Down and Out in the Middle-Class Economy

The truth about growth, recovery, and unemployment by D.W. Mackenzie:

The president recently boasted of the success of his administration’s economic policies, which he calls “middle-class economics.” He describes his approach as “helping working families feel more secure in a world of constant change.” Who can blame him? People like to feel secure.

Given the nature of politics, we should expect politicians to embellish their policy accomplishments and downplay their failures. But Obama’s recent claims regarding our true economic conditions have gone well beyond embellishment and evasion to outright falsehoods. It’s either mendacity or denial.

One need only look at the facts to get some perspective on the real state of the economy.

1. Economic growth

President Obama claims that “we’ve seen the fastest economic growth in over a decade” — but there is no evidence for this claim. Actual GDP growth rates have been unusually low in recent years, even as GDP measures liberally include both fat and muscle.

A casual glance at the above graph is enough to disabuse the electorate of the idea that growth has been fast or stellar. Yet, President Obama would like to craft the narrative that his administration’s policies have not only rescued the economy, but set it ablaze.

2. Recovery

The “recovery” of the last six years is even worse than the above graph indicates. While the GDP growth rate has been historically low, it should have been at historic highs. Why? The economy has much untapped potential.

Potential GDP has been well above actual GDP since 2008. Potential GDP is an estimate of what would be produced if labor employment and capital utilization were as high as can reasonably be expected. The next graph shows that there have been unsustainable booms in the past 25 years. Actual GDP fell slightly below potential GDP during the 1991 and 2001 recessions. Actual GDP reached unsustainable levels above potential GDP during the dot-com and subprime booms. Growth during these booms was limited by availability of labor and capital goods.

Growth in the past six years has barely reduced the gap between actual and potential GDP. Given the large untapped potential in the economy, GDP growth should have been faster than it was during any other expansion in the past half century, but that didn’t happen.

3. Unemployment

Real statistics reveal a boom-bust cycle in the economy up to 2008 and a persistent gap between actual and potential GDP since 2008. The lack of a real economic recovery since 2008 has had dire consequences for American workers. President Obama claims that “our unemployment rate is now lower than it was before the financial crisis,” but this statement is also false. The U-6 unemployment rate gives us a true indication of economic conditions when it comes to putting people back to work.

Full accounting of unemployment shows the unemployment rate in double digits since 2008. The lack of a real recovery has left millions unemployed. The president dodges the failure of the “economic stimulus” in his 2009 Recovery and Reinvestment Act by focusing on the official U-3 unemployment rate — a statistic that ignores millions who have simply given up looking for work in recent years, but are able.

Something new?

The president said something recently that we should take seriously, however: “When what you’re doing doesn’t work for fifty years, it’s time to try something new.”

Federal officials have been trying to “manage the economy” with fiscal and monetary stimulus for half a century. Presidents began taking the advice of demand-side economists during the 1960s, and there has been little deviation from this practice since then, even during President Reagan’s supposed “supply-side” years. The results of the policies favored by both President Obama and his predecessors are clear: management of the economy delivers a boom-bust cycle at best and relative stagnation at worst.

The real evidence indicates that we are living in the worst period of this federally managed economy. President Obama’s “middle-class economics” is nothing more than the same old demand-side economics, only on steroids. Fiscal and monetary “stimulus” policies of the past six years have been some of the most ambitious ever tried.


D. W. MacKenzie is an assistant professor of economics at Carroll College in Helena, Montana.

Sheriff David A. Clarke, Jr.: Irresponsible Groups Descended on Ferguson, MO ‘Like Vultures on a Roadside Carcass’

NATIONAL PRESS CLUB, WASHINGTON D.C.– Sheriff David A. Clarke, Jr. talks about Ferguson Missouri and how politicians and irresponsible groups came like vultures on a roadside carcass to exploit the situation. Eric Holder made a bad situation worse with his self-serving rhetoric. 9-17-14

Clarke is a lifelong resident of the City of Milwaukee and in March 2002 was appointed Sheriff by Governor Scott McCallum, and eight months later was elected to his first four-year term, earning 64%of the vote. Sheriff Clarke is now in his third term, having been re-elected in November 2006 and 2010, increasing his victory margins to 73% and 74%.

Clarke graduated summa cum laude from Concordia University Wisconsin with a degree in Criminal Justice Management, and in May 2003, Concordia honored him with their Alumnus of the Year Award. Sheriff Clarke also is a graduate of the FBI National Academy in Quantico, Virginia. This prestigious school trains law enforcement executives from all over the world, and provides management and leadership instruction. In July 2004, he completed the intensive three-week Program for Senior Executives in State and Local Government, at the John F. Kennedy School of Government at Harvard University.

Sheriff Clarke was honored in May 2013, with the Sheriff of the Year Award from the Constitutional Sheriffs and Peace Officers Association for, “demonstrating true leadership and courage. . . staying true to his oath, true to his badge, and true to the people he has promised to serve and protect.”

For more information visit:

It’s Not Just Brian Williams Who Lies

“When reporters forfeit their credibility by making up stories, sources, or quotes, we are right to mock them. When their violations are significant or repeated, they should be fired,” says Charles Lipson, a professor of political science at the University of Chicago. “Demanding honest reporting has nothing to do with the reporter’s politics, personality, or personal life. It is about professional standards and our reasonable expectations.”

Writing at, Prof. Lipson concluded by saying, “It’s essential for our news organizations, and it matters for our democracy.”

Are we seeing a trend here? Dan Rather at CBS and now Brian Williams at NBC? Well, two news anchors are not a trend, but biased and bad reporting is. It’s not new, but it does seem to be gathering momentum and nowhere has it been more apparent than the millions of words written and spoken about “global warming” and now “climate change.”

It would be easy and convenient to lay the blame on America’s Liar-in-Chief, President Barack Obama, but the “global warming” hoax began well before he came on the scene. It was the invention of the United Nation’s Intergovernmental Panel on Climate Change (IPCC) dating back to its creation in 1988 when it was established by the UN Environment Program and the World Meteorological Organization.

The IPCC came to world attention with the creation of the Kyoto Protocol, an international treaty that committed the nations that signed it to reduce “greenhouse gas emissions” based on the premise that global warming—a dramatic increase—was real and that it was man-made. The Protocol was adopted in Kyoto, Japan, on December 11, 1997. The United States Senate rejected it and our neighbor, Canada, later withdrew from it. Both China and India were exempted, free to continue building numerous coal-fired plants to generate the energy they need for development.

Today, though, the President is an unrelenting voice about the dangers of “climate change” which he and John Kerry, our Secretary of State, have rated the “greatest threat” to the world. Obama’s national security strategy document was released just a day before he equated the history of Christianity with the barbarism of today’s Islamic State.

The national security document included terrorism to which it devoted one out of its 29 pages. Essentially Obama sees all the problems of the world, real and imagined, as challenges that require “strategic patience and persistence.” This is his way of justifying doing nothing or as little as possible.

Still, according to Obama, the climate is such a threat, his new budget would allocate $4 billion to the Environmental Protection Agency for a new “Clean Power State Incentive Fund” to bribe more states to close even more power plants around the nation. He wants to increase the EPA’s overall budget by 6% to $8.6 billion. The Republican Congress is not likely to allocate such funding.

As for the environment, there have been so many lies put forth by the government and by a panoply of environmental organizations of every description, buoyed by legions of “scientists” and academics lining their pockets with billions in grants, that it is understandable that many Americans still think that “global warming” is real despite the fact that the Earth is now 19 years into a well-documented cooling cycle.

Not only are all the children in our schools still being taught utter garbage about it, but none who have graduated in recent years ever lived a day during the non-existent “global warming.”

On February 7, Christopher Booker, writing in The Telegraph, a British daily newspaper, wrote an article, “The fiddling with temperature data is the biggest science scandal ever.” You are not likely to find any comparable reporting in a U.S. daily newspaper.

Citing research comparing the official temperature graphs from three weather stations in Paraguay against what had originally been reported by them, it turned out that their cooling trend had been reversed by the U.S. government’s Global Historical Climate Network and then amplified by “two of the main official surface records, the Goddard Institute for Space Studies (Giss) and the National Climate Data Center.”

Why should we be surprised that the national media continues to report on “global warming” when our government has been engaged in the deliberate distortion of the actual data? It is, however, the same national media that has provided virtually no investigative journalism to reveal what has been going on for decades.

What fate befalls Brian Williams is a mere blip on the screen of events. At this writing, I cannot see how NBC could ever keep him as the managing editor and news anchor.

