured 0.5 percent or 6 percent on an annualized basis. Core inflation was only 0.2 percent or 2.4 percent for a year. That's a big difference. The Fed's use of core inflation to set monetary policy worsens everyone's financial situation.

One more thing. Prices for commodities such as food and energy are affected by a devalued dollar. By eliminating food and energy in calculating the inflation rate, the Fed can hide the true cost of printing more money.

This may be the real reason why the Fed uses the core inflation rate.

Tuesday, December 20, 2011

It’s For the Kids… 14,866 IL Teachers Made Over $100,000 Last Year – Phys Ed Teacher Made $203,154

Posted by Jim Hoft on Tuesday, December 20, 2011, 6:08 AM

It’s for the kids.

760 Illinois Physical Education teachers made over $100,000 last year. 14,866 teachers made over $100,000 in 2010. The highest paid teacher in Illinois teaches PE and made $203,154.

News Alert has more on the story scandal.

Monday, December 19, 2011

Highlights From Debates On The Constitution

THE DEBATES IN THE CONVENTION OF THE COMMONWEALTH OF VIRGINIA, ON THE ADOPTION OF THE FEDERAL CONSTITUTION

But I never thought so, nor do I now. If, in the ratification, we put words to this purpose, "and that all authority not given is retained by the people, and may be resumed when perverted to their oppression; and that no right can be cancelled, abridged, or restrained, by the Congress, or any officer of the United States," - I say, if we do this, I conceive that, as this style of ratification would manifest the principles on which Virginia adopted it, we should be at liberty to consider as a violation of the Constitution every exercise of a power not expressly delegated therein. I see no objection to this. It is demonstrably clear to me that rights not given are retained, and that liberty of religion, and other rights, are secure. I hope this committee will not reject it for faults which can be corrected, when they see the consequent confusion that will follow.


DEBATES IN THE LEGISLATURE AND IN CONVENTION OF THE STATE OF SOUTH CAROLINA, ON THE ADOPTION OF THE FEDERAL CONSTITUTION

With regard to the liberty of the press, the discussion of that matter was not forgotten by the members of the Convention. It was fully debated, and the impropriety of saying any thing about it in the Constitution clearly evinced. The general government has no powers but what are expressly granted to it;


DEBATES IN THE CONVENTION OF THE STATE OF NORTH CAROLINA, ON THE ADOPTION OF THE FEDERAL CONSTITUTION

I can see no powerthat can keep up the little remains of the power of the states. Our rights are not guarded. There is no declaration of rights, to secure to every member of the society those unalienable rights which ought not to be given up to any government. Such a bill of rights would be a check upon men in power. Instead of such a bill of rights, this Constitution has a clause which may warrant encroachments on the power of the respective state legislatures. I know it is said that what is not given up to the United States will be retained by the individual states. I know it ought to be so, and should be so understood; but, sir, it is not declared to be so. In the Confederation it is expressly declared that all rights and powers, of any kind whatever, of the several states, which are not given up to the United States, are expressly and absolutely retained, to be enjoyed by the states. There ought to be a bill of rights, in order that those in power may not step over the boundary between the powers of government and the rights of the people, which they may do when there is nothing to prevent them. They may do so without a bill of rights; notice will not be readily taken of the encroachments of rulers, and they may go a great length before the people are alarmed. Oppression may therefore take place by degrees; but if there were express terms and bounds laid down, when these were passed by, the people would take notice of them, and oppressions would not be carried on to such a length. I look upon it, therefore, that there ought to be something to confine the power of this government within its proper boundaries.

The gentleman has wandered out of his way to tell us - what has so often been said out of doors - that there is no declaration of rights; that consequently all our rights are taken away. It would be very extraordinary to have a bill of rights, because the powers of Congress are expressly defined; and the very definition of them is as valid and efficacious a check as a bill of rights could be, without the dangerous implication of a bill of rights. The powers of Congress are limited and enumerated. We say we have given them those powers, but we do not say we have given them more. {141} We retain all those rights which we have not given away to the general government. The gentleman is a professional man. If a gentleman had made his last will and testament, and devised or bequeathed to a particular person the sixth part of his property, or any particular specific legacy, could it be said that that person should have the whole estate? If they can assume powers not enumerated, there was no occasion for enumerating any powers. The gentleman is learned. Without recurring to his learning, he may only appeal to his common sense; it will inform him that, if we had all power before, and give away but a part, we still retain the rest. It is as plain a thing as possibly can be, that Congress can have no power but what we expressly give them.

The Congress cannot assume any other powers than those expressly given them, without a palpable violation of the Constitution.

DEBATES IN THE CONVENTION OF THE COMMONWEALTH OF MASSACHUSETTS, ON THE ADOPTION OF THE FEDERAL CONSTITUTION.
IN CONVENTION, BOSTON, January 9, 1788
MONDAY, January 14
Mr. Ames
But, sir, the representatives are the grand inquisition of the Union. They are, by impeachment, to bring great offenders to justice. One year will not suffice to detect guilt, and to pursue it to conviction; therefore they will escape, and the balance of the two branches will be destroyed, and the people oppressed with impunity. The senators will represent the sovereignty of the states. The representatives are to represent the people. The offices ought to bear some proportion in point of importance. This will be impossible if they are chosen for one year only.

The Hon. Mr. BOWDOIN
Who, he asked, are the men to be elected? Are they not to be from among us? If they were to be a distinct body, then the doctrine of precaution, which gentlemen use, would be necessary; but, sir, they can make no laws, nor levy any taxes, but those to which they themselves must be subservient; they themselves must bear a part; therefore our security is guarantied by their being thus subject to the laws, if by nothing else.

Mr. GORE.
A passage is adduced from Montesquieu, stating that, where the people delegate great power, it ought to be compensated for by the shortness of the duration. Though strictly agreeing with the author, I do not see that it applies to the subject under consideration. This might be perfectly applicable to the ancient governments, where they had no idea of representation, or different checks in the legislature or administration of government; but, in the proposed Constitution, the powers of the whole government are limited to certain national objects, and are accurately defined.

Mr. GORE.
Further, sir, we must consider this subject with respect to the general structure of the Constitution. The Senate represents the sovereignty of the states; the House of Representatives the people of the United States.

The Hon. Mr. STRONG
Gentlemen have said, the proposed Constitution was in some places ambiguous. I wish they would point out the particular instances of ambiguity, for my part, I think the whole of it is expressed in the plain, common language of mankind If any parts are not so explicit as they could be, it cannot be attributed to any design; for I believe a great majority of the men who formed it were sincere and honest men.

Mr. PARSONS
In the Congress, not only the sovereignty of the states is represented in the Senate, but, to balance their power, and to give the people a suitable and efficient check upon them, the federal representatives are introduced into Congress. The legislatures of the several states are the constituents of the Senate, and the people are the constituents of the Representatives.

Mr. AMES
The state governments are essential parts of the system, and the defence of this article is drawn from its tendency to their preservation. The senators represent the sovereignty of the states; in the other house, individuals are represented. The Senate may not originate bills. It need not be said that they are principally to direct the affairs of wars and treaties. They are in the quality of ambassadors of the states, and it will not be denied that some permanency in their office is necessary to a discharge of their duty. Now, if they were chosen yearly, how could they perform their trust? If they would be brought by that means more immediately under the influence of the people, then they will represent the state legislatures less, and become the representatives of individuals. This belongs to the other house. The absurdity of this, and its repugnancy to the federal principles of the Constitution, will appear more fully, by supposing that they are to be chosen by the people at large. If there is any force in the objection to this article, this would be proper. But whom, in that case, would they represent? - Not the legislatures of the states, but the people. This would totally obliterate the federal features of the Constitution. What would become of the state governments, and on whom would devolve the duty of defending them against the encroachments of the federal government? A consolidation of the states would ensue, which, it is conceded, would subvert the new Constitution, and against which this very article, so much condemned, is our best security. Too much provision cannot be made against a consolidation. The state governments represent the wishes, and feelings, and local interests, of the people. They are the safeguard and ornament of the Constitution; they will protract the period of our liberties; they will afford a shelter against the abuse of power, and will be the natural avengers of our violated rights.
A very effectual check upon the power of the Senate is provided. A third part is to retire from office every two years. By this means, while the senators are seated for six years, they are admonished of their responsibility to the state legislatures. If one third new members are introduced, who feel the sentiments of their states, they will awe that third whose term will be near expiring. This article seems to be an excellence of the Constitution, and affords just ground to believe that it will be, in practice as in theory, a federal republic.

