from EconomicPopulist.org

“We must break the Money Trust or the Money Trust will break us.”
- Louis D. Brandeis, 1913

When the economy appeared to be melting down last September, Wall Street bank representatives began showing up in Congress like mobsters walking into a mom-and-pop business looking for protection money.
“Nice economy ya got here.(crash!) It would be a shame if something were to happen to it.”

Mobsters and Robber Barons have a lot in common.
Neither has any respect for the law or morals, only for power. Neither can ever be satisfied with any amount of wealth. They will always need to steal more and more and more until they’ve completely bankrupted their victims.

We are now at the mercy of modern Robber Barons, and if history is any judge, it is either them or us.

Bank Wars

“The great monopoly in this country is the money monopoly. So long as that exists, our old variety and freedom and individual energy of development are out of the question.”
- Woodrow Wilson, 1911

On February 28, 1913, the House of Representatives released a report with the most banal name imaginable – Committee Appointed Pursuant to House Resolutions 429 and 504 to Investigate the Concentration of Control of Money and Credit.
In spite of the long-winded and innocuous title, the testimony in the report revealed to the world an unseemly and corrupt conspiracy of Wall Street bankers that threatened the very foundations of our democracy. Despite the dangers, many of the recommendations of the Pujo Committee were ignored until after the 1929 Crash.

Arsene Pujo

As a species and a nation, we seem to be doomed to repeat our mistakes.

Dirty political battles between Washington and eastern bankers are not a new concept in America. The Bank War between President Jackson and the Second Bank of the United States is the most obvious and public of these exchanges. Nicolas Biddle, the Second Bank’s President, purposely caused the 1834 Depression, by restricting the money supply, to use as leverage against President Jackson.

^{Src: The Smoking Argus Daily, Allison Bricker}

Unfortunately for Mr. Biddle, his arrogance regarding his ability to cause an economic collapse allowed his ego to get the best of him. He continued boasting, now publicly that relief would only come if Congress renewed the bank’s charter. When Pennsylvania Governor George Wolf, a previous supporter of the central bank was made aware of the bank President’s sentiments, he immediately came out against extension or renewal of the bank’s charter.

When someone mentions trusts and trust-busting, people tend to think of John. D. Rockefeller’s Standard Oil, J. P. Morgan’s Northern Securities railroad company, and Andrew Carnegie’s U.S. Steel.
What frequently gets forgotten is the Money Trust of Wall Street. The reason that it isn’t mentioned is because it was never totally broken. Instead the decision was to regulate it via the creation of the Federal Reserve. Nicolas Biddle’s dream was finally realized.

^{Src: The Smoking Argus Daily, Allison Bricker}

Our Financial Oligarchy

“Far more dangerous than all that has happened to us in the past in the way of elimination of competition in industry is the control of credit through the domination of these groups over our banks and industries.”
- Pujo Committee

“The dominant element in our financial oligarchy is the investment banker. Associated banks, trust companies and life insurance companies are his tools…Though properly but middlemen, these bankers bestride as masters America’s business world, so that practically no large enterprise can be undertaken successfully without their participation or approval.”
- Louis D. Brandeis, 1913

What frequently gets lost in economic discussions is that the current depression is different from all other post-WWII recessions. All previous recessions were caused intentionally by the Federal Reserve.
The Fed would raise interest rates in order to choke off inflation. Once the inflation was contained they would lower interest rate. Consumer demand, which was artificially suppressed by the Fed’s high interest rates, would then be released and the economy would boom.

That didn’t happen this time.

The Fed didn’t raise interest rates to choke off inflation. There was no consumer demand that was artificially suppressed, thus there was no pent-up demand that was waiting to be released when the Fed cut rates.
What little “less bad” news that we’ve heard with home and auto sales has been almost exclusively to do with the tax rebates for first-time home buyers and the cash-for-clunkers program. Both of these programs are limited in time and scope, and both bring future demand to the present, which will leave an even bigger gap in demand once they are finished.

What happened this time was an economic collapse that emanated directly from Wall Street. It’s source was bad loans that the bankers and rating agencies pushed onto the financial markets of the world, knowing full well that it was only a matter of time before they blew up and took down the world economy.
The economy didn’t collapse because of government regulations. It didn’t collapse because the government taxed too much or spent too little.
It wasn’t because the American consumer stopped spending.

It was because the financial system knowingly overpriced a major financial asset class, and then leveraged itself against that asset class in the vain hope that the Day of Reckoning never came.