What matters regarding much of the product of the mainstream media is the continuing torrent of “news” about “global warming” and “climate change”; the former is a complete hoax and the latter a factor of life on planet Earth over which humans have no control, nor contribute to in any fashion.

© Alan Caruba, 2015

President Obama’s ‘War on Christianity’

Never in the history of the United States has there been a President who has aligned himself with so many anti-Christian elements in America. President Obama promised when elected in 2008 to heal the divides in the nation and fundamentally transform it. Many took these promises as a positive, time has shown these promises have had a negative impact on America and Americans, particularly those of the Christian faith.

Anti-Christian groups in America include: Communists, atheists, agnostics, shariah compliant Muslims, homosexuals, transgenders, lesbians and members of certain religious sects. The targets of these groups include: Christians, Jews, Evangelicals, blacks and Hispanics of faith, and those who share a love for the Holy Land (Israel).

President Obama, both domestically and internationally, has taken policy stands that are nothing less than anti-Christian.

Perhaps it is best to understand how, little by little, President Obama has come to embrace those who are most violently opposed to Christians (and Jews) domestically and globally.

Here are some of President Obama’s domestic policies that are anti-Christian:

  1. The Affordable Care Act – The Affordable Care Act has impacted religious liberty by requiring faith based institutions to provide services which are against their Christian beliefs. Religious News Service reporter Kathleen O’Brian notes that Afordable Care Act religious exemptions are hard to get. O’Brien notes, “Under the [ACA] bill, anyone claiming an exemption on the grounds of religious beliefs would have to include a sworn affidavit on their annual tax return. In addition, they would lose the exemption if they sought and received medical care during that tax year.” In 2014 the U.S. Supreme Court rules against Obama in the Hobby Lobby contraception case. This ruling, at least temporarily, held back the anti-Christian ACA onslaught.
  2. Repeal of Don’t Ask Don’t Tell – President Obama is clearly in the homosexual camp when it comes to domestic policy. The repeal of Don’t Ask Don’t Tell is a prime example of an anti-Christian policy to transform our military from a Christian force for good into a secular petri dish for pro-homosexual social policies. In July 2011, reported, “Last year President Obama led the charge to repeal ‘Don’t Ask, Don’t Tell’ that now allows open homosexuality in the military. Obama’s political payoff has altered the fabric of our military and now our military chaplains have become the victims. Christian chaplains have been ordered to go along with homosexual sin or face administrative discharge, even though they were promised that their sermons, counseling, prayers and worship could remain the same.” Commanders, soldiers and Chaplains are now subject to courts martial if they publicly profess their Christian faith.
  3. Medicare, Medicaid and “Gender Reassignment” Surgery – As recently as December of 2014, New York Governor Cuomo approved the use of Medicaid funds for low income sex change operations. In a December 17, 2014  New York Post article Carl Campanile reported, “Gov. Cuomo approved a new policy Tuesday night allowing impoverished transgender New Yorkers to bill taxpayers for sex-change surgery. The Cuomo administration issued new rules requiring New York’s highest-in-the-nation $55 billion Medicaid program — the government health-insurance program for the needy — to foot the bill for ‘gender reassignment’ operations.” Medicare also covers “gender reassignment” operations according to the National Center for Transgender Equality. The use of public funds to support sex change operations offends those of faith. The use of public funding to promote transgenderism is not a Constitutional role for the federal government.
  4. Presidential Executive Orders – President Obama has used the power of his pen to force Christian organizations and businesses to betray their religious beliefs or face stiff penalties and possible criminal prosecution. Todd Starnes from Fox News reported in July 2014, “President Obama signed an executive order Monday barring federal contractors from discriminating on the basis of sexual orientation and gender identity – ignoring the pleas of Christian and other faith leaders to include an exemption for religious organizations… The executive order would prevent Christian and other religious organizations with federal contracts from requiring workers to adhere to the tenets of their religious beliefs. Christianity Today reports the order could impact religious non-profits such as World Vision, World Relief and Catholic Charities.”
  5. Department of Justice failure to defend in court the Defense of Marriage Act (DOMA) – The U.S. Congress passed and President Bill Clinton signed into law the Defense of Marriage Act (DOMA) in 1996. In September 2014,’s Terrance P. Jeffrey reported: President Barack Obama praised retiring Attorney General Eric Holder yesterday for advancing the cause of same-sex “marriage” in the United States by refusing to defend federal law. “And several years ago,” Obama said in a joint appearance with Holder at the White House, “he recommended that our government stop defending the Defense of Marriage Act–a decision that was vindicated by the Supreme Court, and opened the door to federal recognition of same-sex marriage, and federal benefits for same-sex couples. It’s a pretty good track record.” In his own statement at the event, Holder praised Obama for advancing the “visions” he said he and Obama had “always shared.” The vision always shared was and remains an anti-Christian one.

Here are some of President Obama’s foreign policies that are anti-Christian:

  1. Failure to support and defend the Holy Land – President Obama has instituted policies and made public statements attacking Israel and its Prime Minister. What many do not see is that Israel is in fact the protector of the Holy Land. The birth place of Judaism and Christianity.
  2. Obama Declares The Future Must Not Belong to Practicing Christians at the United Nations – In September 2012 Erick Erickson wrote: In his speech to the United Nations General Assembly today the President of the United States declared that the future does not belong to practicing Christians. Already, the media and the left are in full denial, probably based on their general lack of understanding of theology. This would have been a gaffe had Mitt Romney said it. But with Barack Obama, he’s just speaking bold truths. His bold truth declares that the future does not belong to practicing Christians.Pay careful attention to what he says.” Obama has repeatedly stated “The future must not belong to those who slander the prophet of Islam.” Christians have failed to fully comprehend what President Obama stated in 2012 and on many occasions since.
  3. President Obama’s Absence at the Charlie Hebdo Rally in Paris – Reuters reported, “The absence of President Barack Obama or any top members of his administration from a huge march in Paris on Sunday to honour victims of Islamist militant attacks raised eyebrows among some in the US media. French President Francois Hollande and some 44 foreign dignitaries, including leaders from Germany, Italy, Britain, Turkey, Israel and the Palestinian territories, led up to two million people in what commentators said was the largest crowd in Paris since its liberation from Nazi Germany in 1944. Islamist militants killed 17 people, including journalists and police, in three days of attacks in the French capital last week. The United States was represented at Sunday’s march by its ambassador to France, Jane Hartley. But commentators on some US media outlets questioned why Obama did not attend or send a top administration official such as Vice President Joe Biden or Secretary of State John Kerry.”
  4. President Obama’s Quest to give Iran a Nuclear Weapon – Iran has repeatedly declared it will destroy the Holy Land (Israel) and occupy Jerusalem. In November 2014, Stuart Winer and Marissa Newman reported on Iran’s 9-point plan to destroy Isreal. Winer and Newman wrote: “A plan titled “9 key questions about the elimination of Israel” was posted on his Twitter account Saturday night, using the hashtag #handsoffalaqsa, in reference to the recent tensions on the Temple Mount. The sometimes grammatically awkward list explained the how and why of Khomeini’s vision for replacing Israel with a Palestinian state. The first point stated that “the fake Zionist regime has tried to realize its goals by means of infanticide, homicide, violence & iron fist while boasts about it blatantly.” Due to the above, Khomeini argued, “the only means of bringing Israeli crimes to an end is the elimination of this regime.” (See the chart below for the details of the 9-point Iranian plan) A nuclear armed Iran will be a precursor to implement this 9-point plan.


Queer agriculture and the melon of ecstasy

Bishop E.W. Jackson, Sr. on President Obama demanding Christians not name Islam as the Enemy!

Obama’s National Security Strategy: Fight Global Warming and Promote “Gay Rights”

Obama revealed his true colors at Prayer Breakfast, and true ignorance of history

Obama Says Christianity No Different From Islamic State by Raymond Ibrahim

RELATED VIDEO: Bill Warner, Ph.D. on Jihad vs Crusades:

IRAN’S 9-POINT PLAN TO DESTROY THE HOLY LAND (ISRAEL) – Chart courtesy of the Times of Israel.

iran 9 point plan to destory israel

For a larger view click on the chart.

Bishop E.W. Jackson, Sr. on President Obama demanding Christians not name Islam as the Enemy!

Bishop Earl Walker Jackson, Sr. is an American politician, Christian minister and lawyer in Virginia. He was the unsuccessful Republican Party nominee for Lieutenant Governor of Virginia in the 2013 election. In the below video interview Bishop Jackson criticizes President Obama for comparing the Islamic State to Christians.