Judge SUMNER
But some gentlemen object further, and say the delegation of these great powers will destroy the state legislatures; but I trust this never can take place, for the general government depends on the state legislatures for its very existence. The President is to be chosen by electors under the regulation of the state legislature; the Senate is to be chosen by the state legislatures; and the representative body by the people, under like regulations of the legislative body in the different states. If gentlemen consider this, they will, I presume, alter their opinion; for nothing is clearer than that the existence of the legislatures, in the different states, is essential to the very being of the general government.

Mr. DENCH said, that he wished further light on the subject; but that from the words, "We, the people," in the first clause, ordaining this Constitution, he thought it was an actual consolidation of the states, and that, if he was not mistaken, the moment it took place, a dissolution of the state governments will also take place.
Gen. BROOKS (of Lincoln) rose, he said, to consider the idea suggested by the gentleman last speaking, that this Constitution would produce a dissolution of the state governments, or a consolidation of the whole; which, in his opinion, he said, was ill founded - or rather a loose idea. In the first place, says he, the Congress, under this Constitution, cannot be organized without repeated acts of the legislatures of the several states; and, therefore, if the creating power is dissolved, the body to be created cannot exist. In the second place, says the general, it is impossible the general government can exist, unless the governments of the several states are forever existing; as the qualifications of the electors of the federal representatives are to be the same as those of the electors of the most numerous branch of the state legislatures. It was, therefore, he said, impossible that the state governments should be annihilated by the general government, and it was, he said, strongly implied, from that part of the section under debate which gave Congress power to exercise exclusive jurisdiction over the federal town, that they shall have it over no other place. When we attend to the Constitution, we shall see, says the genera], that the powers to be given to Congress amount only to a consolidation of the strength of the Union, and that private rights are not consolidated. The general mentioned the rights which Congress could not infringe upon, and said that their power to define what was treason was much less than is vested in the legislature of this state by our own constitution; as it was confined, in the third section of article third, to levying war, or adhering to and comforting enemies, only. He mentioned the restraint upon Congress in the punishment of treason, and compared it with the extended powers lodged in the Parliament of Great Britain on like crimes; and concluded by observing, that, as the United States guaranty to each state a republican form of government, the state governments were as effectually secured as though this Constitution should never be in force.
Hon. Mr. SINGLETARY. Mr. President, I should not have troubled the Convention again, if some gentlemen had not called on them that were on the stage in the beginning of our troubles, in the year 1775. I was one of them. I have had the honor to be a member of the court all the time, Mr. President, and I say that, if any body had proposed such a constitution as this in that day, it would have been thrown away at once. It would not have been looked at. We contended with Great Britain, some said for a threepenny duty on tea; but it was not that; it was because they claimed a right to tax us and bind us in all cases whatever. And does not this Constitution do the same? Does it not take away all we have - all our property? Does it not lay all taxes, duties, imposts, and excises? And what more have we to give? They tell us Congress won't lay dry taxes upon us, but collect all the money they want by impost. I say, there has always been a difficulty about impost. Whenever the General Court was going to lay an impost, they would tell us it was more than trade could bear, that it hurt the fair trader, and encouraged smuggling; and there will always be the same objection: they won't be able to raise money enough by impost, and then they will lay it on the land, and take all we have got. These lawyers, and men of learning, and moneyed men, that talk so finely, and gloss over matters so smoothly, to make us poor illiterate people swallow down the pill, expect to get into Congress themselves; they expect to be the managers of this Constitution, and get all the power and all the money into their own hands, and then they will swallow up all us little folks, like the great Leviathan, Mr. President; yes, just as the whale swallowe'd up Jonah. This is what I am afraid of; but I won't say any more at present, but reserve the rest to another opportunity.

Hon. Mr. ADAMS
Your excellency's first proposition is, "that it be explicitly declared, that all powers not expressly delegated to Congress are reserved to the several states, to be by them exercised." This appears, to my mind, to be a summary of a bill of rights, which gentlemen are anxious to obtain. It removes a doubt which many have entertained respecting the matter, and gives assurance that, if any law made by the federal government shall be extended beyond the power granted by the proposed Constitution, and inconsistent with the constitution of this state, it will be an error, and adjudged by the courts of law to be void. It is consonant with the second article in the present Confederation, that each state retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not, by this Confederation, expressly delegated to the United States in Congress assembled. I have long considered the watchfulness of the people over the conduct of their rulers the strongest guard against the encroachments of power; and I hope the people of this country will always be thus watchful.

Rev. Mr. THACHER
In this proposed form, each branch of power is derived, either mediately or directly, from the people. The lower house are elected directly by those persons who are qualified to vote for the representatives of the state; and, at the expiration of two years, become private men, unless their past conduct entitles them to a future election. The Senate are elected by the legislatures of the different states, and represent their sovereignty.
These powers are a check on each other, and can never be made either dependent on one another, or independent of the people. The President is chosen by the electors, who are appointed by the people. The high courts of justice arise from the President and Senate; but yet the ministers of them can be removed only upon bad behavior. The independence of judges is one of the most favorable circumstances to public liberty; for when they become the slaves of a venal, corrupt court, and the hirelings of tyranny, all property is precarious, and personal security at an end; a man may be stripped of all his possessions, and murdered, without the forms of law. Thus it appears that all parts of this system arise ultimately from the people, and are still independent of each other. There are other restraints, which, though not directly named in this Constitution, yet are evidently discerned by every man of common observation. These are, the government of the several states, and the spirit of liberty in the people. Are we wronged or injured, our immediate representatives are those to whom we ought to apply. Their power and influence will still be great. But should any servants of the people, however eminent their stations, attempt to enslave them, from this spirit of liberty such opposition would arise as would bring them to the scaffold.

Dr. JARVIS
There is one of them, in a particular manner, which is very agreeable to me. When we talk of our wanting a bill of rights to the new Constitution, the first article proposed must remove every doubt on this head; as, by positively securing what is not expressly delegated, it leaves nothing to the uncertainty of conjecture, or to the refinements of implication, but is an explicit reservation of every right and privilege which is nearest and most agreeable to the people.