The whole financial crisis only came to light because of what amounts to a falling out amongst thieves.

War Between the Ruling Kleptocracy

“Gentlemen: You have undertaken to cheat me. I won’t sue you, for the law is too slow. I’ll ruin you.
Yours truly, Cornelius Vanderbilt.”
- 1853

It is sometimes forgotten that the 19th Century Robber Barons spent much of their time wasting resources trying to crush each other.
For example, the Erie War crippled what should have been the most profitable railroad in the nation, not to mention the cost from the corruption of the entire New York Assembly. An even more colorful battle involved the Albany and Susquehanna Railroadthat resulted in hundreds of paid goons crashing trains into each other and engaging in shooting wars.

History has proven that the unrestrained greed of an unregulated economy is neither fair, nor efficient. It also often leads to economic crisis.

Wall Street knows that you can make enormous amounts of money during an economic crisis, and no crisis is more fortunate than the failure of a leading competitor. The perfect example of that is the Panic of 1907.

John Pierpont Morgan again used rumor and innuendo to create a panic that would change the course of history. The panic of 1907 was triggered by rumors that two major banks were about to become insolvent. Later evidence pointed to the House of Morgan as the source of the rumors.

J. P. Morgan

J. P. Morgan’s false rumors created a real panic and it threatened to bring down the entire financial center. Morgan then nobly contacted his European sources and managed to borrow $100 million worth gold bullion in order to stem the panic. History remembers Morgan as saving the day, and also helping to convince the public that we needed a central bank in this country.
Morgan didn’t save the system from a crisis of his own creation out of the goodness of his heart.

Of course Morgan did not go unrewarded. Recall from our story of two weeks ago that Teddy Roosevelt, despite his antitrust proclivities, allowed Morgan to purchase the Tennessee Coal and Iron Company for about $45 million when the true value was closer to $700 million, thus expanding Morgan’s steel empire.

If this sounds somewhat familiar, it should. Recall the failure of Bear Stearns.

Bear Stearns had been unpopular with the rest of the Wall Street oligarchy since it refused to participate in the bailout of Long-Term Capital Management in 1998, despite helping to create the problem.
The most suspicious fact of the Bear Stearns failure was the massive increase in short positions on March 10 and 11, with only five days left before expiration. Some insiders knew something they shouldn’t have. John Olagues makes a strong case that it was insiders at JP Morgan Chase that were shorting Bear Stearns and helping to create a “run” on their stock, knowing full well that they would be taking over the bank with the Fed’s help.

How would people at JP Morgan Chase know that ahead of time? They were in position to make the deal.

The Fed and U.S. Treasury brokered a deal for J.P. Morgan in haste without question. Usually, such huge deals or mergers would go through committees or FTC oversight, but none of that here –a quick weekend jaunt in the park. It was not surprising that no red flags were raised about J.P. Morgan’s chairman, James Dimon holding a board seat at the Federal Reserve Bank of New York when the deal was made.

Bear Stearns was bought by JP Morgan Chase at a price of $2 a share. A week later it was raised to $10 a share. Was it shame or a guilty conscience to caused JP Morgan Chase to give back a small amount of their quick profits?
JP Morgan Chase was in a position to profit from Bear Stearns demise, and another profit from its taxpayer-funded acquisition, just like in 1907.

Later on that year, JP Morgan Chase managed to purchase Washington Mutual, a bank with $307 Billion in assets, for the price of $1.888 Billion after the FDIC seized the bank.
Back in April JP Morgan Chase offered to purchase WaMu at a far, higher price, but WaMu refused.

“You should have sold to JPMorgan Chase in the spring, and you should do so now. Things could get a lot more difficult for you.”
- Treasury Secretary Paulson to WaMu CEO Kerry Killinger, August 2008

A Naked Coup

“We’re moving to an oligopolistic situation.”
- Kenneth Guenther, Independent Community Bankers of America, 1999

“The goose that lays golden eggs has been considered a most valuable possession. But even more profitable is the privilege of taking the golden eggs laid by somebody else’s goose. The investment bankers and their associates now enjoy that privilege. They control the people through the people’s own money.”
- Louis D. Brandeis, 1913

It’s too big of a coincidence that the biggest winners on Wall Street are also the most politically connected, and no one is more connected than Goldman Sachs.

Bush’s Treasury secretary, Hank Paulson, is a former Goldman C.E.O., and his replacement at Treasury, Tim Geithner, was mentored by Goldman alumni. Mario Draghi, who is leading the crisis response for the E.U., is a former Goldman vice chairman.

