Transparency

The Obama Rush

So far, President Obama has had fairly high ratings (at least according to the liberal media). I think that people in general like him--his person more so than his policies. I don't blame them. He seems like the sort of person I might like to have over for a BBQ or work with in the PTA, even though I disagree strongly with a majority of his policies.

Unfortunately, the President is taking advantage of his popularity, the strong support of the media, and the Democrat majority in the House and Senate to push his agenda through at an unprecedented pace. Perhaps that is wise politically, but it is extremely irresponsible and unfair to the American people--especially after promising transparency.

Since taking office Obama has rushed through an extremely large and expensive stimulus bill (so large no one could actually read it before voting on it), a massive budget that is larger than all previous budgets combined (article, article) and now he has issued an executive order for a council over the automotive industry (article, article, article). He is urging legislation that would increase the power of the Federal Reserve (actual bill, article, article, testimony of the Fed's Inspector General illustrating she doesn't know what they are doing , sign the Audit the Federal Reserve petition here) a somewhat hidden but very large energy tax under in the name of global warming (read the bill, Democrats hired a speed reader to read the 946 page bill, which is now 1201 pages) , and a universal health care plan that would open the door for complete government control over health care (read the bill, explanation of what's in the bill, video on health care, video on Canadian health care , another video on Canadian health care, sign a petition against the bill here). Other items on his agenda that are in progress are mandatory civilian corps service (first step passed the House, article with quotes by Obama and his wife about this goal, article, article), and has alluded to mandatory higher education (Obama's address to the nation, Fed 2009*).

All of these things that have been in the works so far have been rushed through with little time to even read the bills let alone debate them. The President and his allies need to slow down and allow the American people a little say in things, without shoving a one-sided agenda down their throats via the liberal media and a compromised Congress.

*"It is our responsibility as lawmakers and as educators to make this system work, but it is the responsibility of every citizen to participate in it.

So tonight I ask every American to commit to at least one year or more of higher education or career training. This can be a community college or a four-year school, vocational training or an apprenticeship. But whatever the training may be, every American will need to get more than a high school diploma.

And dropping out of high school is no longer an option. It's not just quitting on yourself; it's quitting on your country. And this country needs and values the talents of every American."--Barack Obama

A Letter from Utah Senator Orrin Hatch

I recently wrote to Utah Senator Orrin Hatch encouraging him to support H.R. 1207. He responded in a manner that is a bit upsetting to me. Here is an evaluation of his letter:

"Since the Federal Reserve Act was signed into law in 1913, the Federal government has had a role in ensuring the integrity of our country's financial system in order to protect American investors and consumers against such problems as bank failure. "

I can see how our financial system has maintained integrity since 1913. After all, think how poor everyone was then. The average yearly income was only $1296, gas was $0.12/gallon, a loaf of bread was $0.06, a gallon of milk was $0.36, a new car was $490 and a new house was $3,395, 2.6 times the average yearly income. (Gold is Money, progressive list of retail food prices). Now the median income is $50,233, the average is $67,609 (wikipedia: Household Income in the United States, Census Bureau: 2007 Report). The average home cost in 2007 was $299,100, or 4.4 times the average yearly income. (Census Bureau: 2007 Housing Report) We are so rich now because of them, aren't we?

They really have protected from depressions as well. There were a total of nine recessions between 1797 and 1913--a 116 year span. Since the Establishment of the Federal Reserve there have been a total of 16 recessions--a 95 year span (wikipedia: list of recessions in the United States). One of those recessions happened to be the Great Depression, which was caused by the bursting of a bubble created by the Federal Reserve expanding the money supply by more than 60% between 1921 and 1929 (Murray Rothbard, America's Great Depression), and then hiking interest rates from 3.5% to 6% and contracting the money supply suddenly in 1929 (Lawrence W. Reed, Great Myths of the Great Depression).

"The Federal Reserve System is a mixture of public and private entities. The Federal Reserve Board has been granted the authority by Congress to set monetary policy and to regulate commercial banking activities. While the Federal Reserve System was established as an independent agency, the President of the United States appoints the seven members of the board with the appointments subject to confirmation by the Senate. Congress also has the power to modify the Federal Reserve System."