Mr. PARSONS demonstrated the impracticability of forming a bill, in a national constitution, for securing individual rights, and showed the inutility of the measure, from the ideas, that no power was given to Congress to infringe on any one of the natural rights of the people by this Constitution; and, should they attempt it without constitutional authority, the act would be a nullity, and could not be enforced.
Rev. Mr. STILLMAN
The Convention, I doubt not, will bear with me while I take a general view of the Constitution before us.
From all that has been said on the subject of biennial elections, it is my decided opinion that two years in the general government will not be in proportion to one year in the local governments; because, in the former, the objects of government will be great, numerous, and extensive; in the latter, comparatively small and limited. The general government involves all the states now in the Union - all such as shall in future accede to it - all foreign nations with whom we are now, or hereafter shall be, in alliance - an extensive and growing commerce - war and peace, &c.
It has been said that this is a stride towards septennial elections, or perpetuity in office. I answer, the Constitution itself is to be the rule: that declares that "representatives shall be chosen every second year by the people of the several states." Elections, then, of representatives must be every second year; nor can they be otherwise, without a direct violation of the Constitution. The men who shall be wicked enough to do this, would not be restrained, had the elections been annual; it being equally easy to violate the Constitution in one case as in the other. Elections, indeed, ought to be so frequent as to make the representatives feel they are dependent on and amenable to the people. The difference, then, between annual and biennial elections is small, and, in either case, will answer the end just mentioned.
The powers that are granted to Congress by this instrument are great and extensive; but, sir, they are defined and limited, and, in my judgment, sufficiently checked; which I shall prove before I sit down. These powers have been the subject of long and ingenious debate. But the arguments that have been made use of against delegating these powers to the general government prove too much, being applicable to all delegated power; I mean the possible abuse of it. The very term government implies a supreme controlling power somewhere; a power to coerce, whenever coercion shall be necessary; of which necessity government must be the judge. This is admitted; if so, the power may be abused. Every gentleman must confess that we cannot give a power to do good, but it may be abused to do evil. If a merchant commits the care of a ship and cargo to the master, he may dispose of both, and appropriate the money to his own use. If we raise a body of men, and put arms into their hands for our defence, they may turn them against us and destroy us. All these things prove, however, that, in order to guard as much as possible against the abuse of those powers we delegate to government, there ought to be sufficient checks on them; every precaution should be used to secure the liberties of the people on the one hand, and not render government inefficient on the other. I believe, sir, such security is provided in this Constitution: if not, no consideration shall induce me to give my voice in its favor. But the people are secured by the following circumstances: -
1st. All the offices in Congress are elective, not hereditary. The President and senators are to be chosen by the interposition of the legislatures of the several states, who are the representatives and guardians of the people, whose honor and interest will lead them, in all human probability, to have good men placed in the general government.
2d. The representatives in Congress are to be chosen, every second year, by the people of the several states. Consequently, it lies with the people themselves to say who shall represent them. It will, then, be their own fault if they do not choose the best men in the commonwealth.
Who are Congress, then? They are ourselves; the men of our own choice, in whom we can confide; whose interest is inseparably connected with our own. Why is it, then, that gentlemen speak of Congress as some foreign body, as a set of men who will seek every opportunity to enslave us? Such insinuations are repugnant to the spirit of the Constitution.
But a worthy gentleman from Middleborough has told us, that, though they may be good men when chosen, they may become corrupt. They may so; nor is it in the power of angels or men to prevent it; but should this be the case, the Constitution has made provisions for such an event. When it happens, we shall know what method to adopt, in order to bring them to punishment. In all governments where offices are elective, there ever has been, and there ever will be, a competition of interests. They who are in office wish to keep in, and they who are out, to get in; the probable consequences of which will be, that they who are already in place will be attentive to the rights of the people, because they know that they are dependent on them for a future election, which can be secured by good behavior only. Besides, they who are out of office will watch them who are in, with a most critical eye, in order to discover and expose their malconduct, if guilty of any, that so they may step into their places. Every gentleman knows the influence that a desire to obtain a place, or the fear of losing it, hath on mankind. Mr. Borgh tells us, that, towards the close of the seven years for which the representatives are chosen in the British Parliament, they become exceedingly polite to the people. Why? Because they know there is an approaching election depending. This competition of interest, therefore, between those persons who are in and those who are out of office, will ever form one important check to the abuse of power in our representatives.
3d. Every two years there will be a revolution in the general government in favor of the people. At the expiration of the first two years, there will be a new choice of representatives; at the expiration of the second two years, there will be a new choice of President and representatives; and at the expiration of the third term, making six years from the commencement of the Congress, there will be a new choice of senators and representatives. We all know, sir, that power thus frequently reverting to the people will prove a security to their liberties, and a most important check to the power of the general government.
4th. Congress can make no laws that will oppress the people, which will not equally involve themselves in the oppression.
What possible motive, then, can Congress have to abuse their power? Can any man suppose that they will be so lost to their own interest as to abuse their power, knowing, at the same time, that they equally involve themselves in the difficulty? It is a most improbable supposition. This would be like a man's cutting off his nose to spite his face. I place this, sir, among the securities of the liberties of my fellow-citizens, and rejoice in it.
5th. Congress guaranty to every state in the Union a republican form of government, and engage to protect them against all foreign and domestic enemies; that is, as it hath been justly observed by the honorable gentleman [Mr. Adams] near me, of known and tried abilities as a politician, each state shall choose such republican form of government as they please, and Congress solemnly engage themselves to protect it from every kind of violence, whether of faction at home or enemies abroad. This is an admirable security of the people at large, as well as of the several governments of the states; consequently the general government cannot swallow up the local governments, as some gentlemen have suggested. Their existence is dependent on each other, and must stand or fall together. Should Congress ever attempt the destruction of the particular legislatures, they would be in the same predicament with Samson, who overthrew the house in which the Philistines were making sport at his expense; them he killed, indeed, but he buried himself in the ruins.
6th. Another check in favor of the people is this - that the Constitution provides for the impeachment, trial, and punishment of every officer in Congress, who shall be guilty of malconduct. With such a prospect, who will dare to abuse the powers vested in him by the people?
7th. Having thus considered several of the checks to the powers of Congress, which are interwoven with the Constitution, we will now suppose the worst that can take place in consequence of its adoption: I mean, that it shall be found in some of its parts oppressive to the people; still we have this dernier ressort - it may be amended. It is not, like the laws of the Medes and Persians, immutable. The fifth article provides for amendments.
It has been said, it will be difficult, after its ratification, to procure any alterations. By no means, sir, for this weighty reason - it is a general government, and, as such, will have a general influence; all states in the Union will feel the difficulty, and, feeling it, will readily concur in adopting the method provided by the Constitution. And having once made the trial, experience will teach us what amendments are necessary.
Viewing the Constitution in this light, I stand ready to give my vote for it, without any amendments at all. Yet, if the amendments proposed by your excellency will tend to conciliation, I readily admit them, not as a condition of acceptance, but as a matter of recommendation only; knowing that blessed are the peace-makers. I am ready, sir, to submit my life, my liberty, my family, my property, and, as far as my vote will go, the interest of my constituents, to this general government.
After all, if this Constitution was as perfect as the sacred volume is, it would not secure the liberties of the people, unless they watch their own liberties. Nothing written on paper will do this. It is therefore necessary that the people should keep a watchful, not an over-jealous, eye on their rulers; and that they should give all due encouragement to our colleges, schools of learning, &c., so that knowledge may be diffused through every part of our country. Ignorance and slavery, knowledge and freedom, are inseparably connected. While Americans remain in their present enlightened condition, and warmly attached to the cause of liberty, they cannot be enslaved. Should the general government become so lost to all sense of honor and the freedom of the people, as to attempt to enslave them, they who are the descendants of a race of men who have dethroned kings, would make an American Congress tremble, strip them of their public honors, and reduce them to the lowest state of degradation.

Hon. Mr. TURNER
But I hope it will be considered, by persons of all orders, ranks, and ages, that, without the prevalence of Christian piety and morals, the best republican constitution can never save us from slavery and ruin. If vice is predominant, it is to be feared we shall have rulers whose grand object will be (slyly evading the spirit of the Constitution) to enrich and aggrandize themselves and their connections, to the injury and oppression of the laborious part of the community; while it follows, from the moral constitution of the Deity, that prevalent iniquity must be the ruin of any people. The world of mankind have always, in general, been enslaved and miserable, and always will be, until there is a greater prevalence of Christian moral principles; nor have I any expectation of this, in any great degree, unless some superior mode of education shall be adopted. It is education which almost entirely forms the character, the freedom or slavery, the happiness or misery, of the world. And if this Constitution shall be adopted, I hope the Continental legislature will have the singular honor, the indelible glory, of making it one of their first acts, in their first session, most earnestly to recommend to the several states in the Union the institution of such means of education as shall be adequate to the divine, patriotic purpose of training up the children and youth at large in that solid learning, and in those pious and moral principles, which are the support, the life and soul, of republican government and liberty, of which a free constitution is the body; for, as the body, without the spirit, is dead, so a free form of government, without the animating principles of piety and virtue, is dead also, being alone. May religion, with sanctity of morals, prevail and increase, that the patriotic civilian and ruler may have the sublime, parental satisfaction of eagerly embracing every opportunity of mitigating the rigors of government, in proportion to that increase of morality which may render the people more capable of being a law to themselves! How much more blessed this than to be employed in fabricating constitutions of a higher tone, in obedience to necessity, arising from an increase of turbulent vice and injustice in society! I believe your excellency's patience will not be further exercised by hearing the sound of my voice on the occasion, when I have said, May the United States of America live before God! May they be enlightened, pious, virtuous, free, and happy, to all generations!