Merrill Lynch C.E.O. John Thain was once Goldman’s co-president, and Wachovia chief Robert Steel was a vice chairman. Ed Liddy, the new C.E.O. of A.I.G., was Goldman’s vice chairman. World Bank president Robert Zoellick was a managing director. Even Neel Kashkari, the 35-year-old tapped to oversee the $700 billion Troubled Assets Relief Program, served at Goldman as a vice president.

And the list goes on. Robert Rubin, President Clinton’s former Treasury Secretary, was once the co-chairman of Goldman Sachs. Jon Corzine, now the governor of New Jersey, is a former Goldman Sachs CEO. A top aide of Tim Geithner is former Goldman lobbyist Mark Patterson.
It’s so obvious, so in-your-face, that one must assume that Goldman Sachs feels itself invulnerable.

By now everyone should be aware that Goldman Sachs was the biggest beneficiary of the AIG bailout, to the tune of $12.6 Billion, and will be the winners again if AIG finally goes under.
With Paulson in charge of the Treasury at the time, it appeared that Goldman Sachs was bailing out Goldman Sachs. Rich bankers were bailing out rich bankers, and working-class taxpayers were footing the bill.

America has been purchased in a leveraged buyout. For about $5.2 Billion Wall Street has purchased the complete deregulation of the the financial sector, and unprecedented political influence that even now allows them to defeat any new regulations they choose. It’s actually a very good return on investment.

“America’s economic system is where it is today because gambling became the financial sector’s principal preoccupation. The pile of chips grew so big that the Money Industry displaced real businesses that provided real goods, services and jobs.”
- Harvey Rosenfield

This corrupt collusion between financiers and government officials was spelled out in no uncertain terms in Simon Johnson’s article, The Quiet Coup. Simply put, America is following the path of petty Banana Republics.

elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Johnson goes on to say that chaos and confusion are very much in the interests of the ruling oligarchy, as it lets them take things, both legally and illegally, with impunity.
This message is echoed by Matt Taibbi in his article The Big Takeover.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

It seems hard for you and I to believe that anyone, any group, would purposely engineer an economic crisis for personal benefit. That’s because you and I aren’t consumed with ego, greed, and lust for power like the bankers on Wall Street are today. History has shown, time and time again, that this is exactly what these people do. Why should now be any different?
Goldman Sachs and JP Morgan Chase have already benefited from the crisis.

The spirits of Nicolas Biddle and John Pierpont Morgan are alive and well today in the plush offices of Wall Street.

by Chuck Baldwin’s Son: Timothy Baldwin, Esq.

Let’s be honest, America is facing the same legal, moral and ethical questions that our Founding generation did, especially regarding the issue of “Who Is Sovereign in the United States.” For our Founders, they fought, bled and died on the principles that no man or government has the right to rule over others contrary to their agreement (i.e. compact, constitution) and contrary to the principles of natural law as revealed in the Creation of God; that all men are born in nature with the power to govern themselves; and that no Sovereign government, established lawfully by the consent of we the people, can be usurped and controlled by any other entity. Thus, today in America, the question once again comes down to “Who is Sovereign in the United States?”

Today, there are 3 basic options for “Who is Sovereign in the United States”: (1) the Federal government, (2) the State governments or (3) We the People. I feel confident in stating that most contemporary Americans believe that the answer to this critical question is the Federal government–especially as it concerns any practical effect on the power of and over government. For years, Americans have been brainwashed though public education, major media networks and politicians that ALL federal laws are the “supreme law of the land” and that no state law or action to the contrary is valid, citing Article 6, paragraph 2 of the US Constitution as their “irrefutable” proof. Of course they are completely wrong: American ideology and legal fact states that sovereignty rests with “we the people.” However, the question must be more narrowly defined.

That is, does the sovereign power of we the people rest with all the people in the nation as one body, or does the power rest with the people THROUGH the respective States? The answer to this question cannot be overstated, because if the sovereign power rests with we the people collectively as one body, then the States have absolutely no power and at the ratification of the US Constitution, the States lost all powers originally granted to them by their respective sovereigns (the people of that State). To the contrary, if Sovereignty rests within or through their respective States, then the States conversely have more power than what is being admitted today by the “Centralists” of our day.

