'Tis Only My Opinion!™
May 2015 - Volume 35, Number 5
"Shredding the fabric
... "
This is not our forefathers country!
As I approach my eighth decade of life I cannot help but be
concerned about the future of the country in which I've been
privileged to live.
A little history lesson about our beginnings
Religious persecution in England in the 1600's
led the early Protestant settlers to leave England and seek refuge
and freedom in the New World. Initially, the Pilgrims, or
Puritans, escaped to Holland but the lifestyle of the Dutch,
however, proved to be a threat to their children's moral,
religious and educational beliefs. The next step was
a voyage on a ship named Mayflower for a trip to the "New World"
arriving in 1620.
After a century and a half, the freedom which those Pilgrims
sought was in jeopardy and the conditions for a revolution against
the British government were in place.
The conclusion of the French and Indian War on February 10, 1763
left British finances seriously stressed. As a result, King George
III issued the Proclamation of 1763 which forbade American
colonists from settling west of the Appalachian Mountains. Britain's
government in the treaties of 1768 and 1772 further adjusted those
territory
boundaries which had so infuriated many of the colonists.
Many colonial leaders were influenced by the ideas of John
Locke's theory of a "social contract" which stated that
legitimate
state authority must be derived from the consent of the governed.
Also, that if the government abused the rights of the citizens it
was a natural responsibility of the citizens to rise up and
overthrow their leaders.
To alleviate Britain's serious debt problems, the British
government began to levy new taxes on the colonies with the goal of
offsetting some of the cost of their defense. In December 1773, in response to a tax on tea
imports, colonists in
Boston conducted the "Boston
Tea Party" in which they raided several merchant ships and threw
the tea into the harbor.
With the imposition of the Sugar Act
and the Currency Act of 1764 as well as the Quartering Act, the
American colonies began to boycott British goods. These acts became
known as the "Intolerable Acts."
As punishment, Parliament passed the
Intolerable Acts which closed Boston Harbor and effectively placed
the city under occupation. On April 19, 1774, the British governor
of Massachusetts sent British troops to seize arms from the colonial
militias ... and the first battle in the War for Independence was
underway near Lexington & Concord.
The First Continental Congress
Colonial leaders from all the colonies except Georgia in
attempting to find a way to work with the British government held a
meeting at Carpenters Hall in Philadelphia on September 5, 1774.
Ending on October 26th, the attendees agreed to the formation of the
Continental Association after drafting a compact to be presented to
the British. They also agreed to return to Philadelphia in May 1775
for a second Continental Congress.
The Second Continental Congress
It took 14 months from the opening of the Second Continental
Congress before the Declaration of Independence was adopted on July
4, 1776.
There were five founding principles of government that were
firmly held by all 55 delegates to the constitutional convention.
These principles directed the design of the Constitution of the
United States. They were:
- Rights come from God, not government.
- All political power emanates from the people.
- Government was to be limited in the form of a representative
republic
- Government is nothing but a social contract which must be
written.
- Private Property Rights were intertwined with liberty.
The principles to which my generation and those before us held
are now in the crosshairs of a country which is rapidly losing its
moral compass and its position in the world.
Signs of a social contract that is deteriorating
Here are few signs:
- Persecution of religious and moral beliefs in the name of
"equality". Christian businesses are destroyed by LGBT advocates
whereas Muslim businesses and other religious denominations do
not share the same fate.
- If power comes from sovereign citizens, then it behooves the
government to determine that those who vote possess citizenship.
Loose qualification checks have created a situation where voting
can occur by persons who are not citizens. Voting lists are not
scrubbed against the social security death index to remove
citizens who are not living, nor are they compared to many other
databases to determine if the voter lives within that community.
- Political correctness has run amuck and the nanny state has
created a society that fosters dependency. The unwillingness to call
a "spade" a "spade" has led to many problems including the fear
of offending someone's sensitivity.
- A government where unelected bureaucrats write regulations that
destroy private property rights in the name of environmentalism or
global warming based upon spurious science.
- An administration which uses executive orders to bypass laws
written by Congress or protections guaranteed by the Constitution of
the U.S. and the Bill of Rights.
- Moreover, Congress is so polarized
that it refuses to impeach a President or an administration
official that commits unlawful acts. Investigations into possible
wrongdoing is hamstrung at many levels and court orders to produce
documents take years for compliance.
- Riots like Ferguson, Mo., and Baltimore, Md. are not
quickly brought under control in the belief that people have a right
to vent ... ignoring the destruction of private property caused by
the riots. Flash mobs and knock up games are all part of the
lack of respect for law and order.