What he means is that the Fed is a private bank granted special privileges by the government and given an official sounding name to make us all think they are a part of the government. They are given a monopoly over money because of a law that states that their currency is legal tender and you must accept it as payment, and you must pay your taxes with their currency. Why would the government do this? Why, because the Federal Reserve, who can print as much money as they want for nothing, has promised to buy all government bonds that are not purchased by other people so that the government can afford to do whatever it wants to do. Like have a $3 trillion budget, or buy car companies, or fund expensive and invasive health care plans.

As for the seven members of the board appointed by the President, they have 14 year terms (wikipedia: Federal Reserve System). That means Presidents can come in and out of office without appointing anyone. We don't vote for the board although they control our money. And Hatch claims the Congress has power to modify the Federal Reserve System, but they won't. As illustrated by Hatch's letter later on where he says, "I am hesitant to support proposals to further erode the independence of the Federal Reserve System or to intrude on the setting of monetary policy." And he claims to be a conservative.

Hatch goes on to say:

"While many people have questioned the constitutionality of the Federal Reserve System based upon provisions in the Constitution which give Congress power to "coin money and to regulate the value thereof," the Congress has appropriately assigned theses authorities to government agencies. For example, the Internal Revenue Service (IRS) has been given authority to collect taxes. Similarly, the Federal Reserve System has been delegated the authority to establish monetary policy."

If that is the justification for the Fed it is a very large stretch. For one thing, the Constitution does not give Congress the power to delegate that responsibility. For another, the IRS did not exist until 1862 (wikipedia: income tax, IRS), the same time the income tax was put in place. The founders of our nation and constitution did not put such measure in place and I do not think those measures are justified now--but that is another post.

Hatch also claims that compared with foreign central banks, "the Federal Reserve System appears to be very forthcoming in disclosing policies and open to receiving suggestions."

Sorry, but I don't think comparing bad to worse is justification for not holding them under accountability and creating transparency. Central banks shouldn't even exist for reasons I have listed in previous blogs.

Just as a note, Utah Senator Bob Bennett refuses to give a position on the issue.

Conspiracy

Conspiracies are nothing new or unusual in the history of the world. In the days of Julius Caesar, 60 senators plotted and carried out his murder on the Ides of March, stabbing him to death as he read a false petition (Wikipedia: Assasination of Julius Caesar). John Wilkes Booth and other conspirators plotted the assassination of President Abraham Lincoln (Wikipedia: Abraham Lincoln Assasination). If you read the Book of Mormon you will find a historical (and religious) account of the ancient Americas. Governments were often overtaken by conspirators such as the Gadianton robbers who disguised themselves among the people and infiltrated the governments ( *Helaman 6:15-32*; Helaman 7:4-5; 3 Nephi 2:10-13; Helaman 3:23 ). Even Jesus Christ himself was a victim of conspiracy. Most are familiar with the story of how the leadership of the Jews plotted his death without the knowledge of the common people. Where there is power and money, there is bound to be conspiracy by those seeking to control it.

Therefore, it is reasonable to assume that there is some measure of conspiracy in high levels of government and where money is controlled. I am not implying that all people in those positions are a part of a conspiracy, or that all of them are unknowingly influenced by it. I am simply stating the likelihood of the existence of conspiracy. You would be sticking your head in the sand to deny that there is any conspiracy or corruption in the government or the financial system.

But what does the conspiracy look like? Where does it come from? What makes it so bad? Conspiracy existed before the earth did and we can find an example of it in a book called the Pearl of Great Price (translated from the Dead Sea Scrolls by Mormon prophet Joseph Smith). This account of the preexistance is common knowledge among members of the Church of Jesus Christ of Latter Day Saints. I know there are a lot of false rumors and prejudice about this church, but please take off your blinders a few minutes and open your hearts to this doctrine. It is essential to understanding many of the problems that exist in this world.

Before we came to earth God counseled with all His children (you and me included) about what life would be like on this earth. Satan claimed that by his plan everyone could go to heaven. However, God cast him out of His presence because "...Satan rebelled against me, and sought to destroy the agency of man, which I, the Lord God, had given him." (Moses 4:1-4) Surely if people were allowed to choose they would inevitably make some bad choices. Rather than allow people to suffer the consequences of their erroneous choices (and be rewarded for consequences of good choices) he preferred that someone else, (himself, no doubt) make the choices for everyone to ensure that they made "good" ones. With a plan like this, Man would be denied all means to true happiness that is gained from overcoming obstacles and learning from mistakes. He perpetuates this plan now. Satan wants to deprive us of our agency physically, financially, psychologically.