JOHN HANCOCK, the PRESIDENT, rose, and addressed the honorable Convention as follows:
Were the people of the United States to delegate the powers proposed to be given, to men who were not dependent on them frequently for elections - to men whose interest, either from rank or title, would differ from that of their fellow-citizens in common - the task of delegating authority would be vastly more difficult; but, as the matter now stands, the powers reserved by the people render them secure, and, until they themselves become corrupt, they will always have upright and able rulers. I give my assent to the Constitution, in full confidence that the amendments proposed will soon become a part of the system. These amendments being in no wise local, but calculated to give security and ease alike to all the states, I think that all will agree to them.

Friday, December 16, 2011

Where Did The 'Birthers' Begin?


Investigating the roots of the Obama birthplace conspiracy theory, John Avlon author of Wingnuts: How the Lunatic Fringe Is Hijacking America, uncovers the first Birther and finds she's a Hillary Clinton supporter also implicated in Dan Rather's exit from CBS.

The Birthers were back in force at the National Tea Party Convention in Nashville.

WorldNet Daily founder Joseph Farah used his prime-time speaking slot, broadcast on C-Span, to pump up claims that President Obama was not born in the United States—and received enthusiastic applause from the audience. Birther queen Orly Taitz was in the house, making the rounds as a celebrity conspiracy theorist.

The persistence of this much-debunked rumor is a reminder of how the fringe is blurring with the base in American politics. It provoked conservative Internet impresario Andrew Breitbart into a confrontation with Farah, the new guard vs. the old, with Breitbart arguing that attempts to prove Obama was born abroad are stupid and self-destructive, "a losing issue."

"I determined that I was going to start digging up every bit of dirt that I could find on him and…convince the Democratic Party to dump him and make Hillary the nominee."

The high-profile resurgence of the Birther claims on cable television provoked much self-satisfaction from liberals as the latest evidence of the influence of wingnuts on conservative politics.

But there's an inconvenient truth liberals are going to have to confront: The Birthers began not on the right, but on the left.

Investigations for my new book, Wingnuts, revealed that the Birther conspiracy theory was first concocted by renegade members of the original Obama haters, Party Unity My Ass, known more commonly by their acronym, the PUMAs. They were a splinter group of hard-core Hillary Clinton supporters who did not want to give up the ghost after the bitter 50-state Bataan Death March to the 2008 Democratic nomination.

In the early summer of '08, message boards on sites like PUMAParty.com began lighting up with the ultimate reversal-of-fortune fantasy—that their party's nomination could be overturned on constitutional grounds. "Obama May Be Illegal to Be Elected President!" read one representative e-mail: "This came from a USNA [U.S. Naval Academy] alumnus. It'll be interesting to see how the media handle this...WRITE TO YOUR LOCAL newspaper editors etc. Keep this out there everyday possible. Also write to the DNC too!"

That June, the Obama campaign released his certificate of live birth on its Web site as part of its "fight the smears" effort. Factcheck.org and other organizations examined the document in person and declared it genuine: "Our conclusion: Obama was born in the U.S.A. just as he has always said." But posters at the PUMA sites were unimpressed: "Nobody believes it's for real, except the Kool-Aid drinkers themselves."

A Clinton supporter from Texas known as Linda Starr was particularly fired up by what she later told me was "the daily misogynistic hate speech against Hillary" during the primaries. As a Democratic precinct captain in Medina County, Starr had volunteered for the Clinton campaign during the hotly contested June Lone Star State primary and served as a Clinton delegate at the state convention. But Starr's real talent was as an amateur opposition researcher—she'd dug up dirt against Republican congressional leaders like Dan Burton and Bob Livingston during the Clinton impeachment hearings in the late 1990s. She was also cited as a key source for CBS' discredited election year investigation into George W. Bush's National Guard records that led to Dan Rather's replacement after 24 years as the evening news anchor.

After Clinton's concession, Starr turned her attention to Obama. "I determined that I was going to start digging up every bit of dirt that I could find on him," she told me after I hunted her down in late 2009, "and that hopefully that I would find something against him that would convince the Democratic Party to dump him and make Hillary the nominee."

In the first week of August 2008, as the Democrats were getting ready for their convention in Denver, Starr called Philadelphia attorney Philip Berg and offered a challenge. Berg recalled the conversation for me: "She called me up and said, 'Have you heard about Obama not being national born?' I said, 'Yes.' She said, 'Well, now it's for real, and you're the only attorney in the country with brass balls enough to sue Obama.'"

Berg also had been a Clinton supporter, but he was best-known as a former deputy attorney general of Pennsylvania and a serial unsuccessful Democratic campaigner for statewide office. He also had a reputation as an enthusiastic litigant: In 2004, he filed a 9/11 Truther lawsuit against Bush, alleging that the government allowed the terrorist attacks to happen and that the World Trade Center was destroyed from within. Now he had a new conspiracy to push.

Peter Beinart: The Tea Partiers’ Phony PopulismOn August 21, 2008, Berg filed the first Birther lawsuit, requesting an injunction to stop the Democratic Convention from going forward and alleging that Obama was born in Kenya, not Hawaii. He faxed notices to the DNC and Obama campaign headquarters, and the next day, he launched the Web site Obamacrimes.com with Starr's assistance. The lawsuit went nowhere. Berg still fumes when recounting his frustration: "[DNC chair] Howard Dean at that point should have called Obama and said 'What's the story, are you natural born or not?'…Obviously there was collusion there and I think when it's all said and done they should all be tried and put in jail." Journalists ignored his efforts, as well. "I wish I could sue them," said Berg, of the media. "If the American public knew what was going on here Obama would be out of office or we never would have had him in office."

Of course, the rush to delegitimize Obama once he was elected president fell to wingnut conservatives, who continue to confuse losing an election with living under tyranny. But this new evidence of the conspiracy theory's roots on the far left is a reminder that wingnuts exist in both parties, wherever anger and absolutism drive people to believe that their political opponents are their personal enemies. Unhinged activists can have a disproportionate influence on our debates.

The far right and the far left can be equally insane, and the extremes end up echoing each other.

John Avlon's new book Wingnuts: How the Lunatic Fringe is Hijacking America is available now by Beast Books both on the web and in paperback. Advance orders can be placed here. He is also the author of Independent Nation: How Centrists Can Change American Politics. Previously, he served as chief speechwriter for New York City Mayor Rudy Giuliani and was a columnist and associate editor for The New York Sun.

Thursday, December 15, 2011

From The Guardian

Military given go-ahead to detain US terrorist suspects without trial

Civil rights groups dismayed as Barack Obama abandons commitment to veto new security law contained in defence bill
Guantánamo Bay
Americans can be arrested on home soil and taken to Guantánamo Bay under a provision inserted into the bill that funds the US military. Photograph: John Moore/Getty

Barack Obama has abandoned a commitment to veto a new security law that allows the military to indefinitely detain without trial American terrorism suspects arrested on US soil who could then be shipped to Guantánamo Bay.

Human rights groups accused the president of deserting his principles and disregarding the long-established principle that the military is not used in domestic policing. The legislation has also been strongly criticised by libertarians on the right angered at the stripping of individual rights for the duration of "a war that appears to have no end".