Bishop Jackson states, “We are not on our high horse, we are on high alert.”

From Rabbi and Professor Jeffrey Wolf:

“This is a demagogic and dumb game of smoke and mirrors. I’ve studied and taught the Crusade era for many years. It’s true that the Crusades were bloody, cruel and violent. So were the wars of Islamic conquest (starting with the massacres of Jewish tribes in the the Hijaz by Muhammad himself). So, what does that have to do with anything? The Crusades ended eight centuries ago. The Inquisition closed up shop over two centuries ago. (For the same money, we can condemn Judaism for calling for the annihilation of the Canaanites 3000 years ago—something we didn’t obey, by the way).”

“Islam is the only religion in the world TODAY, which spawns religiously sanctioned babarism and terror, and is backed by credible religious argument and endorsed by religious leaders who are not outliers. Even if 10-20% of Muslims endorse ISS or sympathize with it (as the statistics seem to show), that means 200,000,000 Muslims are on the dark side. That is not a marginal phenomenon. It is an authentic Muslim phenomenon, even if it doesn’t represent the majority of Muslims.”

Fidel Castro’s Testament by Brian Latell

Oddly, there is no mention in the letter of the release of the three convicted Cuban intelligence agents from American penitentiaries. The key figures of the large Cuban spy ring that operated in the United States had been heralded as national heroes by Fidel before his retirement. He was extravagantly associated with the protracted campaign to win their release. The regime’s propaganda and intelligence machines labored long and diligently, overtly and covertly. But Fidel has not taken a victory bow now that they are home.

Rumors of Fidel Castro’s precarious health may swirl again in the aftermath of a letter issued over his signature earlier this week. Addressed to the Federation of University Students, the retired leader is quoted briefly about the changing Cuban relationship with the United States.

After remaining silent for more than five weeks following the announcements by President Obama and Raul Castro of measures taken in pursuit of détente, Fidel finally weighed in. “I will explain,” he is quoted saying, “in a few words, my essential position.”

Ghost written or not, his message provides a hedged endorsement of the process, though not of any of the steps taken by either side to normalize relations. He says nothing, for example, about the impending restoration of diplomatic relations that he caused to be broken in January 1961.

Nowhere in the message does Castro express unambiguous approval for detente. Perhaps the nearest he comes is by stating that he does not reject a “peaceful solution to conflicts or threats of war.” Employing similar lofty language, the letter merely states.

  • “Defending peace is the duty of all.”
  • “Any negotiated, peaceful solution . . . which does not imply the use of force must be addressed in accordance with international principles and norms.”
  • “We will always defend cooperation and friendship with all the world’s peoples, and with those of our political adversaries.”

In short, the message can only be read as grudging. Castro is quoted saying, “I do not trust the policy of the United States, nor have I exchanged one word with them.” It recalls his militance and intransigence during decades of dealings with ten American presidents: “revolutionary ideas must always be on guard. . . . In this spirit I have struggled, and will continue to struggle until my last breath.”

All this sounds reliably like Fidel. But the odds are good that he did not actually contribute meaningfully to the drafting of the document. It is impossible to know of course, but it reads more like a skillful brief composed by Raul Castro’s designees.

They wanted Fidel’s stamp of approval for moving toward better relations with the United States. Emblazoned on the front pages of the major Cuban dailies, the letter got maximum exposure on the island.

After Fidel’s long silence it was also necessary for the regime to stifle speculation that he had died or was on his deathbed. And, for many, his extended silence left the impression that he was opposed to normalization with Washington. It was unacceptable for either of those impressions to persist.

Yet, no utterance attributed to Fidel would have been credible had he enthusiastically endorsed rapprochement. Since his university days –as he in fact mentions in the letter — he pursued radical, anti-American ideals. For him now, in his late eighties, suddenly to abandon decades of anti-American intransigence would not have made sense. After all, the American economic embargo remains fully in force. Other historic Cuban demands are also still unassuaged. How could he give unequivocal approval to a process still in its early stages?

Oddly, there is no mention in the letter of the release of the three convicted Cuban intelligence agents from American penitentiaries, or of the America contractor who served five years in a Cuban jail. The key figures of the large Cuban spy ring that operated in the United States had been heralded as national heroes by Fidel before his retirement. He was extravagantly associated with the protracted campaign to win their release. The regime’s propaganda and intelligence machines labored long and diligently, overtly and covertly. But Fidel has not taken a victory bow now that they are home.

Nor has he met with them as they are being lionized in the official media as representatives of a new generation of revolutionary heroes. If he is not on his death bed, or severely impaired, a photo op with them would have been a routine event. Other than for reasons of health, therefore, it seems inexplicable that he has failed to boast of the Cuban success in bringing them home.

Two days after the letter was aired in Cuba, the press reported that Fidel had met with his old friend and biographer, Brazilian friar Frei Betto. They engaged, it was reported, in a friendly conversation about national and international issues. Normally under such circumstances, a photo of the two would have accompanied the article.

But this time, the photo of them attached to the story was acknowledged to have been taken in February 2014 during an earlier meeting. The most recent photos of Fidel appeared in the middle of last year and he has made no public appearance in about a year. Will rumors of his imminent demise be stoked anew?

Brian Latell, Ph.D., is a distinguished Cuba analyst and a Senior Research Associate at the Institute for Cuban and Cuban American Studies at the University of Miami. He has informed American and foreign presidents, cabinet members, and legislators about Cuba and Fidel Castro in a number of capacities. He served in the early 1990s as National Intelligence Officer for Latin America at the Central Intelligence Agency and taught at Georgetown University for a quarter century. Dr. Latell has written, lectured, and consulted extensively. He is the author of After Fidel: The Inside Story of Castro’s Regime and Cuba’s Next Leader and Castro’s Secrets: The CIA and Cuba’s Intelligence Machine. Brian Latell is a contributor to SFPPR News & Analysis.

Who is the Leader of the ‘Free World’ Obama or Netanyahu?

The question ‘Who is Leader of the Free World, Obama or Netanyahu’ may at first sound foolish. However ask yourself, which other leader of a western style democracy has a better grasp of the danger Iran and Radical Islam poses to the free world.

The leader of the free world must be able to identify the enemy and confront it.

Obama has distanced himself from the reality that Radical Islam and Iran account for most of the terrorism occurring around the world. Obama cannot even utter the words ‘Radical Islamic Terrorism’ and as a result he cannot  be considered the leader of the Free World.

Obama’s trashing Netanyahu for accepting an invitation to speak before Congress has nothing to do with protocol. It has everything to do with Netanyahu’s understanding the threat of an Iran with nuclear weapons and Radical Islam poses to America, Israel and the rest of the free world. As a result Netanyahu’s speech will stand in stark contrast to Obama’s approach to Iran and Radical Islam.

That is what is driving Obama up the wall.

Who is Leader of the Free World: Obama or Netanyahu?

By Joseph Gelman

It’s another day, so you can be pretty sure that another anonymous Obama administration “source” is trashing the Israeli Prime Minister in yet another planted story in a friendly media outlet somewhere.

This used to be news, now it’s just sad.

What is it about Benjamin Netanyahu that has the Obama administration so insecure and borderline hysterical?

Perhaps it has something to do with the way the pesky and smooth-talking Israeli Prime Minister has gradually supplanted Barack Obama as the moral leader of the free world, on the most important issue of our time.

Where there is a leadership void, someone will fill it.

Obama and his minions’ sense it, and the jealousy/resentment seem to know no bounds.

When Netanyahu, a gifted orator in the English language, speaks on the dangers of radical Islam and a nuclear Iran, he projects a confidence and persuasiveness that the administration can’t match.

In stark contrast, when Obama speaks to these matters in his painfully couched language, knowledgeable people smell politics. They can sense the hesitation and stumbling over usage of even the most basic and obvious terminology, like “radical Islam”. Not a confidence-builder when facing the mullahs of Tehran.

While the Israeli Prime Minister has no such inhibitions… the problem for Obama is, neither do most freedom-loving people in the West. They inherently know that radical Islam does in fact have something to do with Islam, no matter how desperately the President tries to convince them otherwise. And they understand that such Islamists, be them of the Shiite or Sunni variety should never be allowed the means to produce nuclear weapons.

This dynamic is not lost upon the administration, and it is, along with ego, at the very heart of the Obama administrations apoplectic reaction to Speaker John Boehner’s invitation to Netanyahu to speak before a Joint Session of Congress.

It has little to do with a “breach of protocol.” Had Boehner invited the Prime Minister of Luxemburg to speak on European monetary policy, the words “breach of protocol” would never have come up. It’s Netanyahu himself that they fear and loath.