Through an honest study of the history and the context of the Articles of Confederation, the US Constitution, the Constitutional Convention and subsequent Ratification debates, the Federalist Papers, the Anti-Federalist Papers, the rulings of subsequent US Supreme Court Rulings and the writings of political philosophers and statesmen of the 1700s and 1800s, the conclusion is undeniable and clear: We the People are the Sovereigns of the States respectively and of the States United through our respective States.

Thus, the issue is not who is Sovereign, because we know that We the People are sovereign in the US and that the Sovereigns of each State have never ceded to the Federal government any power not expressly granted to it by the Compact (the US Constitution). But rather, the issue is one of JURISDICTION: in other words, who has the power to act on behalf of and in compliance with the Sovereign? The issue of jurisdiction is so important because it acknowledges that since the Sovereign has “paramount authority” in government, any powers that are granted from the Sovereign to government are to remain within that grant of authority. Put another way, the States can no more grant authority to the Federal government against the will of the Sovereign–the people–than the Executive branch of the Federal government can give to the Judiciary branch the powers that we the people granted to it alone. To deny that such a grant exists or conversely to ignore the limitations placed on the governments by the Sovereign is to suggest that tyranny is a lawful act and that it must be complied with. America’s founders would have considered such a political theory to be treasonous. Do we the people think so seriously of the matter? According to recent events, the answer to this question will likely be answered sooner than later.

As some of you may know, several states have and are passing legislation regarding the independence and sovereignty of the people of their respective states. (http://www.tenthamendmentcenter.com ) More specifically, the states of Tennessee and Montana have passed “Firearms Freedom Acts,” which have become law and which reaffirm their Sovereignty under the 10th Amendment of the US Constitution. This law states that any firearms that are made, sold and bought in that state are NOT subject to the Federal regulations of firearms, because they are inherently internal affairs, which exempt them from the commerce clause of the US Constitution.

As you would imagine, the Federal government, through its agency, the Department of Justice, did not take too kindly to Tennessee’s assertion of jurisdiction over this matter and position that the federal laws did not apply to the subject matter at hand. This federal opposition has become known through the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), whereby they informed the firearms licensees in an “open letter” in Tennessee that the recently enacted law (Firearms Freedom Act) does not apply and is void and that they (the firearms licensees) must still obey and submit to the federal laws, regardless of the State’s statute. (Seehttp://www.tfaonline.org/downloads/ATFfirearmsfreedomact.pdf )

This ATF response tells us the following about the federal government’s ideology of Sovereignty: (1) the federal government does not recognize the lawful and independent jurisdiction of the Sovereigns of Tennessee to operate their internal affairs as they deem proper and fitting; (2) the Sovereigns of Tennessee do not possess lawful jurisdiction to govern themselves through constitutional means; (3) the federal government has the power and authority to control the internal affairs of all States, as they deem fit. Bottom line, the Federal government is Sovereign. With their theory in mind, however, what commodity, what relationship, what contract, what service, or what molecule in this entire country would not be subject to their control and power?

This issue is the very same reason why the Colonists declared their independence from Great Britain in 1776 and why Great Britain declared the Colonies to be in a state of rebellion against the government. The conflict was in fact the application of their Constitution: whether it be a “living” constitution or whether it be “fundamental laws” based upon the intent and will of the people. The fact is, it was the Great-Britain-view of their constitution verses the American-view of their constitution that caused the conflict between the crown and the colonies. One historian summarizes the conflict this way:

“The contrast cannot be too strongly insisted upon. [The colonists], on the one hand, believed that the British Constitution was fixed by ‘the law of God and nature,’ and founded in the principles of law and reason so that Parliament could not alter it, but [Great Britain believed] that ‘the constitution of this country has been always in a moving state, either gaining or losing something,’ and ‘there are things even in Magna Charta which are not constitutional now’ and others which an act of Parliament might change. Between two such conceptions of the powers of government compromise was difficult to attain . . . Such differences in ideals were as important causes of a breaking-up of the empire [of Great Britain] as more concrete matters like oppressive taxation.” (Claude Halstead Van Tyne, The Causes of the War of Independence, Volume 1, [University of Michigan, Houghton Mifflin Company, 1922], 235, 237).

Indeed, the issues of taxation during the 1760s and 1770s were only fruits of the underlying issue, and that is, who is Sovereign in America. According to Great Britain, the government had the power to impose its will on the people of America despite the will of the colonies and despite the natural laws governing the compact between the English people and their government. In other words, the government believed that their constitution was “living,” giving the government power to impose its will on the people, without the people’s consent. The colonists, however, saw the matter to be a usurpation of their God-given right to be governed by their consent and in compliance with their constitution. The end result: the Sovereigns in each colony seceded from the empire of Great Britain because of Great Britain’s refusal to follow their constitution.