The law, contained in the defence authorisation bill that funds the US military, effectively extends the battlefield in the "war on terror" to the US and applies the established principle that combatants in any war are subject to military detention.

The legislation's supporters in Congress say it simply codifies existing practice, such as the indefinite detention of alleged terrorists at Guantánamo Bay. But the law's critics describe it as a draconian piece of legislation that extends the reach of detention without trial to include US citizens arrested in their own country.

"It's something so radical that it would have been considered crazy had it been pushed by the Bush administration," said Tom Malinowski of Human Rights Watch. "It establishes precisely the kind of system that the United States has consistently urged other countries not to adopt. At a time when the United States is urging Egypt, for example, to scrap its emergency law and military courts, this is not consistent."

There was heated debate in both houses of Congress on the legislation, requiring that suspects with links to Islamist foreign terrorist organisations arrested in the US, who were previously held by the FBI or other civilian law enforcement agencies, now be handed to the military and held indefinitely without trial.

The law applies to anyone "who was a part of or substantially supported al-Qaida, the Taliban or associated forces".

Senator Lindsey Graham said the extraordinary measures were necessary because terrorism suspects were wholly different to regular criminals.

"We're facing an enemy, not a common criminal organisation, who will do anything and everything possible to destroy our way of life," he said. "When you join al-Qaida you haven't joined the mafia, you haven't joined a gang. You've joined people who are bent on our destruction and who are a military threat."

Graham added that it was right that Americans should be subject to the detention law as well as foreigners. "It is not unfair to make an American citizen account for the fact that they decided to help Al Qaeda to kill us all and hold them as long as it takes to find intelligence about what may be coming next," he said. "And when they say, 'I want my lawyer,' you tell them, 'Shut up. You don't get a lawyer.'"

Other senators supported the new powers on the grounds that al-Qaida was fighting a war inside the US and that its followers should be treated as combatants, not civilians with constitutional protections.

But another conservative senator, Rand Paul, a strong libertarian, has said "detaining citizens without a court trial is not American" and that if the law passes "the terrorists have won".

"We're talking about American citizens who can be taken from the United States and sent to a camp at Guantánamo Bay and held indefinitely. It puts every single citizen American at risk," he said. "Really, what security does this indefinite detention of Americans give us? The first and flawed premise, both here and in the badly named Patriot Act, is that our pre-9/11 police powers were insufficient to stop terrorism. This is simply not borne out by the facts."

Paul was backed by Senator Dianne Feinstein.

"Congress is essentially authorising the indefinite imprisonment of American citizens, without charge," she said. "We are not a nation that locks up its citizens without charge."

Paul said there were already strong laws against support for terrorist groups. He noted that the definition of a terrorism suspect under existing legislation was so broad that millions of Americans could fall within it.

"There are laws on the books now that characterise who might be a terrorist: someone missing fingers on their hands is a suspect according to the department of justice. Someone who has guns, someone who has ammunition that is weatherproofed, someone who has more than seven days of food in their house can be considered a potential terrorist," Paul said. "If you are suspected because of these activities, do you want the government to have the ability to send you to Guantánamo Bay for indefinite detention?"

Under the legislation suspects can be held without trial "until the end of hostilities". They will have the right to appear once a year before a committee that will decide if the detention will continue.

The Senate is expected to give final approval to the bill before the end of the week. It will then go to the president, who previously said he would block the legislation not on moral grounds but because it would "cause confusion" in the intelligence community and encroached on his own powers.

But on Wednesday the White House said Obama had lifted the threat of a veto after changes to the law giving the president greater discretion to prevent individuals from being handed to the military.

Critics accused the president of caving in again to pressure from some Republicans on a counter-terrorism issue for fear of being painted in next year's election campaign as weak and of failing to defend America.

Human Rights Watch said that by signing the bill Obama would go down in history as the president who enshrined indefinite detention without trial in US law.

"The paradigm of the war on terror has advanced so far in people's minds that this has to appear more normal than it actually is," Malinowski said. "It wasn't asked for by any of the agencies on the frontlines in the fight against terrorism in the United States. It breaks with over 200 years of tradition in America against using the military in domestic affairs."

In fact, the heads of several security agencies, including the FBI, CIA, the director of national intelligence and the attorney general objected to the legislation. The Pentagon also said it was against the bill.

The FBI director, Robert Mueller, said he feared the law could compromise the bureau's ability to investigate terrorism because it would be more complicated to win co-operation from suspects held by the military.

"The possibility looms that we will lose opportunities to obtain co-operation from the persons in the past that we've been fairly successful in gaining," he told Congress.

Civil liberties groups say the FBI and federal courts have dealt with more than 400 alleged terrorism cases, including the successful prosecutions of Richard Reid, the "shoe bomber", Umar Farouk, the "underwear bomber", and Faisal Shahzad, the "Times Square bomber".

Elements of the law are so legally confusing, as well as being constitutionally questionable, that any detentions are almost certain to be challenged all the way to the supreme court.

Malinowski said "vague language" was deliberately included in the bill in order to get it passed. "The very lack of clarity is itself a problem. If people are confused about what it means, if people disagree about what it means, that in and of itself makes it bad law," he said.



From CBS News

WH OKs military detention of terrorism suspects


(AP)

(CBS News)

The White House is signing off on a controversial new law that would authorize the U.S. military to arrest and indefinitely detain alleged al Qaeda members or other terrorist operatives captured on American soil.

As the bill neared final passage in the House of Representatives and the Senate on Wednesday, the Obama administration announced it would support passage of the National Defense Authorization Act (NDAA), which contains slightly watered-down provisions giving the military a front line role in domestic terrorism cases.

The administration abandoned its long-held veto threat due to changes in the final version of the bill, namely that in its view, the military custody mandate has been "softened." The bill now gives the President the immediate power to issue a waiver of the military custody requirement, instead of the Defense Secretary, and gives the President discretion in implementing these new provisions.

"We have concluded that the language does not challenge or constrain the President's ability to collect intelligence, incapacitate dangerous terrorists, and protect the American people, and the President's senior advisors will not recommend a veto," the White House statement said.

The detainee provisions are just one part of the annual NDAA authorizing $662 billion in federal defense spending next year.

While the bill never expanded the authority to detain American citizens indefinitely without charges, proponents said the legislation would codify court decisions finding the President does have the authority to declare "enemy combatants," as commander-in-chief and under the post-9/11 Authorization for Use of Military Force against al Qaeda and its allies. The administration, which has pledged not to use this power, believes the bill leaves this legal issue unresolved.

"By signing this defense spending bill, President Obama will go down in history as the president who enshrined indefinite detention without trial in U.S. law," said Kenneth Roth, executive director of Human Rights Watch. "In the past, Obama has lauded the importance of being on the right side of history, but today he is definitely on the wrong side."

The debate over captured terrorism suspects
Senate keeps controversial detainee policy in defense bill
Bagram: The Other Guantanamo?

FBI Director Robert Mueller, testifying before the Senate Judiciary Committee on Wednesday, said the provisions still could create confusion among counter-terrorism professionals.

"My concern is that you don't want FBI agents and the military showing up at the same time, with some uncertainty" as to who has control, Mueller said, and raised this hypothetical example: "A case that we're investigating on three individuals, two of whom are American citizens and would not go to military custody and the third is not an American citizen and could go to military custody?"

Mueller was joined earlier in the detainee debate by Defense Secretary Leon Panetta and Director of National Intelligence James Clapper in opposing the military custody provision, because they said it might inhibit flexibility by counter-terrorism professionals, restrain federal, state, and local law enforcement authorities, and risk losing the cooperation of terror arrestees.

"If President Obama signs this bill, it will damage both his legacy and American's reputation for upholding the rule of law," said Laura Murphy, director of the ACLU Washington Legislative Office. "The last time Congress passed indefinite detention legislation was during the McCarthy era, and President Truman had the courage to veto that bill."