They are beside themselves that their appeasement policies vis-à-vis Iran are to be so publicly challenged by someone they view as of inferior status and a lot of chutzpah. And yet Netanyahu is clearly of superior knowledge on the issue, of superior communications skills, and most of all, has a superior stake in the outcome of negotiations with Iran.

Netanyahu will be speaking from the world’s most prestigious platform without the administration’s permission, directly to the American people and over the administration’s head, with the full backing of a solid majority in congress and of a very large constituency in the United States, many of whom have been lifelong supporters of the president’s own party.

It’s enough to drive any anti-Semite stark-raving mad.

Unfortunately, it’s also enough to drive this administration to the brink of DEFCON 1 political hysteria. Count on an endless barrage of negativity directed towards Mr. Netanyahu between now and the speech, and until the Israeli elections on March 17th. This will be an all-out, scorched-earth campaign conducted by the administration to get Netanyahu to back down from the speech, and to ruin his reelection prospects.

The gloves are off.


As I See It: The Obama doctrine says ‘Israel’s enemy is my friend’ – The Jerusalem Post

Obama’s Iran policy rests on false assumptions and half-truths

Israel’s Offshore Gas Discoveries are in Jeopardy

On February 3rd, there was a  Conference  in Tel Aviv co-sponsored by the Israeli Ministry of Infrastructure, Energy and Water and Maala – a group concerned with Socially Responsible Business. Globes Israeli Business and Reuters covered it, “Energy minister: Foreign companies aren’t coming to Israel.”

 Silvan Shalom, Israeli Minister of Infrastructure,  the Israel Manager of  Houston –based Noble Energy, Inc. co-developer with Israel’s Delek Group and a representative of Australian  energy company Woodside, Pty.  appeared among other presenters. They were all  bemoaning the arbitrary, some would say capricious draft ruling of Dr. David Gilo, Director General of Israel’s Antitrust Authority (IAA) , basically stopping development of the offshore Leviathan  gas field and  forcing the possible sale of the existing Tamar gas field in Israel’s Exclusive Economic Zone (EEZ).  Gilo,as we have discussed  in prior posts, has confounded Israel’s energy independence and possible export opportunities with his draft consent order based on misguided consumerist  populism.  His understanding of the economics of pricing of gas as a commodity in the international markets is simplistic at best and simply panders to  misguided domestic  populist concerns over maintaining low energy prices.  His proposals to enhance competition  in the domestic  market come amidst the looming March Knesset elections.  Many  suspect that his actions were in support of the Labor-Hanuat coalition objective of unseating Prime Minister Netanyahu.  Not surprising as Israel’s founding generation, save for  Menachem Begin, were Socialist  Marxists. They created the country’s dual economy with Histadrut – the labor union dominated institution – owning  key sectors in the country’s economy that have  only been partially privatized. The exception being Israel’s much vaunted high tech sector.

Gilo’s  misguided logic is reflected in the comments of the Israeli National Infrastructure-Maala conference presenters. It was bolstered by an announcement that the Noble Energy –Delek Group partners  were on the verge of concluding a deal with Egypt to provide much needed gas from the Aphrodite field in the adjacent Republic of Cyprus EEZ.  Neither Noble or Delek accept the separate marketing proposals and sales of  both Tamar and smaller fields, originally part of an IAA deal agreed to by Gilo.

Note these comments from the Globes article:

“We don’t see foreign gas companies coming to Israel,” Minister of National Infrastructure, Energy, and Water Silvan Shalom admitted. “The foreign companies have interests in countries like Saudi Arabia and the Gulf, and bringing them to Israel is no easy task. Israel is small country, with a small gas market. In a utopian and theoretical world, companies would come, but that’s not how it is in the real world.”

“Unfortunately, our business in Israel was unsuccessful, but our connections with Noble Energy have become stronger,” Woodside VP Corporate Affairs Roger Martin said at a conference organized by the Ministry of National Infrastructure, Energy, and Water and the Maala organization.

Woodside, which planned to acquire 25% of the rights in the Leviathan natural gas reservoir for $2.7 billion, backed out at the last minute, and left Israel. “We’re working together with Noble Energy in Africa, and we signed an additional agreement with them in October for oil and gas exploration off the Cameroon coast,” Martin said.

“Our pride in making our contribution to the community was met with cynicism. They tell us cynically, ‘This is very American’,”  [Nobel Energy Israel Manager]  Zomer said angrily. “What do you want from me? What’s very American? I don’t understand this. Since when is doing good considered American? Why should companies in Israel apologize for their success? Of course Noble Energy hoped to make a profit in Israel, but it also meant to do good for Israel.”

Gidon Tomer [CEO Delek Drilling  Partnership] noted , “That state could expect NIS 250 billion  ($65 Billion) in revenues from the first stage of developing Leviathan. He added, “This revenue doesn’t take into account the immediate saving from the consumption of cheap gas. You have to look at the enterprises saved by natural gas. These enterprises are boosting their competitiveness. It’s a reduction in the cost of living.”

Alexander Varshavsky of the National Gas Authority  asserted that Israel could expect to lose NIS 3 billion ($780 million)  annually starting in 2018 from the delay in developing Leviathan. “Beyond that, it’s a blow to Israel’s credibility,” he argued.

On the matter of Gilo’s express goal of enhancing competition and energy pricing, Globes noted comments of   a conference participant who said, ‘If you want to talk about responsibility, Israel’s responsibility is to bring gas to factories. There are factories in the outlying areas that closed down because of their energy costs. At enterprises like Phoenicia Flat Glass Industries and Shaniv Paper Industry Ltd. (TASE: SHAN), it was a do or die question. Today, they’re hooked up to natural gas and saving money. That’s the most important thing.”

Should PM Netnayahu win the March 17th election perhaps a priority will be to pass legislation amending the mandate of the IAA remodeling it in on 100 year precedent of the U.S. Federal Trade Commission.  Otherwise , director General Gilo of the IAA, will thwart Israel’s economic future and energy independence.

EDITORS NOTE: This column originally appeared in the New English Review. The featured image of the Tamar deep oil platform is courtesy of Oil in Israel.

Ronald Reagan’s Free-Market Mentors by John Fund

Have you ever gone back and revisited or recalled the books or mentors who shaped your political or philosophical thinking? I got that chance this past weekend when I attended the annual summit meeting of the Foundation for Economic Education in Ft. Myers, Fla. A slim pamphlet reprinted by the Foundation for Economic Education was given to me by Dennis Miller, a school teacher, when I was 14 years old. It was “The Law,” by the 19th-century French economist FredericBastiat, and it set me on my current path of thinking.

I’m not the only one whom FEE has influenced. Milton Friedman described “I, Pencil,” FEE’s account of the hundreds of people and the raw materials that contribute to the making of that humble writing instrument, as “one of the clearest explanations of how markets work to benefit consumers” he had ever encountered. The Nobel Prize–winning economist F. A. Hayek said that FEE had helped inspire him to found the free-market Mont Pelerin Society. Ronald Reagan credited FEE materials he read in the 1950s with aiding his conversion to conservatism.

FEE says its mission is to “inspire, educate, and connect future leaders with the economic, ethical, and legal principles of a free society.” In the last five years, it has shifted its emphasis to reaching young people ages 14 to 24 through seminars, readings, and social media. Detroit’s public schools have made FEE’s Common Sense Economics its primary textbook for tenth-graders studying the economy. With a budget of only $3.6 million a year, FEE punches way above its weight in reaching future “influencers” who will populate academia, business, the media, and legal circles.Founded in the immediate aftermath of World War II by Leonard Read, a former head of the Los Angeles Chamber of Commerce, the free-market outreach group has distributed millions of copies of classic texts such as Henry Hazlitt’s Economics in One Lesson, Hans Sennholz’s Up from Poverty, and Lawrence Reed’s Are We Rome?

Take Romina Boccia, a 30-year-old German immigrant of Italian ancestry. “When I was in state schools in Bavaria, I realized that there must be other perspectives on society I wasn’t getting,” she told me. “Then someone handed me a copy of Bastiat’s ‘The Law’ on a train, and I was hooked.” She now is a research fellow in economic policy at the Heritage Foundation.

Another person who got hooked on FEE’s materials was a middle-aged actor named Ronald Reagan. The story is fascinating, as detailed in the 2006 book The Education of Ronald Reagan, by Thomas Evans.

