House Democrats want the CFPA to be an independent agency, but Republicans are opposed. As a result, Senators Chris Dodd and Bob Corker are thinking of making it an arm of . . . the Federal Reserve!

Both Democrats AND Republicans are missing the point. Only Congress – not unelected bureaucrats – should have power to write and pass laws. Please tell Congress to oppose the creation of the CFPA and tell them to introduce the Write the Laws Act (WTLA) instead.

You may borrow from or copy this letter . . .

I’m upset that Congress is considering the creation of a new regulatory agency, the Consumer Financial Protection Agency (CFPA). The CFPA would do more harm than good…

• it will regulate to supposedly protect consumers
• whereas other federal regulators are charged with protecting the health and solvency of these same institutions
• these differing objectives will lead to conflicting regulations
• that will cause harm to both consumers and the industry itself

And the CFPA is unnecessary…

• existing agencies already have consumer protection powers
• members of Congress claim these agencies haven’t regulated adequately or wisely, HOWEVER
• there’s no evidence that yet another new regulatory body will do any better

You, the members of Congress, have ultimate responsibility for policy. You can restrain the bureaucrats, and you can give them specific instructions. New bureaucracies are not needed; instead, Congress must assume its Constitutional responsibility for ALL regulations.

Frankly, I do not believe any new regulations are needed. If you abolished the Fed, granted free competition in currency, and allowed free banking, the market would regulate itself according to the demands of the people. But if you are convinced that federal regulations are needed, the least you can do is follow the Constitution!

• the Constitution reserves legislative power – including regulatory power - in YOU, not in unelected bureaucrats
• write specific legislation, with no details left to the bureaucrats
• Executive Branch agencies should be charged only with enforcing regulations, not with writing them

I therefore insist that you oppose the creation of the CFPA. Instead, introduce the Write the Laws Act.

A final note: I am particularly insulted by the proposal to make the CFPA an arm of the Federal Reserve. All 317 House members and 32 Senators who co-sponsored the Audit the Fed bills must be insulted, too. Please do everything in you can to prevent the expansion of the Fed’s powers.

Via DownsizeDC.org

Here are the highlights …

The Greek government is the latest to come close to default on their massive public debt. Greece has insufficient funds in their treasury to make even the minimum payments that are now coming due. Their debt level is about 120 percent of their gross domestic product and their public sector absorbs… 40 percent of GDP.

Any talk of cutting costs and spending is met with violent protests from the many Greeks heavily dependent on government payments.

Mounting fears of default sent shockwaves through their creditors and all of the eurozone countries. The European Central Bank (gave) assurances that Greece will get the aid it needs.

Is it possible that our Federal Reserve has had some hand in bailing out Greece? We don’t know, and current laws exempt agreements between the Fed and foreign central banks from disclosure or audit.

Greece is only the latest in a series of countries that have faced this type of crisis. Not too long ago the same types of fears were mounting about Dubai and Iceland. Several other countries (Spain, Portugal, Ireland, Latvia) are approaching crisis levels with public debt as well.

Many have strong ties to Goldman Sachs and the case could easily be made that default could have serious implications for big US banking cartels.

Considering the ties between the Fed and these big banks, is it outlandish to wonder if the US taxpayer is secretly bailing out the entire world, country by country? Unless laws are changed to allow a complete and meaningful audit of the Federal Reserve, including its agreements with foreign central banks, we might never know.

The American people have the right to know if they are going to be the ones holding the bag in the end because the Federal Reserve secretly put them on the hook for it.

This knowledge would be a key factor in peacefully dismantling this immoral and unconstitutional system.

Please, join Dr. Paul in support of the Audit the Fed bill. Use DownsizeDC.org’s Educate the Powerful System to tell your Congressional delegation to bring HR 1207 and S. 604 to a vote.

Here’s what I wrote in my personal comments . . .

I’m very concerned that the Federal Reserve has secretly bailed out Dubai and Iceland, and may soon do the same thing with Greece. If this is happening, I want to know about it. I also want to know if this is being done to benefit Goldman Sachs and other major U.S. banking interests. I want transparency. I want YOU to bring an end to crony capitalism. Please audit the Fed now.

Those of us concerned about the ever increasing level of government debt gasped at the astonishing $787 billion cost estimates for this bill. True to form it has actually cost 10 percent more at $862 billion. We heard over and over that government could not sit around and do nothing while people lost their jobs and houses. The administration claimed that unemployment would not go above 8 percent if the stimulus bill passed. Now, a year later, the government estimates that unemployment is over 10 percent. The real number is closer to 20 percent. It appears that those promises were total fabrications in order to close the deal.