Do Sovereigns throughout our States United not see the significance of the issue we are facing today? Are we so blind to history that we cannot compare this scenario to the very scenarios that led to the American Revolution? Are we so ignorant as to the intents and purposes of the US Constitution? Consider that the “supreme laws of the land” were never meant to be carte blanche powers of the Federal government, but instead federal laws were expressly limited by the terms of the compact between and for the States, found in the Constitution. This concept of “supreme law of the land” was expressed by a founding father, whom many would consider to be a “centralist” in belief, Alexander Hamilton, in Federalist Paper #27:

“[T]hat the laws of the Confederacy [meaning, the United States of America--yes, even Hamilton, along with many other founders, such as George Washington, called the US Constitution a Confederacy, because they knew that the nature and character of the compact of the US Constitution did not change from the Articles of Confederation] as to the ENUMERATED and LEGITIMATE objects of its jurisdiction, will become the SUPREME LAW of the land, to the observance . . . in each State, will be bound by the sanctity of an oath. Thus the legislatures, courts, and magistrates, of the respective members, will be incorporated into the operation of the national government AS FAR AS ITS JUST AND CONSTITUTIONAL AUTHORITY EXTENDS.”

Hamilton’s legal position concerning the limited power of the federal government and the “supreme law of the land” was the consensus of the founders, the States and we the people. Nowhere in America’s founding was there the notion that the supreme laws of the land were anything contrary to the compact FOR the States. The supreme laws of the land are simply those “fundamental laws” that we the people have created and imposed upon the government to follow and uphold.

Of course, the question has been raised over the past 150 years of “who has the power to determine whether or not the Federal government has usurped their constitutional authority?” The popular answer is (wrongfully), the US Supreme Court. God forbid that the Sovereigns of each State must wait and rely on 9 federal judges to make rulings of this nature before a State would have any legal rights or justification to act in accordance with the will of their Sovereigns. Indeed, the ATF interpreted the Constitution unilaterally without the opinion of the US Supreme Court and without opinion or order denied the constitutionality of Tennessee’s Firearms Freedom Act. The Sovereigns in each state have the same power, and the historical and legal evidence is plentiful. Consider Thomas Jefferson’s position:

“[T]he States should be watchful to note every material usurpation on their rights; denounce them as they occur in the most peremptory terms; to protest against them as wrongs to which our present submission shall be considered, not as acknowledgments or precedents of right, but as a temporary yielding to the lesser evil, until their accumulation shall overweigh that of separation.” (Thomas Jefferson and John P. Foley, ed., The Jeffersonian Cyclopedia, A Comprehensive Collection of the Views of Thomas Jefferson, [New York and London: Funk & Wagnalls Co., 1900], 133)

I will not attempt to persuade the reader at this point on the fallacious position that only the US Supreme Court can make a determination of constitutional actions. However, for those who would argue that the US Supreme Court is in fact the only legal means by which a State can say “no” to the federal government, then I believe that such a person has reached the point of voluntary slavery, and such a person is dangerous to the concepts of federalism, American-sovereignty, and constitutional limits and freedom, as expressed by thousands of the most influential men in our history. And such a person has accepted only those political means of redress whereby the Sovereigns of each State drudge through the treacherous mud of tyranny and get absolutely nowhere.

What we are seeing today, and have seen for over 100 years in America, is the usurpation of the federal government over Sovereignty–we the people–and over Jurisdiction–the States. While this article cannot begin to expound in depth the true character and nature of the US Constitution, a study of history reveals that the US Constitution was an agreement between the Sovereigns of each State whereby they acceded to give up only certain parts of their sovereignty for the “more perfect union” of the people within those States. As with any sovereign people or government, accession may be limited to whatever means and ways necessary to protect the freedom of that society. This is in fact what the Colonists did in 1776 when declaring independence from Great Britain, what the States did in 1781 when ratifying the Articles of Confederation, and what the States did in 1787 when ratifying the US Constitution. It was the Sovereigns, through their respective States, who declared their natural rights under God, who secured their natural rights through independence from governments and who expressed that any act outside of their consent is tyranny.