From 1954 to 1962, Reagan worked as the host of CBS’s top-rated General Electric Theater and served as General Electric’s official spokesman. For weeks at a time he would tour GE’s 139 plants, eventually meeting most of the 250,000 employees in them. Reagan himself estimated that he spent 4,000 hours before GE microphones giving talks that started out with Hollywood patter but ended up as full-throated warnings about Big Government. “GE tours became almost a post-graduate course in political science for me,” he later wrote. “By 1960, I had completed the process of self-conversion.”

Evans, a lawyer who served in the Reagan administration before turning amateur historian, identified Reagan’s mentor at GE as Lemuel Boulware, the man behind both the company’s PR efforts and its labor-negotiation policy. Boulware believed that at the start of contract talks, GE should make an offer it viewed as fair to stockholders, workers, and customers and then stick with it, allowing for almost no changes. This “take it or leave it” approach was so successful (strikes became almost unknown at GE) that it entered the lexicon of labor relations as “Boulwarism.”

But Boulware also believed that the policy would work only if executives went over the heads of union officials and educated the workers directly about why they had a stake in GE’s prosperity. Evans notes that “a worker who learned that GE’s profit margin was much smaller than he had been led to believe or that union officials had not been truthful with him” was unlikely to join a picket line or insist on over-the-top demands. Thanks to his outreach to workers, and his surveys of them, Boulware was “reputed to understand blue-collar workers better than anyone in the country.”

Boulware’s efforts included an elaborate campaign to educate GE’s workers as well as the public on the moral and economic benefits of free enterprise. He encouraged workers to form book clubs and read free-market texts published by FEE, especially Hazlitt’s Economics in One Lesson and Wilhelm Ropke’s Economics of the Free Society. He also encouraged his managers to read William F. Buckley Jr.’s brand-new National Review.

Boulware’s free-market message so penetrated GE’s work force that Reagan, his traveling ambassador, quickly saw how important it was for him to become familiar with what the workers were reading. Over time, his own reading and his conversations with GE workers had an effect. By the late 1950s, Reagan was lambasting those “who can’t see a fat man standing beside a thin one without automatically concluding the fat man got that way by taking advantage of the thin one.” Historian Rick Perlstein has concluded that “Reagan was an integral component in the Boulwarite system.”

The lessons Reagan had learned during his GE barnstorming stuck with him. Several passages in his famous 1964 speech on behalf of Barry Goldwater came directly from his GE talks. (“There is no such thing as a left or right. There is only an up or down: up to man’s age-old dream, the ultimate in individual freedom consistent with law and order; or down to the ant heap of totalitarianism.”)

The influence of those years lasted well into Reagan’s presidency. The Timemagazine journalist Hugh Sidey recalled admiring some of Reagan’s White House speeches so much that he asked a speechwriter who exactly had written them. “Reagan,” he was told. “They were actually pretty much the speeches he had given when he worked for General Electric.” And for the GE talks, Reagan was his own speechwriter.

Of course, few of the people that FEE has influenced turned out to be the gifted popularizer of liberty that Ronald Reagan was. But FEE marches on, adapting its outreach to the digital age and the fourth generation of young people to have come on the scene since its founding. Not a bad record at all for a group that shuns harsh rhetoric in favor of quiet persuasion.

This piece was first published here at National Review Online. Reprinted with permission.


John Fund is currently the national-affairs columnist for National Review Online and a senior editor at the American Spectator.

Civil Rights Icon Rosa Parks’ Exposure to Armed Self-Defense

On Wednesday, the Library of Congress made the Rosa Parks Collection available to researchers. The compilation includes 2,500 photos and 7,500 manuscripts pertaining to the civil rights icon. Among these documents is a short autobiographical piece highlighting some of Parks’ early experiences with armed self-defense.

A February 3 Washington Post article details the “biographical sketch.” According to the Post, Parks explains how her grandfather used a shotgun to protect the family home in Pine Level, Ala., from potential attack by the Ku Klux Klan. One excerpt states that her grandfather “would stay up to wait for [the Klansmen] to come to our house… He kept his shotgun within hand reach at all times.” Another portion notes that Parks’ grandfather “declared that the first to invade our home would surely die.”

Stories like Parks’, where firearms were used to protect against racially motivated violence before and during the Civil Rights Era, are common. At a time when law enforcement officials were sometimes indifferent to acts of violence perpetrated against African-Americans (or in some cases even complicit in them), those seeking any protection at all had few other options.

History could certainly have been altered in dramatic fashion had the Parks home been left undefended against the depredations of the Klan. Thankfully, Parks’ family had access to an effective means of self-defense, even as they strove to obtain other basic human rights.

Examples abound of the beneficial role arms have played in the struggle for civil rights in the U.S. Local NAACP leader Rob Williams, author of Negroes with Guns, notably chartered a National Rifle Association affiliated club in order to train and arm members of his Monroe, N.C., community to combat the Klan. Chapters of the heavily armed Deacons for Defense and Justice formed throughout the Deep South to protect their communities from racial violence. According to UCLA Professor Adam Winkler,  Martin Luther King Jr. unsuccessfully applied for concealed carry permit in Alabama after his home was bombed, and lived surrounded by what was described as “an arsenal.” In his book,  Restricting Handguns: The Liberal Skeptics Speak Out, Don B. Kates Jr. recalls his time spent as a civil rights worker in the early 1960s South, stating, “The black lawyer for whom I principally worked did not carry a gun all the time, but he attributed the relative quiescence of the Klan to the fact that the black community was so heavily armed.”

The story of armed self-defense revealed in the Rosa Parks Collection is a welcome and important addition to the already well-established history of the use of arms to deter and defend against racially-motivated violence.

EDITORS NOTE: This article and featured image of Rosa Parks originally appeared on

The Great 2016 TEA Party Dilemma

I had the honor of hanging out with a great group of patriots, the Fort Lauderdale TEA Party. I was the keynote speaker at their 309th consecutive meeting. My message articulates why Conservatism is best for all Americans and why Liberalism is destructive. My presentation also includes me singing which enhances my message because music strikes a universal emotional chord.

The audience at the meeting included the president of a high school Republican club. I asked why he chose Conservatism. He chucked and attributed it to his high IQ. There is hope for the future folks.

The extremely faithful and fired-up patriot leaders of the group are Danita and Jack; new friends of my wife Mary and me.

Jack informed me that a poll revealed that Jeb Bush topped his group’s list of least favored presidential candidates for 2016. A gentleman bent my ear for quite a while, ranting about how he will stay home on election day if Jeb Bush is our candidate. He vowed never again to hold his nose and vote for a RINO, citing having voted for McCain and Romney.

Remember, Obama was reelected in 2012 because four million Republicans chose not to vote. Some thought whats the point – Romney vs Obama, six of one, half a dozen of the other. Some Christians said they could not vote for a Mormon. I thought, “Great, so you sat at home and allowed a true devil to win!” Having said that, I do respect and appreciate that Conservatives are thinkers and are driven by character and principles.

I held my nose and voted for Romney because I knew the alternative was much, much worse; giving the most America hating arrogant out-of-control president in U.S. History four more years to urinate on our Constitution; purposely lower our status on the world stage and correct what he erroneously perceives as America’s injustices.

Our president is obviously an anti-America-as-founded far left radical operative; an enemy from within. During the Cold War some feared the Communists would overtake us without firing a shot. Ladies and gentlemen, I give you Barack Hussein Obama.

My faith in God keeps me upbeat and confident that we will overcome the evil seeking to destroy our great nation. God’s Word instructs us not to grow weary in well-doing.

As for Jeb Bush becoming our nominee, I am thumbs down on him because of his support for Common Core (big government overreaching control of education) and amnesty for illegals.

However, if it comes down to Jeb Bush or another flaming RINO as our candidate, the Tea Party will be faced with a difficult dilemma.

Think of the consequences of Hillary becoming the first woman to sit in the big chair in the Oval Office. The Dems and MSM will make every issue about her gender. To silence all opposition to President Clinton continuing Obama’s fundamental transformation of America (socialist/progressive agenda), the Democrats and MSM will update their propaganda, branding all opposition “sexist” rather than “racist.”

We’ve seen this movie before. The MSM will beat the public over the head 24/7 with their lie until the public is repeating it; opposing Hillary is sexist, white cops murder blacks, white privilege is a problem, Republicans are at war with women and so on.

Hillary Clinton occupying the White House will in essence mean at least four more years of a Democrat regime believing themselves invincible, free to continue using the Constitution as toilet paper.

We can not allow the deep-pocketed GOP establishment or mainstream media to select our presidential candidate.