In any case, the American people know that more government spending obviously equals more government. If the goal was to strengthen the private sector, Congress would have allowed businesses and individuals to keep more of their own money through meaningful tax cuts. Outrageously, the administration claims that they did “cut taxes” by reducing withholding, and that they have stimulated the private economy by increasing the amount of money in every worker’s paycheck. What they fail to mention is they did not change the total amount of taxes due. This means that all that money not withheld from paychecks will add up to a big unpleasant surprise when returns are filed this year. Many tax preparers are already seeing shocked taxpayers having to come up with big checks to the government when they normally expect a refund. Stimulus, indeed!

Read the rest.

Read the rest.

Finally, the USDA saw the writing on the wall. It is scrapping NAIS!

The USDA still has plans for an animal tracing system, but it is to apply only to animals moving in interstate commerce, meaning . . .

* animal owners won’t have to file a report every time an animal leaves their property, whereas under NAIS horseback riders, for instance, would have had to file a report every time they went for a ride
* there will be no premise registration
* those who raise animals for personal consumption or to sell in local markets won’t be part of the new regulatory system

Moreover, the new system promises . . .

• to focus entirely on animal disease traceability; bogus NAIS justifications such as “terrorism” have been scrapped
• “allow for maximum flexibility for states, tribal nations, and producers to work together to find identification solutions that meet their local needs”
• encourage low-cost technology; alternatives such as old-fashioned branding will most likely be accepted, instead of expensive RFID tags
• local and organic farmers will be represented

We at DownsizeDC.org are realists. We anticipate that as the new system takes shape, new concerns will arise. But think about what just happened . . .

The government ended a program because the people did not tolerate it.

We the people DO have the power.

We used this power to bring a significant victory for pet owners and livestock producers.

Now, let’s use this power to protect farmers from another threat.

You see, a dangerous “food safety” bill passed the House last year and could be voted on in the Senate at any time. Please tell Congress to scrap this legislation.

You may borrow from or copy this letter . . .

H.R. 2749 and the Senate’s S. 510 go overboard in their attempt to keep food safe.

• they burden farmers and small food producers with FDA inspections and hefty fees and fines – even though food contamination scares have originated from large industrial processors
• several requirements duplicate and override what is already done at the state level
• Congress’s constitutional authority is limited to interstate commerce, yet no distinction is made between producers who distribute food in interstate commerce and those who do not

Lastly, there is no evidence Congress or the Administration actually believe unsafe food is a serious or urgent threat to public health. If it was, you could have made the case to the American people a year ago and passed a bill. Instead, you set aside the issue entirely to focus on long-term issues like climate change and healthcare, both of which will take several years to implement.

I insist that you scrap this legislation. Any food safety bill you do pass should address what actually went wrong at large, corporate-owned processing plants. Do not punish small farmers and small businesses.

Via DownsizeDC.org

As we start the new year 2010, the establishment politicians, economists and Wall Street are trying to convince themselves that we have turned the corner and economic growth has once again begun. The predictions that conditions are getting back to normal come from those who never saw the crisis coming and don’t have the vaguest notion what caused it. Some of them concede that it could be a jobless recovery. That will establish a new definition for a recovery.

Official unemployment is at 10% but even the government knows that if everyone is counted, including those individuals that are too discouraged to even be looking for work, the unemployment rate is 17%. Free-market economists claim the actual unemployment rate is closer to 22%.

There’s reason to believe that the correction is just barely started and has a long way to run. If the financial bubble came from excess credit created by the Federal Reserve, doubling the money supply can hardly be a solution. It wouldn’t make much sense for a doctor taking care of a very sick patient from severe infection to deliberately give the patient another infection. Yet that’s what the PhD doctors are doing to our very sick economy. It can’t work. It will make the economy much sicker. If our leaders don’t wake up soon, the economy will be brought to its knees. Great danger lies ahead.

In foreign policy, it’s always crucial that the motives of those who would do us harm are understood. Denial of the truth and accepting more politically palatable excuses will guarantee that threats to our safety will continue as we pursue a seriously flawed involvement overseas.

It’s the same in economic policy. If there’s denial or ignorance of the real cause of financial bubbles and the inevitable corrections that must follow, the economy cannot be reenergized.

We should have learned the lesson from the Depression of the 1930s that it was a predictable result from the Federal Reserve’s orchestrated excesses of the 1920s. Instead, the new-born Keynesian economists who took charge made certain that the correction would not be a one or two year affair as were the previous corrections in our history. The aggressive intervention by Hoover and Roosevelt, the Republicans and the Democrats, turned a short recession into the Great Depression, which lasted until the end of World War II.