Bill opponents have noted that in the decade since the 9/11, the government has successfully convicted over 300 people for terrorism-related crimes, including thwarted plots to bomb passenger jets, subway lines, and landmarks such as Times Square and the Sears Tower.

By comparison, the military justice system, although stymied by constitutional challenges, has completed only six cases in Guantanamo Bay, Cuba, where 170 detainees remain.




From PrisonPlanet

'Indefinite Detention' Bill Heads To Obama's Desk As White House Drops Veto Threat


Paul Joseph Watson
Infowars.com
Wednesday, December 14, 2011

UPDATE: Obama has dropped his threat to veto the bill and is now expected to sign it into law. Remember – it was Obama’s White House that demanded the law apply to U.S. citizens in the first place.

The bill which would codify into law the indefinite detention without trial of American citizens is about to be passed and sent to Obama’s desk to be signed into law, even as some news outlets still erroneously report that the legislation does not apply to U.S. citizens.


“The House on Wednesday afternoon approved the rule for the 2012 National Defense Authorization Act (NDAA), setting up an hour of debate and a vote in the House later this afternoon,” reports the Hill.

Mainstream news outlets like The Hill, as well as neo-con blogs like Red State, are still pretending the indefinite detention provision doesn’t apply to American citizens, even though three of the bill’s primary sponsors, Senator Carl Levin, Senator John McCain, and Senator Lindsey Graham, said it does during speeches on the Senate floor.

“It is not unfair to make an American citizen account for the fact that they decided to help Al Qaeda to kill us all and hold them as long as it takes to find intelligence about what may be coming next,” remarked Graham. “And when they say, ‘I want my lawyer,’ you tell them, ‘Shut up. You don’t get a lawyer.’”

As Levin said last week, it was the White House itself that demanded Section 1031 apply to American citizens.

“The language which precluded the application of Section 1031 to American citizens was in the bill that we originally approved…and the administration asked us to remove the language which says that U.S. citizens and lawful residents would not be subject to this section,” said Levin, Chairman of the Armed Services Committee.

Senator McCain also told Rand Paul during a hearing on the bill that American citizens could be declared an enemy combatant, sent to Guantanamo Bay and detained indefinitely, “no matter who they are.”

Quite how those still in denial could even entertain the notion that the bill would not apply to American citizens when the Obama administration is already enforcing a policy of state assassination and killing American citizens it claims are “terrorists,” without having to present any evidence or go through any legal process, is beyond naive.

With the White House having largely resolved its concerns with the bill, which had nothing to do with the ‘indefinite detention’ provision, Obama could put pen to paper as early as tomorrow on a law that if recognized will nullify the bill of rights – ironically tomorrow is “Bill of Rights Day”.

Obama Car Czar: We never said taxpayers would get GM bailout money back

Steven Rattner, Obama’s Car Czar, was asked by CNBC if the taxpayers would get paid back by GM. He replied:

No, but we never said the taxpayer was gonna get paid back. We put 82 billion into the car industry as a whole. We will get back all but 14 billion plus or minus of it. But in return for that we saved 2 million jobs in the Midwest and two great American companies. You compare that to the $875 billion dollar stimulus program or the trillions of dollars of QE1,2,3.

I think the tax payers got a good deal.



Here is Obama saying “We are going to get back all the money that we invested in those car companies” (just the beginning portion):



I guess he didn’t mean ‘all of it’, just most of it. I wonder where that 14 billion went?

Friday, December 9, 2011

Obama’s campaign for class resentment

Charles Krauthammer

By , Published: December 8


In the first month of his presidency, Barack Obama averred that if in three years he hadn’t alleviated the nation’s economic pain, he’d be a “one-term proposition.”

When three-quarters of Americans think the country is on the “wrong track” and even Bill Clinton calls the economy “lousy,” how then to run for a second term? Traveling Tuesday to Osawatomie, Kan., site of a famous 1910 Teddy Roosevelt speech, Obama laid out the case.

It seems that he and his policies have nothing to do with the current state of things. Sure, presidents are ordinarily held accountable for economic growth, unemployment, national indebtedness (see Obama, above). But not this time. Responsibility, you see, lies with the rich.

Or, as the philosophers of Zuccotti Park call them, the 1 percent. For Obama, these rich are the ones holding back the 99 percent. The “breathtaking greed of a few” is crushing the middle class. If only the rich paid their “fair share,” the middle class would have a chance. Otherwise, government won’t have enough funds to “invest” in education and innovation, the golden path to the sunny uplands of economic growth and opportunity.

Where to begin? A country spending twice as much per capita on education as it did in 1970 with zero effect on test scores is not underinvesting in education. It’s mis-investing. As for federally directed spending on innovation — like Solyndra? Ethanol? The preposterously subsidized, flammable Chevy Volt?

Our current economic distress is attributable to myriad causes: globalization, expensive high-tech medicine, a huge debt burden, a burst housing bubble largely driven by precisely the egalitarian impulse that Obama is promoting (government aggressively pushing “affordable housing” that turned out to be disastrously unaffordable), an aging population straining the social safety net. Yes, growing inequality is a problem throughout the Western world. But Obama’s pretense that it is the root cause of this sick economy is ridiculous.

As is his solution, that old perennial: selective abolition of the Bush tax cuts. As if all that ails us, all that keeps the economy from humming and the middle class from advancing, is a 4.6-point hike in marginal tax rates for the rich.

This, in a country $15 trillion in debt with out-of-control entitlements systematically starving every other national need. This obsession with a sock-it-to-the-rich tax hike that, at most, would have reduced this year’s deficit from $1.30 trillion to $1.22 trillion is the classic reflex of reactionary liberalism — anything to avoid addressing the underlying structural problems, which would require modernizing the totemic programs of the New Deal and Great Society.

As for those structural problems, Obama has spent three years on signature policies that either ignore or aggravate them:

●A massive stimulus, a gigantic payoff to Democratic interest groups (such as teachers, public-sector unions) that will add nearly $1 trillion to the national debt.

●A sweeping federally run reorganization of health care that (a) cost Congress a year, (b) created an entirely new entitlement in a nation hemorrhaging from unsustainable entitlements, (c) introduced new levels of uncertainty into an already stagnant economy.

●High-handed regulation, best exemplified by Obama’s failed cap-and-trade legislation, promptly followed by the Environmental Protection Agency trying to impose the same conventional-energy-killing agenda by administrative means.

Moreover, on the one issue that already enjoys a bipartisan consensus — the need for fundamental reform of a corrosive, corrupted tax code that misdirects capital and promotes unfairness — Obama did nothing, ignoring the recommendations of several bipartisan commissions, including his own.

In Kansas, Obama lamented that millions “are now forced to take their children to food banks.” You have to admire the audacity. That’s the kind of damning observation the opposition brings up when you’ve been in office three years. Yet Obama summoned it to make the case for his reelection!

Why? Because, you see, he bears no responsibility for the current economic distress. It’s the rich. And, like Horatius at the bridge, Obama stands with the American masses against the soulless plutocrats.

This is populism so crude that it channels not Teddy Roosevelt so much as Hugo Chavez. But with high unemployment, economic stagnation and unprecedented deficits, what else can Obama say?

He can’t run on stewardship. He can’t run on policy. His signature initiatives — the stimulus, Obamacare and the failed cap-and-trade — will go unmentioned in his campaign ads. Indeed, they will be the stuff of Republican ads.

What’s left? Class resentment. Got a better idea?

Tuesday, December 6, 2011

Black Activists Sue Democrat Party For History of Racism & Abuse

When the Civil War ended, and after Republican President Abraham Lincoln freed the slaves, Democrats initiated Jim Crow laws to keep the black man down. Democrats didn’t much like blacks. In fact, the KKK, as you know, was founded as the the terrorist wing of the Democrat Party.

The Ku Klux Klan assassinated many Republicans including Republican Representative James M. Hinds (December 5, 1833—October 22, 1868) of Little Rock. Hinds represented Arkansas in the United States Congress from June 24, 1868 through October 22, 1868.