So, how do we avoid the great 2016 Tea Party dilemma, having to vote for a RINO? We must rally around a conservative candidate who probably will not walk on water (be perfect on every issue). I can support a non perfect conservative candidate as long as they are fearless and laser focused on stopping Obama’s insane evil agenda.

I am starting to hear patriots say they are “all in” for their favorite 2016 presidential candidate; Ted Cruz, Scott Walker, Dr. Ben Carson and so on. Fine, I am cool with that. I am not ready to go “all in” for anyone at this stage.

All I ask is that we unite and rally around the last conservative standing. Folks, I pray that our nation can recover and turn back the mess of 8 years under Obama, America’s first king. The last thing America needs is Hillary, America’s first queen.

Florida Report Outlines Lasting Property Insurance Market Reform Recommendations    

jmi property insuranceUnprecedented hurricane landfall inactivity in Florida presents opportunity for policymakers to help shield Florida’s economy from inevitable, storm-related threats report states.

A hurricane has not made landfall in Florida for nine years; however, a new report from The James Madison Institute (JMI) warns this nearly decade long respite should not be considered the norm, but rather a fortuitous anomaly.

In it Backgrounder: “Lasting Reforms for Florida’s Property Insurance Market,” JMI adjunct scholar and R Street co-founder, R.J. Lehmann explores solutions that could reasonably be considered during the 2015 legislative session to shield Florida from economic hardship in the event of a major storm or series of storms.

The report states that because of the last few years of hurricane landfall inactivity, Citizens Property Insurance Corp., the Florida Hurricane Catastrophe Fund (Cat Fund) and the state’s private insurance sector are all in ideal financial positions to absorb reforms without undue adverse impacts on taxpayers, ratepayers or the state’s economy.

“Florida has been struck by the most hurricanes of any U.S. state, including the most powerful hurricane on records and seven of the 10 costliest hurricanes to have affected the nation. Unfortunately, this lull of dormancy has resulted in a misplaced public policy goal of insurance rate suppression leading to a dysfunctional property insurance system,” said Lehmann. “What happens when a storm finally arrives? Although no set of reforms can make Florida entirely immune to all of the problems that it could face, a sensible approach that recognizes the state’s role in Florida’s property insurance system, but trusts the market to solve many problems, will work best and bring the greatest sustainability.”

Recommendations include:

Citizens Reduction and Reform

  • Continue incremental reduction of Citizens coverage limits for two additional years to $500,000;
  • Remove non-primary residences from Citizens, with exceptions;
  • Implement incremental Citizens eligibility reform with a “circuit-breaker” ensuring Citizens shrinks slowly, but steadily
  • Allow excess and surplus lines carriers to take out policies from Citizens, with conditions; and
  • Establish stricter notification requirements for future depopulation initiatives.

Cat Fund Reduction and Reform

  • Gradually decrease the Cat Fund’s statutory capacity from $17 billion to $14 billion, with an emergency “override;”
  • Gradually increase the Cat Fund’s statutory “deductible” from $7 billion to $8 billion;
  • Ensure surplus protection mechanisms cover second-year claims;
  • Explicitly authorize (but not require) Cat Fund managers to negotiate the purchase of private risk transfer;
  • Allow flexibility to primary insurers in years when the Cat Fund is projected to experience a shortfall;
  • Include taxpayer protection in the Cat Fund’s mission statement;
  • Require reports from financial advisors to explicitly discuss second event and second season claims-paying capacity;
  • Redefine “funds” or “cash balance” as any money that does not have to be repaid; and
  • Include taxpayer protection efforts in bi-annual reports.

Claims-Paying Estimate and Conflict-of-Interest Reform

  • Require an annual report on the combined post-storm bonding capacity of Citizens, the Cat Fund and the Florida Insurance Guaranty Association, assuming all three may attempt to issue bonds simultaneously after a significant hurricane event or season; and
  • Enact conflict-of-interest rules to preclude financial advisers from deriving financial gain from bond issuances.

Providing background on state-run Citizens and the Cat Fund, the report also establishes how these state-run entities are both “one-hit wonders” designed to cover just one adverse hurricane season with no practical means to cover a second or third season without economically devastating consequences.

Although legislation has enabled a “glidepath” that allows yearly rate increases for Citizen’s policies, and some areas of the state now pay actuarially adequate rates, Citizens coverage remains significantly underpriced in much of the state’s coastal and other high-risk regions. Such underpricing would mean that if disaster strikes and Citizens were to run a deficit, it must first impose surcharges on its own policyholders, but may subsequently impose so-called “emergency assessments” on policies issued in Florida in nearly every property and casualty line of business.

“These assessments could amount to a “hurricane tax” that could add up to 30 percent to the cost of each insurance policy paid by the roughly 78 percent of homeowners, renters, drivers, boaters, businesses, charities and civic organizations statewide who derive no benefit from Citizen’s subsidized, underpriced rates,” describes Lehmann. “With its imposing size and its power to levy assessments, Citizens has the potential to place Floridians on the hook for billions of dollars if a sufficiently bad hurricane season wipes out the surplus it has slowly accumulated over the past nine years.”

Further complicating this serious threat, Citizens relies on another taxpayer-backed entity, the Cat Fund, to provide roughly $4.63 billion in reinsurance, which accounts for the majority of Citizen’s reinsurance support following a catastrophe.  The Cat Fund covers a portion of the risk when insurers’ total losses exceed certain levels. However, unlike private reinsurers, it keeps no funds on-hand to pay the promised claims. The Cat Fun instead has the authority to issue bonds, which it repays by imposing assessments on policies in a way similar to Citizens.

“By relying on post-event financing, the Cat Fund charges substantially lower rates than the private sector for comparable coverage. To pay off the Cat Fund’s bond debts, dating back to the 2004 and 2005 hurricane seasons, Floridians were forced to pay 1.3 percent assessments on their homeowners, auto, renters and other insurance policies until Jan. 1, 2015,” continued Lehmann. “The Cat Fund turns the principles of diversification on its head by concentrating Florida’s peak hurricane risk within the state, rather than spreading it around the world, as private reinsurers do.”

Diving deeper into the explanation of the report’s solutions, the JMI backgrounder offers a comprehensive look into opportunity that Florida’s lawmakers have during the 2015 legislative session. The report concludes lawmakers should continue to shrink Citizens, reduce the size of the Cat Fund, and promote reforms that would result in a surge of capital to the state after a storm to help it quickly recover both physically and economically, rather than saddle it with debt.

“Florida surpassing New York to become the third most populous state should be another wake-up call for policymakers that the resulting risk of a major storm or a very active hurricane season is greater than ever. As our scholar has said, our coastal exposure alone has increased to more than 2.9 trillion,” said Dr. Bob McClure, president and CEO of The James Madison Institute. “Instead of worrying about a hurricane trajectory when it’s too late, Florida leaders should take action now on property insurance reforms to better ensure an economic trajectory that bounces back quickly into the positive after an inevitably active hurricane season.”

Read the full report by clicking here.

How Markets Tell the Truth and Politics Tells Lies

Or, how to get more trust in society by Gary M. Galles:

Have you ever tried to work with people you couldn’t depend on to tell you the truth? It isn’t pretty. Without the ability to rely on what you’ve been told (or the assurance that you’ve been told everything relevant), effective cooperation at almost every margin of choice is reduced. That’s because the foundation on which cooperation is built has been undermined.

As John Donne succinctly put it, “No man is an island.” In a modern economy, all of us are dependent on multitudes of strangers not just for our prospering, but for our survival. So the problem of effective cooperation increases exponentially when we expand our horizons to the countless areas in which people — the vast majority of whom don’t even know each other — interact.

People aren’t always truthful because being dishonest can serve one’s interests. Sometimes we perceive a strategic advantage in lying to gain at another’s expense. Our words are also often post-hoc rationalizations, both to ourselves and to others, for why whatever we said or did was a good idea.

But with time, that can make what people say a frail reed to hang upon. And when political power is involved, the incentives for such deception and self-delusion are put on steroids. The payoffs of deception are far greater when it comes to politics, because politics rarely rewards honesty. As the level of dishonesty goes up, the level of trust goes down. And in the absence of trust, information that is vital to cooperation becomes increasingly scarce.

Making matters worse, the amount of information out there is vast. No individual can possibly know the infinite permutations of who, what, when, where, why, and how. As Hayek famously reminds us, knowledge is mostly local, distributed among billions of people. But voluntary market arrangements, based on private property rights, provide a powerful mechanism for overcoming problems associated with our limited knowledge.