The real tragedy was that the interpretation of the 1930s institutionalized bad economic theories. Unfortunately, and erroneously, the Depression was blamed on the gold standard, free markets and a lack of regulations. Though monetary policy was analyzed, its importance was 100% misinterpreted. The low interest rates and excess credit of the 1920s, driven by Federal Reserve policy, was not considered a factor in producing the stock market bubble and the mal-investment.

Instead, the 1930s analysts and even later analysis by Milton Freidman and the monetarists, along with academic “scholars” like Bernanke, came to an opposite conclusion: the Fed was at fault but only because it was too tight, arguing that massive monetary inflation was the only answer to the slumping economy.

And now we are witnessing a grand experiment by the very person who for years claimed special knowledge regarding the Depression. Chairman Bernanke is in the midst of trying to solve the problem of massive monetary inflation and excessively low interest rates instituted by his predecessor, Alan Greenspan, by implementing even more inflation at historic rates. The sad part is the answer to his very risky experiment with the wealth of our country and the health of our economy will take years to analyze. The conclusions will be just as flawed as they were in the aftermath of the Great Depression by an intellectual and political community that had totally rejected commodity money and the principle of free market with the current understanding in Washington.

One hope, though, is that free-market thinking and Austrian economic theories will have greater influence in the next decade or two, since their influence is now on a dramatic upswing. But there are a lot of hurdles to overcome.

In the 1930s, in an effort to find the true cause of the crisis, Congress ordered an official investigation. It became known as the “Pecora Investigation” named after Ferdinand Pecora, the aggressive chief council of the hearings. It received a lot of public attention and brought about many major changes but, tragically, every conclusion made and new policies implemented caused the depression to worsen and legitimized bad economic theories that continue to haunt us to this day.

The Federal Reserve was not blamed except for not printing enough money fast enough. Artificially low interest rates and mal-investment, the main source of the grossly distorted economy and bubble of the 1920s, were exonerated. Not enough regulations were blamed, thus the Glass-Stiegall Act and the Securities Act of 1933 were passed and deepened the depression. Separating commercial and investment banking and the newly created SEC were to have solved all future problems-as long as the Fed was free from any restraint in its money creation operation to serve big-government spenders and members of the banking cartel.

Since the flaws in the monetary and economic system were not corrected but made worse after the Depression, it was to be expected that periodic booms and busts would persist. The longer these cycles could be papered over with new money and credit, the greater would be the distortions and debt that would one day have to undergo a major correction.

That correction is now in its early stages. Since the dollar was the reserve currency of the world and totally fiat since 1971, without any linkage to gold, the financial bubble became worldwide. This bubble that burst in 2008 was the largest in history. During the formation of the bubble, the U.S. as the issuer of the world currency received undeserved benefits. We essentially became the counterfeiter of the world and no one called us on it. Even today, the trust in the dollar that persists has buffeted the pain of the correction for us. This unique setup was a prime cause for our balance of payment deficits and the huge foreign debt we owe-the largest in the history of the world. The discord in the world financial system is telling us that it’s time for us to pay for our profligate spending and massive foreign indebtedness. We have lived, as a nation, far beyond our means and the message is, for the foreseeable future, that we will be forced to live beneath our means as this debt is paid.

The inflation optimists are excited about current signs of economic growth and have even announced the end of the recession. It is conceivable that a reprieve can be achieved and the penalty that our economy must endure delayed. A reprieve must not be confused with a pardon; one is a temporary delay, the other an exemption. The payback for our excesses is certain to come.

Massively increasing debt and monetary inflation can slow the crash and change some government statistics encouraging the optimists. But real job growth and return of prosperity will remain elusive. The odds of us once again becoming an exporter of manufactured goods, like steel, cars, and textiles, are remote.

Ironically, a reprieve may well restore some confidence and motivate some spending and investment. But instead of restoring long-term growth, it may well act perversely by precipitating price inflation and higher interest rates. Since today’s interest rates are artificially set, much of our investing is unproductively misdirected.

Current enthusiasm in the stock market is once again a reflection of the message that low interest rates send. Thus too, the government’s stimulus package has helped to sustain the bond bubble, which in time must be deflated in order to get back to sound economic growth. All of this activity poses a threat to the dollar.

Governments are very powerful, and when in partnership with the monetary authorities that can inflate the currency at will, big government thrives. Welfare demands and senseless wars can be financed for long period of time through inflation, as long as trust in the currency lasts. Trust, though ultimately controlled by facts, can be misleading, since currency values can gain benefit from a country that has a strong military and wealth and a reasonably healthy economy. Eventually, markets and reality overwhelm, and illusions about a currency’s worth become a reality.