Fortunately for all of us, God chose to allow us to choose for ourselves and make mistakes. He sent Christ to give us a chance to start anew after making those mistakes in order for us to learn from them. He wants us to take this opportunity and follow Christ for our own good, yet He does not force us to take this path. In other words, he provided for gratitude, knowledge, and progression. We came to this earth planning and hoping to use our agency correctly -- agency which we knew would be available here.

So getting back to the point, our constitution was created by men who left their homelands for for freedom of religion and who fought their mother country for the right to control their own property. They were fighting for the right of every man to exercise his own agency. It was inspired by God and modeled after His plan. The rights to life, liberty, and property were to allow men to choose for themselves, make mistakes for themselves, receive consequences of their choices, and learn from those choices.

But there is opposition in all things (2 Nephi 2:11), and there are always those minions of the Devil working to fight against God's plan. He finds those on earth subject to the temptations of power and money and utilizes them to bring about his plan. These are the conspirators, among others, who attempt to emulate the imprisoning plan of Satan. Some claim they have good intentions, wanting to usurp freedoms for "our own good" or for the "greater good". Just as Satan wanted to do in the beginning. Whether their intentions are good (for "our own good") or evil (for personal gain) is irrelevant.

Let me be a little more specific. An example of taking away the consequences of actions for the "greater good" would be the government bailing out industries that have made unwise choices. Along with the bailout money the government imposes various new regulations on these industries and companies that they must comply to, restricting their agency even more--to prevent them from making more bad choices (in theory).

An example of taking away the agency of the people would be when the government decided that a certain percentage of everyone's paycheck be put towards their retirement. It didn't matter if they had a large savings or inheritance, or were investing on their own. It didn't matter if they needed that money for food just to get by right now. They had no choice in the matter.

Another example of taking away our agency is when our ability to use our property--our money-- as we see fit. When it is controlled by those who can inflate and thus make our money worth less and less by printing as much of it as they please, it takes away our purchasing power. This is not obvious to us immediately and so they do so without our knowledge or permission. It is a form of robbery and prevents us from choosing how we would have spent that money had it been in the form of something of relatively stable value such as gold or silver.

As you educate yourselves in preparation to vote on initiatives, policies, and for politicians to represent you, keep these things in mind. Look at the consequences of the laws being proposed and the stances the politicians take on those laws. Look for consequences both seen on the surface and more indirect and hidden consequences. Do they take away the agency of the people? Do they take away consequences of people's choices? Whose plan is it modeled after?

Remember the great conspiracy of Satan and that he would have you in chains if he could. But he can only do this if we allow it to happen. The beautiful thing about the way our government is set up is that conspiracies and corruption can be rooted out and overthrown if enough people open their eyes and vote out those who intentionally or unintentionally seek to thwart our freedom. Please educate yourself, look beyond the surface and analyze the true consequences of what our representatives are doing.

Online Political Arguments

I have noticed that when many people engage in political conversations over the internet, specifically through online editorial comments, they tend to use terms like "idiots", "morons", "stupid", "treehugger", "gun-loving", "whiner" and other such derogatory terms. I really don't know what they are trying to accomplish by this other than making themselves feel smart and superior.

When I see things like, "These people are a bunch of morons!" or "Are you really that stupid?" I wonder if they are actually trying to convince someone of their point of view. I don't know anyone who would admit they were wrong, whether or not they are wrong, when someone is shoving insults down their throat. I tend to think online discussers who use such terms just like to argue and make themselves feel good.

If they really wanted to convince someone of their point of view they ought to both listen and speak respectfully. Everyone has different life experiences that affect the way they interpret information. We ought to learn from the experiences of others and take them into consideration, not just assume that our way is the best way. We ought to educate ourselves about multiple approaches and perspectives so that we can understand why those who disagree with us feel and think the way they do. If you are learning with a mind set to prove yourself right you may not truly be learning. Really, none of us could possibly be right about absolutely everything. It is important to be open to new ideas, to facts, and to reason--and especially to the idea that we might be wrong sometimes.

If in the end you still feel the same way about the issue, that's great! Your knowledge is stronger, more in debt, and most importantly--not blind. And you will be enabled to speak respectfully with facts and reason to those who disagree with you without needing to result to insults and degradation.