When this recognition resounds in the hearts and minds of the people, as our Declaration of Independence states, “it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.” Do you really think after only 11 years from the signing of the Declaration of Independence that those same people who risked everything for independence from those “living-constitutionalists” in Great Britain and who believed in the principles seen in the Articles of Confederation would have completely renounced their understanding of a Confederacy and Federalism and would have resigned the same and delegated all of their powers that they fought and died to secure for each State and for their citizens? If you think so silly a notion, you severely impose injustice upon the intelligence and intentions of our founders.

However, the record is clear that the Sovereigns of each State never ceded to the federal government powers not expressly vested to it and never waived the ability to reclaim that power through their proper channels–the States–the same channels by which the US Constitution was ratified. Consider the Sovereigns’ voice in the State of Virginia in 1787:

“We the delegates of the people of Virginia . . . Do, in the name and in behalf of the people of Virginia, declare and make known, that the powers granted under the constitution, being derived from the people of the United States, may be resumed by them whensoever the same shall be perverted to their injury or oppression, and that every power not granted thereby, remains with them and at their will; that therefore no right, of any denomination, can be cancelled, abridged, restrained or modified by the congress, by the senate or house of representatives acting in any capacity, by the president or any department, or officer of the United States, EXCEPT IN THOSE INSTANCES IN WHICH POWER IS GIVEN BY THE CONSTITUTION FOR THOSE PURPOSES.” (Emphasis added.)

However, the Federal government today does not recognize the Sovereignty in the people of the respective states; it does not recognizes the respective States’ jurisdiction over all matters not expressly delegated to the federal government; and it does not seem to acknowledge State Sovereignty under the 10th amendment of the US Constitution. Given their evident intent and purposes to continually grow in power and to continually oppress and suppress the sovereignty of we the people, against our respective states, the question becomes, how will they be made to understand this? It is of course up to the Sovereigns in each state to answer this question. And we see the answers arriving through State laws such as the Firearms Freedom Act.

The time has come in America where to be free necessarily means to resist status quo and federal usurpation and to actively change the course and philosophy being shoved down our throats. There really is no middle ground any more. This is not a matter of politics anymore. This is not a matter of Republican and Democrat. This is a matter of FREEDOM, as much so as were the matters of 1775 and 1776. It is staring you in the face, daring you to make a move. May we never be guilty of causing, whether by our apathy, indifference, laziness or comfort, this nation to lose the freedoms that our founders attempted to secure with infinite pains and labors. We the people must once again reassert our Sovereignty in this country and the States must recognize and act upon their God-ordained role as Freedom protectors and tyranny resisters.

*If you appreciate this column and want to help me distribute these editorial opinions to an ever-growing audience, donations may now be made by credit card, check, or Money Order. Use this link:

http://www.chuckbaldwinlive.com/donate.php

© Chuck Baldwin

by Aaron Turpen

The climate bill that passed the House of Representatives in June 26, called the American Clean Energy and Security Act of 2009 (HR2454, aka “ACES”) and better known as the Cap-and-Trade Bill, had many benefits. None of those benefits were for the American people or even the climate.

All of those benefits were for the lobbyists and Legislators.

On July 14, the non-partisan, non-profit group MAPLight.org published their findings of what they called the “watered down climate bill.” In that report, they compared proposed amendments and the person(s) proposing them to the campaign funding and donations received from groups related to the changes that amendment would make.

What they found is that, behind the rhetoric, ACES was just more business as usual in Washington. Those who got paid, performed for their benefactors. Those who didn’t, voted against.

Several amendments are on the ACES list that MAPLight compiled. What was most interesting to me, however, was how truly bipartisan the bribe-taking was. Going down the list of Congressmen and their party affiliation shows that Democrat or Republican, it made no difference. They were all running around with their hand out, waiting for the highest bidder.

As a for instance, let’s look at the “redefining renewable energy” markups. Fred Upton (R-MI) offered an amendment to redefine renewable energy to include nuclear energy. His amendment was narrowly defeated (29-26). Those who supported his amendment received twice as much money from nuclear interests as those who voted no. I guess the nuclear pushers didn’t pay off enough people.

In fact, about the only amendment proposed that was distributed almost entirely on party lines was the now-famous Randy Forbes (R-VA) bill that would have gutted the entire climate bill to start with. This is not surprising, since top contributors to Forbes’ campaigns from 2003-08 were a gas pipelineconstruction company, large defense contractors, and similar groups. All of which lobbied to oppose the Cap-and-Trade bill.