Signs of Disintegration
The "social contract" as evidenced in the Constitution and the Bill of Rights
suggests that law and order will be observed by the population and
those in positions of authority. We have had many instances
where that social contract has been given lip-service and ignored.
I will only point out two recent examples.
One is President Obama's executive order to not enforce the
immigration laws of the U.S. The Constitution has no provision for
an administration to simply ignore laws with which it does not
agree.
The second happened this week in Baltimore during the unrest over
the arrest and subsequent demise of Freddie Gray, a black 25 year
old with a police blotter sheet with while in police custody which
is shown below:
Heavy.com posted Gray’s complete rap sheet
on Monday and it includes several
charges — primarily for offenses relating to
drug distribution.
March 20, 2015: Possession
of a Controlled Dangerous Substance
March 13, 2015: Malicious destruction of
property, second-degree assault
January 20, 2015: Fourth-degree
burglary, trespassing
January 14, 2015: Possession of a
controlled dangerous substance,
possession of a controlled dangerous
substance with intent to distribute
December 31, 2014: Possession of
narcotics with intent to distribute
December 14, 2014: Possession of a
controlled dangerous substance
August 31, 2014: Illegal gambling,
trespassing
January 25, 2014: Possession of
marijuana
September 28, 2013: Distribution of
narcotics, unlawful possession of a
controlled dangerous substance,
second-degree assault, second-degree
escape
April 13, 2012: Possession of a
controlled dangerous substance with
intent to distribute, unlawful
possession of a controlled dangerous
substance, violation of probation
July 16, 2008: Possession of a
controlled dangerous substance,
possession with intent to distribute
March 28, 2008: Unlawful possession of a
controlled dangerous substance
March 14, 2008: Possession of a
controlled dangerous substance with
intent to manufacture and distribute
February 11, 2008: Unlawful possession
of a controlled dangerous substance,
possession of a controlled dangerous
substance
August 29, 2007: Possession of a
controlled dangerous substance with
intent to distribute, violation of
probation
August 28, 2007: Possession of marijuana
August 23, 2007: False statement to a
peace officer, unlawful possession of a
controlled dangerous substance
July 16, 2007: Possession of a
controlled dangerous substance with
intent to distribute, unlawful
possession of a controlled dangerous
substance (2 counts)
The Washington Post reported on Friday
that Gray had a lengthy criminal history and
even had a two-year stint in prison.
According to The Post, his charges were
primarily for selling heroin and marijuana.
However, only a few of the counts he was
charged with resulted in convictions.
Two days after the riots presumably over the treatment of Freddie
Gray, it was reported by the Washington Post that Gray had deliberately tried to injure
himself during the ride in the police van by another prisoner who
was in the same van.
Of course, that does not absolve the
police ... they are responsible by law for the welfare and health of
any person in their custody which Mr. Gray clearly was.
The real problem is the response of the politicians in
Baltimore to the threat of potential disturbances and protests on
behalf of Mr. Gray.
In Baltimore, a black Democratic Mayor
allegedly said and did the following according to the Wall Street
Journal:
"Despite a firm denial by Baltimore Mayor Stephanie
Rawlings-Blake, a senior law enforcement source charges that she
gave an order for police to stand down as riots broke out Monday
night, raising more questions about whether some of the violence and
looting could have been prevented.
The source, who is involved in the enforcement efforts,
confirmed to Fox News there was a direct order from the mayor to her
police chief Monday night, effectively tying the hands of officers
as they were pelted with rocks and bottles.
Asked directly if the mayor was the one who gave that
order, the source said: “You are God damn right it was.”
The claim follows criticism of the mayor for, over the
weekend, saying they were giving space to those who “wished to
destroy.”
To think that an elected official would condone law-breaking by a
mob is simply unfathomable to many of my generation ... in a
different period, officials would have been tarred and feathered for
such actions.
Again quoting the same article:
"The sharp rise in violent crime in our inner cities, which dates
to the 1970s and 1980s, happened to coincide with an increase in the
number of black leaders in many of those very same cities. What can
be said of Baltimore is also true of Cleveland, Detroit,
Philadelphia and Washington, D.C., where black mayors and police
chiefs and aldermen and school superintendents have held sway for
decades."
Isn't it apparent that cities with a significant black Democratic
political apparatus fail to improve the environment and the
living levels of their citizens? One wonders why?
Dependency breeds poverty
The United States has become a country where one of five families
has no one working, and about 47 million of its citizens receive
food stamps. During the six years of the Obama administration
the number of citizens receiving food stamps has almost doubled.