Bastiat's "Private and Public Services"

Mises.org has posted my recording of Bastiat's "Private and Public Services". Please, everyone, take a listen! It's less than an hour long; you can burn it on a CD and listen to it on your commute. This article by Bastiat reasons in favor of keeping services in the private sector excluding those that specifically require the use of force (such as defense and public properties). It's a fantastic article. The full text is available in PDF here.

Audit the Federal Reserve

In a recent address, President Obama gave a reason for why the government is giving money to banks instead of directly to the American people. He said that for every one dollar the government gives to a bank equals eight or ten dollars in loans for Americans. Stop for a minute and think about what that means. One dollar is worth more to a bank than it is to you? I'm going to attempt to explain why that is the case, and what it means to you.

We currently have a fiat money system. Which means that our money is backed by, well...nothing. I take that back. It is backed by something. It is backed by debt. In order to explain what I mean I am going to take an excerpt from the book The Creature from Jekyll Island by G. Edward Griffin, which describes the way the Federal Reserve and our current monetary system works.

"The federal government adds ink to a piece of paper, creates impressive designs around the edges, and calls it a bond or Treasury note. It is merely a promise to pay a specified sum at a specified interest on a specified date....The bond is given to the Fed where it is then classified as a Securities Asset...which can be used to offset a liability. [An asset is something that makes you money. A liability is something that costs you money.] It then creates this liability by adding ink to yet another piece of paper and exchanging that with the government in return for the asset.

"That second piece of paper is a Federal Reserve Check. There is no money in any account to cover this check. Anyone else doing that would be sent to prison....in accounting terms, the books are said to be 'balanced' because the liability of the money is offset by the 'asset' of the IOU. The Federal Reserve check received by the government then is endorsed and sent back to one of the Federal Reserve banks where it now becomes a government deposit...it is used to pay government expenses and, thus, is transformed into many Government Checks.

"These checks become the means by which the first wave of fiat money floods into the economy. Recipients now deposit them into their own bank accounts where they become Commercial Bank Deposits.

"Commercial bank deposits...are liabilities to the bank because they are owed back to the depositors. But, as long as they remain in the bank, they are also considered as assets because they are on hand....Through the magic of fraction-reserve banking [the practice I mentioned previously -- Obama stating where the same money is loaned to multiple people at the same time], the deposits are...reclassified in the books and called Bank Reserves.

"...Here's how it works. The banks are permitted by the Fed to hold as little as 10% [or the current rate] of their deposits in 'reserve.' That means, if they receive deposits of $1 million from the first wave of fiat money created by the Fed, they have $900,000 more than they are required to keep on hand....that $900,000 is called Excess Reserves.

"...Now that they have been transmuted into an excess, they are also considered as available for lending....these excess reserves are converted into Bank Loans.

"But wait a minute. How can this money be loaned out when it is owned by the original depositors who are still free to write checks and spend it any time they wish? Isn't that a double claim against the same money? The answer is that, when the new loans are made, they are not made with the same money at all. They are made with brand new money created out of thin air for that purpose. The nation's money supply simply increases by ninety per cent of the bank's deposits. Furthermore...the old money, which they received from depositors, requires them to pay out interest or perform services for the privilege of using it. But, with the new money, the banks collect interest, instead, which is not too bad considering that cost them nothing to make. Nor is that the end of the process. When this second wave of fiat money moves into the economy, it comes right back into the banking system...in the form of More Commercial Bank Deposits.

"The process now repeats but with slightly smaller numbers each time around....It takes about twenty-eight times through the revolving door of deposits becoming loans becoming deposits becoming more loans until the process plays itself out to the maximum effect, which is...

"Bank Fiat Money = Up to 9 Times the National Debt. The amount of fiat money created by the banking cartel is approximately nine times the amount of the original government debt which made the entire process possible. When the original debt itself is added to that figure we finally have...

"Total Fiat Money =Up to 10 Times the National Debt. The total amount of fiat money create by the Federal Reserve and the commercial banks together is approximately ten times the amount of the underlying government debt. To the degree that this newly created money floods into the economy in excess of goods and services, it causes the purchasing power of all money, both old and new, to decline...The result is the same as if that purchasing power had been taken from us in taxes. The reality of this process, therefore, is that it is a Hidden Tax = up to 10 Times the National Debt....And that still is not the end of the process. Since our money supply is purely an arbitrary entity with nothing behind it except debt, its quantity can go down as well as up. When people are going deeper into debt, the nation's money supply expands and prices go up, but when they pay off their debts and refuse to renew, the money supply contracts and prices tumble. That is exactly what happens in times of economic or political uncertainty. This alternation between periods of expansion and contraction of the money supply is the underlying cause of Booms, Busts, and Depressions.