Today, reality is setting in and the first of three major events has begun. The worldwide financial system, built on a foundation of paper, has received the shock waves of an impending collapse.

The wild speculation and the derivatives market, the stock market bubble, the insurmountable debt-public and private-and the massive mal-investments have been shattered.

The only solution so far offered worldwide, but led by the United States, has been to “print money” faster, keep interest rates low at practically zero percent, and remove all stops for controlling deficits. These are the very policies that caused the disequilibrium, and doing more of the same, but only faster, can hardly help our economy. The addiction to easy credit and deficit defies a wise political solution. Politicians are incapable of delivering the message of frugality, common sense, and sound money.

We can expect that the course we are on to continue and accelerate, since the first event, the collapse of the financial system, is still in its early stage.

The housing crisis is far from over; the commercial property crisis has not yet gotten much attention, and the financial obligations of the government are growing exponentially. And none of this forces the slightest pause in the expanding of welfare growth. The number of regulations, which are indeed a tax, are exploding though the market was already suffering from regulatory excesses. There’s a consensus in Washington that “wise” regulations can compensate for all the mistakes made by the Federal Reserve, the Executive Branch, and Congress. This fallacy has been around a long time and will be difficult to overcome.

The pessimism of the middle class continues to get worse despite the prognostication of Wall Street and the Administration. Most Americans know that the standard of living and real wages have not gone up for the past 10 years. If you’re not a shrewd stock trader and instead invested in stocks 10 years ago and held on, in real terms you would have lost 20% of your savings. The middle class is poorer also because house prices have crashed and many have lost their homes. On top of this, all we hear about is the trillions of dollars of debt and entitlement obligations that have been racked up for future taxpayers to pay. When it is revealed that the insider friends of the Fed and Congress get billions of dollars in bailout at the expense of the middle class, it’s no wonder the people are taking to the streets and directing their hostilities toward both Republicans and Democrats in Washington. Many would agree it’s well-earned anger and properly directed.

This anger and frustration will certainly grow as the consequences of the collapse of the financial system become more severe. The concerted effort to prevent the correction the market demands, guarantees a prolonged agonizing crisis. Every effort to reverse the tide will depend on spending, higher deficits, increased taxes and money creation. This effort is now providing another grand bubble: the dollar/bond bubble.

The next event will be a dollar crisis. A full-blown dollar crisis will be worse than our current financial crisis. The extent of a dollar crisis depends on whether or not the Washington politicians wake up and change their ways-a dubious hope.

More likely, the insanity will continue until some not yet known event will undermine the confidence of the dollar worldwide. Signs of less desire by foreigners to hold our dollars are already present. I’m certain our Treasury and Federal Reserve are pulling out all stops to prevent a massive run on the dollar. At present the “orderly” retreat from the dollar is working. But it won’t last.

China is quite active in investing in natural resources around the world, and including in Iran. While we live in the dark ages and believe only our military presence and military threats can protect our access to oil, China is actually spending some of their savings investing in their future access to energy and other precious metals and minerals.

But the orderly retreat from the dollar won’t last forever. Since 1973, shortly after the breakdown of the Bretton Woods Agreement, the dollar has lost 32% of its value against a Federal Reserve basket of currencies. But that doesn’t tell the real story, since that is a measurement against all other currencies, and they are fiat currencies as well. This gave the dollar an artificial benefit from its position of power in great wealth and military prowess. The dollar in relationship to gold, however, is down 97% since 1971, and 82% as measured by the CPI. The dollar, mismanaged by the Fed, has not been a benefit to the savers who sought to responsibly take care of themselves. They’ve been cheated by a rotten system and are just beginning to understand exactly how the Federal Reserve has been responsible for the swindle.

It is impossible to predict the time when confidence will be lost, but it can come quickly. Resorting to buying other paper currencies will not be of much help. When the dollar crashes, most likely the purchasing power of all currencies-since all countries hold dollars as a reserve-will go down as well.

This means that dollars and other currencies will go into buying consumer items, precious metals and other physical properties. Consumer prices will soar, as well as interest rates. The central bank will lose control; and the more they inflate, the worse the confidence becomes. The interest rates will respond to these efforts by rising sharply.

If the Fed tries to reverse the run on the dollar, interest rates will also soar, and the pain on the American citizens will be of such proportion that political chaos will result. Either scenario leads to political and social chaos-the third event, and the most dangerous.