Even more telling, though, is when you go beyond MAPLight’s analysis and look at who benefits from the ACES bill as a whole. This is easily measured, since the number one thing the ACES bill does is create a new commodities market for carbon emissions. Assuming the bill passes as-is through the Senate, of course.

Who will benefit the most from that new carbon market? Why, those who are already trading in the underground carbon offsets market and those who are poised with an on-the-books carbon market right now.

Is there such a thing already? Has there already been a carbon market created in the U.S. by someone who stands to benefit greatly were it enacted into law and made mandatory to corporations around the nation that they participate?

Of course. That person’s name is Al Gore.

Gore’s private equity firm, called Generation Investment Management (GIM), isn’t even based in the U.S. It’s in London. This firm purchases carbon offsets from green companies and endeavors around the globe and then sells those offsets to its clients. Basically, a business that produces emissions can offset those by purchasing offsets (investing in) companies that do the reverse.

That in itself is laudable and creates no free market problems. It’s voluntary, fits into the paradigm of businesses working together in non-coercion, and could be productive. Where it gets tricky is when the overall “carbon market” is considered.

This market includes several foundations and exchange groups. The largest of the carbon exchange groups is Chicago-based CCX (Chicago Climate eXchange) and the Carbon Neutral Company (CNC) of Great Britain. These two are likely to become either the excahnges of choice for an ACES-created carbon market, or the measuring sticks used to build a new one.

In either case, the co-founder of Gore’s GIM is Hank Paulson. Recognize that name? Yep, Treasury Secretary and former Goldman Sachs CEO Paulson. Sachs owns 10% of CCX. In fact, most of the founding partners of Gore’s GIM are Sachs officials or former management. Including Peter Knight, Gore’s Chief of Staff when he was in the Senate and manager of the Clinton-Gore re-election campaign in 1996.

This means that if Cap-and-Trade becomes a reality, Gore will be at the forefront of those who’ll profit by it in a huge way. Not only will his own offset investment group be ready to pounce and start taking futures, but his stake in America’s only current, recognized carbon exchange will be worth a lot of money.

The Capital Research Center (CRC)’s Foundation Watch published a short, 9-page pamphlet entitled “Al Gore’s Carbon Crusade: The Money and Connections Behind It” in 2007. That short pamphlet details much more than I’ve done here and clearly shows who really benefits from a carbon tax.

It also shows why Al Gore has featured so prominently in early (one-sided) debates, the introduction of ACES, and other climate change legislative work in the past few years.

by Sheldon Richman, FFF

In Washington, the rule is: If a little poison doesn’t cure the patient, give him more.

This rule is being applied not only to health care, where massive doses of government intervention are being prescribed to treat the toxicity of past government intervention. It’s also being used in the attempt to end the recession.

When Barack Obama took power he told the American people that an “economic stimulus” bill was indispensable to fixing the economy. Sensible economists warned against it, but no politician wants to be perceived as doing nothing. So logic and well-reasoned economic theory were once again tossed out in favor of massive government spending: close to $500 billion for state and local governments and special interests. But even on its own terms, the “stimulus” was no such thing. Most of the spending was far off into the future. The government says that only $60 billion of $499 billion has been allocated in the five months since Obama signed the bill. It’s hard to believe, but there is a limit to how fast federal, state, and local governments can spend money.

That raises the question: how stimulating can stimulus be? The answer is: not much. The politicians promised it would reduce unemployment, but the jobless rate continues to rise, standing now at 9.5 percent.

The lack of improvement is so acute that even Vice President Joe Biden says the administration underestimated how bad the economy was and congressional leaders are talking about a second stimulus package.

Again, on its own terms, this is just silly. If the bureaucrats can’t spend half a trillion quickly enough to goose the economy, what’s the point of giving them more money?

Of course, we can only take the stimulus logic on its own terms for the sake of argument. The stimulus logic is wrong, so things are worse than described.

Even if the government could have spent the half trillion in the first 24 hours, it wouldn’t have fixed the economy. That’s because the problem isn’t inadequate spending. The problem is the distortions in the economy that the government caused through pervasive intervention. Thus more intervention through spending will only make things worse.

First, let’s look at what’s wrong with the stimulus logic. Government has no money that it hasn’t first lifted one way or another out of the private sector. It creates nothing of value. The federal budget is deep in the red, so to increase spending the Treasury has to borrow the money. But borrowed money obviously is already in the economy, and the lenders would have been willing to lend it to finance productive private ventures had the government not borrowed it instead. There can be no net stimulus if government is simply reallocating capital.