"Who benefits from all this? Certainly not the average citizen. The only beneficiaries are the political scientist in Congress who enjoy the effect of unlimited revenue to perpetuate their power, and the monetary scientists within the banking cartel called the Federal Reserve System who have been able to harness the American people, without their knowing it, to the yoke of modern feudalism. "

It's no wonder our leaders seem to think that a lending freeze is such a crisis. It's no wonder that they get upset when we save our tax returns and stimulus checks instead of spend them. The way our monetary system is set up is completely immoral. We are encouraged to live beyond our means. That is why you have a higher credit score with 20 maxed out credit cards as long as you make the minimum payment than you do if you have 1 credit card that you pay off every month and a mortgage you pay extra on. The whole system is contrary to what common sense would tell you, and our prophets advise (referring to the prophets of the Church of Jesus Christ of Latter Day Saints)[See Climbing Out of Debt, Pay Thy Debt and Live] .

Being in debt to someone is being in bondage to them. I am trying to pay down my home mortgage as quickly as possible because if I fail to pay the mortgage company a certain sum every month they can take my home away from me. Fortunately for me, that is the only debt I have. I am not held down by monthly car payments, credit card payments, student loan payments, etc. That was not always the case for me and I can promise that I have much more freedom now than I did then.

I would have even more freedom if I had several months worth of paychecks or more set aside as a cushion. If everyone had that cushion of savings think of how stable the economy could be. You wouldn't see the kinds of foreclosures that we are seeing now because people would have several months or more to find a new job if they could still make all their payments, and without government assistance. Many more jobs would be saved because people wouldn't suddenly be unable to spend what they were spending before. And with fewer job losses obviously there would be less of a problem. A recession wouldn't be nearly as devastating if an economic downturn even was able to reach the label of "recession" to begin with.

But that is not what our current system encourages. You are taxed on the interest you earn in your savings and given tax breaks on the interest you pay on your mortgage.

In Obama's book, The Audacity of Hope, while discussing the opportunity to pay down the national debt at the end of Bill Clinton's presidency, he states the following, "In fact, Federal Reserve Chairman Alan Greenspan expressed concern that the debt might get paid down too fast, thereby limiting the Reserve System's ability to manage monetary policy." p187 He did not want us to pay down the national debt. If everyone were to pay off their debts, under our current system there would be no money left.

This constant debt is all made possible by the Federal Reserve System. Wikipedia states,

"The Federal Reserve System is...a quasi-public banking system that comprises the presidentially appointed Board of Governors of the Federal Reserve System in Washington D.C.; (2) the Federal Open market Committee; (3) twelve regional privately owned Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the U.S. Treasury, each with its own nine-member board of directors; (4) numerous other private U.S. member banks, which subscribe to required amounts of nontransferrable stock in their regional Federal Reserve Banks; and (5) various advisory councils"

Note that the banks are privately owned and yet they are fiscal agents for the U.S. Treasury.

Now consider the $700 billion bailout package, several billion dollars going to car companies and AIG, and our proposed $3 trillion budget. Our government borrows money from private banks who create money out of thin air, and then pays them back interest on it. Even at a low interest rate you will be paying a lot of interest on $3 trillion!

In addition to this, the Federal Reserve cannot be fully audited by any outside entity. Law specifically says that we cannot audit any foreign transactions they are involved in, anything having to do with monetary policy (which is pretty much everything), communications between the boards of governors, and various other items (U.S. Code Collection). Basically they can do whatever they want with our money supply but they are not answerable to the taxpayers.

Abolishing the Federal Reserve is an important step of stablizing our monetary system. However, it is unlikely that this will happen until their actions can be exposed. A bill going through the House of Representatives right now, called the Federal Reserve Transparency Act of 2009 (H.R. 1207), if passed, will change the law and require a full audit of the Federal Reserve by 2010. It has support by both Republican and Democrat congressional leaders. Please contact your representatives and encourage them to support this bill. You can find your representatives at house.gov and senate.gov.