With no ability of the federal government to fund its commitments, international or domestic, major changes will occur in our system. The social unrest will elicit cries for government to exert unusual force to head off a complete breakdown of law and order. The ultimate trap will be set for a system of government claiming to protect a free society. If more power and police authority are not given to the federal government, it will be argued that only anarchy will result. If more government policing power is given, it will mean a lethal threat to civil liberties. Already we have permitted the notion that a single person, the Attorney General or President, can decide who is an “enemy combatant”, thus denying that individual the right to habeas corpus, permitting indefinite detentions without charges made. This attitude toward civil liberties has changed significantly since the fear built around 9/11.

Yes, I know declaring one an “enemy combatant” is reserved for the radical Muslims engaged in terrorism against the United States. To be reassured by this reasoning is quite dangerous and naïve. Logic should not lead us to equate suspects with terrorists, and include American citizens, and yet this has already been set by precedent. Under difficult circumstances, our political leaders will not be hesitant to use these powers to maintain order. Tragically, the people may even demand it.

We are rapidly moving toward a dangerous time in our history. Society as we know it is vulnerable to political and social chaos.

This impending crisis comes as a consequence of our flawed foreign and domestic economic policies, a silly notion about money, ignorance about Central Banking, ignoring the onerous power and mischief of our out-of-control intelligence agencies, our unsustainable welfare state, and a willingness to sacrifice privacy and civil liberties in an attempt to achieve safety and security from an inept government. Dangerous times indeed!

What can be done about it? Must we wait for the inevitable and expect to restore our liberties in a street fight against the overwhelming power of the state? Not a good option!

The only way that we can prevent blood from running in the streets is to offer a better idea of the proper role of government in a society that desires first and foremost -liberty.

And that is impossible without a firm commitment by our thought leaders to the ideas of freedom, the source of all creative energy and prosperity. An all-powerful state is the threat to that ideal.

The prevailing attitude of the people-as it once was in early America-must be that of liberty and self reliance, rather than the nanny state and dependency relying on government force to mold all private choices.

If this is understood, a smooth-although not painless-transition to a free society is achievable. Ignoring this option will be very destructive to everything that is dear to the hearts of most Americans.

What is it that we must do? We must immediately embark on:
• Balance the budget by reducing spending
• Change our foreign policy to that of non-intervention
• A full audit and more supervision of the Federal Reserve leading to abolishing the Federal Reserve
• Legalize competition to the Federal Reserve with competing currencies
• Regain respect for civil liberties and privacy while reigning in the CIA
• Wean ourselves off the dependence of wealth transfers by government
• Abolish crony capitalism-no subsidies, no bailouts, no regulatory or tax privileges to protect the powerful elite, especially the military industrial complex
• Eliminate the income tax, inheritance tax and taxes on savings and dividends.

None of this can happen without the restoration of Congress to its dominant position of the three Branches of Government as was originally intended by the Constitution. The Executive and Judicial must be reined in, and Congress must assert its prerogatives over all legislation curtailing all unconstitutional agendae through budgetary controls.

Signs abound that angry Americans are now more ready than ever before for a change in direction that is indeed real. If this program were improvised-even suddenly and dramatically-the adjustment, though significant and to a degree somewhat painful, would be much shorter and of minor consequence compared to the chaos and poverty that will result if we refuse to change our gluttonous appetite for a free lunch.

Via Campaign for Liberty

The result of Brown’s flip-flop on healthcare is that he defeated Democrat Martha Coakley in last night’s Massachusetts special election to fill Edward Kennedy’s vacant U.S. Senate seat. This means that Democratic leaders no longer have the votes in the Senate to block a filibuster.

Now it will be almost impossible for the Senate to approve a version of the healthcare bill that’s acceptable to the House of Representatives. And House Democrats are already saying that there’s little chance they’ll approve the version of the bill previously passed by the Senate.

The healthcare bill is dying. It may already be dead. But, as the German philosopher Friederich Nietzsche once wrote, “That which is falling, let it also be pushed.”

Victory is near. Let’s not come up short. Run the race all the way through the finish line. Send another letter to Congress opposing the cancerous healthcare bill.

The victory caps a dramatic surge in recent days as Brown, a state lawmaker from Wrentham once thought to have little chance of beating a popular attorney general, roared ahead of Coakley to become the first Republican senator elected from Massachusetts since 1972.

With 73 percent of precincts reporting, Brown had 53 percent and Coakley had 46 percent.

In a race that became the center of national attention, Brown’s win is widely seen as a vote against the president’s agenda from one of the most reliably Democratic states. And in a particularly ironic twist, Brown, in succeeding Edward M. Kennedy — the late liberal lion who deemed health care “the cause of my life’’ — may well be the 41st vote to prevent the Democratic-led plan from moving forward.

Via The Boston Globe