The War on Poverty and Christian Compassion meets the Law of
Unintended Consequences
We have created at least three generations of citizens who have
found a way to survive through various welfare programs. The welfare
system provides free housing, free child-care, free phones and food
to a growing part of the population. The U.S. also provides
this assistance to a large number of undocumented immigrants as well
as refugees from overseas. In many cases, U.S. welfare is a
substantial increase in life style that these individuals and
families received in their home country.
While the U.S. has been considered by many as a melting pot
nation at what point do the citizens realize that the ideals that
made this country the "shining light on the hill" has been
substantially reduced by its largesse.
The aid to
dependent children program has caused a complete breakdown of the
family unit within much of the African-American community. Coupled
with convictions for drug abuse the end result is that many children
have little contact with a father figure.
Over 72% of black children
are born to single-mother households today, three times the black
illegitimacy rate when
Daniel Patrick Moynihan wrote his prescient analysis of black
family breakdown in 1965.
When the incentive to work has been removed and clearly, many now
believe that the government exists to provide for their needs, it is
time to ask the question ... is this necessary?
Maine has been a state that has been trying to reform welfare.
"At the close of 2014 approximately 12,000 individuals were
enrolled in the state assistance program. Keep in mind that these
individuals are adults who aren’t disabled and who don’t have
children at home and who are claiming the food-stamp benefits
because of a lack of financial resources.
After forcing these individuals to either work part-time for twenty
hours each week, enroll in a vocational program, or volunteer for a
minimum of twenty-four hours per month, the numbers showed a
significant drop from 12,000 enrollees to just over 2,500.
Republicans in the state are calling it a major victory, while
Democrats are infuriated and are calling for special measures to
roll back some of the strict requirements."
Since the meltdown of 2008, welfare benefits including
unemployment benefits have ballooned. Recipients have
found ways to game the system. Taxpayers should demand that
the government take steps to monitor and remove recipients that can
work.
The narrative is false!
The black culture has become one where crime is not only
tolerated but embraced. Magnitudes more black men are killed by
other black men in Baltimore and other American cities than by the
police. But those killings are ignored, because they don’t fit into
the favored narrative of a white, racist America
lethally oppressing blacks.
The following table shows the data from 2011 and clearly it is
not a case of whites killing blacks.
The War on Drugs is a failure!
One result of the war on drugs is that the ability to make an
honest living is destroyed because of a criminal record. On
September 30, 2013 (the end of the most recent fiscal year for which
federal offense data were available), 98,200 inmates (51% of the
federal prison population) were imprisoned for possession,
trafficking, or other drug crimes."
In the U.S. about 2.4 million people are incarcerated.
After a lifetime of observing the results of incarceration, it is
apparent to me that prisons have become a place where persons get a
higher-education in crime and the criminal justice system does not
improve the ability of a convicted criminal to subsequently improve
their legal standard-of-living after serving their prison time.
In October 1991, my concerns about the criminal justice system were
discussed in the Opinion article "Crime Pays Everyone but the
Victim!"
The United States has more people incarcerated per capita than
any other country except the Seychelles at 707 per 100,000
population of which a significant percentage are for nonviolent drug
crimes.
Since the 1980's, federal inmates numbers have soared almost 800% as law enforcement
cracked down on drug offenders to decrease rates of addiction and
use.
The result: Minor drug offenses put
blacks behind bars at disproportionately higher rates than
whites. And the growing number of whites in prison can be partly attributed to
America's massive meth problem that has arisen in the last 10 years.
The U.S. tried once before to ban beer and alcohol and it gave
us Prohibition. Luckily, it only took 13 years for the
citizens to end Prohibition ... a period in which people kept
drinking, making otherwise law-abiding citizens into criminals and
crime syndicates arose and flourished.
Unfortunately, the nation failed to learn that lesson from history
and President Richard Nixon on 17 July 1972 began the war on drugs.
Nixon told Congress that drug addiction had "assumed the dimensions
of a national emergency". Nixon asked Congress for an initial $84
million for "emergency measures".
After 40 years, the U.S. war on drugs has cost over $1 trillion and
hundreds of thousands of lives, and for what? Drug use is rampant
and violence even more brutal and widespread today.
It is past time to legalize drugs and collect taxes on their sale.
Legalization will also allow the country to
reduce the prison system population saving millions of dollars each
month. In addition,
convictions for personal drug use should be expunged from the police
records.
The Federal Reserve's Model is not working
The financial meltdown that began with Bear Stearns and Lehman
Brothers in 2008 were considered by politicians and members of the
Federal Reserve as a liquidity problem. Secretary of the Treasury
Paulson and members of the Federal Reserve along with their Wall
Street banker cronies believed that if
the Federal Reserve could reliquify the system and save the
"To-Big-To-Fail" banks, the financial problem could be handled.
That was the same solution applied to the LTCM collapse in 1998
... only on a larger scale.