The price is right

Most of the time, we don’t really care to know all the details that might have affected our interactions with others. In commercial interaction, we mainly just want to know, “How much?” In that price, we get a glimpse of what trade-offs others are willing to make between goods and services, current versus future consumption, labor versus leisure, and so on. Regardless of the specific determinants from person to person, others’ trade-offs determine what is and isn’t possible for us in any society where people are free to choose.

By revealing more and more accurate information, more and more social coordination is possible. Mutually beneficial arrangements are expanded. Others, including all prospective central planners, don’t know the trade-offs each individual would make; only the individuals involved know for sure. Coordination requires a process that reveals accurate information to those who make choices. Otherwise, the information will be lost, along with any wealth creation that might have followed.

Undistorted market prices provide that information. While what people say may be misleading, people reveal many truths when they engage in market behavior. After all, what you do is often far more truthful than what you say. For example, if you buy a product for $10, you reveal that it is worth at least $10 to you; similarly, if you sell a product for $10, you reveal that what the money might purchase is worth more to you than the product. And those choices reveal valuable information about the real alternatives available to those who might deal with you in the future.

The mendacity of politics

In contrast, because politics is based more on what people say than on what they do, it often short-circuits the mechanisms for discovering the truth: prices, profit, and loss. Politics becomes less about cooperation and more about creating perceptions. In fact, government interference in people’s voluntary relationships substitutes lies for the very truths that might otherwise be revealed. And in a world where relative scarcities are generally what we really want to know the truth about, politics can be very damaging. Consider the following:

1. Price ceilings lie

Price ceilings, such as rent controls, lie about scarcity. In the absence of such controls (truth), market rents tell you the prices at which you can find apartments and reflect the opportunity costs landlords really face. But rent controls impose a price divorced from landlords’ opportunity costs, and a price at which many prospective tenants will be unable to rent an apartment. The price lies to people, telling them that the opportunity costs are cheaper than they really are. In the process, it distorts the terms at which apartments can generally be rented successfully.

2. Price floors lie

Price floors, such as minimum wages, act in a similar manner. In the absence of such controls (truth), market wages tell you the prices at which you can generally find jobs and hire employees. But a minimum wage dictates a price that is divorced from prospective workers’ opportunity costs, and at which many people will be unable to find jobs. Such wages misinform people that unskilled labor’s opportunity costs are higher than they really are. And in the process, minimum wages distort the terms at which jobs can be successfully gotten.

3. Taxes lie

Taxes, which are the price of an artificial input — “government permission to produce and sell” — reflect coercively imposed government burdens rather than opportunity costs of inherently scarce goods and services. Taxes tell buyers that products are scarcer than they really are.

The same is true of import restrictions such as tariffs and quotas, which raise prices above opportunity costs.

The burdens of government regulations and mandates also act like taxes. Government barriers to entry and operation in markets similarly raise prices above what relative scarcity would dictate. All of these interventions result in artificially high prices, underuse, and waste.

4. Subsidies lie

Subsidies act in a parallel manner to taxes, but in the other direction. They communicate to prospective buyers that products are more abundant than they really are, leading to artificially low prices, overuse, and waste.

Not only do voluntary market interactions better reveal the truth about relative scarcities through pricing; they also allow more accurate evaluation of other aspects of trading, such as product and service quality.

Reputation promotes honesty

The key (though often ignored) factor is repeat business. The usual scare stories to justify a “need” for government regulation involve one-time interactions in which others can gain by “cheating” on what they promise. The relevant question, however, is not whether they can cheat, but whether it is in their interest to do so.

We don’t need government protection against acts people will choose not to engage in. And since almost everyone we deal with economically wishes to continue in business, effects on future business act as a performance bond against misbehavior — both directly, as when current customers refuse to deal with such suppliers in the future, and indirectly, through reputation effects on other current and prospective trading partners.

Reputation leads to far better outcomes than scare stories imply. As students of game theory recognize, one-shot games and repeated games generate very different strategies.

Repeat business discourages cheating

Consider an example. Suppose I can cheat you today by providing lower-than-promised quality, and doing so would generate $1 million in increased profits. If it would leave my future business relationships unchanged, I have an incentive to cheat.

But what if I expect the resulting damage to my reputation to cost me $1 million or more in future discounted profits? I can cheat you, but I will not, because I have no incentive to.

The problem in this case is completely solved by markets’ reputation mechanisms. Even if the future losses don’t completely eliminate my incentives to cheat, they sharply reduce them, letting much of the air out of the “we need government regulation” balloon.

Ancient reputation markets

This mechanism, while ignored by ubiquitous state acolytes, is far from new. For instance, the famous 11th-century Maghribi traders of Northern Africa did not rely on government enforcement of international trade arrangements but on reputation-based self-regulation. In fact, a core role of Maghribi trader guilds was to protect themselves against government extortion by threatening them with the loss of future business relationships.

Modern technology has done nothing but improve voluntary reputational institutions. It allows people to detect “cheating” on quality more quickly, reducing the gains to be had from that misbehavior, as with the constantly improving transaction-by-transaction feedback from those on both sides of exchanges on eBay and other websites. Further, it spreads the word to other potential trading partners far faster and more broadly than was once the case, increasing the ability to punish, and thereby deter, such misbehavior.

Government promotes dishonesty

What has been the role of governments in all of this? They have been orders of magnitude behind markets in their creation and utilization of reputational mechanisms. In fact, their efforts have more frequently been turned against efforts to better serve customers, defending the old ways that governments have found to control and extort against potentially superior new options (for example, heavily regulated taxis versus Uber and heavily taxed hotels versus Airbnb) without such parasitic attachments.

This sort of intervention is not new, either. For example, it is striking how taxi regulations targeting Uber and Lyft, to benefit those enriched by government restrictions at the expense of consumers, mirror cities’ earlier strangulation of the jitney (unregulated cab) market, because jitneys were taking too much business from municipality-owned streetcar systems. Further, unlike those who have their own money at stake in preventing or solving abusive behavior in markets, government overseers have far worse incentives to watch as carefully or innovate as much.

Ask yourself if you get more, better, and quicker oversight from Airbnb or the hotel commission.

A great deal of social coordination is only achievable when based on the truth.

Not only does the truth set us free, but freedom in our cooperative endeavors reveals truths we have no other way of knowing.


Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013).

5 Reasons Progressives Should Support Economic Freedom

Freer economies are wealthier, healthier, and more liberating – by Matt Palumbo:

Advocates of interventionism characterize capitalism as the freedom to exploit — that is, as freedom to pay sweatshop wages, freedom to amass unequal wealth, freedom to degrade the environment to enable production, and freedom to discriminate.

While a free market does sometimes allow individuals the freedom to act in ways progressives may not like, the overall effect of economic freedom is to promote many of the values its opponents claim to champion.

Market competition penalizes exploitation and rewards those who contribute to the general welfare.

Skeptics may scoff, but the empirical data support our claims.

The Fraser Institute releases reports on its Economic Freedom of the World (EFW) index annually. The simplified criterion for economic freedom is determined by the size of government (which encompasses spending and taxes), security of property rights, access to sound money, freedom for international trade, and regulation of credit, labor, and business, though there are actually 42 different data points used as measurement, all of which fit into the five categories listed. In other words, the more capitalist the economy, the more it’s considered economically free in Fraser’s index.

Do countries with more economic freedom truly pay poor wages, abuse their environment, and suffer from other flaws critics contend that they do?

Spoiler alert: no.

Listed below are five reasons to support economic freedom.

1. Economic freedom is good for economic growth

To start with the blatantly obvious, economic freedom is good for the economy.

As the chart below shows, in the 20-year period between 1990 and 2010, the most economically free nations grew at rates more than double those of the least free nations.

Even a tiny level of growth compounds heavily over time. An economy that grows half a percent faster than it would have otherwise grown over a 100-year period will experience 400 percent more growth overall than without that extra half a percentage point. The difference between 4 percent and 3 percent annual growth determines whether it will take an economy 18 years to double in size or 24 years (simply divide 72 by average annual growth to determine how long it will take for an economy to double in size).

Critics argue that due to rising inequality, those at the top have captured all the benefits of economic growth. According to this argument, less economically free nations may have slower growth, but the increase in wealth is more evenly distributed among the population. I refute this argument in the next section.

2. Economic freedom makes everyone richer

Economic growth translates to higher incomes not for just the wealthy, but for everyone. To quote from Fraser’s findings, in purchasing power parity adjusted 2011 dollars, per capita income in the freest nations was $39,899, compared to $6,253 in the least free nations. These numbers are just averages, so technically they may be overstated if an income distribution is right-skewed.