Moreover, government reallocation is not merely a neutral substitution of its projects for private ones. Government doesn’t have to make a profit or risk going out of business. So its spending is not driven by the need to satisfy consumers who are free to spend their money as they like. In contrast, entrepreneurs invest capital with an eye to satisfying what consumers see as their most important demands.

Government spending is dictated by the political agenda, while private investment is shaped by consumer welfare and efficiency considerations.

Bottom line: government adds nothing, but rather takes resources that already exist and devotes them to inferior purposes.

That is only the beginning of trouble. The government’s debt will sooner or later be covered by the Federal Reserve’s expansionary monetary policies. While the Fed can create money, it can’t create real resources. So the new money will bid up the prices of all kinds of goods and shift purchasing power from the mass of people a favored few. That is as much a tax as one collected by the Internal Revenue Service. The inflation will further distort the structure of the economy and pave the road to the next downturn and next round of unemployment.

The “stimulus” isn’t working because it can’t work. A new “stimulus” is therefore idiotic. Freeing the economy is the only path to sustainable prosperity.

Sheldon Richman is senior fellow at The Future of Freedom Foundation, author of Tethered Citizens: Time to Repeal the Welfare State, and editor ofThe Freeman magazine. Visit his blog “Free Association” atwww.sheldonrichman.com.

The costly truth about Canada’s health care system

by John Stossel

President Obama says government will make health care cheaper and better. But there’s no free lunch.

In England, health care is “free”—as long as you don’t mind waiting. People wait so long for dentist appointments that some pull their own teeth. At any one time, half a million people are waiting to get into a British hospital. A British paper reports that one hospital tried to save money by not changing bedsheets. Instead of washing sheets, the staff was encouraged to just turn them over.

Obama insists he is not “trying to bring about government-run healthcare.”

“But government management does the same thing,” says Sally Pipes of the Pacific Research Institute. “To reduce costs they’ll have to ration—deny—care.”

“People line up for care, some of them die. That’s what happens,” says Canadian doctor David Gratzer, author of The Cure. He liked Canada’s government health care until he started treating patients.

“The more time I spent in the Canadian system, the more I came across people waiting for radiation therapy, waiting for the knee replacement so they could finally walk up to the second floor of their house.” “You want to see your neurologist because of your stress headache? No problem! Just wait six months. You want an MRI? No problem! Free as the air! Just wait six months.”

Polls show most Canadians like their free health care, but most people aren’t sick when the poll-taker calls. Canadian doctors told us the system is cracking. One complained that he can’t get heart-attack victims into the ICU.

In America, people wait in emergency rooms, too, but it’s much worse in Canada. If you’re sick enough to be admitted, the average wait is 23 hours.

“We can’t send these patients to other hospitals. Dr. Eric Letovsky told us. “Every other emergency department in the country is just as packed as we are.”

More than a million and a half Canadians say they can’t find a family doctor. Some towns hold lotteries to determine who gets a doctor. In Norwood, Ontario, 20/20 videotaped a town clerk pulling the names of the lucky winners out of a lottery box. The losers must wait to see a doctor.

Shirley Healy, like many sick Canadians, came to America for surgery. Her doctor in British Columbia told her she had only a few weeks to live because a blocked artery kept her from digesting food. Yet Canadian officials called her surgery “elective.”

“The only thing elective about this surgery was I elected to live,” she said.

It’s true that America’s partly profit-driven, partly bureaucratic system is expensive, and sometimes wasteful, but the pursuit of profit reduces waste and costs and gives the world the improvements in medicine that ease pain and save lives.

“[America] is the country of medical innovation. This is where people come when they need treatment,” Dr. Gratzer says.

“Literally we’re surrounded by medical miracles. Death by cardiovascular disease has dropped by two-thirds in the last 50 years. You’ve got to pay a price for that type of advancement.”

Canada and England don’t pay the price because they freeload off American innovation. If America adopted their systems, we could worry less about paying for health care, but we’d get 2009-level care—forever. Government monopolies don’t innovate. Profit seekers do.

We saw this in Canada, where we did find one area of medicine that offers easy access to cutting-edge technology—CT scan, endoscopy, thoracoscopy, laparoscopy, etc. It was open 24/7. Patients didn’t have to wait.

But you have to bark or meow to get that kind of treatment. Animal care is the one area of medicine that hasn’t been taken over by the government. Dogs can get a CT scan in one day. For people, the waiting list is a month.