Setting the Record Straight

A group of black activists led by Wayne Perryman has filed a brief against the Democrat Party for its long history of racism and discrimination of the black community.
Zilla reported:

Suing President Barack Obama and the Democratic Party for racism would be a joke if the Plaintiffs were anyone other than Rev. Wayne Perryman, a respected black minister and community activist. Perryman, an author, lecturer and a former newspaper publisher and radio talk show host who has received a multitude of honors and awards for his work and community service, was recently recognized by Chairman Benjamin Jealous of the NAACP for his latest research on racism and politics.

On September 11, 2011, Perryman brought together blacks from the West Coast and the East Coast to sign one of the most comprehensive legal briefs ever prepared for a racial discrimination lawsuit. The suit was to filed on September 12, 2011 in US District Court against President Barack Obama and the DNC. The plaintiffs, who refer to the defendants as the “Father of Racism,” allege that as an organization, the Democratic Party has consistently refused to apologize for the role they played in slavery, Jim Crow and for other subsequent racist practices from 1792 to 2011. Mrs. Frances P. Rice, the Chair of the National Black Republican Association is also a named plaintiff in the class action lawsuit.

The case cites the collective work of over 350 legal scholars and includes Congressional records, case law, research from our nation’s top history professors, racist statements from Democratic elected officials, citations from the Democrat’s National Platforms regarding their support of slavery, excepts of speeches from Senator Obama, individual testimonies from blacks who lived in the Jim Crow South and opinions from the NAACP.

Perryman said President Obama was named as a defendant not only because he is the official leader of the Democratic Party, but because of certain statements he made about his own party in his book, Dreams from My Father.

Kudos to Wayne Perryman and the brave black activists who joined him in this historic pursuit of justice.





From The Wall Street Journal
From AUGUST 13, 2008

As Democrats prepare to nominate Sen. Barack Obama to be the first black president, the Democratic National Committee and its chairman, Howard Dean, have whitewashed the party's horrific and lengthy record of racism. The omission is in the section of the DNC Web site that describes the party's history. The missing history raises the obvious question of whether the Democrats, unable or simply unwilling to put their party on record as taking direct responsibility for one of the worst racial crimes of the ages, will be able to run a campaign free of the racial animosities it has regularly brought both to American presidential campaigns and American political and social life in general.

What else to make of the official party history as presented by the DNC on its Web site? It is a history so sanitized of historical reality it makes Stalin look like David McCullough.

The DNC Web site section labeled "Party History," linked here, is in fact scrubbed clean of the not-so-little dirty secret that fueled Democrats' political successes for over a century and a half and made American life a hell on earth for black Americans. Literally, the DNC official history, which begins with the creation of the party in 1800, gets to the creation of the DNC itself in 1848 and then--poof!--the next sentence says: "As the 19th Century came to a close, the American electorate changed more and more rapidly." It quickly heads into a riff on poor immigrants coming to America.

In a stroke, 52 years of Democratic history vanishes. Disappeared faster than the truth in the Clinton administration. Why would this be? Allow me to sketch in a few facts from those missing 52 years. For that matter, lets add in the facts from the party history before and after those 52 years, since they aren't mentioned by the Democrats' National Committee either.

* * *

So what's missing?

  • There is no reference to the number of Democratic Party platforms supporting slavery. There were six from 1840 through 1860.
  • There is no reference to the number of Democratic presidents who owned slaves. There were seven from 1800 through 1861
  • There is no reference to the number of Democratic Party platforms that either supported segregation outright or were silent on the subject. There were 20, from 1868 through 1948.
  • There is no reference to "Jim Crow" as in "Jim Crow laws," nor is there reference to the role Democrats played in creating them. These were the post-Civil War laws passed enthusiastically by Democrats in that pesky 52-year part of the DNC's missing years. These laws segregated public schools, public transportation, restaurants, rest rooms and public places in general (everything from water coolers to beaches). The reason Rosa Parks became famous is that she sat in the "whites only" front section of a bus, the "whites only" designation the direct result of Democrats.
  • There is no reference to the formation of the Ku Klux Klan, which, according to Columbia University historian Eric Foner, became "a military force serving the interests of the Democratic Party." Nor is there reference to University of North Carolina historian Allen Trelease's description of the Klan as the "terrorist arm of the Democratic Party."
  • There is no reference to the fact Democrats opposed the 13th, 14th and 15th amendments to the Constitution. The 13th banned slavery. The 14th effectively overturned the infamous 1857 Dred Scott decision (made by Democratic pro-slavery Supreme Court justices) by guaranteeing due process and equal protection to former slaves. The 15th gave black Americans the right to vote.
  • There is no reference to the fact that Democrats opposed the Civil Rights Act of 1866. It was passed by the Republican Congress over the veto of President Andrew Johnson, who had been a Democrat before joining Lincoln's ticket in 1864. The law was designed to provide blacks with the right to own private property, sign contracts, sue and serve as witnesses in a legal proceeding.
  • There is no reference to the Democrats' opposition to the Civil Rights Act of 1875. It was passed by a Republican Congress and signed into law by President Ulysses Grant. The law prohibited racial discrimination in public places and public accommodations.
  • There is no reference to the Democrats' 1904 platform, which devotes a section to "Sectional and Racial Agitation," claiming the GOP's protests against segregation and the denial of voting rights to blacks sought to "revive the dead and hateful race and sectional animosities in any part of our common country," which in turn "means confusion, distraction of business, and the reopening of wounds now happily healed."
  • There is no reference to four Democratic platforms, 1908-20, that are silent on blacks, segregation, lynching and voting rights as racial problems in the country mount. By contrast the GOP platforms of those years specifically address "Rights of the Negro" (1908), oppose lynching (in 1912, 1920, 1924, 1928) and, as the New Deal kicks in, speak out about the dangers of making blacks "wards of the state."
  • There is no reference to the Democratic Convention of 1924, known to history as the "Klanbake." The 103-ballot convention was held in Madison Square Garden. Hundreds of delegates were members of the Ku Klux Klan, the Klan so powerful that a plank condemning Klan violence was defeated outright. To celebrate, the Klan staged a rally with 10,000 hooded Klansmen in a field in New Jersey directly across the Hudson from the site of the convention. Attended by hundreds of cheering convention delegates, the rally featured burning crosses and calls for violence against African-Americans and Catholics.
  • There is no reference to the fact that it was Democrats who segregated the federal government, at the direction of President Woodrow Wilson upon taking office in 1913. There \is a reference to the fact that President Harry Truman integrated the military after World War II.
  • There is reference to the fact that Democrats created the Federal Reserve Board, passed labor and child welfare laws, and created Social Security with Wilson's New Freedom and FDR's New Deal. There is no mention that these programs were created as the result of an agreement to ignore segregation and the lynching of blacks. Neither is there a reference to the thousands of local officials, state legislators, state governors, U.S. congressmen and U.S. senators who were elected as supporters of slavery and then segregation between 1800 and 1965. Nor is there reference to the deal with the devil that left segregation and lynching as a way of life in return for election support for three post-Civil War Democratic presidents, Grover Cleveland, Woodrow Wilson and Franklin Roosevelt.
  • There is no reference that three-fourths of the opposition to the 1964 Civil Rights Bill in the U.S. House came from Democrats, or that 80% of the "nay" vote in the Senate came from Democrats. Certainly there is no reference to the fact that the opposition included future Democratic Senate leader Robert Byrd of West Virginia (a former Klan member) and Tennessee Senator Albert Gore Sr., father of Vice President Al Gore.
  • Last but certainly not least, there is no reference to the fact that Birmingham, Ala., Public Safety Commissioner Bull Connor, who infamously unleashed dogs and fire hoses on civil rights protestors, was in fact--yes indeed--a member of both the Democratic National Committee and the Ku Klux Klan.