But the poor are richer in more economically free nations than in the least economically free nations by a multiple of eight, with a per capita income of $11,610 compared to $1,358. Fraser researchers even note that the average income of the poorest 10 percent of the population in the freest nations is nearly double the average income in the least free nations. So whatever one thinks about inequality, purchasing power is stronger in economically freer nations. And greater purchasing power for the poor means a higher standard of living.

3. Economic freedom smooths the business cycle

Economic freedom not only helps the economy grow faster overall, but it also makes growth less volatile. There are only three studies on the subject that I am aware of (published by Noel Campbell and Thomas Snyder in 2012, Jody W. Lipford in 2007, and John W. Dawson in 2010), but all yield the same results: a negative correlation between economic freedom and volatility in the business cycle. Campbell and Snyder do find that there are diminishing returns to the positive effects economic freedom yields for the business cycle, but there is no doubt that the effects are positive.

The boon that economic freedom provides translates to employment stability. Research published at the St. Louis Federal Reserve found that, domestically, the freest economies (using the Fraser Institute’s index) experienced faster employment growth. To give some exact figures, the paper found that a one-unit increase in economic freedom (Fraser uses a scale of 1–10, with one being the least free and 10 being the most free) resulted in increased employment growth of 3.8 percentage points from 1980 to 1990, 4.5 percentage points from 1990 to 2000, and 1.4 percentage points from 2000 to 2005.

These results are found after adjusting for other differences that would affect employment growth, such as the percent of population with a college degree, countries with a larger percentage of the population employed in declining industries (e.g., manufacturing), and population density. The authors argue that economic freedom stimulates employment growth in two ways: by encouraging entrepreneurial activity and by reducing costs for existing businesses.

Such benefits to employment occur internationally as well. Summarizing some of the existing research on the topic, economist Horst Feldmann writes:

A substantial body of evidence supporting these hypotheses has accumulated in recent years. For example, using country averages from 45 industrial and developing countries, Feldmann (2007) finds that a higher level of economic freedom in 1980/1985 is correlated with a decline in both the unemployment and the youth unemployment rate over the period to 2000–2003. Furthermore, he finds an increase in economic freedom from 1980/1985 to 2000–2003 to be associated with a fall in the youth unemployment rate over the same period. Additionally, using panel data from 81 industrial and developing countries he finds that a higher level of economic freedom is correlated with a lower youth unemployment rate.

4. Economic Freedom Helps the Environment

Before we dive into the evidence, it’s worth exploring why we should expect economic freedom to help the environment. The most basic explanation is that private ownership incentivizes the conservation of resources. When everyone owns a resource in common, the incentive to conserve is removed. This is called the tragedy of the commons. While someone may conserve a resource on their own private property because they know it will be worth more in the future, the incentive to conserve disappears when the possibility that someone else can take the resource becomes part of the equation.

To give a few examples of theory in action, Richard L. Stroup of PERC (the Property and Environment Research Center) writes:

Access to clean water, sanitation measures, life expectancy, and deforestation all are more favorable in nations with stronger private property rights. When property rights were well protected, for example, about 90 percent of the population had access to safe water; but in nations with weak property rights, only about 60 percent of the people had that key health advantage.

The Fraser Institute finds that more economically free nations have higher levels of air quality, and the Heritage Foundation finds that nations with the greatest protection of property rights have the most favorable scores on Yale University’s Environmental Performance Index.

Environmental regulations come with a cost. If the United States imposed all of its environmental regulations on developing nations, it would destroy their economies. A country must have a certain degree of wealth to be able to afford such regulations, which is itself a reason for environmentalists to support economic freedom. “Wealthier,” as they say, “is healthier.”

5. Economic Freedom Helps Women

In her honors dissertation at Florida State University, Signè Thomas examines a potential social benefit of economic freedom: it improves the socioeconomic status of women.

Thomas compares three different metrics of socioeconomic status against the economic freedom indices in those countries. These metrics include the Gender Empowerment Measurement (GEM), Gender Inequality (GI) Index, and Gender Equality Rating (GER). The GEM is based on the number of seats held in parliament by women; the number of female legislators, senior officials, and managers; the number of female professional and technical workers; and the ratio of female to male income. The GI index measure looks at the maternal mortality ratio, adolescent fertility rate, female parliamentary representation, educational attainment, and female labor force participation rates. The GER looks at the degree to which a country enforces laws and policies that promote equal access for men and women in education, health, economic participation, and legal protection.

After controlling for religion, political rights, ethnic diversity, natural resources, and GDP, the results are clear: more economic freedom leads to a nation performing more favorably on the metrics discussed.

The evidence refutes the critics of capitalism. The market system benefits not only the rich but the poor and middle classes as well by raising incomes for everyone and stabilizing economies. The benefits of free enterprise stretch far beyond mere monetary benefits, as capitalistic countries have cared better for their environments and helped elevate the social status of women more than any piece of legislation could hope to.

The Nonsense of Open Borders

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Jeb Bush

Liberal Republican presidential contender and former Florida Governor Jeb Bush stated “I can persuade conservatives on amnesty.”  Of course, Bush is referring to the federal government’s refusal to build a viable fence and enact reasonable measures to protect our republic from the vicious hordes of invading illegal immigrants.  I find this most infuriating.  Here we unfortunately have individuals who voluntarily run for political office. Those fortunate enough to fool us and win election take an oath of office.  That oath includes swearing or affirming to defend and uphold the United States Constitution.  The Constitution itself instructs office holders to defend the United States from enemies both foreign and domestic.

So when I see, read, or hear about congress and the president or any individual more willing to govern on behalf of illegal immigrants than for example ranch owners killed by illegal immigrants, it is high time to make  some logical changes.  I am sure that Jeb Bush and every other presidential contender is well aware of the clear and present dangers presented by the teaming masses of illegal immigrants.  It does not matter if the majority of them are strolling into our country illegally for better opportunities.  The United States is a nation of laws and illegal immigrants are continuously breaking our immigration laws.  Thus they are law breakers and should be dealt with accordingly.  If the current president, presidential candidates or those in the legislative branch care so much about those living in impoverished conditions in other countries, perhaps setting a better example would be better in the long run.

What I am zeroing in here is that the United States should first begin to once again restore real economic growth and authentic opportunities for Americans!  After which, the United States should export those worthy free market concepts to other nations like Mexico and Honduras, for example.  The only thing happening now regarding thirty million illegals in our republic is that they are replacing numerous Americans in the workplace throughout the country.  To add insult to injury, those born in America and are blessed to have a job or run a business are forced to foot the bill for a myriad of government/Obama administration hands to the illegals. Those handouts include medical care, nice houses, drivers licenses, automobiles, education and more.

If the federal government officials in office continue to refuse to show disregard for the republic they were elected to serve, then perhaps we would be better off if they go and serve in Mexico or some other nation whose values they hold in higher esteem than ours. After all, those in office who won’t even work to secure our borders are doing the bidding of the United Nations agenda 21 effort to do away with our national sovereignty.  To add insult to injury, the federal government refusal to properly secure the borders has opened wide the door of opportunities for dedicated muslims from around the world to freely saunter into our republic.  So now, I believe that some of earths most dangerous dedicated muslim terrorists are comfortably encamped within the United States and could soon unleash destructive terrorist havoc.  I believe it will not be on the level of the 9-11 attacks that obliterated the World Trade Center, but brutal none the less.

The dedicated muslim group ISIS has threatened to murder Americans in America.  Cities like Dearbornistan, MI could in my opinion house beehives of terrorist planning activities.  History will prove whether I am right or wrong. But it is fool hearty for our elected officials to leave this nation so vulnerable to the possibility of a dedicated muslim terrorist attack.  I am still shocked and amazed that president Obama has not been taken to the wood shed for doing the traitorous bidding  of the United Nations.  Remember when he threatened the state of Arizona because of the effort to simply secure that states border with Mexico?

No nation of any major significance has ever remained so after losing or giving up their border security.  Such utter nonsense cannot be tolerated, unless of course the goal is to rid the United States of her God given sovereignty.   Progressives like Presidential advisor Valerie Jaret and Attorney General nominee Loretta Lynch support the very open border policies that could be the undoing of this, the greatest nation EVER!  If the government big wigs will not secure the borders, then sadly history will reveal the extreme stupidity, and betrayal exhibited by those we elect.  That will be the just reward granted “We the People” if we shrink from the challenge to restore the Love of God and country throughout our beloved republic.

May God bless America and may America bless God.