However, the problem was not one of liquidity but rather the system
had simply too much debt and was insolvent. It was true in
2008 and it remains true today.
There is simply no way that the U.S.
with a GDP of $17 trillion can service a GAAP debt that is in excess
of $100 trillion. The math simply does not work even at
current
low interest rates which simply continue to extract wealth from the
middle class.
To hide the extent of the problem, pressure was brought upon the
Federal Accounting Standards Advisory Board by the U.S. Congress,
the U.S. Treasury and the Federal Reserve Bank to rewrite the GAAP
accounting rules to change them from "mark-to-market" to
"mark-to-make-believe".
If banks had been required to "mark-to-market" their loan portfolios,
several of the large banks would have been bankrupt. The bankruptcy
solution would have caused financial pain to many investors and reduced
contributions to politicians. It might have frozen the banking
system for some time.
It is obvious that many bankers and
politicians did not believe in capitalism but were socialists at
heart.
The liquidity solution of quantitative easing and currency
swaps with foreign countries and institutions did not
reduce the level of debt. Rather, today the level of
derivatives and shaky bank loans both here and abroad are greater
than in 2008.
Despite all the quantitative easing policies instituted by the
Federal Reserve system and increasing regulatory systems, the
economy in the first quarter of 2015 is barely limping along
according to the recent GDP data.
In fact, by changing the
methodology of calculating GDP, the Ministry of Truth was able to
show 0.2% growth in the 1st quarter of 2015. Of course, does
anyone really believe that the inflation factor (PCE) was actually
negative 0.1% during the quarter.
The Federal Reserve playbook is an equilibrium model based upon a bell curve approach
espoused originally by John Maynard Keynes.
James Rickards definition of the equilibrium is as follows:
"An equilibrium
model basically says the world runs like a clock, and
every now and then, there’s some perturbation, and it gets knocked
out of equilibrium, and all you do is you apply policy and push it
back into equilibrium. So it’s like winding up the clock again, and
it’s all good."
Unfortunately, the politicians and Keynesian academics did not realize that although JMK proposed
using debt financing to restart the economy, he also stated that the
debt should be repaid. By changing monetary and fiscal policy,
the economy could be manipulated and the interaction would resemble
a bell curve according to Keynes.
Bell Curve
However, the world is a complex place and complexity theory
is based upon the power curve which differs significantly from the
bell curve as shown below:
Actions which might fit the bell curve behave significantly
different if the power curve was operative. The failure
of the Federal Reserve policies to kick-start the economy is simply
that their model is incorrect.
A bell curve model is a central planning top-down model whereas
the power curve model is a bottom-up model. The Federal Reserve is
really a form of control and does not meet the principles of our
founding fathers who were against a central bank.
In 2013, the Federal Reserve system was 100 years old. When
it began, the dollar could be converted into either gold and/or
silver. Today, it is worth something less than a nickel based upon
the inflation created by the Federal Reserve policies and it can
only be converted in paper whose value just might become toilet
paper.
How any politician could look at the destruction of the dollar's
value and think that the Federal Reserve system had done a good job
in meeting its mandates and renew its charter is simply unfathomable
to me.
Conclusion
Daily, we are seeing the "social fabric" being
shredded by citizens and institutions with little or no respect to
the principles upon which the country was founded.
Unless a major upheaval occurs that changes the beliefs of the
dependency groups, politicans along with judicial activists will continue to tear up the social contract to meet the
demands of voters who primarily will be from the dependancy
group or advocacy groups like those seeking to destroy the concept
of marriage.
Kicking the can down the road has been the mantra for
politicians of both parties rather than addressing the issues of
healthcare reform, social security and disability fraud along with
inadequate funding that enables the current situation to exist.
Tom Clancy may have had half of the solution.
"Fly a 747 in to the
Capitol Building during a joint session of Congress and the Supreme
Court and wipe all the current elected officials."
That would solve the problem of tenure.
While that sounds like a solution, it does not solve the problem
of civil-servant government employees who really make the decisions.
You don't really think that those civil-servants will give up all
those juicy benefits and pensions, do you? Ask yourself why
Forbes in 2014 calculated that six out of the ten wealthiest
counties in the U.S. surround Washington, D.C.?
No, I am afraid that the "social contract" is shredded and about to
be torn asunder. I hope that my conclusion is wrong because it
will be our children and their offspring who will suffer the loss of
the freedom that we knew.
But then - 'Tis Only My Opinion!
Fred Richards
April 30, 2015
www.adrich.com
www.strategicinvesting.com
Corruptisima republica plurimae leges. [The
more corrupt a republic, the more laws.] -- Tacitus, Annals III 27
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