Reading the DNC's official "Party History" of the Democrats and the race issue and civil rights is not unlike reading "In Through the Looking Glass": " 'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean--neither more nor less.' "

Here's this line from the DNC: "With the election of Harry Truman, Democrats began the fight to bring down the final barriers of race . . ." Truman, of course, was elected in 1948, and to his great credit he did in fact, along with then-Minneapolis Mayor Hubert Humphrey, begin to push the Democrats towards a pro-civil-rights stance. This culminated in the passage of the 1960s civil rights laws--legislation that redid what had been done by Republicans a hundred years earlier but undone by the Democrats' support for segregation. But the notion that "Democrats began to bring down the final barriers of race" raises the obvious questions. What were these barriers doing there in the first place? And who exactly was responsible for creating them?

* * *

AS IF TO CONFIRM the "Who, me?" racial psychology behind the DNC Web site, Nancy Pelosi's Democrats passed a House resolution on July 29 sponsored by Tennessee Democrat Steve Cohen. The resolution, passed by voice vote, concludes this way:

Resolved, That the House of Representatives--
(1) acknowledges that slavery is incompatible with the basic founding principles recognized in the Declaration of Independence that all men are created equal;
(2) acknowledges the fundamental injustice, cruelty, brutality, and inhumanity of slavery and Jim Crow;
(3) apologizes to African Americans on behalf of the people of the United States, for the wrongs committed against them and their ancestors who suffered under slavery and Jim Crow; and
(4) expresses its commitment to rectify the lingering consequences of the misdeeds committed against African Americans under slavery and Jim Crow and to stop the occurrence of human rights violations in the future.

What word is missing here?

You got it. The word "Democrat." Never mentioned anywhere. As with the DNC website, all these terrible things--somehow, apparently, it seems, so they keep hearing--happened. Ms. Pelosi, Mr. Cohen and their fellow House Democrats just can't understand how. But, you know, whatever. They are sorry. Really.

Are they? Let's take them up on this.

After all those Democratic platforms and conventions that championed slavery and segregation, what do you think the chances are they will use the occasion of Mr. Obama's nomination to have the Democratic platform formally apologize for the active, frequently violent and decidedly official support of the Democratic Party for slavery, segregation, lynching, the Ku Klux Klan and all the rest?

Better yet, do you think they'll pass a resolution promising to use the funds raised from all those Jefferson-Jackson Day fundraisers to pay reparations for slavery? (Did I mention that while the DNC discusses party co-founders Jefferson and Jackson, it neglects to mention that between them the two owned an estimated 360 slaves?)

Will the NAACP and other groups seeking reparations from nongovernment entities for their role in supporting slavery (companies like Aetna, Wachovia and Chase along with educational institutions like Brown University) finally zero in on the prime historical mover behind some of the worst chapters in American history? Will they sue the Democrats?

The Democrats are poised to nominate a black man for president of the United States. But will they apologize for slavery? Will they start paying reparations not from tax dollars but their own dollars for what they have done?

Do they have the guts to publicly admit what serious history records of their deeds? Are they capable of running a campaign without playing the race card as they have played it for the better part of two centuries? Can they even escape the race psychology that has indelibly branded them as America's Party of Race?

Or, when it comes to their own responsibility for race relations in America, will they order up more of what, under the circumstances, is a very appropriate word for the DNC website?

Whitewash.

Tax Rates, Inequality and the 1%

A recent report from the Congressional Budget Office (CB0) says, "The share of income received by the top 1% grew from about 8% in 1979 to over 17% in 2007."

This news caused quite a stir, feeding the left's obsession with inequality. Washington Post columnist Eugene Robinson, for example, said this "jaw-dropping report" shows "why the Occupy Wall Street protests have struck such a nerve." The New York Times opined that the study is "likely to have a major impact on the debate in Congress over the fairness of federal tax and spending policies."

But here's a question: Why did the report stop at 2007? The CBO didn't say, although its report briefly acknowledged—in a footnote—that "high income taxpayers had especially large declines in adjusted gross income between 2007 and 2009."

No kidding. Once these two years are brought into the picture, the share of after-tax income of the top 1% by my estimate fell to 11.3% in 2009 from the 17.3% that the CBO reported for 2007.

The larger truth is that recessions always destroy wealth and small business incomes at the top. Perhaps those who obsess over income shares should welcome stock market crashes and deep recessions because such calamities invariably reduce "inequality." Of course, the same recessions also increase poverty and unemployment.

The latest cyclical destruction of top incomes has been unusually deep and persistent, because fully 43.7% of top earners' incomes in 2007 were from capital gains, dividends and interest, with another 17.1% from small business. Since 2007, capital gains on stocks and real estate have often turned to losses, dividends on financial stocks were slashed, interest income nearly disappeared, and many small businesses remain unprofitable.

The incomes that top earners report to the IRS have long been tightly linked to the ups and downs of capital gains. Changes in the tax law in 1986, for example, evoked a remarkable response—with capital gains accounting for an extraordinary 47.7% of top earners' reported income as investors rushed to cash in gains before the capital gains tax rose to 28%.

That was obviously temporary, but the subsequent slowdown in realized gains lasted a decade. Taxable gains accounted for only 16.7% of the top earners' income between 1987 and 1996. And the paucity of realized capital gains kept the top earners' share of income flat.

When the top capital gains tax fell to 20% in 1997 and remained there until 2002, realized capital gains rose to 25.4% of the top earners' income, and it explained much of the surge of their income share to 15.5% in 2000. Stock gains were more modest from 2003 to 2007, yet the tax rate on profitable trades was down to 15%, so realized capital gains rose to 26.7% of income reported by the top 1%.

True enough, capital gains are not the whole story, and the CBO's report, "Trends in the Distribution of Household Income Between 1979 and 2007," notes that "business income was the fastest growing source of income for the top 1 percent." But that too was a behavioral response to lower tax rates.

In 1988, business income jumped to 16.5% of the reported income of the top 1%, from 8.2% in 1986. Why? As the CBO explains, "many C corporations . . . were converted to S corporations which pass corporate income through to their shareholders where it is taxed under the individual income tax."

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The CBO estimates top incomes from individual tax returns. So it looked like a big spurt in top income in 1988 when thousands of businesses switched to reporting income on individual rather than corporate returns as the top individual tax rate dropped to 28% from 50%.

In reality, it was just a switching between tax forms to take advantage of the lower individual tax rate. Such tax-induced switching from corporate to individual tax forms in 1986-1988 makes it illegitimate to compare top income shares between 1979 and 2007.

After the tax rate on dividends fell to 15% in 2003 from 35%, the share of income reported by top earners from dividends doubled to 8.4% in 2007 from 4.2% in 2002, according to similar tax-based estimates from economists Thomas Piketty and Emmanuel Saez. Top earners held more dividend-paying stocks in taxable accounts rather than in tax-exempt bonds, or they kept dividends in tax-free retirement accounts.

In short, what the Congressional Budget Office presents as increased inequality from 2003 to 2007 was actually evidence that the top 1% of earners report more taxable income when tax rates are reduced on dividends, capital gains and businesses filing under the individual tax code.

If Congress raises top individual tax rates much above the corporate rate, many billions in business income would rapidly vanish from the individual tax returns the CBO uses to measure the income of the top 1%. Small businesses and professionals would revert to reporting most income on corporate tax returns as they did in 1979.

If Congress raises top tax rates on capital gains and dividends, the highest income earners would report less income from capital gains and dividends and hold more tax-exempt bonds. Such tax policies would reduce the share of reported income of the top earners almost as effectively as the recession the policies would likely provoke. The top 1% would then pay a much smaller portion of federal income taxes, just as they did in 1979. And the other 99% would pay more. As the CBO found, "the federal income tax was notably more progressive in 2007 than in 1979."

Mr. Reynolds is a senior fellow with the Cato Institute. This op-ed is adapted from a forthcoming Cato Institute working paper, "The Mismeasurement of Inequality."